TTM Technologies(US:TTMI)2025-04-30 21:32Financial Data and Key Metrics Changes - TTM Technologies 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 aerospace and defense program backlog was approximately $1.55 billion, up from $1.38 billion year-on-year [18] - Networking revenue grew by 53% year-on-year, accounting for 8% of total revenue, driven by increased demand [21] Company Strategy and Development Direction - The company is focused on diversifying its end markets and manufacturing footprint, with significant investments in new production capabilities in regions like Malaysia [8] - TTM is positioned to benefit from increased defense spending, with expectations of continued growth in the aerospace and defense sector [15] - The company aims to mitigate tariff impacts through strategic sourcing and delivery timing [12] Management's Comments on Operating Environment and Future Outlook - Management noted that there has been no significant change in customer behavior due to tariffs, with a strong outlook for the aerospace and defense market [9][66] - The company is optimistic about the potential for increased domestic manufacturing investments in the U.S., which could benefit TTM in the long term [13] - Management highlighted the importance of maintaining flexibility and vigilance in response to potential economic slowdowns [13] Other Important Information - TTM's cash and cash equivalents at the end of Q1 2025 totaled $411.3 million, with net debt to EBITDA at 1.3 [32] - The company plans to ramp up production at its new facility in Syracuse, with expectations for production to begin in mid-2026 [16] - TTM published its second corporate sustainability report on April 22, reflecting its commitment to environmental responsibility [17] Q&A Session Summary Question: Revenue and margins at the Penang facility - In Q1, the Penang facility generated approximately $2.2 million in revenue, with an operating income loss of about $11.5 million, but is expected to reach breakeven by Q3 [36][37] Question: Decline in aerospace and defense program backlog - The program backlog decreased slightly from $1.56 billion to $1.55 billion, but bookings remain strong, indicating healthy demand [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 [50][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 future volume needs and is positioned to leverage its Penang facility for advanced technology production [70][71] Question: Potential upside from defense spending - The reconciliation bill includes programs related to air missile defense, which could provide additional revenue opportunities for TTM [80][82]