TTM Technologies Reports Strong Q2 2024 Results

TTM Technologies Inc. has shown impressive performance in the second quarter of 2024, with revenue and non-GAAP earnings per share exceeding expectations. The company’s growth is largely driven by strong demand in the aerospace and defense and data center computing sectors.

TTM is actively transforming its business to focus on less cyclical and more differentiated product offerings, with over half of its revenues now coming from engineered and integrated electronic products. The company is expanding its operations with new facilities in Malaysia and Syracuse, New York, to enhance its advanced technology capabilities and better serve commercial markets.

Key Insights:

• TTM reported net sales of $605.1 million for Q2, up significantly from $546.5 million the previous year.
• Non-GAAP earnings per share reached $0.25, an increase from $0.07 year-on-year.
• Gross margin improved to 20%, compared to 19.2% in Q2 2023.
• The aerospace and defense backlog surged to a record $1.45 billion.
• Projected Q3 sales are expected to be between $580 million and $620 million, with non-GAAP earnings per share estimated at $0.37 to $0.43.

Company Outlook:

• TTM is positioning itself to be less impacted by market cycles and is emphasizing differentiated, engineered electronic products.
• New manufacturing facilities in Malaysia and New York are set to boost capabilities and market reach, with limited revenue expected from Malaysia in Q3 as production ramps up.

Challenges:

• TTM faces customer audit delays and sample qualification issues at its Penang facility.
• The automotive sector is navigating challenges as clients reassess their portfolios and delay program releases.
• Labor shortages remain a pressing issue, particularly concerning additional labor needs.

Positive Developments:

• Strong demand persists in the aerospace, defense, and data center computing markets.
• TTM is experiencing increased interest in generative AI applications, which has positively impacted the data center sector.
• The company is gaining market share with 80% of new program positions coming from existing clients.

Discussion Highlights:
CEO Thomas Edman addressed the ongoing transformation of TTM’s operations, focusing on higher layer count requirements driven by generative AI. He emphasized close collaboration with customers for smoother transitions and accurate forecasting while noting a reduced revenue impact from supply chain challenges.

TTM continues to prioritize stock buybacks, M&A opportunities, and potential debt repurchases to optimize its capital allocation strategy. In summary, TTM Technologies Inc. has shown resilience and strategic vision, focusing on growth markets and operational efficiency amidst various challenges. As the company navigates a competitive landscape and complex supply chain dynamics, it remains committed to delivering value to stakeholders and seizing emerging opportunities in aerospace, defense, and data center sectors.