TTM Technologies, Inc. (TTMI) - 10-Q Summary
Business Context and Reporting Period
Company: TTM Technologies, Inc.
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 29, 2026 (Second Quarter of Fiscal Year 2026)
Business Overview: A leading global manufacturer of technology products, including mission systems, RF components, and advanced interconnect products (PCBs). The company serves aerospace and defense, automotive, data center, and medical/industrial markets.
Segment Realignment: Effective Q1 2026, the company consolidated into two reportable segments: Aerospace & Defense (A&D) and Commercial, following the realignment of RF&S Components into A&D.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | YTD 2026 (2Q) | YTD 2025 (2Q) |
|---|---|---|---|---|
| Net Sales | $1,004,054 | $730,621 | $1,850,030 | $1,379,289 |
| Gross Profit | $211,858 | $148,109 | $393,039 | $279,081 |
| Gross Margin | 21.1% | 20.3% | 21.2% | 20.2% |
| Operating Income | $109,055 | $61,769 | $181,504 | $112,029 |
| Operating Margin | 10.9% | 8.5% | 9.8% | 8.1% |
| Net Income | $83,047 | $41,530 | $133,035 | $73,708 |
| Diluted EPS | $0.77 | $0.40 | $1.24 | $0.70 |
| Cash & Equivalents | $507,905 | $447,967 | $507,905 | $447,967 |
| Total Debt (Principal) | $980,000 | $924,150 | $980,000 | $924,150 |
| Operating Cash Flow (YTD) | $118,172 | $87,149 | $118,172 | $87,149 |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 37.4% QoQ and 34.1% YTD, driven primarily by strong demand in the Data Center and Networking market (AI build-out) and growth in A&D and Medical/Industrial sectors.
- Margin Expansion: Gross margin improved to 21.1% (Q2) and 21.2% (YTD) due to higher volume, favorable product mix, and operational execution. Operating margin expanded to 10.9% (Q2) and 9.8% (YTD).
- Segment Performance:
- A&D: Sales up 14.2% QoQ; Operating margin improved to 16.7%.
- Commercial: Sales up 57.1% QoQ; Operating margin improved to 18.1%.
- Debt Restructuring: On June 1, 2026, the company entered a new Credit Agreement, refinancing the Term Loan Facility ($400M) and establishing a new $1.0B Revolving Credit Facility (RCF). This replaced prior U.S. and Asia ABL facilities.
- Unusual Items:
- Derivative Loss: A $13.994M unrealized loss on a deal-contingent USD/CHF cross-currency swap related to the proposed STG acquisition was recorded in Q2.
- Debt Extinguishment: A $0.747M loss on extinguishment of debt was recognized.
Guidance, Outlook, and Risks
- Capital Expenditures: Total 2026 CapEx is expected to range between $345.0M and $365.0M, primarily for capacity expansion.
- Acquisitions: Definitive agreements announced on June 17, 2026, to acquire Swiss Technology Group (STG) and ILFA GmbH. Closing is expected in Q3 2026, subject to regulatory approval.
- Liquidity: As of June 29, 2026, the company held $507.9M in cash and had $913.9M available under the RCF. Management believes cash flows and borrowing capacity are sufficient for the next 12 months.
- Share Repurchases: No shares were repurchased in Q2 2026. The full $100.0M authorization from the May 2025 program remains available.
- Risks:
- Currency: Exposure to RMB, MYR, and CHF fluctuations. A strengthening RMB and MYR contributed to foreign exchange losses in Q2.
- Acquisition Execution: Risks associated with closing and integrating the STG and ILFA acquisitions.
- Customer Concentration: The top 10 customers accounted for 55% of net sales in Q2 2026.
Investor Verification Checklist
- Acquisition Status: Verify the closing timeline and regulatory approval status for the STG and ILFA acquisitions.
- Derivative Impact: Confirm the final fair value and accounting treatment of the USD/CHF swap upon the closing of the STG deal.
- CapEx Utilization: Monitor progress on the new Syracuse, NY facility and overall 2026 capital expenditure burn rate.
- Working Capital: Review the significant increase in Accounts Receivable ($156M increase YTD) and Contract Assets ($128M increase YTD) to ensure collection trends remain healthy.
- Debt Covenants: Verify continued compliance with the new 2026 Credit Agreement covenants (Leverage Ratio max 4.50:1.00, Interest Coverage min 2.50:1.00).