TTM Technologies, Inc. Q2 FY26 Earnings Analysis

- The company is tracking well ahead of its previously communicated plan to grow revenues 15% to 20% per year for the next 3 years. - They expect continued strong growth in data center networking, medical, industrial and instrumentation, and aerospace and defense end markets. - First quarter 2026 sales grew 30% year-over-year to $846 million, driven by AI demand in data centers. - Data center and networking end market saw 61% year-on-year growth and is expected to represent 42% of net sales in Q2 2026. - Aerospace and defense sales grew 11% year-over-year; bookings remain strong driven by defense budgets. - Increased capital expenditures (CapEx) from previously guided $250 million to now $300-$320 million in 2026 to support accelerated growth. - Strong backlog of $1.6 billion in aerospace and defense and increased book-to-bill ratios indicate robust future demand. - Emphasis on innovation and technology leadership to support complex, high-layer PCB volumes driving ASP and volume growth.

- The company projects net sales growth to continue in the second half of 2026, following a strong first half. - Non-GAAP diluted EPS for Q2 2026 is expected in the range of $0.82 to $0.88 per share, up from $0.75 in Q1 2026. - The company aims for revenue growth of 15% to 20% per year over the next 3 years. - They plan to double earnings from 2025 to 2027. - Adjusted EBITDA margin improved to 15.7% in Q1 2026, indicating strong operating performance. - Growth is driven by expanding demand in data center networking (AI-related), medical, industrial, instrumentation, aerospace and defense markets. - Capital investments are increasing (CapEx raised from $250 million to $310 million) to support accelerated growth. - The company maintains disciplined cost management with SG&A and R&D expenses controlled relative to net sales.

- Capital expenditures (CapEx) for 2026 are increased from an initial range of $240-$260 million to $300-$320 million. - The increase reflects accelerated investments primarily in Asia, including facilities in China, Malaysia, and Syracuse, to keep pace with customer demand. - Early orders and deposits on equipment have been placed to mitigate lead time risks. - The company is expanding its global footprint with 24 manufacturing sites across China, Malaysia, Canada, and the U.S. - A new UK facility (~750,000 sq. ft.) is being developed with 3 modules to serve commercial and defense customers, including an R&D center for close customer collaboration. - The focus is on capacity expansion and leading-edge technologies, especially to support growth in data center networking, medical, aerospace, defense, and AI-related end markets.

- The transcript does not mention any current or future plans for fundraising through debt or equity. - There is no disclosure of new debt issuance or equity offerings in the discussed earnings call. - The company highlights maintaining a healthy net leverage ratio of about 1, indicating controlled use of debt. - Capital expenditures are increasing (from $250M to $310M+) funded through strong cash flows from operations. - No comments or indications were made regarding seeking external financing through equity or additional debt.

- At the end of Q1 2026, the 90-day backlog was $787 million, up from $517 million a year ago. - Aerospace and Defense (A&D) backlog stood at $1.6 billion, similar to the level a year ago. - Book-to-bill ratios: Overall at 1.41; Commercial segment at 1.65; A&D segment at 1.10 in Q1 2026. - Significant A&D bookings in Q1 2026 included programs like Alteams Air Defense Radar, APS 153 maritime surveillance radar, and ballistic missile detection systems. - Data center and networking end market order growth exceeded expectations with 61% year-on-year increase. - Ongoing strong demand from data center and networking customers, particularly driven by AI data center buildouts. - Medical, industrial, and instrumentation segments also showing healthy demand with 61% year-over-year growth in Q1 2026. - Strategic alliance contracts with major customers provide multi-year visibility on orders.