TTM Technologies Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Sales: Achieved $1 billion, a 37% increase year-on-year, marking the first quarterly result above $1 billion.

Non-GAAP EPS: Reported at $0.99 per diluted share, a 71% improvement year-on-year.

Adjusted EBITDA Margin: 16.6%, up 160 basis points year-on-year and 90 basis points sequentially.

GAAP Net Income: $83 million or $0.77 per diluted share, compared to $41.5 million or $0.40 per diluted share in Q2 2025.

Book-to-Bill Ratio: 1.49 for the quarter, indicating strong order intake.

Cash Flow: Operating cash flow of $96.4 million and free cash flow of $46 million.

2Strategic Updates and Business Highlights

Market Focus: TTM is concentrating on advanced interconnect products and printed circuit boards, particularly in AI and defense sectors, which account for approximately 80% of net sales.

Acquisitions: Announced intentions to acquire Swiss Technology Group AG and ILFA GmbH, expected to close in Q3 2026, enhancing TTM's European presence and capabilities in medical and aerospace & defense markets.

Product Launches: Early production ramp-up of N+M asymmetrical interconnect printed circuit boards, with positive yield results.

End Market Performance:

Aerospace & Defense: 37% of sales, 14% year-on-year growth.

Data Center & Networking: 40% of sales, 91% year-on-year growth.

Medical, Industrial & Instrumentation: 50% of sales, 33% year-on-year growth.

Automotive: 8% of sales, slight decline year-on-year.

3Forward Guidance and Outlook

Q3 2026 Guidance: Expected net sales between $1.10 billion and $1.14 billion, with non-GAAP EPS ranging from $1.21 to $1.27.

Full Year 2026 Outlook: Projecting approximately $4.4 billion in sales and non-GAAP EPS approaching $5 per diluted share.

Long-term Growth: Anticipating 15% to 20% organic revenue growth for 2027 and 2028.

4Challenges and Points of Concern

Automotive Market: Experienced a marginal decline, with expectations of mid-single-digit year-on-year decrease for the full year due to supply chain issues.

Supply Chain Pressures: Noted challenges in lower-end automotive products and potential impacts on T-glass and other materials for sophisticated printed circuit boards.

Foreign Exchange Losses: Recognized a noncash pretax unrealized loss of $14 million related to currency hedging for acquisitions.

5Notable Q&A Insights

N+M Technology: Expected to significantly contribute to revenue in Q4, with a ramp-up of production anticipated to improve margins.

Customer Distribution: TTM has a balanced customer base with several 10% customers across commercial and defense sectors, indicating a healthy diversification.

Capacity Expansion: TTM is focusing on brownfield expansions to meet demand, particularly in MI&I and A&D sectors, while managing supply chain dynamics effectively.

European Expansion: The acquisitions are seen as a strategic move to establish a foothold in Europe, with potential for future growth in that region. Overall, TTM Technologies reported strong financial performance in Q2 2026, driven by robust demand in key markets, while also outlining strategic initiatives for growth and addressing challenges in specific sectors.