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 (from $649 million in Q1 2025), marking an all-time quarterly high.
• Non-GAAP EPS: $0.75 per diluted share, a 50% improvement year-over-year.
• GAAP Operating Income: $72.4 million, up from $50.3 million in Q1 2025.
• 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 growth.
• Cash Flow: Operating cash flow was $21.7 million, compared to a usage of $10.7 million in Q1 2025. Free cash flow was a net usage of $85 million, reflecting increased capital expenditures.

2. Strategic Updates and Business Highlights

• TTM is focusing on two strategic directions: advanced interconnect technologies and complex modules/subsystems, particularly in AI and defense sectors.
• Approximately 80% of net sales are tied to AI and defense megatrends, which are driving demand.
• The company is expanding its global manufacturing footprint with 24 sites across China, Malaysia, Canada, and the U.S.
• Significant growth was noted in the data center and networking markets (61% year-over-year), which now represent 36% of total sales.
• Aerospace and defense sales grew 11% year-over-year, making up 40% of total sales, with a backlog of $1.6 billion.
• TTM participated in the Artemis-I mission, showcasing its capabilities in aerospace applications.

3. Forward Guidance and Outlook

• Q2 2026 Guidance: Projected net sales between $930 million and $970 million, with non-GAAP EPS expected between $0.82 and $0.88.
• The company anticipates continued growth in the second half of 2026, supported by strong demand dynamics.
• Capital expenditures for 2026 are expected to increase to $300 million to $320 million, up from previous estimates of $240 million to $260 million.

4. Bad News, Challenges, or Points of Concern

• Automotive Market: Sales in this segment were modestly declining, representing only 8% of total sales, with TTM being selective in this market.
• Supply Chain Pressures: The company is observing some pressure in the supply chain environment, particularly regarding lead times and pricing, though it does not expect this to hinder growth.
• Foreign Exchange Losses: The company reported a $7 million foreign exchange loss due to a weakening U.S. dollar.
• High Capital Expenditures: While necessary for growth, the increased capital spending could impact short-term cash flow.

5. Notable Q&A Insights

• UK Facility: Discussions are ongoing with potential customers for the UK facility, with plans to build an R&D center to enhance customer collaboration.
• Impact of Oil Prices: Management indicated that while there are pressures in the supply chain, they do not foresee significant impacts from rising oil prices on laminate costs.
• Data Center Networking Growth: The growth in this segment is primarily driven by higher average selling prices (ASPs) due to increased complexity in products, rather than just volume increases.
• Penang Facility Ramp-Up: Yields are improving significantly, with expectations of reaching breakeven by Q4 2026.
• Contract Structures: TTM maintains strong relationships with customers, focusing on flexibility and technology leadership rather than solely relying on fixed contracts.

This summary encapsulates TTM Technologies' Q1 2026 performance, strategic direction, and outlook while highlighting both opportunities and challenges facing the company.