TTM Technologies Reports Strong Q2 Earnings Amid Challenges

Ttm Technologies ((TTMI)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for TTM Technologies highlighted a robust financial performance, showcasing notable revenue growth across key markets and achieving a record non-GAAP EPS. Despite facing challenges such as a slower ramp-up of the Penang facility and a decline in the automotive market, the overall sentiment was positive, emphasizing strong operational execution and strategic expansions.

Strong Revenue Growth

TTM Technologies reported a significant 21% year-on-year revenue increase, reaching $730.6 million. This growth was primarily driven by heightened demand in the aerospace and defense, data center computing, networking, and medical, industrial, and instrumentation markets.

Record Non-GAAP EPS

The company achieved a quarterly record with a non-GAAP EPS of $0.58, reflecting adjustments for unrealized foreign exchange gains. This milestone underscores TTM’s strong financial management and operational efficiency.

Impressive Operating Margins

TTM Technologies reported non-GAAP operating margins of 11.1%, marking a 210 basis point increase year-on-year. This achievement represents the fourth consecutive quarter of double-digit operating margin performance, highlighting the company’s consistent profitability.

Significant Cash Flow

The company generated robust cash flow from operations, accounting for 13.4% of revenues. This strong cash flow position reinforces TTM’s financial health and ability to invest in future growth opportunities.

Aerospace and Defense Market Performance

The aerospace and defense market was a major contributor, accounting for 45% of total revenues and experiencing 21% year-on-year growth. The segment also boasts a program backlog of $1.46 billion, indicating sustained demand and future revenue potential.

Data Center Segment Growth

The data center computing market represented 21% of total sales, with a 20% year-on-year growth. This segment’s expansion reflects the increasing demand for data center solutions and TTM’s strong positioning in this market.

Networking Market Surge

The networking market experienced a remarkable 52% year-on-year growth, driven by increased switch-related demand from networking customers. This surge underscores the growing importance of networking solutions in TTM’s portfolio.

Penang Facility Ramp-Up Challenges

TTM faced challenges with the slower-than-expected revenue ramp-up at its Penang facility, delaying the breakeven point. These challenges are attributed to the greenfield start-up nature of the facility.

Automotive Market Decline

The automotive market saw a slight decline, representing 11% of total sales, down from 14% in the previous year. This decrease was due to inventory adjustments and soft demand in the sector.

Aerospace and Defense Book-to-Bill Ratio

Despite a strong backlog, the aerospace and defense segment’s book-to-bill ratio was 0.69, below 1, due to order timing. This indicates potential future challenges in aligning order intake with revenue recognition.

Increased Operating Expenses

General and administrative expenses increased, driven by higher incentive compensation accruals. This rise in expenses reflects the company’s investment in talent and performance-based incentives.

Forward-Looking Guidance

Looking ahead, TTM Technologies projected Q3 2025 revenue between $690 million and $730 million, with non-GAAP EPS ranging from $0.57 to $0.63. The company announced strategic expansions, including a new facility acquisition in Eau Claire, Wisconsin, and land rights in Penang for a second facility, aligning with increased U.S. and Malaysian production capabilities.

In summary, TTM Technologies’ earnings call conveyed a positive outlook, driven by strong revenue growth and record financial metrics. While challenges in certain segments were acknowledged, the company’s strategic expansions and robust market performance position it well for future success.