TTMI — TTM Technologies, Inc.

TTM Technologies Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Sales: $846 million, a 30% increase year-over-year (Q1 2025: $649 million).
• Non-GAAP EPS: $0.75 per diluted share, up 50% from $0.50 in Q1 2025.
• GAAP Operating Income: $72.4 million (Q1 2025: $50.3 million).
• GAAP Net Income: $50 million or $0.47 per diluted share (Q1 2025: $32.2 million or $0.31).
• Adjusted EBITDA Margin: 15.7%, slightly up from 15.3% in the previous year.
• Book-to-Bill Ratio: 1.41 for the quarter, indicating strong order intake.
• Cash Flow: Operating cash flow of $21.7 million; free cash flow was a net usage of $85 million due to increased capital expenditures.

2. Strategic Updates and Business Highlights

• TTM continues to focus on two strategic directions: advanced interconnect technologies and complex modules/subsystems.
• The company is benefiting from strong demand in two key megatrends: artificial intelligence and defense, which account for approximately 80% of net sales.
• Notable achievements include participation in the Artemis-I mission and winning contracts in the aerospace sector.
• The company is ramping up its UK facility and investing in R&D to support customer needs.
• Significant growth in the data center and networking segment, with sales up 61% year-over-year, driven by AI-related demand.

3. Forward Guidance and Outlook

• Q2 2026 Guidance: Expected net sales between $930 million to $970 million and non-GAAP EPS of $0.82 to $0.88.
• The company anticipates continued growth in the second half of 2026, supported by strong demand dynamics.
• TTM is increasing its capital expenditures forecast for the year to $300 million - $320 million, up from $240 million - $260 million, to accelerate growth initiatives.

4. Bad News, Challenges, or Points of Concern

• The automotive segment saw a modest decline, contributing only 8% of sales, and TTM remains selective in this market.
• There are supply chain pressures, particularly related to lead times and pricing, although management believes these will not hinder growth.
• Foreign exchange losses were noted, with a $7 million impact due to a weakening U.S. dollar.
• The company is facing challenges in ramping up production in its Penang facility, although improvements in yield rates are being observed.

5. Notable Q&A Insights

• Interest in UK Facility: The company is making progress in identifying anchor customers for its UK facility, which will support both commercial and defense businesses.
• Impact of Oil Prices: Management noted some supply chain pressure due to oil prices but does not foresee significant impacts on their goals.
• Data Center Networking Growth: The growth in this segment is primarily driven by higher average selling prices (ASPs) due to increasing complexity in products rather than just volume.
• Aerospace and Defense Breakdown: Currently, 50% of the A&D business is radar-related, with only 5% from space, indicating potential for future growth in the space sector.
• Contract Structures: The company emphasizes strong relationships with customers, which allows for flexibility in contract structures rather than relying solely on fixed-price contracts.

Overall, TTM Technologies reported strong financial performance in Q1 2026, driven by demand in key sectors while navigating some challenges in supply chain and specific market segments. The outlook remains positive with significant growth anticipated in the coming quarters.