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    TTMI
    Earnings call· Jun 2026(Q2 FY26)

    TTM TECHNOLOGIES Q2 FY26 earnings call TTMI

    Aug 5, 2026 Source

    Executive summary

    TTM Technologies Q2 FY26 — Record Revenue and EPS Driven by AI and Defense Demand

    TTM Technologies delivered a strong second quarter, achieving record revenue and non-GAAP EPS, primarily fueled by robust demand in AI-driven Data Center and Networking, and continued strength in Aerospace and Defense. The company is strategically expanding capacity and pursuing accretive acquisitions in Europe to enhance its long-term market position and technology offerings, while managing supply chain pressures in lower-end markets.

    Highlights

    5

    • Achieved record net sales of $1.0 billion in Q2 FY26, up 37% YoY.

    • Reported record non-GAAP EPS of $0.99 per diluted share in Q2 FY26, a 71% YoY improvement.

    • Adjusted EBITDA margin expanded to 16.6% in Q2 FY26, up 160 bps YoY.

    • Aerospace and Defense end market sales grew 14% YoY, with a book-to-bill of 1.3 and a $1.7 billion backlog.

    • Data Center and Networking end market sales surged 91% YoY, driven by AI data center build-outs.

    Concerns

    2

    • Automotive sales were marginally down YoY in Q2 FY26 and are expected to decrease in mid-single digits for FY26 due to supply chain material availability issues.

    • Weakening U.S. dollar resulted in a $4.9 million foreign exchange loss in Q2 FY26.

    Guidance & targets

    23
    CategoryTargetConfidence
    Organic revenue growth
    15% to 20%
    high materiality
    High
    Aerospace and Defense sales as % of total sales
    32%
    medium materiality
    High
    Aerospace and Defense sales growth
    low to mid-teens
    medium materiality
    High
    Data Center and Networking sales as % of net sales
    49%
    medium materiality
    High
    Data Center and Networking sales growth
    more than double
    high materiality
    High
    Medical, Industrial and Instrumentation sales as % of total sales
    13%
    medium materiality
    High
    Medical, Industrial and Instrumentation sales growth
    35% to 40%
    medium materiality
    High
    Automotive sales as % of total sales
    6%
    medium materiality
    High
    Automotive sales growth
    decrease in the mid-single digits
    medium materiality
    High
    Net sales
    $1.10 billion to $1.14 billion
    high materiality
    High
    Non-GAAP EPS
    $1.21 to $1.27 per diluted share
    high materiality
    High
    Net sales
    approximately $4.4 billion
    high materiality
    High
    Non-GAAP EPS
    approach $5 per diluted share
    high materiality
    High
    SG&A expense as % of net sales
    approximately 7%
    medium materiality
    High
    R&D expenditures as % of net sales
    approximately 1%
    medium materiality
    High
    Interest expense
    approximately $11.3 million
    medium materiality
    High
    Interest income
    approximately $2.5 million
    medium materiality
    High
    Realized foreign exchange and other nonoperating expenses
    approximately $5 million
    medium materiality
    High
    Effective tax rate
    between 13% and 17%
    medium materiality
    High
    Depreciation expense
    approximately $33.5 million
    medium materiality
    High
    Amortization of intangibles
    approximately $9.2 million
    medium materiality
    High
    Stock-based compensation expense
    approximately $18.8 million
    medium materiality
    High
    Noncash interest expense
    approximately $0.7 million
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Aerospace and Defense
    Sales growth is a result of positive tailwinds in defense budgets, strong strategic program alignment, and key bookings for new and ongoing programs. Expected to represent 32% of total sales in Q3 FY26 and grow in the low to mid-teens YoY for FY26.
    		37%14%——
    Data Center and Networking
    Experienced continued demand strength from data center and networking customers building out AI data centers. Expected to represent 49% of net sales in Q3 FY26 as N+M Asymmetrical Printed Circuit Boards ramp up, and more than double YoY for FY26.
    		40%91%——
    Medical, Industrial and Instrumentation
    Aided by healthy demand in Medical (support for major monitoring products) and Instrumentation (automated test equipment supporting AI solutions). Top 5 medical customers' performance more than doubled internal expectations. Expected to represent 13% of total sales in Q3 FY26 and grow 35% to 40% YoY for FY26. Transcription note: The transcript stated this segment represented '50% of second quarter 2026 sales', which is inconsistent with other stated segment percentages (37% A&D, 40% Data Center, 8% Automotive). The value has been corrected to 15% to ensure segment percentages sum to 100%.
    		15%33%——
    Automotive
    Company is very selective in this market, focusing on higher value-add products. Expected to represent about 6% of total sales in Q3 FY26 and decrease in the mid-single digits YoY for FY26 due to slight pressure in supply chain materials availability.
    		8%marginally down——

    Operational metrics

    24
    Net sales
    $1.0 billionup 37% YoY from $731 million
    Q2 FY26

    Achieved an all-time quarterly high.

    GAAP operating income
    $109.1 millionvs $61.8 million in Q2 FY25
    Q2 FY26

    GAAP operating income for the second quarter of 2026.

    Noncash pretax unrealized loss
    $14 million
    Q2 FY26

    Related to the pending STG acquisition, hedge accounting could not be used.

    GAAP net income
    $83 millionvs $41.5 million in Q2 FY25
    Q2 FY26

    GAAP net income for the second quarter of 2026.

    GAAP EPS
    $0.77vs $0.40 in Q2 FY25
    Q2 FY26

    GAAP EPS for the second quarter of 2026.

    Non-GAAP gross margin
    21.9%up 100 bps from 20.9% in Q2 FY25
    Q2 FY26

    Non-GAAP gross margin for the second quarter of 2026.

    Selling and marketing expense
    $24.2 millionvs $20.3 million in Q2 FY25
    Q2 FY26

    Compared to 2.8% of net sales in Q2 FY25.

    General and administrative expense
    $49.3 millionvs $44.3 million in Q2 FY25
    Q2 FY26

    Compared to 6.1% of net sales in Q2 FY25.

    Non-GAAP operating margin
    13.8%up 270 bps from 11.1% in Q2 FY25
    Q2 FY26

    Non-GAAP operating margin for the second quarter of 2026.

    Interest expense
    $9.9 millionvs $10.6 million in Q2 FY25
    Q2 FY26

    Interest expense for the second quarter of 2026.

    Interest income
    $1.9 millionvs $2.2 million in Q2 FY25
    Q2 FY26

    Interest income for the second quarter of 2026.

    Realized foreign exchange and other nonoperating income and expenses (net)
    $4.7 million net expensevs $1.6 million net expense in Q2 FY25
    Q2 FY26

    Increased expense driven by weakening of the U.S. dollar.

    Foreign exchange loss
    $4.9 millionvs $1.4 million loss in Q2 FY25
    Q2 FY26

    Driven by the weakening of the U.S. dollar.

    Effective tax rate
    15.0%vs 15.0% in Q2 FY25
    Q2 FY26

    Effective tax rate for the second quarter of 2026.

    Tax expense
    $18.9 millionvs $10.7 million in Q2 FY25
    Q2 FY26

    Tax expense for the second quarter of 2026.

    Non-GAAP net income
    $106.9 millionvs $60.8 million in Q2 FY25
    Q2 FY26

    Non-GAAP net income for the second quarter of 2026.

    Non-GAAP EPS
    $0.99up 71% YoY vs $0.58 in Q2 FY25
    Q2 FY26

    Achieved an all-time quarterly high.

    Adjusted EBITDA
    $166.8 millionvs $109.7 million in Q2 FY25
    Q2 FY26

    Adjusted EBITDA for the second quarter of 2026.

    Adjusted EBITDA margin
    16.6%up 160 bps YoY from 15.0% in Q2 FY25
    Q2 FY26

    Reflecting strong operating performance.

    Net leverage ratio
    0.9x
    Q2 FY26

    Maintained a healthy ratio.

    Capital expenditures increase
    approximately $45 million
    FY26

    Approval received to accelerate some capital expenditures for the year.

    Penang facility breakeven
    late Q3/Q4
    FY26

    Facility is getting to very decent revenue levels.

    Wisconsin facility cost
    less than $20 million
    acquisition

    Cost of acquiring the site (Eau Claire).

    N+M technology revenue
    $600 million
    H2 FY26

    Expected revenue from N+M Asymmetrical PCBs, with yields looking very well.

    Industry KPIs

    8
    MetricValueDetails
    M a contributionless than 5%% of incremental sales
    Orders book to bill1.49
    Design wins product cycle rampsFull production launch initiated for N+M Asymmetrical PCBs; Initial volume ramp for Ultra-HDI products
    Order visibility backlog policy90 days
    Supply demand imbalance lead timesSlight pressure
    Capacity expansion internal sourcingapproximately $45 millionUSD
    End market revenue mix organic growth37% A&D; 40% Data Center and Networking; 15% Medical, Industrial and Instrumentation; 8% Automotive% of sales
    Operating margin incremental leverage13.8% Non-GAAP operating margin; 16.6% Adjusted EBITDA margin%

    Orderbook & backlog

    6
    Aerospace and Defense book-to-bill1.3Q2 FY26
    Total Aerospace and Defense backlog$1.7 billionend of Q2 FY26

    up from $1.5 billion a year ago

    Aerospace and Defense business proposals pipelineover $7 billionQ2 FY26

    Currently qualified potential business.

    Overall book-to-bill1.49Q2 FY26
    Commercial reporting segment book-to-bill1.63Q2 FY26
    90-day backlog (subject to cancellations)$901 millionend of Q2 FY26

    81% increase year-on-year from $497 million

    Product announcements

    2
    ProductTypeDetails
    N+M Asymmetrical Interconnected Circuit Boardslaunch
    Ultra-HDI productsexpansion

    Deals & partnerships

    2
    Swiss Technology Group AG (STG)Acquisition of a privately held company in Switzerland to establish a European footprint.

    Adds healthy long-cycle businesses primarily into Medical and A&D end markets with strategic technology capabilities.

    ILFA GmbHAcquisition of a privately held company in Germany to establish a European footprint.

    Adds healthy long-cycle businesses primarily into Medical and A&D end markets with strategic technology capabilities.

    Capital programs

    3
    Syracuse Ultra-HDI ramp-upunderway
    Start: Q3 FY26

    Benefit: full capacity run rate

    Initial stages of ramping up volume for Ultra-HDI products, continuing into Q4 FY26 and throughout 2027.

    Brownfield expansions in Chinaunderway

    Benefit: expanded capacity

    Ongoing expansions in existing facilities, with recent approval for another capital investment to move quickly.

    Wisconsin facility (Eau Claire)announced
    Spent to date: less than $20 million

    Benefit: some production and an innovation center

    Acquired for less than $20 million, company is not in a rush to develop it but plans to start production and an innovation center for advanced R&D.

    Risks & headwinds

    2
    Automotive supply chain materials availabilityQ3 FY26 and FY26

    Slight pressure

    Mitigation: Actively working with supply chain partners to secure adequate supply that is in line with customer demand.

    Weakening U.S. dollarQ2 FY26

    $4.9 million foreign exchange loss

    What to watch in Q3 FY26

    5

    N+M Asymmetrical PCBs ramp-up

    Q3 FY26 and Q4 FY26
    CurrentEarly stages of full production launch, $600M expected in H2 FY26 (1/3 in Q3, 2/3 in Q4).
    TargetContinued ramp-up, yield improvement, and positive margin impact.

    Why it matters

    This technology is a key driver for Data Center and Networking growth and margin expansion.

    But again, we have to do another about $600 million of that technology, which is a really nice technology. So that will help us in our margins, assuming that the [indiscernible] will stay all the same.

    Q&A highlights

    7

    How will the N+M scale-up affect Q3 revenues and margins, qualitatively or quantitatively?

    Management confirmed N+M is a significant factor for H2, with $600 million expected, 1/3 in Q3 and 2/3 in Q4. Yields are looking good, and it will help margins as yields improve. This is already built into Q3 and full-year guidance.

    “But again, we have to do another about $600 million of that technology, which is a really nice technology. So that will help us in our margins, assuming that the [indiscernible] will stay all the same.”

    asked by James Ricchiuti · answered by Edwin Roks

    2 min read7 chapters

    Detailed Narrative

    01

    AI and Inference Megatrends

    Approximately 80% of TTM's net sales are related to the key megatrends of artificial intelligence and inference, which have been strong drivers of performance and new business activity. The company believes this positioning will continue to be beneficial for investors in the foreseeable future, aligning with its strategy to satisfy next-generation needs for customers.

    02

    N+M Asymmetrical PCBs Ramp-up

    TTM is initiating the early stage of full production launch for its N+M asymmetrical interconnected circuit boards, particularly exciting for growth momentum in the Data Center and Networking end markets. Management expects to produce approximately $600 million of this technology in the second half of FY26, with about one-third in Q3 and two-thirds in Q4, with yields looking very promising.

    03

    European Acquisitions

    TTM announced its intention to acquire two privately held European companies, Swiss Technology Group AG (STG) and ILFA GmbH, with transactions expected to close in Q3 FY26. These strategic acquisitions will establish TTM's initial footprint in Europe, adding healthy, long-cycle businesses primarily in the Medical and A&D end markets with strategic technology capabilities that reinforce TTM's up-the-chain value-add approach. They are expected to be moderately accretive on an adjusted EBITDA basis and contribute less than 5% of incremental sales.

    04

    Syracuse Facility Ramp-up

    The new Syracuse facility will begin the initial stages of ramping up volume for Ultra-HDI products in Q3 FY26. This ramp-up is expected to continue into Q4 FY26 and throughout 2027, aiming to reach full capacity run rate in 2028. This expansion supports TTM's leading position in advanced interconnect products for the Aerospace and Defense market.

    05

    Penang Facility Progress

    The Penang facility is performing well, achieving very decent revenue levels and is projected to reach a breakeven point in late Q3 or Q4 FY26. While primarily supporting the Medical, Industrial, and Instrumentation (MI&I) business, Penang is also producing N+M technology, supporting Data Center and Networking customers, demonstrating its versatility and strategic importance.

    06

    Wisconsin Facility Strategy

    TTM is not rushing the development of its Wisconsin facility (Eau Claire) but plans to initiate some production and establish an innovation center there. This center will demonstrate the newest technologies, leveraging its proximity to Chippewa Falls. The site was acquired for less than $20 million, indicating a strategic, low-risk investment for future expansion and R&D.

    07

    Capital Expenditure Acceleration

    The company received approval to accelerate some of its capital expenditures, leading to an increase of approximately $45 million in expected expenditures for FY26. This investment supports brownfield expansions in existing facilities, particularly in China, and other relevant sites to enhance capacity and meet growing demand.

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