TTM Technologies, Inc. Q2 FY2025 earnings call

• TTM achieved strong Q2 2025 results with revenue up 21% y-o-y, driven by aerospace and defense, data center computing, networking, medical, industrial, and instrumentation; automotive had a slight decline.
• Aerospace and defense market was 45% of total revenues, with a program backlog of ~$1.46 billion.
• Non-GAAP operating margins were 11.1%, up 210 basis points y-o-y, and non-GAAP EPS was $0.58, a quarterly record.
• New facilities in Penang and Syracuse; Penang had revenue of $5.2 million in Q2 but slower ramp; acquired land in Penang for a second site; Syracuse facility external construction mostly complete, internal fabrication ongoing.
• End markets: Aerospace and defense at 45% of sales, data center computing at 21%, medical/industrial/instrumentation at 15%, automotive at 11%, networking at 8%.

In the second quarter of 2025, the Aerospace and defense segment recorded net sales of $327.6 million and operating income of $45.3 million. The Commercial segment had net sales of $395.6 million and operating income of $60.1 million. The RF and Specialty Components segment recorded net sales of $10.1 million and operating income of $2.9 million. Aerospace and defense accounted for 45% of total revenues, Commercial for a significant portion, and RF and Specialty Components for a smaller share.

• Projected Q3 2025 net sales in range of $690 million to $730 million and non-GAAP earnings in range of $0.57 to $0.63 per diluted share.
• Expect SG&A expense to be about 8.9% of net sales, R&D about 1% of net sales.
• Estimate interest expense ~$10.5 million, interest income ~$2.6 million, effective tax rate between 13% and 17%.

• Potential indirect impacts from tariffs such as end market demand weakness and economic slowdown.
• Slower-than-expected revenue ramp in Penang facility due to greenfield start-up growing pains.
• Cost differentials in new facilities like Eau Claire compared to Penang or China, which need to be balanced with customer appetite.

Q: Jim Ricchiuti with Needham & Co. asked about the time line for new capacity in Wisconsin and if the investment was driven by customer requests.

A: Thomas Edman said Eau Claire was driven by defense requirements and customer supply chain resiliency discussions, with discussions around data center space but waiting for customer commitment.

Q: Jim Ricchiuti also asked about slippage in Malaysia and impact on competitive position.

A: Thomas Edman said slippage was due to qualifications and personnel training taking longer, but Penang was still ramping with $5.2 million in Q2 and expected linear growth.

Q: Ruben Roy with Stifel asked about China capacity and data center customer diversification.

A: Thomas Edman said China facilities were being scaled with additional capacity for data center and asymmetric designs, and data center customer diversification was going well with spread across customers.

Q: William Stein with Truist Securities asked about segments overlapping with products and margin drivers.

A: Thomas Edman explained segment breakdown with Commercial being printed circuit boards and RF&S being small, and Daniel Boehle said mix was a large driver of margins.

Q: Michael Crawford with B. Riley Securities asked about Penang land buy and Syracuse capacity.

A: Thomas Edman said Penang land buy was for future expansion, Syracuse had interior work ongoing with initial production in second half of 2026, and Eau Claire capital spend not yet defined.

Q: William Stein also asked about cost competitiveness in Eau Claire and margin drag in Penang.

A: Thomas Edman said Eau Claire had cost differentials, and Daniel Boehle said Penang margin drag was up to ~210 bps.