TTM Technologies, Inc. (TTMI) Earnings & Analysis

Latest quarter

TTM Technologies reported third-quarter revenue of $1.2 billion, above the $1.1 billion consensus. Adjusted earnings were $1.46 per diluted share, also above the $1.25 consensus.

Revenue rose 59.9% from $752.7 million a year earlier. In its filing, TTM attributed the increase to data center and networking demand associated with AI infrastructure, as well as growth in medical, industrial and instrumentation and aerospace and defense. Commercial segment sales increased 92.7%, while aerospace and defense segment sales rose 20.9%.

The filing said gross margin rose to 24.2% from 20.8%, primarily because of higher sales volume, product mix and operational execution. Operating margin increased to 13.5% from 9.55%. TTM reported diluted earnings of $0.79 per share, compared with $0.50 a year earlier, and free cash flow of $74.8 million, up from $42.6 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Edwin Roks said AI demand drove growth in data center and networking, while medical, industrial and instrumentation sales benefited from pricing adjustments and demand for automated test equipment. CFO Daniel Boehle said higher volume and product mix helped non-GAAP gross margin, alongside execution improvements at the Penang facility.

Roks said the overall book-to-bill ratio was 2.1x in the third quarter, meaning bookings exceeded shipments, while aerospace and defense program backlog reached $2 billion. He said that backlog provided visibility into roughly 65% of projected 2027 revenue for the market. Separately, TTM’s 90-day backlog was $1.3 billion and subject to cancellation.

Analysts asked about the timing of N+M board programs. Roks said one of three major programs had shifted because of a customer’s schedule and that there were “no technical issues.” He expected it to be fully in production in the first quarter of 2027. He said N+M represented about 30% of data center and networking activity and could reach about 50% next year.

Asked about materials and pricing, Roks said lead times and costs were rising, but “customers will take these price increases.” He added that selling prices were rising faster than costs as board complexity increased.

Roks said an additional $400 million capacity investment, primarily for N+M, would begin in the fourth quarter of 2026 and continue into early 2028. He also expects the proposed $650 million Ophir acquisition to close in the second quarter of 2027, subject to approvals and customary conditions. Asked about financing and further acquisitions, Boehle said TTM would focus on reducing leverage and use expected cash flow to fund capital expenditure and repay debt. Roks said it was too early to give an exact 2027 business split.

Guidance

TTM raised its full-year 2026 revenue guidance to $4.47 billion to $4.49 billion. Roks said the company now expects medical, industrial and instrumentation sales to grow nearly 70% for the year and aerospace and defense sales to grow approximately 20%. For automotive, he expects mid-single-digit growth rather than the previously expected mid-single-digit decline.

In its filing, TTM also raised its expected 2026 capital expenditures to $410.0 million to $430.0 million, primarily because of the planned capacity expansion for AI infrastructure.