ATI Inc (ATI) 2025 Q3 法說會逐字稿

Hello, and welcome, everyone, to the ATI Third Quarter 2025 Results Conference Call. My name is Becky, and I'll be your operator today. (Operator Instructions)

大家好，歡迎參加 ATI 2025 年第三季業績電話會議。我叫貝基，今天我將擔任您的接線生。（操作員指示）

I will now hand over to your host, David Weston to begin. Please go ahead.

現在我將把主持人戴維·韋斯頓 (David Weston) 交給他開始。請繼續。

Thank you. Good morning, and welcome to ATI's Third Quarter 2025 Earnings Call. Today's discussion is being webcast online at atimaterials.com. Participating in today's call to share key points from our third quarter results are Kim Fields, President and CEO; and Don Newman, Executive Vice President and CFO.

謝謝。早上好，歡迎參加 ATI 2025 年第三季財報電話會議。今天的討論將在 atimaterials.com 進行網路直播。總裁兼執行長 Kim Fields 和執行副總裁兼財務長 Don Newman 將出席今天的電話會議，分享我們第三季業績的要點。

Before starting our prepared remarks, I would like to draw your attention to the supplemental presentation that accompanies this call. Those slides provide additional color and details on our results, capabilities and outlook and can also be found on our website at atimaterials.com. After our prepared remarks, we'll open the line for questions. As a reminder, all forward-looking statements are subject to various assumptions and caveats, those are noted in the earnings release and in the accompanying presentation.

在開始我們準備好的演講之前，我想提請您注意本次電話會議附帶的補充介紹。這些幻燈片進一步闡述了我們的成果、能力和前景，您也可以造訪我們的網站 atimaterials.com 取得。準備好的發言結束後，我們將開放提問環節。提醒一下，所有前瞻性陳述都受各種假設和警告的影響，這些假設和警告在收益報告和隨附的簡報中均有註明。

Now I'll turn the call over to Kim.

現在我將把電話轉給金。

Good morning, everyone, and thank you for joining us. Q3 was another strong quarter for ATI, delivering results ahead of our projections, advancing our long-term strategy and strengthening our leadership in aerospace and defense. Our teams continue to perform at a high level, meeting growing customer needs and driving sustained value.

大家早安，感謝大家的收看。第三季度是 ATI 又一個表現強勁的季度，業績超越我們的預期，推進了我們的長期策略，並加強了我們在航空航太和國防領域的領導地位。我們的團隊持續保持高水準表現，滿足日益增長的客戶需求並推動持續的價值。

Let's start with a quick overview of our Q3 results. Revenue was up 7% year-over-year, once again exceeding $1.1 billion. Adjusted EPS was $0.85, $0.10 above the high end of our projected range. Adjusted EBITDA totaled $225 million. Excluding approximately $10 million related to the sale of oil and gas rights, $215 million of adjusted EBITDA exceeded the high end of our guidance by $5 million.

讓我們先快速概述一下我們的第三季業績。營收年增7%，再次超過11億美元。調整後的每股收益為 0.85 美元，比我們預測範圍的高端高出 0.10 美元。調整後的 EBITDA 總計 2.25 億美元。不包括與出售石油和天然氣權利有關的約 1000 萬美元，調整後的 EBITDA 為 2.15 億美元，比我們預期的高端高出 500 萬美元。

Adjusted EBITDA margin exceeded 20%, our highest since the pandemic and almost double 2019's margin. Bulk segments delivered excellent profitability. Our High Performance Materials & Components segment margins were above 24%, and Advanced Alloys & Solutions segment above 17%, driven by strong pricing, mix and increasing aerospace and defense content. Cash generated from operations year-to-date reached $299 million, a $273 million improvement from last year. We also returned $150 million to shareholders this quarter through share repurchases with $120 million remaining under our current authorization.

調整後的 EBITDA 利潤率超過 20%，為疫情爆發以來的最高水平，幾乎是 2019 年利潤率的兩倍。散貨運輸業務實現了出色的獲利能力。由於強勁的定價、產品組合以及不斷增加的航空航太和國防內容，我們的高性能材料和零件部門的利潤率超過 24%，先進合金和解決方案部門的利潤率超過 17%。今年迄今的經營活動產生的現金達到 2.99 億美元，比去年增加了 2.73 億美元。本季我們也透過股票回購向股東返還了 1.5 億美元，目前授權的金額還剩 1.2 億美元。

Given this performance and our outlook for Q4, we are raising our full year guidance across the board. Adjusted EBITDA for 2025 now forecast between $848 million and $858 million, a $28 million increase at the midpoint. Adjusted free cash flow now forecast between $330 million and $370 million, a $40 million increase at the midpoint. Don will share more details on this in a moment.

鑑於此表現以及我們對第四季的展望，我們將全面提高全年業績預期。目前預測 2025 年調整後 EBITDA 在 8.48 億美元至 8.58 億美元之間，中間值增加 2,800 萬美元。調整後的自由現金流目前預測在 3.3 億美元至 3.7 億美元之間，中間值增加 4,000 萬美元。唐稍後將分享更多有關此問題的細節。

With one quarter left in 2025, I want to highlight three key themes driving ATI's continued momentum and future outlook. First, we have strong demand in our core markets with aerospace and defense leading the way. Total A&D revenue rose 21% year-over-year in the third quarter, fueled by record defense performance and sustained demand in jet engines. This quarter, A&D reached an all-time high of 70% of total revenue, marking an important milestone in our strategy. Long-term agreements and differentiated materials are supporting consistent growth through 2026 and beyond.

2025 年還剩一個季度，我想強調推動 ATI 持續發展勢頭和未來前景的三個關鍵主題。首先，我們的核心市場需求強勁，其中航空航太和國防領域處於領先地位。受創紀錄的國防業績和噴射發動機持續需求的推動，第三季航空航太與國防總收入年增 21%。本季度，A&D 收入佔總收入的比例達到歷史最高水準的 70%，標誌著我們策略的一個重要里程碑。長期協議和差異化材料將支持 2026 年及以後的持續成長。

I'll detail what I see in these markets. Our largest market, jet engines, now 39% of total revenue, grew 19% year-over-year in Q3, with MRO representing about 50% of total engine sales. Next-generation programs such as LEAP and GTF continued to accelerate with strong production and aftermarket demand. You probably heard OEMs make those forecasts in their recent earnings calls. This sustained momentum supports long-term growth for ATI's proprietary alloys and forged turbine discs.

我將詳細介紹我在這些市場看到的情況。我們最大的市場是噴射發動機，目前佔總收入的 39%，第三季年增 19%，其中 MRO 約佔發動機總銷售額的 50%。LEAP 和 GTF 等新一代專案持續加速推進，生產和售後市場需求強勁。您可能聽說過 OEM 在最近的財報電話會議上做出了這些預測。這種持續的勢頭支持了 ATI 專有合金和鍛造渦輪盤的長期成長。

Our order book extends into the mid-2027, underscoring tight supply and the strength of our customer partnerships. As a priority supplier, we've gained additional share in content where others have faced execution challenges while maintaining pricing that reflects the value of our capabilities. Looking ahead, we expect Q4 jet engine revenue growth in the high single to low double digits. For the full year, jet engine growth is expected to exceed 20%. With multi-decade customer agreements and increasing platform demand, ATI is well positioned for continued share gains and profitable growth through this aerospace cycle.

我們的訂單將延續到 2027 年中期，這凸顯了緊張的供應和我們與客戶合作夥伴關係的牢固。作為優先供應商，我們在其他人面臨執行挑戰的內容中獲得了額外的份額，同時保持了反映我們能力價值的定價。展望未來，我們預計第四季噴射引擎營收成長率將達到高個位數至低兩位數。預計全年噴射發動機增幅將超過20%。憑藉數十年的客戶協議和不斷增長的平台需求，ATI 已做好準備，透過這項航空航天週期繼續實現市場份額成長和利潤成長。

Airframe sales grew 9% year-over-year and 3% year-to-date this quarter, supported by the ongoing ramp in Boeing and Airbus production and timing of customer orders. Boeing's production rate increase of 42 per month on the 737 and Airbus' A320 target of 75 per month by 2027 signal healthy sustained demand. We expect Q4 airframe revenues to finish modestly above 2024 levels as airframers adjust their inventory to production needs.

受波音和空中巴士產量持續成長以及客戶訂單及時性的推動，本季機身銷售額年增 9%，年初至今成長 3%。波音公司 737 的產量目標為每月增加 42 架，而空中巴士 A320 的目標產量為到 2027 年每月增加 75 架，這表明市場需求將持續健康成長。我們預計，隨著飛機製造商根據生產需求調整庫存，第四季度的飛機機身收入將略高於 2024 年的水準。

ATI's expanded titanium capacity and advanced processing capabilities are driving share gains and improved pricing across OEM platforms, enhancing our mix of higher-value structural components and supporting continued margin expansion. Next year, we anticipate high single-digit growth in airframe revenues, driven by steady production ramps, increased ATI content and favorable pricing under new long-term contracts that start at the beginning of 2026.

ATI 擴大的鈦產能和先進的加工能力正在推動整個 OEM 平台的份額成長和定價改進，增強我們的高價值結構零件組合併支持利潤率的持續擴大。明年，我們預計機身收入將實現高個位數成長，這得益於產量的穩步提升、ATI 內容的增加以及 2026 年初開始生效的新長期合約下的優惠定價。

Beyond 2026, as build rates rise, ATI's airframe business is poised to grow faster than overall industry volumes, reflecting our differentiated titanium portfolio and deep customer alignment. Defense markets remain exceptionally strong. Revenue increased 51% year-over-year and 36% sequentially, reflecting broad-based strength across naval nuclear, rotary cracked missile and armored vehicle programs. Our diversified product base benefits from both U.S. and allied spending growth, we continue to qualify our new programs entering early production. ATI's Defense business has now delivered three consecutive years of double-digit growth, outpacing defense spending.

2026 年以後，隨著建造率的提高，ATI 的機身業務預計將比整個行業增長得更快，這反映了我們差異化的鈦產品組合和深度的客戶一致性。國防市場依然異常強勁。營收年增 51%，季增 36%，反映出海軍核子、旋轉破片飛彈和裝甲車項目的廣泛實力。我們的多樣化產品基礎受益於美國和盟國的支出成長，我們將繼續對進入早期生產階段的新項目進行資格審查。ATI 的國防業務已連續三年實現兩位數成長，超過了國防開支。

Highlights this quarter include being named Supplier of the Year by General Dynamics U.K., underscoring customer trust and ATI's performance and reliable delivery. Missile and propulsion programs are expanding rapidly. ATI's advanced materials are increasingly specified in FAD and PAC 3 systems, where production is accelerating to meet recapitalization demand. We're also supporting emerging initiatives like Golden Dome, positioning ATI for above-market growth into the next decade.

本季度的亮點包括被英國通用動力公司評為年度供應商，這突顯了客戶的信任以及 ATI 的性能和可靠的交付。導彈和推進計劃正在迅速擴大。ATI 的先進材料越來越多地被指定用於 FAD 和 PAC 3 系統，這些系統的生產正在加速以滿足資本重組的需求。我們也支持 Golden Dome 等新興計劃，幫助 ATI 在未來十年實現高於市場的成長。

Emergent Naval Nuclear also contributed meaningfully to Q3 performance, showcasing the resilience and scale of our defense portfolio. With expanding qualifications, multiyear visibility and growing international participation, defense is set for continued record performance as modernization and replenishment programs ramp worldwide. Bottom line, A&D remains the foundation of ATI's growth.

新興海軍核能也為第三季的業績做出了重大貢獻，展現了我們國防產品組合的彈性和規模。隨著資質的不斷提高、多年的知名度和國際參與度的不斷提高，隨著現代化和補給計劃在全球範圍內的推進，國防將繼續保持創紀錄的表現。總而言之，A&D 仍然是 ATI 發展的基礎。

My second key theme, operational excellence and disciplined execution are the backbone of our performance. This quarter, the team delivered strong productivity gains. Across ATI, we're delivering what we call the triple threat: higher uptime, improved first pass yield and expanding manufacturing capabilities. We have examples across the company. In our nickel remelt operations, output increased by double digits.

我的第二個關鍵主題是卓越的營運和嚴格的執行是我們績效的支柱。本季度，該團隊的生產力得到了顯著提升。在 ATI，我們正在實現所謂的三重威脅：更高的正常運作時間、更高的首次通過率和更大的製造能力。我們整個公司都有這樣的例子。在我們的鎳重熔業務中，產量增加了兩位數。

In the isothermal flow path, heat treat cycle time improved 3 times. Accelerated throughput is lower in cost and frame capacity for our crucial jet engine products. At our Specialty Materials business, we also expanded powder atomization capacity by over 25%, improving yield and quality. We expect to see the benefits of this improvement in our first half 2026 shipments. Our specialty enrolled product business achieved a new record for monthly coil shipments, another demonstration of increased throughput and efficiency.

在等溫流路中，熱處理循環時間提高了3倍。加速生產可以降低我們關鍵噴射引擎產品的成本和框架容量。在我們的特殊材料業務中，我們還將粉末霧化能力提高了 25% 以上，提高了產量和品質。我們預計在 2026 年上半年的出貨量中會看到這項改進帶來的好處。我們的特種註冊產品業務創下了每月線圈出貨量的新紀錄，這再次證明了產量和效率的提高。

Specialty Alloys and Components unlocked more than 20% additional capacity in the zirconium sponge process. This was accomplished through standard work and maintenance optimization requiring minimal capital investment.

特殊合金和零件在海綿鋯製程中釋放了超過 20% 的額外產能。這是透過標準化工作和維護優化來實現的，需要最少的資本投資。

As a reminder, ATI is the leading producer of high-purity zirconium at scale in the Western world. This material is important to national defense, energy and aerospace. It's a small but highly profitable part of our business today with significant growth potential ahead. Collectively, these initiatives have expanded available capacity by roughly 10% with the greatest impact in our differentiated mode of products and contribute to our margin gains. These are not just operational wins, they enhance reliability, increase asset utilization and drive long-term earnings growth.

需要提醒的是，ATI 是西方世界領先的高純度鋯生產商。這種材料對國防、能源、航空航太具有重要意義。這是我們目前業務中規模雖小但利潤豐厚的一部分，未來具有巨大的成長潛力。總的來說，這些措施將可用產能擴大了約 10%，對我們差異化的產品模式影響最大，並有助於提高我們的利潤率。這些不僅僅是營運上的勝利，它們還提高了可靠性，提高了資產利用率並推動了長期獲利成長。

By securing additional customer qualifications on new equipment and products, we're building the foundation for ATI's next chapter of performance and profitability. My third theme this quarter, our strategy and investments continue to drive long-term value. Our strategy is working, with 70% of revenue now coming from aerospace and defense, ATI is firmly focused on our most differentiated, high-value materials and markets. Our nickel investment expands differentiated capacity at the top of the value chain. You'll recall, we're the sole-source producer for five of the seven most advanced super alloys in the jet engine. Before we decide to invest, each project undergoes a disciplined review process, requiring projected internal rates of return above 30% and clear alignment with long-term customer contracts.

透過確保新設備和產品的更多客戶資格，我們為 ATI 的下一階段性能和盈利奠定了基礎。本季的第三個主題是，我們的策略和投資持續推動長期價值。我們的策略正在發揮作用，目前 70% 的收入來自航空航太和國防，ATI 堅定地專注於我們最具差異化、高價值的材料和市場。我們對鎳的投資擴大了價值鏈頂端的差異化產能。您會記得，我們​​是噴氣發動機七種最先進的超級合金中的五種的唯一來源生產商。在我們決定投資之前，每個專案都要經過嚴格的審查流程，要求預期內部報酬率達到 30% 以上，並與長期客戶合約明確保持一致。

In many cases, our customers are funding alongside us, reinforcing shared confidence in the demand outlook and guaranteeing needed capacity in place for the future. We'll continue deploying capital with focus and discipline, prioritizing differentiated products, high-return investments and strategic partnerships that sustain ATI's leadership and create long-term value.

在許多情況下，我們的客戶與我們一起提供資金，增強對需求前景的共同信心，並保證未來所需的產能。我們將繼續有重點、有紀律地部署資本，優先考慮差異化產品、高回報投資和策略合作夥伴關係，以維持 ATI 的領導地位並創造長期價值。

I've been recently asked by a few investors whether investing in nickel melt capacity will negatively impact our pricing. The short answer is no. Our focus is on our most differentiated products. This is about expanding the competitive mode while supporting the engine ramp and our customers' ambitious growth targets.

最近有幾位投資人問我，投資鎳熔煉產能是否會對我們的定價產生負面影響。簡短的回答是「不」。我們的重點是我們最具差異化的產品。這是為了擴大競爭模式，同時支持引擎坡道和我們客戶雄心勃勃的成長目標。

In summary, strong aerospace and defense demand, a relentless focus on operational excellence and a strategy that's creating long-term value resulted in Q3 being ATI's strongest quarter of the year. We're well positioned to extend our momentum to finish 2025 strong.

總而言之，強勁的航空航太和國防需求、對卓越營運的不懈關注以及創造長期價值的策略使第三季成為 ATI 今年表現最強勁的季度。我們已做好準備，繼續保持良好勢頭，在 2025 年取得圓滿成功。

And with that, I'll turn it over to Don.

說完這些，我就把麥克風交給唐。

Thanks, Kim. I'll provide some additional detail on our financial performance and discuss our outlook for the fourth quarter and full year. In Q3, we once again delivered results ahead of expectations. Adjusted EBITDA was $225 million, including a $10 million gain from oil and gas right sales. Excluding that, EBITDA of $215 million represents a 19% year-over-year and 6% sequential improvement with margins at 20% or 19.1% excluding asset sales.

謝謝，金。我將提供有關我們財務業績的更多細節，並討論我們對第四季度和全年的展望。第三季度，我們再次取得了超乎預期的業績。調整後的 EBITDA 為 2.25 億美元，其中包括石油和天然氣權利銷售收益 1,000 萬美元。除此之外，2.15 億美元的 EBITDA 年成長 19%，季增 6%，利潤率為 20% 或不包括資產銷售為 19.1%。

Strong price, mix and volume performance, particularly in defense and jet engines, drove this outperformance, resulting in nearly $10 million of operational upside versus our prior guidance range midpoint. Year-to-date, our sales are up 7% and adjusted EBITDA is up 19% over the prior year, excluding asset sales. This reflects improved mix, cost discipline and incremental margins, which remain near 50%, demonstrating the leverage of our business model.

強勁的價格、產品組合和銷售表現，特別是在國防和噴射發動機領域，推動了這一優異表現，與我們之前的指導範圍中點相比，營運利潤增長了近 1000 萬美元。年初至今，我們的銷售額成長了 7%，調整後的 EBITDA 比前一年成長了 19%（不包括資產銷售）。這反映了產品組合的改善、成本控制和增量利潤率（仍保持在 50% 左右），證明了我們商業模式的槓桿作用。

Segment performance was strong. HPMC EBITDA margins expanded to 24.2%, up 50 basis points sequentially and 190 basis points year-over-year. A&S margins improved to 17.3%, a 290 basis point increase sequentially and a 250-point increase year-over-year. This reflects gains from ongoing transformation and efficiency efforts.

各分部表現強勁。HPMC EBITDA 利潤率擴大至 24.2%，季增 50 個基點，年增 190 個基點。A&S 利潤率提高至 17.3%，比上一季增加 290 個基點，比去年同期增加 250 個基點。這體現了持續轉型和效率努力的成果。

Cash generation also remained strong. Through the third quarter, we have generated nearly $300 million in operating cash flow, supported by working capital improvements and strong earnings. We continue to monetize noncore assets including the oil and gas rights sale and a small noncore machining divestiture, all while keeping capital investments focus and disciplined. Gross capital expenditures year-to-date totaled $188 million. Managed working capital as a percentage of sales remains around 36% with opportunity to improve.

現金產生能力也維持強勁。截至第三季度，在營運資本改善和強勁獲利的支持下，我們已產生近 3 億美元的營運現金流。我們繼續將非核心資產貨幣化，包括石油和天然氣權利出售以及小型非核心機械加工資產剝離，同時保持資本投資的重點和紀律。今年迄今的總資本支出總計 1.88 億美元。管理營運資本佔銷售額的百分比仍維持在 36% 左右，但仍有提升的空間。

We expect a strong finish to the year. The seasonal working capital release and projected strong Q4 performance position us for robust fourth quarter cash generation. Now let's look at our guidance for the fourth quarter and full year. Building on Kim's comments, we are raising full year guidance to reflect stronger performance and visibility through year-end. Adjusted EBITDA, $848 million to $858 million, up $28 million at the midpoint. Adjusted EPS, $3.15 to $3.21. Free cash flow, $330 million to $370 million.

我們期望今年能夠圓滿成功。季節性營運資本的釋放和預計強勁的第四季度業績使我們在第四季度實現強勁的現金產生。現在讓我們來看看我們對第四季和全年的指導。根據金的評論，我們提高了全年業績預期，以反映年底更強勁的業績和可見性。調整後的 EBITDA 為 8.48 億美元至 8.58 億美元，中間值上漲 2,800 萬美元。調整後每股收益3.15美元至3.21美元。自由現金流3.3億美元至3.7億美元。

CapEx, $260 million to $280 million. That's unchanged from prior guidance. Q4 adjusted EBITDA is projected at $221 million to $231 million, a sequential 5% increase, excluding oil and gas gains. The midpoint of $226 million is driven by continued growth in jet engine forgings, improved price and mix and sustained strength in defense programs.

資本支出為 2.6 億至 2.8 億美元。這與先前的指導意見沒有改變。第四季調整後的 EBITDA 預計為 2.21 億美元至 2.31 億美元，季增 5%，不包括石油和天然氣收益。2.26億美元的中點是由噴射發動機鍛造的持續增長、價格和產品組合的改善以及國防項目的持續強勁推動的。

Turning to margins. Based upon our continued strong performance, I expect consolidated margins in Q4 will exceed 19%, and full year margins will be in the range of 18.5%. At the segment level, HPMC Q4 margins should continue to increase, exceeding Q3 margins of 24.2%. A&S Q4 margins are expected to be between 16% and 16.5%, consistent with sales mix expectations. We expect another strong quarter of cash generation supported by collections and improved working capital efficiency.

轉向利潤。基於我們持續強勁的業績，我預計第四季的綜合利潤率將超過 19%，全年利潤率將在 18.5% 左右。從細分市場來看，HPMC 第四季的利潤率應該會繼續成長，超過第三季的 24.2%。A&S 第四季利潤率預計在 16% 至 16.5% 之間，與銷售組合預期一致。我們預計，在收款和營運資金效率提高的支持下，本季的現金產生將再創強勁。

We are on track for $330 million to $370 million in adjusted free cash flow this year. This is a $40 million increase to the midpoint of the range. Gross capital expenditures will stay within the planned range of $260 million to $280 million, partially funded by proceeds from sale of noncore assets. Cash generated from sales of noncore assets and businesses totaled approximately $30 million year-to-date and $76 million in 2024. Our focus remains on high return, customer-supported investments that enhance mix, margin and long-term competitiveness.

我們今年的調整後自由現金流預計將達到 3.3 億至 3.7 億美元。這比該範圍的中點增加了 4000 萬美元。總資本支出將維持在計畫的 2.6 億美元至 2.8 億美元範圍內，部分資金來自出售非核心資產的收益。今年迄今為止，非核心資產和業務出售產生的現金總額約為 3,000 萬美元，到 2024 年將達到 7,600 萬美元。我們仍然專注於高回報、客戶支援的投資，以提高組合、利潤率和長期競爭力。

Each quarter this year, we have increased EBITDA, margins and cash generation. Q4 will build on that performance, creating momentum that we will carry into 2026. With that, I will turn the call back over to Kim.

今年每個季度，我們的 EBITDA、利潤率和現金產生量都有所增加。第四季我們將在此基礎上繼續努力，創造 2026 年的良好勢頭。說完這些，我將把電話轉回給金。

Thanks, Don. As we shared on September 11, Don has elected to retire from his role as CFO following our fourth quarter call. We'll have more to say about Don and his outstanding career next quarter, but I want to take a moment now to thank him for his leadership and many contributions that help put ATI in the strong position we're in today. The search for Don's successor is well underway. We're considering both internal and external candidates to identify the best possible leader. I'll share progress on the search in the months ahead for a seamless transition. Our disciplined financial strategy will continue.

謝謝，唐。正如我們在 9 月 11 日分享的那樣，Don 已選擇在第四季度電話會議後辭去財務長職務。下個季度我們將更多地談論唐和他傑出的職業生涯，但現在我想花點時間感謝他的領導能力和許多貢獻，這些幫助 ATI 處於今天的強勢地位。尋找唐的繼任者的工作正在順利進行中。我們正在考慮內部和外部候選人，以確定最佳領導者。我將在未來幾個月分享搜尋的進展，以實現無縫過渡。我們將繼續採取嚴謹的財務策略。

Before we turn to Q&A, I want to reflect on what makes ATI a compelling aerospace and defense story. When we began this transformation several years ago, ATI served a wide range of products and customers with limited concentration in our most differentiated materials. Fast forward to today and the transformation is clear. ATI is an aerospace and defense leader with more than 70% of our revenue coming from these high-value markets.

在我們進入問答環節之前，我想先思考一下是什麼讓 ATI 成為一個引人注目的航空航太和國防故事。當我們幾年前開始這項轉型時，ATI 為廣泛的產品和客戶提供服務，但對最具差異化的材料的關注有限。快轉到今天，轉變已經很明顯了。ATI 是航空航太和國防領域的領導者，其 70% 以上的收入來自這些高價值市場。

In 2019, our margins were roughly half the 20% we delivered this quarter, and our growth rates were more susceptible to price and input cost swings. Today, we are structurally stronger, anchored and differentiated materials, long-term customer relationships and sustainable pricing power. We've made tremendous progress, but we're not finished.

2019 年，我們的利潤率大約是本季 20% 的一半，而且我們的成長率更容易受到價格和投入成本波動的影響。如今，我們的結構更加強大，材料更加穩定和差異化，擁有長期的客戶關係和可持續的定價能力。我們已經取得了巨大的進步，但尚未完成。

The path forward centers on three levers: First, strategic pricing and mix optimization. Demand continues to outpace supply in key markets like jet engines, defense and specialty energy. We're optimizing our product mix at our most valuable assets to capture higher value opportunities. Our long-term agreements and strategic pricing actions capture the value we deliver, securing the price, terms and pass-throughs that reflect our differentiated materials and the reliability our customers depend on. These long-term partnerships also underpin future investments and joint technology development, ensuring we expand capabilities in alignment with customers' needs.

前進的道路圍繞著三個槓桿：首先，策略定價和組合最佳化。噴射發動機、國防和特種能源等關鍵市場的需求持續超過供應。我們正在優化我們最寶貴資產的產品組合，以抓住更高價值的機會。我們的長期協議和策略定價行動體現了我們提供的價值，確保了反映我們差異化材料和客戶所依賴的可靠性的價格、條款和轉嫁。這些長期合作夥伴關係也為未來的投資和聯合技術開發奠定了基礎，確保我們根據客戶的需求擴展能力。

Our second lever is operational excellence and productivity. Across ATI, yield and throughput improvements are expanding capacity without adding capital. Product and process innovation drive efficiency and reliability, supporting record margins and cash generation across both segments.

我們的第二個槓桿是卓越營運和生產力。在 ATI，產量和吞吐量的提高無需增加資本就能擴大產能。產品和流程創新提高了效率和可靠性，支持兩個部門創下創紀錄的利潤率和現金創造。

Our third lever is focus and simplification. We apply an 80-20 mindset, investing where ATI creates the most value and exiting where we don't. We're redeploying capital to high-value, high-growth areas. ATI is more agile, more profitable and better positioned to deliver long-term value. These levers are driving continued margin expansion, strong cash generation and higher returns on capital. Customers recognize ATI's reliable track record, long-term contracts and technical expertise, reinforce the surety supply our partners count on.

我們的第三個槓桿是專注和簡化。我們採用 80-20 思維模式，在 ATI 創造最大價值的地方進行投資，在無法創造價值的地方退出。我們正在將資本重新部署到高價值、高成長領域。ATI 更靈活、獲利能力更強，更有能力實現長期價值。這些槓桿正在推動利潤率持續擴大、現金產生強勁以及資本回報率上升。客戶認可 ATI 的可靠業績記錄、長期合約和技術專長，增強了我們合作夥伴所依賴的保證供應。

ATI's foundation is strong. We're profitably growing, expanding margins and generating robust cash flow, trends we expect to continue well into the next decade. We're ahead of schedule on our 2027 growth and margin targets and our business model provides clear visibility through 2030 and beyond. Even as customers build schedules fluctuates, ATI continues to gain share across A&D, optimize its asset base and deliver consistent growth and increasing returns. Our differentiated materials, technical expertise and integrated capabilities create a durable competitive moat, one that aligns closely with our A&D partners.

ATI 的基礎非常穩固。我們的獲利正在成長，利潤率正在擴大，並產生了強勁的現金流，我們預計這些趨勢將持續到下一個十年。我們提前實現了 2027 年的成長和利潤目標，我們的商業模式為 2030 年及以後的發展提供了清晰的可視性。即使客戶的建造計劃出現波動，ATI 仍繼續在 A&D 領域獲得份額，優化其資產基礎並實現持續成長和增加回報。我們的差異化材料、技術專長和綜合能力創造了持久的競爭優勢，並與我們的 A&D 合作夥伴緊密結合。

We've accomplished a lot, and we're just getting started. With that, let's open the line for your questions.

我們已經取得了很多成就，而這只是開始。現在，讓我們開始回答您的問題。

(Operator Instructions) Our first question comes from Richard Safran from Seaport Research Partners. Your line is now open, please go ahead.

（操作員指示）我們的第一個問題來自 Seaport Research Partners 的 Richard Safran。您的線路已開通，請繼續。

Thanks, good morning. Congrats to you on the retirement, and thanks for all the help over the years, appreciate it. Okay. So Kim, I heard your opening remarks, but I'm not exactly sure I understand what's changed since 2Q to drive the revised outlook and the guidance increase. So maybe you could discuss what's changed in your outlook and going to the moving pieces that drove this guidance increase we see today? Thanks.

謝謝，早安。恭喜您退休，並感謝您多年來的幫助，不勝感激。好的。所以 Kim，我聽到了你的開場白，但我不太確定我是否理解自第二季度以來發生了什麼變化，從而推動了修訂後的展望和指導增加。那麼，也許您可以討論您的觀點發生了哪些變化，以及推動我們今天看到的指導增加的因素是什麼？謝謝。

Sure. Thanks, Rich. So let me start with the guidance is reflecting that stronger-than-expected A&D performance, particularly in defense, we had a tremendous quarter. And we see the A&D growth and momentum in third quarter continuing through the rest of this year, and frankly, into 2026 -- we delivered $225 million adjusted EBITDA, and excluding the oil and gas rights, that's $215 million. HPMC was over 24% in margin, A&S was over 17%.

當然。謝謝，里奇。因此，首先我要說的是，這份指引反映了 A&D 表現強於預期，特別是在國防領域，我們度過了一個非常棒的季度。我們認為第三季的 A&D 成長和勢頭將持續到今年剩餘時間，坦白說，到 2026 年——我們實現了 2.25 億美元的調整後 EBITDA，不包括石油和天然氣權利，即 2.15 億美元。 HPMC利潤率超過 24%，A&S 超過 17%。

And the operational productivity that I talked about is really starting to flow through, and we're seeing that in those margin numbers. Free cash flow continues to be a standout at $299 million year-to-date, up $273 million from last year. So as we look at the momentum that we built in the third quarter, we see that, we anticipate that strength going into Q4 across A&D and frankly, continuing into 2026. So overall, strength in markets and strength in our position and the returns that we're getting on the investments from an operational mix and pricing.

我談到的營運生產力確實開始發揮作用，我們在利潤數字中看到了這一點。自由現金流持續表現突出，年初至今已達 2.99 億美元，較去年同期增加 2.73 億美元。因此，當我們回顧我們在第三季度建立的勢頭時，我們預計這種強勁勢頭將延續到第四季度的 A&D 領域，坦白說，將持續到 2026 年。因此，整體而言，市場實力雄厚，我們的地位也雄厚，而且我們從營運組合和定價中獲得的投資回報也很高。

Okay, this next one is a somewhat related two part question about nickel and titanium. You have a lot of single source nickel alloys, I'm talking about things like Rene 65. On the OE side, you're facing rate 52 at Boeing, rate 75 at Airbus. There's aftermarket demand. So first part, what are you doing to manage this melt capacity you discussed in your opening remarks?

好的，下一個問題是關於鎳和鈦的兩部分相關問題。您有很多單一來源的鎳合金，我說的是像 Rene 65 這樣的東西。在 OE 方面，波音的費率為 52，空中巴士的費率為 75。存在售後市場需求。那麼第一部分，您正在採取什麼措施來管理您在開場白中討論的熔化能力？

Second part, Kim, I think you recently said ATI is now the number one source of flat-rolled titanium products to Airbus. What actually does that mean? And how does that translate eventually to the P&L, if you would?

第二部分，Kim，我想您最近說過 ATI 現在是空中巴士平板鈦產品的第一大來源。這到底是什麼意思？那麼，這最終如何轉化為損益表呢？

Sure, sure. So you're right. We continue to see record demand for premium nickel alloys, especially those used in next-generation engine products like LEAP and GTF, as well as defense, which, as I just mentioned, we had a fantastic quarter. So we're seeing demand across all of those market segments. And meeting that demand this year has really been focused around that productivity and reliability, higher melt yields, more downstream processing, the increased testing capacity in our forged products business.

當然，當然。所以你是對的。我們繼續看到對優質鎳合金的創紀錄需求，特別是用於 LEAP 和 GTF 等下一代發動機產品以及國防的鎳合金，正如我剛才提到的，我們度過了一個非常棒的季度。因此，我們看到了所有這些細分市場的需求。今年滿足這一需求的重點實際上是生產力和可靠性、更高的熔體產量、更多的下游加工以及鍛造產品業務的測試能力的提高。

Those actions are delivering these strong results that you're seeing and how we supported that more than 20% jet engine growth this year as well as the margins at HPMC over 24%. So we're going to continue to focus on expanding process efficiency and customer co-funded projects. And as I mentioned in my remarks, these investments will exceed 30% IRR, our internal rate of return targets and ensure that supply assurance without adding unnecessary melt capacity.

這些行動正在帶來您所看到的強勁成果，以及我們如何支援今年噴射發動機成長超過 20% 以及 HPMC 利潤率超過 24%。因此，我們將繼續專注於提高流程效率和客戶共同資助的專案。正如我在演講中提到的，這些投資將超過 30% 的 IRR，即我們的內部收益率目標，並確保供應保證，而無需增加不必要的熔煉能力。

But at the same time, as you said, this demand that we're seeing this year is going to continue to grow. The other OEMs have said on their earnings calls, they're expecting this to continue to build and accelerate through the decade. And so we're also looking at selectively expanding our mill capacity to support that long-term growth, particularly in these high priority -- I'm sorry, proprietary alloys. Those hot [sectionalities], I talked about two quarters ago, those 5 of 7, not the standard nickel alloys. So we're doing very purpose-built type of capital expansion.

但同時，正如您所說，我們今年看到的需求將繼續增長。其他原始設備製造商在財報電話會議上表示，他們預計這一趨勢將在未來十年繼續增強並加速。因此，我們也在考慮選擇性地擴大我們的產能，以支持長期成長，特別是在這些高優先級的專有合金方面。那些熱門的[部門]，我在兩個季度前談到過，那 7 個中的 5 個，而不是標準的鎳合金。所以我們正在進行有針對性的資本擴張。

And these projects are being developed in partnership with our customers. They're backed by long-term agreements. They have co-funding to ensure the new capacity and capabilities align with the future needs of this market. And as I mentioned, all these products are well in excess of the 30% target.

這些項目正在與我們的客戶合作開發。他們得到了長期協議的支持。他們共同出資以確保新產能和新能力符合該市場的未來需求。正如我所提到的，所有這些產品都遠遠超過了 30% 的目標。

So it's important to remember those proprietary alloys, in many cases, we are sole sourced on those 5 of 7 in the hot section with very, very long qualification times and difficult learning curves and under LTAs for decades. So we're managing it in the short term, both from a productivity standpoint to continue to improve our output from our current asset base. And then in the long term, selectively investing purpose-built assets for those hot section alloys where we have those sole-source and long-term agreements.

因此，記住這些專有合金非常重要，在許多情況下，我們是熱處理部分中 7 種合金中的 5 種的唯一來源，認證時間非常長，學習曲線困難，並且已經遵守了數十年的長期協議。因此，我們在短期內進行管理，從生產力的角度繼續提高我們現有資產基礎的產出。然後從長遠來看，選擇性地投資那些我們擁有單一來源和長期協議的熱型合金專用資產。

On the second question, you asked me around Airbus. Yes, that's, like I said, is a great success story. I'll just remind everybody before COVID, we weren't shipping anything to Airbus at that time. We had just signed our first contract with them. We hadn't even started shipping.

關於第二個問題，您詢問了我有關空中巴士的情況。是的，就像我說的，這是一個偉大的成功故事。我只是想提醒大家，在 COVID 之前，我們當時沒有向空中巴士運送任何東西。我們剛剛與他們簽署了第一份合約。我們甚至還沒有開始出貨。

We went into COVID, Ukraine was invaded and quickly, they need to engage and get us up to speed became an imperative. And today, as I mentioned, when I say we're the number one flat rolled supplier in the industry -- or I'm sorry, in the product portfolio that we're selling them that means we're the majority supplier today. The share-based contracts allow us to expand that share in content as they continue to ramp and grow, there's mechanisms for pass-through for metal, inflation, tariffs. And we effectively, starting next year, doubling our Airbus revenue and expanding those margins. So the benefit, as you asked to the P&L comes through that stronger mix, consistent volume, expanded content and share and the higher margins from the premium titanium plate and sheet.

我們陷入了新冠疫情，烏克蘭遭到入侵，他們需要迅速介入並讓我們快速了解情況，這已成為當務之急。今天，正如我所提到的，當我說我們是業內第一大扁平材供應商時——或者對不起，在我們向他們銷售的產品組合中，這意味著我們是當今的主要供應商。基於股份的合約使我們能夠隨著內容的不斷增加和成長而擴大內容份額，並有金屬、通貨膨脹、關稅的傳導機制。從明年開始，我們將有效地將空中巴士收入翻一番，並擴大利潤率。因此，正如您對損益表的要求一樣，其好處來自於更強大的產品組合、穩定的數量、擴大的內容和份額以及優質鈦板和薄板帶來的更高利潤。

Yes. I just want to mention here, there's been -- go ahead, sorry.

是的。我只是想在這裡提一下，有——繼續吧，抱歉。

Just on your MELD comment, are you effective -- if I understood you right, are you effectively saying you're managing to the high-margin products, is that what that means?

僅就您的 MELD 評論而言，您是否有效 - 如果我理解正確的話，您是否實際上是在說您正在管理高利潤產品，是這個意思嗎？

Yes, in both the short and the long term, yes. We are optimizing the mix. So you see that in some of our aero like and other categories and growth. So we are managing to the highest value mix in the short term and optimizing the throughput and output. And then in the long term, putting purpose-built assets in partnering with our customers for that.

是的，無論從短期或長期來看，都是如此。我們正在優化組合。因此，您可以看到我們的一些航空類產品和其他類別產品正在成長。因此，我們正在短期內實現最高價值組合併優化吞吐量和產出。然後從長遠來看，我們將投入專用資產與客戶合作。

Perfect, thank you.

非常好，謝謝。

Thank you. Our next question comes from Myles Walton from Wolfe Research. Your line is now open. Please go ahead.

謝謝。我們的下一個問題來自 Wolfe Research 的 Myles Walton。您的線路現已開通。請繼續。

I was hoping to dig a little deeper into the engine mix that you have going on with MRO being 50% of total engine sales. How much of that do you have a sense as in production MRO work or in production engines being MRO versus out of production engines being MRO?

我希望更深入地了解你們的引擎組合，其中 MRO 佔引擎總銷售額的 50%。您認為在生產中有多少是 MRO 工作，或者在生產中的引擎是 MRO，而停產的引擎是 MRO？

Well, for us, as I look at our mix, we have a higher content on the next-gen engines that are out, the LEAP, the GTF. So what we're seeing is continued MRO and continued heavier shop visits where as I've mentioned, those forge dips that we make are typically the number one place that they're going to start looking if they're coming in for either for just a typical upgrade as they're continuing to increase life and efficiency as well as the normal scheduled maintenance visit. So I would -- for us, it's mainly the next-gen engines that we have the higher content. That's where those powder alloys and those proprietary alloys that I just talked about really are predominant. And that's what drives that increased efficiency and life in those engines.

嗯，對我們來說，當我看我們的組合時，我們在下一代引擎上的內容更高，LEAP，GTF。因此，我們看到的是持續的 MRO 和持續更頻繁的車間訪問，正如我所提到的，我們製造的那些鍛造浸漬通常是他們首先要尋找的地方，如果他們來這裡只是為了進行典型的升級，因為他們會繼續增加壽命和效率以及正常的定期維護訪問。所以我想——對我們來說，主要是下一代引擎擁有更高的內容。這就是我剛才談到的粉末合金和專有合金真正占主導地位的地方。這就是提高引擎效率和延長引擎壽命的動力。

Okay. And a lot of the engine OEMs are talking about mid-teens type growth into next year. Is that something that would be in line with the level of growth you'd expect in your engine end market?

好的。許多引擎原始設備製造商都在談論明年的中期成長。這是否符合您對引擎終端市場成長水準的預期？

Yes, I'd say that's in line with how we're thinking about it. We do see, as you said, they are sharing, and we see that continued growth in demand, not just in the short term but through the whole decade and because of our LTA or long-term agreements and our relationships, customers -- we have very transparent communications, we're aligned. These alloys in their hot section being a sole source or proprietary supplier, really affords us the opportunity to partner closely. And to your point, we do see the growth as they're saying next year, but also through the decade and then we're looking at investments to ensure that we're continuing to support that.

是的，我認為這與我們的想法一致。正如您所說，我們確實看到他們正在分享，而且我們看到需求持續增長，不僅是在短期內，而是在整個十年內，而且由於我們的 LTA 或長期協議以及我們與客戶的關係——我們擁有非常透明的溝通，我們是一致的。這些合金在其熱部分作為唯一來源或專有供應商，確實為我們提供了密切合作的機會。正如您所說，我們確實看到了他們所說的明年的增長，而且也看到了未來十年的增長，然後我們正在考慮投資以確保我們能夠繼續支持這一點。

Perfect, thanks you.

非常好，謝謝你。

Our next question comes from Phil Gibbs from KeyBanc. Your line is now open. Please go ahead.

下一個問題來自 KeyBanc 的 Phil Gibbs。您的線路現已開通。請繼續。

Hey, good morning.

嘿，早安。

Good morning.

早安.

Good morning. So excluding the oil and gas rights, you were ahead of the midpoint by about $10 million in the quarter for your adjusted EBITDA. Should we think about that based on some of the comments you were providing earlier that maybe half of that is operational and half of that is due to the stronger or strong defund sales you had in the quarter?

早安.因此，不包括石油和天然氣權利，本季您的調整後 EBITDA 比中點高出約 1000 萬美元。根據您之前提供的一些評論，我們是否應該考慮一下，也許其中一半是營運性的，而另一半是由於您在本季的資金削減銷售表現強勁？

Yes. I mean, I think that's fair. We've done work across all of our assets. Defense, like I said, that was really a bright spot, and the team did a fantastic job. We had -- defense continues to grow at double digit for us, and that pace across missiles, nuclear naval and rotary programs but we had some demand come in last quarter.

是的。我的意思是，我認為這很公平。我們已經對所有資產進行了處理。防守，就像我說的，那真的是一個亮點，球隊做得非常出色。我們的國防開支繼續以兩位數的速度成長，包括飛彈、核海軍和旋轉項目，但上個季度我們有一些需求。

That is going to continue through the rest of this year and into next year that really allowed us to focus and you saw some of the numbers moved around a little bit as we prioritize those shipments to those customers. But we expect that double-digit growth in Defense to continue into 2026, missiles, like systems like VAD, PAP 3 are continuing to expand. And we were blending those mature programs we have with some of these new cutting-edge programs like the MB75 and the F47. So yes, it comes from both, the productivity, which we'll continue to keep focusing on so that we can keep meeting the demand that from an A&D standpoint does continue to come in very strong.

這種情況將持續到今年剩餘時間和明年，這確實使我們能夠集中精力，而且您會看到，當我們優先向這些客戶發貨時，一些數字略有變化。但我們預計國防開支的兩位數成長將持續到2026年，飛彈、VAD、PAP 3等系統將持續擴大。我們將現有的成熟項目與一些新的尖端項目（如 MB75 和 F47）結合。是的，這源自於生產力，我們將繼續專注於生產力，以便我們能夠繼續滿足從 A&D 角度來看持續強勁的需求。

So Kim, the defense sales levels overall, do you expect those to continue in the fourth quarter? Or was some pulled into the third quarter?

那麼金，您預計國防銷售總體水平將在第四季度繼續保持這一水平嗎？還是有些被拉入第三季？

No. I mean -- so we did have some significant shipments from the forging business in the third quarter, and we will see that moderate a bit as we go into the fourth quarter. But as I look forward, the strength and momentum of the demand coming from these defense programs are going to continue to build as we come through the fourth quarter and into 2026. Now that said, Jet engine overall, you will see that uptick in the fourth quarter. As like I said, we prioritized some of our assets and shipments in the third quarter for some immediate defense needs that will start to come back, and it will be up.

不。我的意思是——我們在第三季度確實從鍛造業務中獲得了一定數量的出貨量，而進入第四季度，我們會看到這一數字有所緩和。但展望未來，隨著我們進入第四季並進入 2026 年，來自這些國防計畫的需求的強度和勢頭將繼續增強。話雖如此，就噴射引擎整體而言，您將在第四季度看到這種上升趨勢。正如我所說的那樣，我們在第三季度優先考慮了部分資產和貨物，以滿足一些緊急的國防需求，這些需求將會回升，並且數量也會增加。

And then lastly, on the net working capital side, that was a pretty strong improvement in terms of the free cash flow bridge. Where is that coming from predominantly? Is it mostly inventory? Or is it some inventory and payables? Just curious on that, thanks so much.

最後，在淨營運資本方面，自由現金流橋方面有了相當大的改善。這主要來自哪裡？大部分是庫存嗎？或是一些庫存和應付款項？只是對此感到好奇，非常感謝。

I'll tell you, I'll take that question. Part of the improvement that we saw in working capital really throughout the year, but especially in Q3 was tied to our management of accounts receivable. Now we are making progress certainly on the inventory side of the house, we've improved our efficiencies and our intensity there. But for accounts receivable, we put in place a securitization facility and that securitization facility, we did execute some of the AR factoring in the period. And so that benefited some of our working capital efficiencies in Q3.

我會告訴你，我會回答這個問題。我們全年看到的營運資金改善，尤其是在第三季度，部分改善與我們的應收帳款管理有關。現在我們在庫存方面確實取得了進展，我們提高了效率和強度。但對於應收帳款，我們建立了證券化工具，並且在該證券化工具期間，我們確實執行了一些應收帳款保理。這有利於我們第三季的營運資金效率。

But as you take a step back, though, and you look at the full year guidance when it comes to free cash flow, clearly, we're making progress, both operationally and the cash that's generated through operations, and we are making progress across the working capital, especially AR and inventory to improve that part of our cash generation. Thank you.

但是，當你退一步來看全年自由現金流方面的指導時，顯然我們在運營和通過運營產生的現金方面都取得了進展，而且我們在營運資本方面也取得了進展，特別是應收賬款和庫存，以改善我們現金產生的這一部分。謝謝。

Thank you. Our next question comes from Gautam Khanna from TD Cowen. Your line is now open. Please go ahead.

謝謝。我們的下一個問題來自 TD Cowen 的 Gautam Khanna。您的線路現已開通。請繼續。

Hey, thanks, good morning and Congrats, Don. I know we had you for a little longer, but congrats. Guys, I had a couple of quick questions. You did mention in 2026, you expect airframe sales to be up, high single digit. And I wanted to ask if you had any other preliminary color you could provide on 2026 with respect to other end markets, like jet engine, maybe if you could just opine generically on incremental margins at HPMC. Any sort of parameters you'd give us as we start to pencil in '26.

嘿，謝謝，早安，恭喜你，唐。我知道我們還有一段時間沒見到你了，但還是要恭喜你。夥計們，我有幾個簡單的問題。您確實提到過，預計 2026 年飛機銷售將上漲，達到高個位數。我想問一下，您是否可以對 2026 年其他終端市場（如噴氣發動機）提供任何其他初步信息，或者您是否可以對 HPMC 的增量利潤率發表一般性意見。當我們開始規劃 26 年時，您能為我們提供什麼參數嗎？

I'd say, as you mentioned, I'll just -- I'll talk about the guidance. I'll let Don talk a little bit about the incremental margins, which we do see expanding. But for 2026, as you mentioned, we're expecting that airframe growth to be steady throughout the year, maybe start modestly and grow as we get to the back half of the year and accelerate as the planned increase rates start to take effect. From an engine standpoint, we do see, as I mentioned, continued growth and strength in that space. We're not giving specific guidance on every market.

我想說，正如你提到的，我只會——我會談論指導。我讓唐稍微談談增量利潤率，我們確實看到增量利潤率在擴大。但正如您所提到的，對於 2026 年，我們預計機身增長將在全年保持穩定，可能一開始會適度增長，到下半年會增長，並隨著計劃的增長率開始生效而加速。從引擎的角度來看，正如我所提到的，我們確實看到該領域的持續成長和實力。我們不會針對每個市場提供具體的指導。

We wanted to share some things around airframe because there was a lot of questions on that last quarter. But as we're finalizing our plans, we'll give official guidance in the first quarter and share all of those numbers. But that said, we are seeing and anticipate demand for jet engines to remain exceptionally strong through next year and into 2027 based on our order book and what we see already today.

我們想分享一些有關機身的事情，因為上個季度有很多問題。但隨著我們最終確定計劃，我們將在第一季提供官方指導並分享所有這些數據。但話雖如此，根據我們的訂單和今天看到的情況，我們看到並預計噴射引擎的需求將在明年和 2027 年保持異常強勁。

Don, do you want to talk about margins at all?

唐，你想談談利潤嗎？

I would love to. So to your point, yes, we've been seeing some really excellent performance around our incremental margins. Year-to-date, we're approaching 50%. And so we're really pleased with that. It's not a surprise to us.

我很樂意。所以就你的觀點而言，是的，我們在增量利潤率方面看到了一些非常出色的表現。今年迄今為止，我們已接近 50%。因此我們對此感到非常高興。這對我們來說並不意外。

We've talked in the past about what our expectations were over time when it comes to incrementals. The standing rule that we've shared with our standing guidance that we've shared with you guys is assume incrementals live in the 30% to 40% range. Think about 40% as aligned to HPMC expectations, 30% more aligned to the A&S part of the house, but we expected as our mix was improving as price was being captured as efficiencies were being delivered that our incrementals would improve. Now we've seen that in the first several quarters of this year. And the question -- the basic question is, okay, is this an indicator of a new incremental that we should be modeling to?

我們過去曾討論過，對於增量，我們的期望是什麼。我們與你們分享的常規指導原則是假設增量在 30% 到 40% 的範圍內。認為 40% 與 HPMC 預期一致，30% 與房屋的 A&S 部分一致，但我們預計，隨著我們的組合不斷改善、價格不斷上漲、效率不斷提高，我們的增量也會隨之提高。我們已經在今年前幾季看到了這一點。而問題——基本問題是，好吧，這是我們應該建模的新增量指標嗎？

I would say at this point, we would continue to recommend the 30% to 40%. In the future, in the near future, I would expect management will share with investors and analysts if that margin needs to be increased to a higher level. But I can tell you from my standpoint, while I'm really happy with the performance we're seeing when I'm modeling the business, I still use that 30% to 40% range. And -- but I do expect that we will see the improvement that we have indicated as time unfolds here.

我想說，在這一點上，我們會繼續推薦 30% 到 40%。在未來，在不久的將來，我預計管理層將與投資者和分析師分享是否需要將利潤率提高到更高的水平。但我可以從我的角度告訴你，雖然我對我們在建模業務時看到的表現感到非常滿意，但我仍然使用 30% 到 40% 的範圍。而且——但我確實希望，隨著時間的推移，我們會看到我們所指出的改善。

Thank you. Our next question comes from Andre Madrid from BTIG. Your line is now open. Please go ahead.

謝謝。我們的下一個問題來自 BTIG 的 Andre Madrid。您的線路現已開通。請繼續。

Hey everyone, good morning and Don, congratulations. Again, I'm glad we have you for one more, but it's been a pleasure. So you called out Naval Nuclear is one of the main drivers at defense, but maybe could you just give us a status update there on the zirc supply chain and how things are going there vis-a-vis China?

大家好，早安，唐，恭喜你。再次，我很高興您能再次來到這裡，這真是一件令人愉快的事。所以您說海軍核武力量是國防的主要驅動力之一，但您能否向我們介紹鋯石供應鏈的最新情況以及與中國相比的情況？

Yes. So obviously, the news continues to change depending on if we have a trade deal or not. But I'd say from the supply chain side on the zirc product, it's been very stable. We haven't seen any impacts or anything that is concerning from our standpoint. I will mention that -- I think I've mentioned this in the past, we've also built stockpiles, both the raw materials as well as finished products to make sure if there's any intermittent impacts that, as we can see through some of these trade negotiations that we're able to maintain that and manage that.

是的。因此，顯然，新聞會根據我們是否達成貿易協議而不斷變化。但我想說，從鋯產品的供應鏈方面來看，它非常穩定。從我們的角度來看，我們沒有看到任何影響或任何令人擔憂的事情。我要提一下——我想我以前提到過，我們還建立了庫存，包括原材料和成品，以確保如果有任何間歇性影響，正如我們透過一些貿易談判所看到的那樣，我們能夠維持和管理它。

And so we're in a really good position from the supply chain side of things. When I look at the market, though, I'm expecting positive momentum as we go into the Q4. We used these last couple of quarters, frankly, to and upgrade some of our equipment with some customer-funded capital because, again, our customers are looking at some of our capabilities and seeing tightness with the demand that they've got coming both nuclear, defense as well as energy, gas turbine energy. So we did put some upgrades. So we do anticipate to see some of those benefits starting to come through and the demand fundamentals are solid.

因此，從供應鏈方面來看，我們處於非常有利的地位。不過，當我觀察市場時，我預計進入第四季將出現正面的勢頭。坦白說，我們利用最近幾個季度的時間，用一些客戶資助的資金升級了我們的一些設備，因為我們的客戶正在關注我們的一些能力，並且看到他們對核能、國防以及能源、燃氣渦輪機能源的需求緊張。所以我們確實進行了一些升級。因此，我們確實預期其中一些好處將開始顯現，而且需求基本面穩健。

So we're working on new qualifications and new material to get qualified for those applications as well.

因此，我們正在研究新的資格和新材料，以獲得這些應用的資格。

Got it. Got it. And in terms of the stockpile, if you can share -- I mean how much -- how long of demand does that reflect those stockpiles? Like how? Is it like a year or two years?

知道了。知道了。就庫存而言，如果您可以分享的話——我的意思是多少——這些庫存反映了多長時間的需求？比如怎樣？大概是一年還是兩年？

I would say we generally on finished products, we have almost two years, probably around two years of inventory. And on the raw material side, we have over a year of materials. You have to remember, these raw materials are not -- especially the raw materials for zirc, it's not a very high -- and it's only half. So let me quantify, it's only half of the raw materials that we put in to make our zirc product and it's not a very high dollar amount. And so we're able to hold large amounts of inventory in that raw materials.

我想說，我們一般來說，成品有將近兩年，大概兩年左右的庫存。在原料方面，我們有一年多的材料儲備。你必須記住，這些原材料並不——尤其是鋯的原材料，價格不是很高——而且只有一半。所以讓我量化一下，這只是我們生產鋯產品所用原料的一半，而且金額也不是很高。因此我們能夠儲存大量原材料庫存。

And as I said, we haven't had this jump to pull into that or use any of that. We're actually -- we're maintaining and managing it. We haven't seen disruptions this year. There's been good flow, and it hasn't been threatened as of yet. But again, if there's any bubble or any momentary disruption, I think we're in a good position to maintain through that.

正如我所說的，我們還沒有實現這一目標或利用其中任何一個。我們實際上正在維護和管理它。今年我們還沒有看到任何中斷。流動性一直很好，目前還沒有受到威脅。但同樣，如果出現任何泡沫或任何暫時的中斷，我認為我們能夠很好地維持下去。

Got it. Got it. And if I could just squeeze one more in. I mean, you said MRO is roughly half of engine. What was that percentage previously, pre-COVID and whatnot?

知道了。知道了。如果我能再擠進一個就好了。我的意思是，您說 MRO 大約佔引擎的一半。在疫情之前，這個比例是多少？

Yes. Pre-COVID, I would say, typically, what our (inaudibel) 20%, 25%. And we've seen that accelerate rapidly and you know all of these things, Andre, as you look at shop visits and the airlines waiting on planes to get delivered to some of those older planes are staying in service longer.

是的。在新冠疫情之前，我想說，通常我們的（聽不清楚）是 20%、25%。我們已經看到這一進程迅速加速，安德烈，你知道所有這些事情，當你看到商店訪問量和等待飛機交付的航空公司時，一些老舊飛機的服役時間會更長。

I think the other aspect is the next-gen engines. They're continuing to drive lifing and efficiency, so they're doing upgrade packages. So all of those are coming to bear. And again, they all hit squarely into that hot section, those forge disks, that have so much wear that basically provides a threat for the engine and the plane to get off the ground. And so we are seeing, like I said, a substantial increase.

我認為另一個方面是下一代引擎。他們正在繼續推動生活和效率，因此他們正在進行升級包。所以所有這些都將產生影響。而且，它們都直接撞擊到那個熱部分，那些鍛造盤，磨損嚴重，基本上對引擎和飛機起飛構成了威脅。因此，正如我所說，我們看到了大幅的成長。

And I will talk for the OEMs. They're sharing it publicly, but they're sharing with us that they're seeing this to continue through the decade as we go forward and these engines get into their first and second shop visits.

我將代表 OEM 發言。他們公開分享了這一情況，但他們也告訴我們，隨著我們繼續前進，這些引擎將進入他們的第一次和第二次維修店，他們預計這種情況將持續十年。

Kim, that's super helpful color. I'll leave it there.

Kim，這顏色超級有用。我就把它留在那裡。

Sure, thank you.

當然，謝謝。

Thank you. Our next question comes from Seth Seifman from JPMorgan. Your line is now open. Please go ahead.

謝謝。我們的下一個問題來自摩根大通的 Seth Seifman。您的線路現已開通。請繼續。

Thanks very much, good morning. Nice results and nice remarks. And Don, thanks for everything. So I guess just starting out, you mentioned in the HPMC business kind of a change in the structure of a contract, I think, something that goes -- that moves it more towards just recognizing your value add on work rather than all the materials. Is there -- do you anticipate more happening there? And kind of -- what kind of determines when that happens and when it doesn't?

非常感謝，早安。很好的結果和很好的評論。唐，謝謝你所做的一切。所以我想，剛開始時，您提到了 HPMC 業務中合約結構的一種變化，我認為，這種變化更傾向於認可您在工作中增加的價值，而不是所有材料。您預計那裡還會發生更多的事情嗎？那麼——什麼決定了什麼時候會發生這種情況，什麼時候不會發生呢？

Seth, it's Don. So let me take that one. You're right. In the quarter, we highlighted because we were wanting to explain the movement in our jet engine revenue sequentially. We highlighted that we had a contract, a particular contract that we had converted from a materials and conversion structure, which means we would buy the material and convert the material and sell the product to our customers.

塞斯，我是唐。所以讓我來選擇這個。你說得對。在本季度，我們強調這一點，因為我們想按順序解釋噴射引擎收入的變動。我們強調，我們有一份合同，一份從材料和轉換結構轉換而來的特定合同，這意味著我們將購買材料、轉換材料並將產品出售給我們的客戶。

We converted at the request of our customer, that contract to a conversion only. What that means is we don't buy the material, they provide the material. And the long and the short of that is you have less revenue that you recognize. It doesn't negatively impact your bottom line, and it can actually be a help to your margins. So that's the background there.

我們根據客戶的要求將該合約轉換為僅轉換合約。這意味著我們不購買材料，而是他們提供材料。總而言之，您的收入比您確認的要少。它不會對您的底線產生負面影響，實際上還可以幫助您提高利潤。這就是那裡的背景。

Is it a trend? Well, it's not unusual in our business to have conversion contracts. We don't see a trend that the material contracts will transition to conversion contracts. It was, I would say, generally an isolated situation where it shifted over. That particular contract had about a $10 million effect on revenue from Q2 to Q3.

這是一種趨勢嗎？嗯，在我們的業務中，轉換合約並不罕見。我們沒有看到重大合約轉變為轉換合約的趨勢。我想說，這通常是一種孤立的情況，但後來發生了轉變。該特定合約對第二季至第三季的收入產生了約 1000 萬美元的影響。

That particular contract will be with us through the end of this year. So you'll see that same effect in Q4. But no, not a trend and no messaging around this particular change.

這份合約將持續到今年底。因此，您會在第四季度看到相同的效果。但事實並非如此，這不是一種趨勢，也沒有關於這一特定變化的任何資訊。

Excellent. Great. And then I think this probably follows up a little bit on Andre's question, but specialty energy in the slides, you talked about it being kind of a longer-term growth market. In recent years, there's been a little bit of growth, but not a lot and down this year. And so how do you think about the time frame for that? And is it sort of linked to -- should we think about it more linked to developments in nuclear energy or anything else?

出色的。偉大的。然後我認為這可能與安德烈的問題有點相似，但在幻燈片中，您談到特種能源是長期成長市場。近年來，有所成長，但今年成長不多，而且有所下降。那麼您如何看待這個時間框架呢？這是否與——我們是否應該認為它與核能或其他任何事物的發展有更多聯繫？

Yes. I would say we're going to start to see growth in that market segment next quarter, and that's going to continue to accelerate as we go into 2026. For us, and you're right to point that out, it's both. It's both gas turbine. And I'd say that is going to be in the immediate the next few quarters.

是的。我想說，下個季度我們將開始看到該細分市場的成長，而且到 2026 年，這種成長將繼續加速。對我們來說，您指出這一點是正確的，兩者皆有。兩者都是燃氣渦輪機。我想說這將在接下來的幾個季度內實現。

You'll see that will be what's behind that growth, and you'll see that continue to increase. We are in the process of developing some new materials there and getting qualified. And so there is significant demand there.

您將會看到這就是增長背後的原因，您將看到它將繼續增長。我們正在那裡開發一些新材料並獲得認證。因此那裡的需求很大。

I'd say on the nuclear side, as you said, we are in a unique position. We're one of the only western suppliers of some of the zirconium in the Trax or tubing form that is really needed for the commercial nuclear facilities globally. And so that business, as I mentioned, we did some upgrades. We put some capacity freed up some bottlenecks there. And so we're going to see that continue to grow.

我想說，在核問題方面，正如你所說，我們處於獨特的地位。我們是全球商業核設施真正需要的 Trax 或管狀鋯的唯一西方供應商之一。正如我所提到的，我們對該業務進行了一些升級。我們釋放了一些產能，解決了那裡的一些瓶頸。因此我們將看到它繼續增長。

I know they're trying to fast track some of those nuclear facilities and bringing them back online. And we're seeing that demand come in now in orders for that today. So both of them, but I'd say the gas turbine really being driven by the data centers and the demand for energy.

我知道他們正在努力加快一些核設施的運作並使其恢復運作。我們看到今天的訂單中出現了這種需求。兩者都是，但我想說燃氣渦輪機實際上是由資料中心和能源需求驅動的。

And for both, this is a market that we don't spend a ton of time. We talk a lot about aerospace. But it really leverages our differentiated materials, our breadth of materials, zirconium, hafnium, as well as titanium and nickel products and those capabilities. I know we've mentioned it, I probably underemphasized the capabilities of our assets and the flexibility of those to be able to flex into some of these markets where there are very few, if any, in the Western world that have those capabilities in that product form. So we are seeing a lot of demand.

對於這兩者而言，我們都不會在這個市場上花費大量時間。我們談了很多有關航空航天的話題。但它確實利用了我們的差異化材料、廣泛的材料、鋯、鉿以及鈦和鎳產品和這些能力。我知道我們已經提到過，我可能沒有充分強調我們資產的能力和靈活性，以便能夠進入一些市場，而西方世界很少有（如果有的話）以該產品形式具備這些能力。因此，我們看到了大量的需求。

I'm very excited about the future energy for us. I do think it's a small part of our business today, but I do see that growing, and it's a very profitable part of our overall portfolio.

我對我們未來的能源感到非常興奮。我確實認為這只是我們目前業務的一小部分，但我確實看到它正在成長，而且它是我們整體投資組合中非常有利可圖的一部分。

Excellent. Thanks very much.

出色的。非常感謝。

Thank you. We currently have no further questions. So I'll hand back to Kim Fields for closing remarks.

謝謝。目前我們沒有其他問題。因此我將把發言交還給 Kim Fields 做最後發言。

Thanks. Well, thank you, everybody, for the call today. As I said, we had a fantastic quarter. I'm very pleased with the results that we've demonstrated in the third quarter and the momentum that we see going into the fourth quarter and frankly, into 2026. Next quarter, we'll share our official formalized guidance.

謝謝。好吧，謝謝大家今天的來電。正如我所說，我們度過了一個非常棒的季度。我對我們在第三季度取得的成果以及我們在第四季度乃至 2026 年看到的勢頭感到非常滿意。下個季度，我們將分享我們的官方正式指導。

But just to close on, we're going to stay focused on where we're most differentiated, those advanced materials and forgings for aerospace and defense. The next phase is really around growing our content per platform, scaling those co-funded investments and improving operational leverage. We continue to see that mix grow. And A&D is going to continue to grow faster probably than our other markets as we go into next year and that momentum will continue from Q4 to 2026.

但最後，我們將繼續專注於我們最具差異化的領域，即用於航空航太和國防的先進材料和鍛造件。下一階段實際上是圍繞增加每個平台的內容、擴大共同資助的投資並提高營運槓桿。我們繼續看到這種混合的成長。進入明年，A&D 市場的成長速度可能仍會高於其他市場，而這種勢頭將從第四季度持續到 2026 年。

Over time, like I said, the bottom line is our transformation is working. We're seeing that in both our margins, our mix and our overall growth. Now it's really about compounding that performance for the rest of this year and into 2026.

隨著時間的推移，正如我所說的，我們的轉型最終正在發揮作用。我們從利潤率、產品組合和整體成長中都看到了這一點。現在真正要做的就是在今年剩餘時間和 2026 年繼續鞏固這一業績。

Thank you guys for your time. I really appreciate it, and I'll talk with you later.

謝謝你們的時間。我真的很感激，我稍後會和你談談。

This concludes today's call. Thank you for joining. You may now disconnect your lines.

今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路了。