Okay. Thank you, everybody. We're going to move to the Q&A portion of the program. Couple things. We've got some excited members here. Raise your hand. We've got some mics here. We can hand those out. Make sure to identify yourself, both your name and your affiliation. That will help us for the record. We've got a couple of questions coming in online. To start off, why don't we start in the front, our brand new analyst, John from Citi.
Thanks. Hey. Thank you for taking my question.
Oops, it's not working.
Hey. Thank you for taking my question. John Godyn at Citi. Kim, when you were talking about the guidance framework, you described it as guideposts, not the full limit of ATI's potential. I was hoping that you could elaborate on that, we could explore that for a minute. Separately, obviously, the last guidance was hit a year early. Kind of what would have to happen to hit the new guidance a year early?
I like that, looking ahead already, so I appreciate it. Yes, so we did hit our guidance a year early. As Rob said, I think it was the first earnings call, the first question, "Hey, what are you going to do about that?" He's like, "Yeah, I just got here, so give me a minute." I wanted to be clear because this growth that we talked about in these markets does not stop at the end of 2029. As we just shared, we're making some very important investments. We expect that to continue to expand and grow. I shared the one example. We're still winning share. That sixth alloy is a great proof point of, there's still more growth for us to do in this space, not just with the markets, which are phenomenal, and Marty talked about that, but additional share, additional products.
We're seeing that across not just the powder billets and those five hot sections, but also in premium quality materials, some of our advanced nickel materials. As OE continues to ramp and then MRO really starts to kick in at the end of this, we do see that growth continuing past 2029. Now, to your point, what would pull that in? There's a couple things that I think, as I look at our markets, that could really drive that. One, with airframe, we've got build rates that I would say are fairly conservative. They're right around the consensus spot, maybe a little bit below that number. If that were to accelerate, that would help on the narrow-body. Let's be honest, wide-body hasn't really come back yet since before the pandemic.
If that were to start to increase, I think Marty's slide had up there, anywhere from three to five more titanium goes into those airframes, but the engines take a significant amount of our material as well. So that would be a really strong tailwind to allow us to be at the top end of that range or to do that sooner. Defense, right now, our guide has not built in a lot of the increased defense spending that have been talked about. Most of the programs that we're on are funded programs, so in the event of a CR, we're still very, very confident in the numbers we put out. But, there are things like missiles that are continuing to grow. I shared on some of our earlier calls, we've already taken some orders for some missile work.
We've got significant, kind of seven, eight-fold above that of inquiries that have come in as the industrial base starts to ramp up. That, with the replenishment and restocking, could really create some tailwinds. Sorry about that. Then, specialty energy. I think we've got some significant positions, especially around nuclear energy, and we're expanding that gas turbine space. So, I think each of those guideposts, again, I think are based on pretty reasonable assumptions, but if we see some acceleration in any one of those markets or continued share wins, I think that would help us get there a lot quicker.
We go right back here. Rich?
You can hear me, right? I was kind of interested in your point about share gains. I was kind of interested first if you could tell me, one, is there further opportunity for share gains out there with [Pilgrim]? Second is, what really drives that? I mean, for example, is it pricing? What's driving ATI to gain share, as we think about this going forward? Thanks.
Yeah. Thanks, Rich. As I think I just mentioned, and Marty talked about as well, there are still significant share gains. I will share with you and the whole group, we don't typically win those on price. We're going to win on our performance, our quality, our service, our technical capabilities in those differentiated areas. The sixth alloy is a very open example of that, but we've won share gains across multiple areas of differentiated growth. I think one that I talked a little bit about in the past is around our premium quality titanium used for jet engines. We're one of two in the world that are qualified. There's been some recent issues and challenges with that other supplier, and it's really accelerated the good demand for our products.
In that case, I know we've talked about this, where we may have a share and a contract, most of our contracts contain caps, mainly for us to maintain that surety of supply for our customers. As you start to exceed those caps, then that opens up another opportunity for us to talk about what does that agreement look like going forward. So, there is still significant share gains. As I go into every air show, I think this is going to be the year when things start to settle and people are pretty well aligned, and yet there's always opportunities where people are coming and looking for those expertise or capabilities to help them to make sure that they are continuing to keep up with the build rates. Defense, space, all of those, again, are growing and using these fungible assets.
We do have increasing demand across the whole portfolio, which is really underpinning the investments we've talked about as well as those commitments. That's what it looks like for us. I can talk more detail, but generally, we're getting the market growth and then on top of that, these share gains and new market opportunities, and new product opportunities. You heard Airbus, seven times growth with them since 2021, and a lot of that came from, some of you know, we didn't have a contract with them before the pandemic. We came out of the pandemic, we had not been qualified yet. Russia invaded Ukraine, and all of a sudden, we were in acceleration mode. Today, in many of those products, we're over 50% share.
That is just another example on top of the one I shared here that we've got these opportunities to come in and provide very, very high-quality precision material to meet those very demanding performance requirements.
Thanks, Kim. Seth.
Hey, thanks. Seth Seifman from JP Morgan. I guess to start out, could you tell us how much of the jet engine revenue now comes from the five, soon to be six alloys, and then how we think about that contribution to the overall growth in the coming years?
Yeah. I will let Rob jump in here so that he can answer a couple questions. Yeah, it is a portion of that, but it is not all of that jet engine-
Right
on revenue. As I mentioned, premium quality titanium, we do hot-die forgings as well. It is not just in the very hot section. We are also doing, if you look at an engine, it has got titanium, it has got more conventional nickel alloys, and then it has these very high temperature powdered alloys. We are participating in all of those applications. That picture Marty showed of the jet engine could have lit up blue all over the place because we are participating in lots of other areas as well. But Rob, I do not know if you want to add any color to that.
Yeah. If you look at the, when we do the disclosure with the revenue by segment, kind of in that nickel space,-
Yep.
it is a majority of the nickel within the HPMC side. So, kind of just over that 50% kind of range right now.
Cool. That's super helpful. Maybe as a quick follow-up, I don't mean this to be a downer question at all, because the tour was awesome today, and thank you. I don't doubt that the customers want to work with you, and they're obviously assigning you share, which is great. When you think when the customers talk theoretically about how they want to run a business and avoid single points of failure, how do you make sure that you work with them to make sure that you maintain your position as the only supplier of these products?
Yeah. I mean, I think it's a really important part because to your point, everybody wants diversity of supply. The problem is these differentiated capabilities that we provide are very, very difficult to replicate, and they're going into applications that, as I mentioned, the cost of failure is very high. When you just think about the technical capability, the qualifications, and the decades of consistent supply at scale, it's very difficult for them or anyone else to come into this space and supply materials. I was sharing, we were talking last night with some folks, and in this space, as we're doing this, we're also partnering with them, and I talked about that on the technical development. Many times, the equipment we're putting in, I shared someone was saying, "Hey, somebody else could buy a VIM," for example.
Those VIMs we put in, just to share, we don't buy the off-the-shelf control systems. We put and design and program our own control systems, our own sensing equipment. There are pieces of that equipment we design all in-house and build, and nobody else gets to see it. Just the equipment alone is a very significant barrier. I think the reason customers continue to want to work with us, and I do hear this, Marty, you can jump in, our technology and our expertise, you got to meet some of them today, they're heads and shoulders above what they see in other companies. When they have a really hard problem, that whole where we earn that first call, that's very true.
They're calling us and they're bringing things to us, either we want to go design this next engine platform, we want to do this next missile design. They're coming to us. In some cases, I shared, we had even the regulatory agencies coming to us and saying, "We want to help characterize these types of defects. Can you partner with us to do that?" That's the technical reputation and quality reputation that we have throughout the industry that we bring every day, that customers want to partner with us to tap into. I don't know, Marty, you want to add anything to that?
No, that is exactly right. When we talk to our customers, even with this sixth alloy, the amount of time it took for us to get into production, qualify, and we are ramping, it is impressive. I do not know if there is any other business in the world who could have gone as quick as that to secure the supply chain. I think that was around your question is, how do we ensure that we do not have this single point of failure? I believe we look at the capital installment, just like the powder facility. We have a couple of different powder facilities in different locations, so some of that is de-risking it from a location standpoint, and we have presses that can do similar things. So there you got some capability requirements that, when you are sole source, you do have some operations that can pick up if something happens.
Yeah, good point.
Okay, thank you. We actually have a number of questions online. I am going to grab one on the technical side. This might be good for you, Marty. Question is, is the new jet engine technology making engines cooler, potentially reducing the benefit of your differentiation?
Yeah, the engines are not getting cooler. I can tell you that. These next-generation engines, they have to become hotter, and that is how they become more fuel efficient, how they have to meet these emission requirements. So if you get these engines have specific requirements, not only from world standards of emission, but if you think about all the volatility in gas that we have seen just over the last little bit, the aerospace industry demands these requirements because it is really helping them reduce that risk. The engine guys are always going to innovate, and where they innovate, they get better performance. So driving things like casting technologies, and we do not do castings, but that helps the performance of the overall engine. But the heat and temperatures that these engines are running at are required for the emission and the fuel efficiency.
Thanks, Marty. Let's go back to in room. Sam?
Oh, sorry, Sam.
It is fine. Sam McKinney from KeyBanc. Referencing the line on slide 24, once you are in, that customers prefer you in the dual source that you are on the sixth alloy, it stands to reason you would eventually like to take more share and maybe become sole source on that one. First, is that true? And second, assuming it is, talk us through how you might plan to get there and what the typical timeframe for winning more alloy share on a platform has been like in the past.
Sure. Certainly our goal is always to continue to grow and take share, so I appreciate that opening. For that alloy in particular, one of our other strategies are to continue to integrate both at upstream advanced alloy melting and producing with our downstream isothermal forgings. And so as I look at it, our target would be to continue to grow that share so that we are completely supplying that material internally for those parts, those isothermal forged parts. If I look at what that could mean, that could be doubling our current position on this alloy. And to Marty's point, just to remind everyone, we started this at the beginning of this year, and we have already increased some of our share position there, and it is because of that surety of supply, make sure we are supporting the overall supply chain. So what would that timing look like?
Sometimes, and I shared a little bit on that other example, something unusual happens. There's a quality issue, or maybe the other supplier can't step in when there's a need, or an airframe or ramps, or MRO demands continue to raise, or I hear a lot about upgrade packages, right? All of a sudden, those are opportunities for us to come in, and that what has to be true is really pervasive through our company of saying, "What do we have to do to be able to meet and rise to the challenge that's been laid out in front of us?" Many times when we're able to do that, those doors open, and we're able to move that share position. I do think, we talked about isothermal forgings, just to remind everybody, it's more than two years of lead time right now on those products.
It's been like that pretty consistently for over a year, a year and a half. Premium quality titanium has just shot out as well because of some of these challenges that are going on. I do look not just in the hot section, but across our whole portfolio for those opportunities. Our team, I tell you, the key is our team. They are the ones that come together, and they don't let It isn't the standard answer, which from what I hear, may be what other customers hear from other suppliers. We do say, "How do we pull out the stops? How do we do the qualification in the example of this alloy? How do we get the testing done? How do we accelerate that?" Because we know we got to hit a mark to meet that need.
Customers know that, and they have that confidence in us as well. Those keep opening doors. We've got great opportunity to keep growing. There's some other fun spaces, like space continues to expand, and we're increasing our content across the company in the different applications we're doing there, as well as some of the other emerging technologies that are coming out.
Thanks, Kim. Let's go with Myles here. Thank you, Andre.
Thanks so much. Myles Walton, Wolfe Research. Kim, you talked about the four differentiators at the company. Three of those, you have laid out some of the investment strategies. You just talked about isothermal having the longest lead time, but I did not see the investment strategy there. Maybe just talk about why that is, and that is absent. Rob, I think the implied cash flow for 2029, you have to hold net working capital constant for the next three years. For the last three years, you grew it by $200 million. How are you going to do that?
All right, great. I will touch on your first question. I am glad you gave him the hard one. Isothermal forging. Yes, when we look at the overall industry balance, there is probably the need for one or maybe even two new forges by the end of the decade. We are in a position where we are one of only two qualified suppliers. We are continuing to look at that and talk through that and making sure that we are thinking about what is the right timing. One of the things through Elevation, which I believe I mentioned, that hurdle rate is important, but also the timing. We want to make sure these investments are aligned to exactly when that demand hits, because putting in an early means you have underutilized assets. That is the balance as we are thinking through and talking with our customers.
It is very important that before we start a project, that we have got those firm customer commitments that are going to support that once it is in place, both for the revenue stream, but also for the qualification, which in many cases can be lengthy.
Yeah, in regards to the inventory, I think if you heard my opening, I said we have some room to go with our managed working capital. If you look at where we are at, inventory specifically, I talked about that SIOP process, getting more efficiency with our production planning and just a lot of the work going into that. When you look at where we are at $1.7-ish billion of inventory, that is not the efficiency that we are targeting. When you think about how we grow that kind of cash flow, putting the focus, and we talked about using Elevation is going to be the focus area that we put on driving that managed working capital efficiency. Is it going to be easy? No. But is it our focus area? Absolutely.
Okay. Andre?
Yep. Thanks. Andre Madrid with U.S. Bancorp. Staying on the topic of isothermal forgings, you mentioned you are the only provider that is across all three OEMs. Obviously, one of those is a bit newer to the mix too, relatively speaking. I guess just, can we maybe talk about what that mix looks like currently across the three and how it should probably trend through towards the end of the decade?
Sure. Yeah. As we look at it, and we have grown our position. I have talked a little bit in the past about the work we have done on the GTF and helping to support the AOGs there. As I look at the mix from those three, it is pretty evenly balanced, distributed between all three engine OEMs. How does that mix change as we go forward? Some of it will be driven by demand of single aisle build rates versus wide body. That is one thing that we are watching. That will be the underlying drivers. We are thinking about those two. There is always share gains. There is always opportunities where they need specific parts or they need an upgrade package that suddenly brings a part into higher demand.
Those are the kinds of conversations that we have with our customer and bring those opportunities, as we were just talking about, for share gains.
Yeah, that's good. Let's go here. Doug.
Okay. Doug Harned from Bernstein. Is this on?
It's not on again. Hi, Doug.
Okay. How are we doing? No? Yes.
Good.
We can hear you.
Okay, great. Try another one? Okay. All right. Still Doug Harned from Bernstein. An important part of the story that I think you talked about was the growth in MRO demand on the next-gen engines. I am interested in, as you play this out and look at your growth, what fraction should we see coming from the MRO side as opposed to OE? You put a number up there of 12% CAGR starting in 2029 through 2036. That would require massive increases in MRO capacity to do it. How do you think about your growth plans? How much is aftermarket? Where do you expect that to go?
Sure. I think I am going to let Marty take this since that was his slide, and I will let him take a crack at it.
That is great. When we think about the MRO and the new build split, as you kind of move out, you do see the installed base of engines starts to ramp up. You get the next generation of engines, and then the service starts to come in. That is growth, and we see that growth. When we try to think about the split between MRO and the OE, we are agnostic. Our materials and our parts, they service both sides, and the margin perspectives are similar. It does not change as you kind of switch in and out of those two. We really see that transition going from growing with the market, and then this growth is really a strong projection going out into 2030 and beyond.
Thanks, Marty. Let's go to David over here. Thanks, Mara.
Thanks. David Strauss from Wells Fargo. First question, I think you said specialty energy is going to double as a percent of sales. If you could just lay out also what you're assuming within that 10%-12% for airframe, engine, and defense. That's the first question. The second question, your implied incrementals, I think through 2029, are around 50%, right around 50. Rob, could you break that out between kind of the legacy capacity versus new capacity? Is the new capacity incremental kind of in that period somewhat depressed because you're just ramping up? Thanks.
Sure. I'll take the first part of the question, then Rob, I'll let you take that second half. From a commercial energy, yes, our target is to double the revenues and percentage there. The predominant portion of that today is nuclear energy, both defense, that's in the energy space, although we also serve the defense markets as well. We do see significant amount of growth. I think Marty mentioned 30 companies have made commitments to increase their nuclear energy. We support all of those. Just to add some detail, being the only independent supplier, the other two have their own commercial nuclear businesses. Any other companies that are looking that maybe don't want to buy from their competitor are coming to us and looking for that long-term partnership and supply. We're doing both new builds as well as refurbishments, refueling, restarts, and that's all going on.
That's a big driver in there. I think the other piece of that is the industrial gas turbines. I mentioned the interconnectedness. All four businesses are operating and participate in that market. We do see that continuing to grow. That market has changed. Those dynamics have changed pretty significantly. Before, it used to be more boom or bust, municipalities buying, so they were more transactional purchasers for us. With this change to very long backlogs into 2033, Google and Meta and others placing orders and positions on their order book, they're looking for that surety supply, very similar to where an aerospace company is. That's providing opportunities for us to partner, to have deeper relationships, to think longer term with those companies.
Both of those come together and they help balance the growth in energy as well as supporting considerable growth on the defense side as well.
Sorry, and the airframe, what's the consensus pacing in that?
Yeah. On the engine side, it's going to be low double digits, in line with market for the most part. Marty shared a little bit about some of the market. We do see OE and then MRO accelerating outside this 2029 base, mainly for next-gen engines, because if you remember, that's where our content is higher than on those legacy engines. On the airframe build rate, we are in line with consensus, actually maybe a couple lower per month, if you think about that. So, I think a fairly sound base to go forward. Where we might differ is that we have a little bit of a longer horizon on some of those build rates than where consensus is at over the three years, but pretty close to that number when you're in 2029.
Yeah. In regards to the incrementals, David, I think you've got it. You're thinking about it the right way in terms of there is, with the two new projects that we announced today, the zirconium project as well as the nickel powder we put, approximately 50% incrementals on that. But as we work our way through the capital deployment, the commissioning startup, the qualification, and as we're ramping, there is some time in that ramping where you have slightly muted incrementals as you kind of work through that efficiency process. So, all of our projects from a new organic growth CapEx are scheduled to come online at various spots within 2028. Some of them will be at full run rate early 2028, and some of them coming online at run rate towards the end of 2028.
Okay. We've got another one online that we'll take here. From a top line and bottom line perspective, is 2029 looked at as a peak for you? Explain what you see beyond 2029.
Let me be clear. It is not a peak. It is a waypost, it's a guidepost. It's a way station up the mountain. I do think this growth continues. We have significant positions. These markets that we've talked about today, aerospace, defense, specialty energy, all have significant mega trends that are happening around the world that are driving growth. We are investing. We are well-positioned. So that growth just continues on forward.
Ken.
Yeah. Hi, thanks. Ken Herbert with RBC. I just wanted to ask a question on IGT markets. There's been just a lot more, I think, volatility or changes in sentiment on that market more recently. I'm guessing you haven't seen anything, obviously, in terms of your customers and their sort of longer term views, Vernova and others. But as you just look at some of that volatility and look at the backlogs there, are you at all thinking any differently about durability of those backlogs with some of the more recent commentary or concerns that there could be some overbuild, especially relative to aerospace?
Well, so on the energy side, specialty energy, as I mentioned, a lot of that is related to the nuclear power. But maybe more broadly to your point, there's lots of headlines around data centers and MRO and aircraft retirements. We have seen no impact. And in fact, most of our customers, I shared one quote when they said, "Hey, if you could double our capacity and production shipments today, we would take all of it." So, we've seen no abating of any of that demand. For a lot of those data centers you mentioned in particular, we don't look at energy and the growth there as being a data center story, right? Energy demand continues to go up. We're headquartered in Texas. Texas is a perfect example of the needs just continuing to rise. But this is a global phenomenon.
Both grid stability and energy needs are driving increased demand. When I look out on energy or if it is airplane builds, really long, 8- 10-year kind of backlogs. We have over $4 billion worth of backlog ourselves. We do not see any abatement or any concern as I am looking at our demand and our growth rates at all.
We will go Pete.
Thank you. Pete Skibitski, Alembic Global. Maybe some more color in commercial nuclear. I think Westinghouse is one of the captive suppliers. I want to get a sense, do you guys have content with Westinghouse in utility scale, or is a lot of your commercial nuclear growth going to be in SMRs or microreactors, or how do we think about where that is going to manifest?
Sure. I am going to let Rob take this one since he was previously the president of the business that makes those materials. Rob?
Sure. When you think about the nuclear kind of vertical integration, Westinghouse does have a vertical integration kind of supply chain for their zirconium hafnium. However, they do also purchase from us to help augment. You think about the other vertically integrated nuclear producer, you think about the folks over in France, they are vertically integrated. We also sell into them. We are one of three in the Western world that are capable of producing that nuclear-grade hafnium and zirconium. If you think about the customers that don't have vertical integration, there are some of the folks that don't have a vertical integration, they are very logical partners for us. In addition, that independence also makes us uniquely positioned for the government contracts. We are able to sell into both of the other two producers, as well as to those folks that don't have that vertical integration.
It is a great spot to be as the only independent producer of zirconium and hafnium.
Let's go Kyle over here.
Thank you. Kyle Wenclawiak at Jefferies. It looks like the net new projects from 2026 to 2029 contribute about half the revenue growth and half the EBITDA growth. Maybe if you can just talk about that in the context of Rob's comments that you're doing this in the mindset of keeping price stability. You mentioned to Myles' question about isothermal forgings being a project that's maybe a couple years out, but in that context, how you're thinking about these capital projects, the contribution there, how it addresses lead times, and then an extension of that question is, what's gross versus net CapEx in the forward years? Thank you.
Yeah. Our guidance is based really on the kind of the gross CapEx. If you think about how we put out the 2026 guidance framework with $280 million-$300 million kind of gross, with customer funding between that $55 million and $65 million, the CapEx that we're kind of laying out and talking through, not to exceed 7%, is kind of that gross thinking. We're thinking about that in terms of gross CapEx. In terms of how you're thinking about it, we talked about the price volume mix and that a majority of the volume is going to be coming from the volume enabled by the new growth CapEx projects, and we kind of laid out the ranges of the revenue and generally the kind of implied incrementals from some of those.
Then you've got the price, the volume, and the mix that's going to be enabled by Elevation as another segment of that. Overall, there's going to be a lot coming from both the newly added organic growth CapEx, as well as the price volume mix that's going to be unlocked by Elevation. We've talked a lot about Elevation, but that's where we're going after it and unlocking additional capacity, capturing new commercial opportunities with better pricing, working on that 80/20 on that mix side of things, and then the other pieces in that profitability side is looking to more than offset our inflation with cost reduction. I expect that to be a net positive contributor.
Let's go Seth again.
Okay. Thanks. Maybe two more. One on that kind of volume versus price mix. The price mix bar in the chart looks a little small relative to the others. I wonder if you could talk about whether there might be some possibility for upside on that metric. Secondly, when we think about the half of the revenue growth that's coming from Elevation, or I guess maybe when we think about the phasing of the growth, because the CapEx, the growth CapEx is enabling about half the growth, and the growth CapEx is a kind of a 2028 and 2029, does that mean that the growth rate is accelerating through the period, or does the Elevation portion come earlier, and so that makes for a more even growth path?
Just in terms of Elevation, do we think that you're kind of close to running very much at capacity right now, and so the Elevation efforts that you're going to make to get more out of the assets are something to kind of sweat for? Or do we think about that base growth as something where there's a fair amount of spare capacity right now in the business?
I'll take the first part, and then I'll let Rob jump in here and talk about his volume mix and graph up there. From an Elevation standpoint, I think you're right. As you look at this, the way I would think about it is that it's accelerating growth through that three-year period. It does start to pick up some momentum as those new assets come on. But as Rob was just talking about, Elevation is an important part of unlocking that hidden factory. When we look throughout our facility, there are some limited supply positions in there. I've talked a little bit about bottlenecks in the past, where we've put in some very discrete pieces of capital. The Mexico facility is a great example that gives us testing and finishing and inspection assets that allow us to flow more of that material.
We're still making those changes, as well as some of just the fundamental blocking, tackling around standard work and process improvement, improving yields, increasing equipment reliability. We've had significant improvements in those, and so we're seeing that. You're seeing that in our results now. It's coming through. That's going to continue to gain momentum as we layer upon that, those additional initiatives. But you're thinking about it right. It starts to accelerate as that new assets really come online, and we get the full benefit of those.
Yeah, in terms of the price volume mix, the pricing opportunities, I can also let Marty take a shot at adding some price, because to your point, I do think there's continued pricing opportunities throughout the next three-year period. In terms of the Elevation focus areas, I talked about really those three areas of the supply chain, which gets back to the question earlier about the cash and how are we going to drive that cash generation with better inventory, SIOP processes, and planning and execution across the enterprise. Then I talked about the operational side of it, which was really those focused areas within scrap yield. Because if you think about it, if you can unlock the scrap, the yield, the process flow efficiencies, you're creating incremental capacity on your already existing assets.
So, when we think about Elevation, it covers a wide variety of the functional areas, but the focus areas with supply chain and those operational improvement areas are what we're going to be leaning on to unlock additional capacity.
And we have time for one more question, and I'm going to take this one online. I think the person submitted it six times in a row here.
Hopefully it's not you.
Yeah. The question is about long-term agreements and why they seem to be your preferred approach over time.
Want me to take that?
Marty, I will let you take that, yeah.
Okay. So, our long-term agreements, we have talked about before, is we get into these agreements, and it provides our customer with the security of supply. And when we do that, we also get the security of demand, and so we get this long-term demand profile. We also get to work with them on technology. LTAs are a great partnership in the sense that when you grow with your customer, they trust you are developing technology, you are working on problems all the time, and so you have this kind of connectivity. So when we think about that future generation, the next generation, those are the opportunities that we see, and we are having those conversations.
That is a key area of the LTA, but from just a maintenance standpoint, when we think about our LTAs, and I mentioned it earlier that our customers continue to push us in different ways to help them secure the supply chain, drive technology, improve the performance of their products, and even within these LTAs, that is where we work with them and do that, and it gives us that opportunity to continue to value ourselves there, to monetize it. At the end of the day, LTAs are a significant strategic approach for us.
Great. Awesome. Before everybody ends up going and leaving, I just want to recap on a couple of things here. First, we met our 2027 targets one year early. Second, we have got more than 1,000 basis points of improvement since we set these targets, since 2021. Our total shareholder returns have been 2X our A&D peer benchmarks. We have transformed ATI into a strong company with differentiated capabilities, and we are now accelerating. This acceleration is going to be driven by three things. One is extending that differentiated lead. We have talked about it, one of three, one of two, the only. We are going to expand our capabilities and our share in growth in those four areas, our advanced nickel superalloys, our premium quality titanium, our zirconium and hafnium, and our isothermal forgings.
Not only do we have tremendous capabilities, but we are investing to continue to grow with customer demand. Second, we are going to grow in these incredible markets where the barriers to entry are high and our partnerships run very deep and very long. We are converting that demand into execution, bottom line performance. As we shared, we are on a path to be a $7 billion company by 2029. Margins in the high 20s to low 30%, and we are going to double our free cash flow from the free cash flow we are generating this year in 2026. We are going to return that value to all of you, our shareholders, in the form of share repurchases. We are focused, we are accelerating, we are proven to perform. Thank you all for coming. I appreciate your interest. Travel safe.