Business Context and Reporting Period
Company: TTM Technologies, Inc. (TTMI)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 29, 2025
Business Overview: TTM is a leading global manufacturer of advanced technology products, including mission systems, RF components, and interconnect products (PCBs and substrates). The company operates 24 specialized facilities in North America and Asia, serving approximately 1,300 customers in aerospace and defense, data center computing, automotive, medical, industrial, and networking markets. Operations are reported through three segments: Aerospace & Defense (A&D), Commercial, and RF & Specialty Components (RF&S).
Key Financial Metrics
| Metric | 2025 (Actual) | 2024 (Actual) | 2023 (Actual) |
|---|---|---|---|
| Net Sales | $2,906.3 million | $2,442.8 million | $2,232.6 million |
| Gross Profit | $601.7 million | $477.4 million | $413.3 million |
| Gross Margin | 20.7% | 19.5% | 18.5% |
| Operating Income | $264.7 million | $116.0 million | $42.3 million |
| Operating Margin | 9.1% | 4.8% | 1.9% |
| Net Income | $177.4 million | $56.3 million | $(18.7) million |
| Diluted EPS | $1.68 | $0.54 | $(0.18) |
| Operating Cash Flow | $291.9 million | $236.9 million | $187.3 million |
| Total Debt (Outstanding) | $924.2 million | $927.9 million | N/A |
| Cash & Equivalents | $501.2 million | $503.9 million | $450.2 million |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 19.0% year-over-year to $2.9 billion, driven by strong demand in aerospace and defense, and significant growth in data center computing and networking markets fueled by generative AI applications.
- Margin Expansion: Gross margin improved to 20.7% from 19.5%, attributed to higher sales volume, improved operational execution, and favorable product mix. Operating margin more than doubled to 9.1% from 4.8%.
- Profitability Surge: Net income jumped to $177.4 million from $56.3 million in 2024. This was significantly aided by the absence of a $32.6 million goodwill impairment charge recorded in 2024 and reduced restructuring charges.
- Foreign Exchange Impact: Total other expense increased to $54.3 million due to a $20.4 million foreign exchange loss, primarily from the strengthening of the Renminbi (RMB) and Malaysian Ringgit (MYR) against the U.S. dollar.
- Segment Performance:
- A&D: Sales up 13.4%; Operating margin up to 14.2%.
- Commercial: Sales up 24.3%; Operating margin up to 15.1%.
- RF&S: Sales up 7.2%; Operating margin up to 28.1%.
Guidance, Outlook, and Risks
- Capital Expenditures: Management expects 2026 capital expenditures to range between $240.0 million and $260.0 million to support capacity expansion, particularly for AI-processing products.
- Share Repurchases: A new $100.0 million repurchase program was authorized in May 2025. As of year-end, no shares had been repurchased under this new program, leaving the full $100.0 million available.
- Strategic Investments: The company is constructing a new advanced technology PCB facility in Syracuse, New York, with volume production expected in the second half of 2026. Additionally, land rights were acquired in Penang, Malaysia, for a future production site.
- Key Risks:
- Customer Concentration: The top five OEM customers accounted for 44% of net sales in 2025; two customers alone represented 23%.
- Geopolitical & Trade: Exposure to tariffs, trade restrictions, and supply chain disruptions related to China and global conflicts (e.g., Russia-Ukraine).
- Currency Fluctuation: Significant exposure to RMB and MYR exchange rates, which impacted 2025 results negatively.
- Debt Covenants: The company carries substantial indebtedness ($924.2 million) and must maintain specific leverage and fixed charge coverage ratios.
Investor Verification Checklist
- Customer Concentration: Verify the stability of the top two customers (23% of sales) and the impact of any potential order cancellations.
- AI Market Sustainability: Assess the durability of the demand surge in data center computing and networking driven by generative AI.
- Currency Hedging: Review the company's strategy to mitigate foreign exchange risk given the $20.4 million loss in 2025.
- Capital Allocation: Monitor the execution of the $240-$260 million 2026 CapEx plan and the timeline for the new Syracuse and Penang facilities.
- Debt Servicing: Confirm compliance with debt covenants (Secured Leverage Ratio) given the $924 million debt load and interest rate environment.