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TTM Technologies (TTMI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 5, 2026

Source: earnings call transcript

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

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

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——

Orderbook & backlog

Aerospace and Defense book-to-bill 1.3 Q2 FY26
Total Aerospace and Defense backlog $1.7 billion end of Q2 FY26

up from $1.5 billion a year ago

Aerospace and Defense business proposals pipeline over $7 billion Q2 FY26

Currently qualified potential business.

Overall book-to-bill 1.49 Q2 FY26
Commercial reporting segment book-to-bill 1.63 Q2 FY26
90-day backlog (subject to cancellations) $901 million end of Q2 FY26

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

Product announcements

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

Deals & partnerships

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 GmbH Acquisition 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

Syracuse Ultra-HDI ramp-up underway
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 China underway

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

Automotive supply chain materials availability Q3 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. dollar Q2 FY26

$4.9 million foreign exchange loss

What to watch in Q3 FY26

N+M Asymmetrical PCBs ramp-up

Q3 FY26 and Q4 FY26
Current Early stages of full production launch, $600M expected in H2 FY26 (1/3 in Q3, 2/3 in Q4).
Target Continued 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.

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Q&A highlights

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 read 7 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

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.

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