TTM Technologies (TTMI) Q1 2025 Earnings Call April 30, 2025 04:30 PM ET Speaker0 Good afternoon. Thank you for standing by. Welcome to the TTM Technologies Inc. First Quarter twenty twenty five Financial Results Conference Call. During today's presentation, all parties will be in a listen only mode. Following the presentation, the conference will be open for questions. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your ha ...

Financial Data and Key Metrics Changes - TTM achieved revenue of $648.7 million in Q1 2025, a 14% increase year on year from $570.1 million in Q1 2024 [26] - Non-GAAP EPS for Q1 2025 was $0.50, compared to $0.28 in Q1 2024, reflecting strong financial performance [30] - Non-GAAP operating margin improved to 10.5%, up 340 basis points from 7.1% in the same quarter last year [28] Business Line Data and Key Metrics Changes - Aerospace and defense represented 47% of total sales in Q1 2025, with revenues growing 15% year on year [17] - Data center computing accounted for 21% of total sales, also growing 15% year on year, driven by demand for generative AI applications [19] - Automotive sales declined to 11% of total sales, down from 13% in the previous year, primarily due to inventory adjustments [20] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.1 for the quarter, indicating a healthy order intake relative to shipments [7][25] - The medical industrial instrumentation market contributed 13% of total sales, returning to 5% year on year growth as demand normalized [19] - Networking sales grew 53% year on year, accounting for 8% of revenue, driven by increased demand from AI-related products [21] Company Strategy and Development Direction - TTM is focused on reducing seasonality in operating performance and has diversified its end markets and manufacturing footprint [8] - The company is investing in new production capabilities in regions like Malaysia while divesting lower-margin facilities in China [8] - TTM aims to mitigate tariff impacts through strategic sourcing and delivery timing, maintaining a diverse manufacturing footprint [12] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand in aerospace and defense, with a solid program backlog of approximately $1.55 billion [18] - The company is optimistic about future growth, particularly in defense spending, with expectations of continued increases in the defense budget [15] - Management highlighted the importance of monitoring customer behavior in response to tariffs but noted no significant changes thus far [66] Other Important Information - TTM's new facilities in Penang and Syracuse are progressing well, with expectations for revenue ramp-up and breakeven points in the near future [16] - The company published its second corporate sustainability report, reflecting its commitment to minimizing environmental impact [17] Q&A Session Summary Question: Revenue and margins at the Penang facility - Revenue at the Penang facility was approximately $2.2 million in Q1, with an operating income loss of about $11.5 million, but management expects steady improvement [36][37] Question: Decline in aerospace and defense program backlog - The program backlog slightly decreased from $1.56 billion to $1.55 billion, but bookings remain strong, indicating a healthy outlook [41][44] Question: Customer qualifications at the Penang facility - TTM has four anchor customers and is qualifying approximately 10 additional customers, with a focus on data center and networking markets [51][54] Question: Impact of tariffs on customer behavior - Management has not observed significant changes in customer behavior due to tariffs, with steady demand across various markets [66] Question: Competitive dynamics in PCB manufacturing - TTM is engaging in discussions with customers regarding competitive dynamics, particularly in light of the Penang facility's capabilities [68][70] Question: Potential upside from defense spending - Management is optimistic about the reconciliation bill and its potential positive impact on aerospace and defense revenue [82][84]