Core Insights - TTM Technologies reported strong fourth-quarter sales of $774.3 million, exceeding guidance, with a year-over-year increase of 19% driven by demand in data center computing and networking linked to generative AI, as well as growth in medical, industrial, and aerospace sectors [1][4][5] Financial Performance - The company achieved record non-GAAP EPS of $0.70, an adjusted EBITDA margin of 16.3%, and operating cash flow of $63 million for Q4, with full-year net sales rising to $2.9 billion from $2.4 billion [5][6][13] - TTM's book-to-bill ratio was 1.35 for the quarter, with a strong defense segment book-to-bill of 1.46, contributing to a program backlog of approximately $1.6 billion [5][8][12] Market Demand and Growth Drivers - Approximately 80% of TTM's net sales are associated with artificial intelligence and defense, highlighting the strategic focus on Advanced Interconnect technologies and integrated modules [2][6] - The aerospace and defense sector represented 41% of Q4 sales, with a 5% year-over-year growth, while data center computing saw a remarkable 57% growth in Q4 [7][9] Guidance and Future Outlook - Management guided for FY26 net sales to increase by 15% to 20%, with Q1 2026 net sales expected to range from $770 million to $810 million [5][16][17] - The company plans significant capital expenditures of approximately $240 million to $260 million for 2026, alongside targeted investments of $200 million to $300 million in data center capacity [5][20] Capacity Expansion and Strategic Initiatives - TTM is expanding capacity in Syracuse and Eau Claire, with the Syracuse facility expected to generate revenues in the second half of the year [18][19] - The company is focusing on organic growth and aims to double earnings from 2025 to 2027, leveraging demand and capacity investments [21]

Financial Data and Key Metrics Changes - The company achieved sales of $774.3 million in Q4 2025, a 19% year-on-year increase, exceeding the high end of the guided range [9][15] - Non-GAAP EPS reached $0.70 per diluted share, marking an all-time quarterly record high for the company [9][22] - Adjusted EBITDA margin was 16.3% in Q4 2025, up from 14.7% in the prior year, reflecting improved execution [9][22] - Cash flow from operations was $63 million, or 8.1% of sales, bringing total cash flow for fiscal 2025 to $292 million, or 10% of sales [9][15] Business Line Data and Key Metrics Changes - Aerospace and defense represented 41% of Q4 2025 sales, with a 5% year-on-year growth for the quarter and 13% for the full year [10][11] - Data center computing accounted for 20% of Q4 2025 sales, experiencing a 57% year-on-year growth [11][12] - The networking end market represented 8% of Q4 2025 sales, with a 23% year-on-year growth [11][12] - Medical, industrial, and instrumentation accounted for 14% of Q4 2025 sales, with a 28% year-on-year growth [12][13] Market Data and Key Metrics Changes - The overall book-to-bill ratio was 1.35 for Q4 2025, with the aerospace and defense segment at 1.46 [14] - The company expects sales from the aerospace and defense market to represent 42% of total sales in Q1 2026 [10][11] - The combined sales for data center and networking would have represented 36% of total sales in Q4 2025, expected to be 37% in Q1 2026 [11][12] Company Strategy and Development Direction - The company focuses on Advanced Interconnect technologies and aims to move up the value chain into complex modules and subsystems [4][5] - The strategy includes capital investment to support growth in artificial intelligence and defense markets, which account for approximately 80% of net sales [6][7] - The company aims to grow revenues by 15%-20% per year for the next three years and to double earnings from 2025 to 2027 [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet growth targets, citing strong demand in key markets [6][7] - The company is well-positioned to support growth across end markets and is investing in capacity expansion [7][8] - Management highlighted the importance of technological innovation and customer alignment in product development [5][6] Other Important Information - The company plans to participate in upcoming industry conferences, including the Citi Industrial Tech and Mobility Conference and the JPMorgan Leveraged Finance Conference [25] Q&A Session Summary Question: Capacity addition in China and Syracuse - Management confirmed good progress in extending capacity in both China and the U.S., with no issues anticipated in supply chain or equipment [28] - Syracuse facility is on track, with first revenues expected in the second half of the year [29] Question: Gross margin improvement and Penang headwinds - Management noted a headwind of about 180 basis points from Penang, with improvements expected throughout the year [31][32] Question: Eau Claire facility plans - Eau Claire is the largest PCB site in the U.S., with plans to tool up the facility over the next 18-24 months [36] Question: Book-to-bill ratio and order visibility - Management indicated that visibility for commercial business remains at six to nine months, while defense backlog is significant and spans multiple years [41] Question: CapEx and growth targets - The company plans additional capital expenditures of $200 million-$300 million for data center capacity in China over the next two to three years [46] Question: Impact of copper prices - Management does not expect significant impacts from copper price volatility, as pricing adjustments can be passed through to customers [58]

Financial Data and Key Metrics Changes - The company achieved sales of $774.3 million in Q4 2025, a 19% year-over-year increase from $651 million in Q4 2024, driven by strong demand in various end markets [9][15] - Non-GAAP EPS reached $0.70 per diluted share, marking an all-time quarterly record high for the company [9][22] - Adjusted EBITDA margin improved to 16.3% in Q4 2025 from 14.7% in the prior year, reflecting better operational execution [9][22] - Cash flow from operations was $63 million, or 8.1% of sales, bringing total cash flow for fiscal 2025 to $292 million, or 10% of sales [9][15] Business Line Data and Key Metrics Changes - The aerospace and defense end market represented 41% of Q4 2025 sales, growing 5% year-over-year [10] - Data center computing sales grew 57% year-over-year in Q4 2025, representing 20% of total sales [11] - The medical, industrial, and instrumentation end market saw a 28% year-over-year growth in Q4 2025, accounting for 14% of total sales [12] - Automotive sales represented 9% of Q4 2025 sales, with a focus on higher-value products expected to decrease to 8% in Q1 2026 [13][14] Market Data and Key Metrics Changes - The overall book-to-bill ratio was 1.35 for Q4 2025, with the aerospace and defense segment at 1.46 [14] - The company expects sales from the aerospace and defense market to represent 42% of total sales in Q1 2026 [10] - The combined sales for data center and networking markets would have represented 36% of total sales in Q4 2025, expected to rise to 37% in Q1 2026 [11][12] Company Strategy and Development Direction - The company focuses on Advanced Interconnect technologies and aims to move up the value chain into complex modules and subsystems [4][5] - The strategy includes investing in capacity expansion to support growth in AI and defense markets, with a revenue growth target of 15%-20% per year for the next three years [6][7] - The company is positioned to leverage its global footprint across 24 sites to meet increasing demand for complex technology solutions [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential driven by megatrends in AI and defense, with 80% of net sales related to these areas [6][7] - The company anticipates continued strong demand in data center computing and networking markets, particularly for AI applications [11][12] - Management highlighted the importance of technological innovation and capacity expansion to seize growth opportunities [6][7] Other Important Information - The company plans to participate in upcoming industry conferences, including the Citi Industrial Tech and Mobility Conference and the JPMorgan Leveraged Finance Conference [25] Q&A Session Summary Question: Capacity addition in China and Syracuse - Management confirmed good progress in extending capacity in both China and the U.S., with no issues in supply chain or equipment [28] - Syracuse facility is on track, with first revenues expected in the second half of the year [29] Question: Gross margin improvement and Penang headwinds - Management noted a headwind of about 180 basis points from Penang, with improvements expected throughout the year [31][32] Question: Eau Claire facility plans - Eau Claire is the largest PCB site in the U.S., with plans to tool up the facility over the next 18-24 months [36] Question: Book-to-bill ratio and order visibility - Management indicated that visibility for ongoing commercial business is about 6-9 months, with a significant backlog in defense [41] Question: CapEx and growth targets - The company plans additional capital expenditures of $200 million-$300 million for data center capacity in China over the next two to three years [46] Question: Impact of copper prices - Management does not expect significant impacts from copper price volatility, as they can pass costs through to customers [58]

Investment Rating - The report maintains a Neutral rating for Maxscend with a 12-month target price of Rmb86, indicating an upside potential of 23.2% from the current price of Rmb69.81 [2][11]. Core Insights - Management is optimistic about the company's RF modules expansion, the ramp-up of in-house capacity utilization, and new growth opportunities in the long term [1][2]. - The smartphone market is anticipated to take time to transition to the next product cycle (6G), and the shift from fabless to fab-lite may also require time to enhance efficiency and profitability [2]. Summary by Sections 2025 Business Outlook - Management expects quarterly revenues and margins to increase sequentially in 2025, driven by RF modules expansion, improved smartphone seasonality in the second half of 2025, and normalizing depreciation as utilization rates rise [3]. - Inventory levels are projected to decline but remain relatively high due to geopolitical tensions [3]. Xinzhuo Project Development Progress - The 6" and 12" wafer production lines have commenced mass production, with the 12" production line currently achieving a capacity of 4,000 wafers per month, aiming for 5,000 wafers per month by the end of 2025 [4]. - As capacity increases, the depreciation cost per wafer is expected to decrease, leading to margin improvements [4]. New Growth Opportunities - Management is positive about the potential of LEO satellite direct-to-cell functions, which could create additional RF module opportunities for Maxscend [8]. - There are also long-term prospects in high-end markets such as AI and robotics, allowing the company to leverage its in-house capacity more effectively [8].