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TTM Technologies (TTMI) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Information Technology· Apr 29, 2026

Source: earnings call transcript

Executive summary

TTM Technologies Q1 FY26 — Record Revenue and EPS Driven by AI and Defense Demand

TTM Technologies delivered a strong first quarter, achieving record revenue and non-GAAP EPS, primarily fueled by robust demand in AI-driven data center and networking, as well as aerospace and defense end markets. The company is strategically investing in capacity expansion and technological innovation to capitalize on these megatrends, while also making significant progress in improving operational efficiencies at its Penang facility. Management anticipates continued sales growth trajectory into the second half of the fiscal year.

Highlights

5

  • Net sales reached an all-time high of $846 million, growing 30% year-on-year.

  • Non-GAAP EPS achieved a record $0.75 per diluted share, a 50% improvement year-on-year.

  • Adjusted EBITDA margin increased to 15.7% in Q1 FY26 from 15.3% in Q1 FY25, reflecting positive mix impacts.

  • Data Center and Networking sales grew 61% year-on-year, driven by AI demand.

  • Medical, Industrial and Instrumentation sales also grew 61% year-on-year, aided by AI-enabled robotics.

Concerns

2

  • Free cash flow was a net usage of $85 million in Q1 FY26, reflecting increased capital expenditures.

  • Realized foreign exchange and other non-operating expenses resulted in a net expense of $6.8 million in Q1 FY26, primarily due to a $7 million FX loss.

Guidance & targets

CategoryTargetConfidence
Net sales
$930 million to $970 million
high materiality
High
Non-GAAP EPS
$0.82 to $0.88 per diluted share
high materiality
High
Net sales growth trajectory
continue in the second half
medium materiality
Medium
SG&A expense
about 7.4% of net sales
low materiality
High
R&D expenditures
about 1% of net sales
low materiality
High
Interest expense
approximately $10.6 million
low materiality
High
Interest income
approximately $2.5 million
low materiality
High
Realized foreign exchange and other non-operating expenses
approximately $6.9 million
low materiality
High
Effective tax rate
between 13% and 17%
low materiality
High
Depreciation
approximately $32.1 million
low materiality
High
Amortization of intangibles
approximately $9.2 million
low materiality
High
Stock-based compensation expense
approximately $11.5 million
low materiality
High
Noncash interest expense
approximately $0.5 million
low materiality
High
Revenue growth
15% to 20% per year
high materiality
High
Earnings
double from 2025 to 2027
high materiality
High
Capital expenditures
$300 million to $320 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Aerospace and Defense
Represented 40% of Q1 FY26 sales. Expected to represent 36% of Q2 FY26 sales, with both year-on-year and sequential growth. Bookings included Alteams Air Defense Radar, APS 153 maritime surveillance radar, and a transportable radar safaris system.
—11%——
Data Center and Networking
Represented 36% of Q1 FY26 sales. Expected to represent 42% of Q2 FY26 net sales. Growth driven by AI data center build-outs.
—61%——
Medical Industrial Instrumentation
Represented 16% of Q1 FY26 sales. Expected to represent 14% of Q2 FY26 total sales, growing both sequentially and year-on-year. Aided by healthy demand for AI-enabled robotics and automated test equipment for AI applications.
—61%——

Orderbook & backlog

A&D program backlog $1.6 billion Q1 FY26

similar to a level a year ago

Overall book-to-bill ratio 1.41 Q1 FY26
Commercial reporting segment book-to-bill 1.65 Q1 FY26
A&D reporting segment book-to-bill 1.10 Q1 FY26
90-day backlog (subject to cancellations) $787 million Q1 FY26

compared to $517 million a year ago

Product announcements

ProductTypeDetails
Sense and Avoid Radar Systemlaunch
Continuous Glucose Monitoring (Next Generation)roadmap

Capital programs

Asia Capital Expenditures underway $200 million to $300 million

Acceleration of previously discussed CapEx for Asia. Some of this has been accelerated into FY26 due to lead times on equipment.

Risks & headwinds

Foreign exchange loss Q1 FY26

$7 million

Supply chain pressure (lead times and pricing)

not restricting ability to reach goals

Mitigation:Proactive equipment ordering and strong supplier relationships.

What to watch in Q2 FY26

Penang facility breakeven

Q4 FY26 or earlier
Current Yields at 70-80%
Target Breakeven

Why it matters

Achieving breakeven at Penang will significantly improve profitability and validate operational efficiency improvements.

In the past, I would say a year ago, we disclosed some of the breakeven numbers. I can tell you, we were getting very close to that number. So I will be very surprised, let's say, in Q4 and hopefully earlier, we are in a breakeven situation for Penang.

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Q&A highlights

Can you discuss customer interest in the UK facility and the impact of higher oil prices on laminate costs?

The UK facility is making good progress, identifying anchor customers and planning an R&D center. While there's general supply chain pressure, no direct impact from oil prices on laminate costs is currently observed.

“If you think about Once, I think we're making really, really good progress there. we are identifying, let's say, our anchor customers like we did in Penang. So that's going well.”

asked by Steven Fox · answered by Edwin Roks

2 min read 5 chapters

Detailed narrative

Strategic Focus and Megatrends

TTM Technologies is strategically focused on advanced interconnect technologies, including complex PCBs, substrates, and advanced packaging, and moving up the value chain into sophisticated modules, subsystems, and systems. The company benefits from two key megatrends: Artificial Intelligence and Defense, which collectively account for approximately 80% of its net sales. This positioning allows TTM to leverage organic growth opportunities through continuous innovation and capacity expansion across its global footprint of 24 sites.

Data Center and Networking Market Dynamics

The data center and networking end market is experiencing materially accelerated demand driven by AI requirements. TTM plays in the high-end segment, focusing on boards with more than 40 layers, high complexity, and small pitch. Innovations like asymmetrical boards (Emplozem) and zero-sub technology are critical for signal integrity. The growth in this segment is primarily driven by increased ASPs due to complexity, rather than just volume, as complex panels require more manufacturing cycles. TTM maintains strong relationships with its top 10 customers in this segment, with only one currently being a 10% customer.

Penang Facility Ramp-Up and Operational Efficiency

The Penang facility ramp-up is progressing well, with yields for anchor customers in the data center networking area improving significantly from 40% to 70-80%. The facility is highly automated, and management expects it to reach a breakeven situation by Q4 FY26 or earlier. The headwind from Penang is projected to reduce from 160 basis points to 80 basis points for the full year, indicating improved operational performance and contribution.

Aerospace and Defense Market Outlook

The Aerospace and Defense end market continues to excel, with strong strategic program alignment and positive tailwinds from defense budgets. The segment's business breakdown is approximately 50% radar-related, 25% communication, less than 10% munitions, and 5% space. Management anticipates significant upside in the munitions sector in coming periods due to increased supply demand. The company is also expanding its product offerings to include modules, subsystems, and full mission systems.

UK Facility Development

TTM is making good progress on its UK facility, identifying anchor customers and establishing supplier agreements. The facility, spanning 750,000 square feet with three flexible modules, can support both commercial and defense businesses. A key aspect of the UK site is the planned R&D center, which will foster close collaboration with customers on new product development and innovation.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.