TTM Technologies targets Q4 sales between $730M-$770M while advancing Penang and Syracuse expansions

Earnings Call Insights: TTM Technologies (TTMI) Q3 2025

MANAGEMENT VIEW

* Edwin Roks, President and CEO, stated that "for the fourth quarter in a row, TTM achieved sales and non-GAAP EPS above the high end of the guided range. Sales grew 22% year-on-year, reflecting continued demand strength in our data center computing and networking end markets, driven by the requirements of generative AI." Roks emphasized the company’s strategic move up the value chain into highly complex modules and subsystems, particularly for markets where reliability and performance are critical, such as aerospace, defense, and data centers.
* Roks reported that the company is in the middle of its annual strategic review and plans to present this to the Board for approval next month, which will guide future conversations.
* The aerospace and defense segment delivered better-than-expected results, with sales representing 45% of total sales, due in part to a pull forward of sales initially expected in Q4. The A&D backlog is approximately $1.46 billion.
* Roks highlighted strong customer interest and confidence in the company’s Penang facility, which achieved $5 million in third quarter sales, with expectations for growth in Q4. Plans for a second Penang facility remain on track, aligned to long-term demand.
* Roks confirmed progress at the Ultra-HDI PCB facility in Syracuse, New York, with equipment installation underway and volume production expected to start in the second half of 2026.
* Daniel Boehle, Executive VP & CFO, stated, “For the third quarter, net sales were $752.7 million compared to $616.5 million in the third quarter of 2024. The 22% year-over-year increase was due to growth in our aerospace and defense, data center computing, networking; and medical, industrial and instrumentation; end markets, partially offset by a slight decline in our automotive end market.”

OUTLOOK

* Boehle projected net sales for Q4 2025 to be in the range of $730 million to $770 million and non-GAAP earnings to be in the range of $0.64 to $0.70 per diluted share. This guidance includes expected operating costs associated with ramping up the Penang facility.
* The company expects SG&A expense to be about 8.9% of net sales, R&D at about 1% of net sales, interest expense of approximately $10.2 million, and an effective tax rate between 11% and 15% for Q4.
* Roks indicated that the strategic plan, once approved, will shape future guidance and priorities.

FINANCIAL RESULTS

* Boehle detailed, “Gross margin for the third quarter of 2025 was 20.8% compared to GAAP gross margin for the third quarter of 2024 of 21.1%.” GAAP operating income was $71.9 million, or 9.6%.
* Non-GAAP EPS for Q3 was $0.67, marking a record for TTM. Adjusted EBITDA reached $120.9 million or 16.1% of net sales.
* Cash flow from operations was $141.8 million or 18.8% of net sales, and cash and cash equivalents at quarter-end totaled $491.1 million. Net debt to last 12 months EBITDA was 1.0.
* By segment, the Aerospace and Defense segment recorded $336.8 million in net sales and $52.9 million in operating income. The Commercial segment posted $408.9 million in net sales and $60 million in operating income.

Q&A

* James Ricchiuti, Needham & Company: Asked about visibility in the data center market and additional capacity. Roks responded, "our visibility is between 6 to 9 months... we're good regarding capacity, both in North America and Asia Pacific; well balanced."
* Ricchiuti asked about Penang margin headwinds. Boehle answered that in Q3, Penang was about "195 basis points to the bottom line, which is an improvement from Q2, which was about 210 basis points. And then in Q4, we're forecasting... about 160 basis points impact to the bottom line."
* Michael Crawford, B. Riley Securities: Inquired about PCB manufacturing capacity share. Roks replied, “in the U.S., we are still the #1 player... about the #6 or 7 of the world. Concentrate on data center, it’s about the #3 or 4.”
* Crawford asked about density in China for data center applications. Roks described progress toward “demonstrating 87 layers,” emphasizing R&D investments for higher resolution and complex designs.
* William Stein, Truist Securities: Asked about key financial metrics and targets. Roks stated, "the top metric for me is always cash. It's always growth, it's gross margin... our EBITDA should be healthy. Bottom line should be healthy. But again, we are set up to grow."

SENTIMENT ANALYSIS

* Analysts consistently highlighted positive results but pressed for detail on margin headwinds, capacity expansion, and long-term strategic direction, displaying a neutral to slightly positive sentiment with a focus on sustainability of growth and profitability.
* Management maintained a confident and optimistic tone during both prepared remarks and Q&A, emphasizing growth, innovation, and investment in new facilities. Roks reiterated, "we are set up to grow" and "we want to make sure that our gross margin stays very, very healthy."
* Compared to the previous quarter, analyst sentiment remained mostly positive but became more focused on operational execution and margin sustainability, while management continued its confident tone, now under new leadership.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for Q4 2025 net sales increased compared to the Q3 guidance range from the previous quarter, while non-GAAP EPS guidance remained in a similar range.
* The CEO transition from Thomas Edman to Edwin Roks marks a significant management change, with Roks emphasizing continuity and a focus on growth and innovation.
* Segment performance showed continued robust growth in aerospace, defense, and data center end markets, with automotive remaining a weak spot.
* Margin headwinds related to the Penang facility showed improvement, with further reduction expected in Q4.
* Analyst focus shifted from U.S. capacity expansion and customer commitments to operational ramp-up and margin improvement in Penang and technology leadership in data center applications.

RISKS AND CONCERNS

* Management acknowledged ongoing margin headwinds from ramping up the Penang facility but expects continued improvement as yields stabilize.
* The company cited possible indirect risks from tariffs or overall end market demand weakness, but stated that “we have not seen that impacting our key end markets.”
* Automotive end market continues to face soft demand and inventory adjustments, with expectations for further decline in Q4.

FINAL TAKEAWAY

TTM Technologies reported another quarter of strong revenue and EPS growth, led by exceptional performance in aerospace, defense, and AI-driven data center markets. The transition to new CEO Edwin Roks was marked by a reaffirmation of the company’s strategic focus on growth, innovation, and operational excellence. With robust backlog, advancing expansions in Penang and Syracuse, and improving margin dynamics, the company remains confident in its ability to capture long-term opportunities across its key end markets.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ttmi/earnings/transcripts]

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