TTM Technologies(US:TTMI)2025-04-30 20:30Financial 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]