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    TTMI
    Earnings call· Mar 2026(Q1 FY26)

    TTM TECHNOLOGIES Q1 FY26 earnings call TTMI

    Apr 29, 2026 Source

    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

    16
    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

    3
    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%——

    Operational metrics

    23
    Non-GAAP EPS
    $0.7550% improvement YoY
    Q1 FY26

    All-time quarterly high.

    Non-GAAP EPS
    $0.50
    Q1 FY25

    Prior year comparable.

    Adjusted EBITDA
    $132.9 million
    Q1 FY26

    Reported for the quarter.

    Adjusted EBITDA
    $99.5 million
    Q1 FY25

    Prior year comparable.

    Adjusted EBITDA margin
    15.7%up from 15.3% in Q1 FY25
    Q1 FY26

    Reflecting positive mix impacts.

    Non-GAAP gross margin
    22.3%increase of 150 basis points from 20.8% in Q1 FY25
    Q1 FY26

    Reported for the quarter.

    Non-GAAP operating margin
    12.8%230 basis point improvement from 10.5% in Q1 FY25
    Q1 FY26

    Reported for the quarter.

    Selling and marketing expense
    2.8%vs 3.1% of net sales a year ago
    Q1 FY26

    Reported for the quarter.

    General and administrative expense
    5.8%vs 6% of net sales a year ago
    Q1 FY26

    Reported for the quarter.

    Interest expense
    $10 millionvs $10.9 million in Q1 FY25
    Q1 FY26

    Reported for the quarter.

    Interest income
    $2.5 millionvs $3 million in Q1 FY25
    Q1 FY26

    Reported for the quarter.

    Realized foreign exchange and other non-operating income and expenses
    -$6.8 millionvs net income of $1.5 million in Q1 FY25
    Q1 FY26

    Reported for the quarter.

    Effective tax rate
    14.5%vs 15% in Q1 FY25
    Q1 FY26

    Resulting in a tax expense of $13.6 million.

    Non-GAAP net income
    $80.1 millionvs $52.4 million in Q1 FY25
    Q1 FY26

    Reported for the quarter.

    Net leverage ratio
    about 1x
    Q1 FY26

    Maintaining a healthy ratio.

    Penang yield improvement
    70% and 80%from above 40% in prior quarter
    Q1 FY26

    Yields for anchor customers are improving significantly.

    Penang headwind
    80 basis pointsfrom 160 basis points
    FY26

    Expected headwind for the full year, reduced from previous estimates.

    Data Center Networking ASP increase
    factor of 4, maybe a factor VIII
    Q1 FY26

    ASPs are increasing due to the growing complexity of boards.

    Aerospace and Defense business breakdown
    50%
    Q1 FY26

    Breakdown of the A&D business.

    Aerospace and Defense business breakdown
    25%
    Q1 FY26

    Breakdown of the A&D business.

    Aerospace and Defense business breakdown
    below 10%
    Q1 FY26

    Breakdown of the A&D business, with expected upside.

    Aerospace and Defense business breakdown
    5%
    Q1 FY26

    Breakdown of the A&D business, with a lot of potential for growth.

    Net sales
    $649 million
    Q1 FY25

    Net sales in the prior year comparable quarter.

    Industry KPIs

    7
    MetricValueDetails
    Orders book to bill1.41
    Segment revenue growth$846 millionUSD
    Design wins product cycle rampsArtemis-I mission
    Order visibility backlog policy$787 millionUSD
    Capacity expansion internal sourcing$300 million to $320 millionUSD
    End market revenue mix organic growth40%% of sales
    Operating margin incremental leverage12.8%%

    Orderbook & backlog

    5
    A&D program backlog$1.6 billionQ1 FY26

    similar to a level a year ago

    Overall book-to-bill ratio1.41Q1 FY26
    Commercial reporting segment book-to-bill1.65Q1 FY26
    A&D reporting segment book-to-bill1.10Q1 FY26
    90-day backlog (subject to cancellations)$787 millionQ1 FY26

    compared to $517 million a year ago

    Product announcements

    2
    ProductTypeDetails
    Sense and Avoid Radar Systemlaunch
    Continuous Glucose Monitoring (Next Generation)roadmap

    Capital programs

    1
    Asia Capital Expendituresunderway$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

    2
    Foreign exchange lossQ1 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

    5

    Penang facility breakeven

    Q4 FY26 or earlier
    CurrentYields at 70-80%
    TargetBreakeven

    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.

    Q&A highlights

    5

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.