TTM Technologies, Inc. (TTMI) - Q2 2025 10-Q Summary
Business Context and Reporting Period
This filing covers the quarterly period ended June 30, 2025. TTM Technologies is a global manufacturer of advanced technology solutions, including printed circuit boards (PCB), mission systems, and radio frequency (RF) components. The company serves aerospace and defense, data center computing, automotive, medical, and industrial markets. During this quarter, the company reorganized its reporting structure into three segments: Aerospace & Defense (A&D), Commercial, and RF&S Components.
Key Financial Metrics
| Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 |
|---|---|---|---|---|
| Net Sales | $730.6 million | $605.1 million | $1,379.3 million | $1,175.3 million |
| Gross Profit | $148.1 million | $117.2 million | $279.1 million | $220.9 million |
| Gross Margin | 20.3% | 19.4% | 20.2% | 18.8% |
| Operating Income | $61.8 million | $39.0 million | $112.0 million | $56.1 million |
| Operating Margin | 8.5% | 6.4% | 8.1% | 4.8% |
| Net Income | $41.5 million | $26.4 million | $73.7 million | $36.8 million |
| Diluted EPS | $0.40 | $0.25 | $0.70 | $0.35 |
| Cash from Operations (YTD) | $87.1 million (vs. $85.8 million YTD 2024) | |||
| Total Debt (Net) | $917.1 million (as of June 30, 2025) | |||
| Cash & Equivalents | $448.0 million (as of June 30, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 20.7% quarter-over-quarter and 17.4% year-to-date, driven by strong demand in Aerospace & Defense, Data Center Computing (generative AI), and Networking.
- Margin Expansion: Gross margin improved to 20.3% due to favorable product mix, increased volume, and operational execution. Operating margin rose to 8.5%.
- Segment Performance:
- A&D: Sales up 19.3%; Operating margin improved to 13.8%.
- Commercial: Sales up 22.4%; Operating margin slightly decreased to 15.2% due to ramp-up costs in Penang, Malaysia.
- RF&S Components: Sales up 11.0%; Operating margin increased to 28.4%.
- Foreign Exchange Impact: Total other expense increased due to an unrealized foreign exchange loss of $5.7 million in Q2 2025 (vs. $0.1 million loss in Q2 2024), primarily from the devaluation of the USD against the Chinese Renminbi and Malaysian Ringgit.
- Capital Expenditures: Net cash used in investing activities was $123.5 million YTD, significantly higher than the prior year, driven by purchases of property, plant, and equipment.
Guidance, Outlook, and Risks
- Capital Expenditures: Total 2025 CapEx is expected to range between $235.0 million and $255.0 million. Approximately $66.0 million is allocated to the new Syracuse, New York facility.
- Strategic Investments: The company acquired a 750,000-square-foot facility in Eau Claire, Wisconsin, and land rights in Penang, Malaysia, to support AI-driven data center demand and supply chain diversification.
- Share Repurchases: A new $100 million repurchase program was authorized in May 2025. No shares were repurchased in Q2 2025; $17.9 million was spent in the first two quarters under the prior program.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) was enacted on July 4, 2025. The company is evaluating its impact on deferred tax balances, which will be reflected in Q3 2025 results.
- Risks: Key risks include foreign currency fluctuations, global economic volatility, supply chain disruptions, and the successful integration of new manufacturing facilities.
Investor Verification Checklist
- Verify the impact of the new OBBBA tax legislation on future effective tax rates and deferred tax liabilities.
- Monitor the ramp-up costs and production timelines for the new Eau Claire, Wisconsin, and Penang, Malaysia facilities.
- Assess the sustainability of the 20.3% gross margin given the high capital investment and potential supply chain inflation.
- Review the foreign exchange exposure management strategy, particularly regarding the RMB and MYR, given the recent unrealized losses.
- Confirm the progress of the Syracuse, New York facility construction and equipment installation scheduled for Q3 2025.