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A global manufacturer of mission systems, RF components, and advanced printed circuit boards, TTM Technologies builds the electronics behind radar and surveillance systems, RF/microwave assemblies, and advanced circuit boards used in aerospace, defense, data centers, automotive, medical, and networking gear. It runs three segments across two dozen facilities in North America and Asia, serving roughly 1,300 customers from equipment makers to government agencies with a one-stop design-to-volume-production service.
TTM revenue crossed $1B in a quarter for the first time, rising 37% on AI data center demand.
crossed $1 billion for the first time. Sales rose 37.4% to $1,004.1 million and widened 2.4 points to 10.9%, driven by AI-related data center and networking demand that grew to 40% of total sales. The company raised its full-year plan to as much as $365 million to keep expanding capacity.
Key takeaways
rose 37.4% to $1,004.1 million, the first quarter above $1 billion, driven primarily by the data center and networking end market's AI-related buildout, which grew to 40% of sales from 29% a year ago.
improved 0.8 points to 21.1% as higher sales volume, favorable product mix, and improved operational execution more than offset ramp-up costs.
rose 76.6% to $109.1 million, with widening 2.4 points to 10.9%, despite a $16.5 million increase in operating expenses from higher labor and acquisition-related costs.
Section summaries
Management's Discussion and Analysis
Net sales surged 37% to $1B on AI data center demand; gross margin expanded to 21.1% and operating income rose 77%.
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Total rose 37.4% to $1,004.1M, driven primarily by the data center and networking end market's AI-related buildout, which grew to 40% of sales from 29%.
The Commercial led growth with sales up 57.1% to $621.6 million and segment reaching 18.1%, while the Aerospace & Defense segment grew 14.2% with margin improving to 16.7%.
The company raised its full-year 2026 capital expenditure outlook to $345 million to $365 million, up from the $300 million to $320 million plan set last quarter, to fund capacity expansion.
A deal-contingent was executed to hedge foreign-exchange risk tied to the planned STG acquisition, carrying a net of $14.0 million as of quarter-end.
What changed
The data center and networking end market accelerated further, growing to 40% of sales from 29% a year ago and driving the first $1 billion quarter, after powering 30.4% growth in Q1.
widened to 21.1% from 20.3% a year ago, continuing a recovery toward the 23.0% prior peak, as higher volume and mix benefits outweighed Penang ramp-up costs that had compressed margins in recent quarters.
The company raised its plan for the third time in four quarters, to $345–$365 million, up from $300–$320 million set last quarter and more than double the original $240–$260 million outlook from the FY2025 annual report.
remained negative at -$85.1 million in Q1 and turned positive to $34.1 million in Q2, but the $96.4 million in still fell short of funding the elevated .
What to watch
Whether can turn sustainably positive for the full year as rises to $345–$365 million, or whether the $507.9 million cash balance is drawn down further to fund the Syracuse, Eau Claire, and Penang expansions simultaneously.
Whether can continue widening toward the 23.0% prior peak as Penang ramp-up costs fade, or whether the addition of the Eau Claire facility and ongoing Syracuse construction keep start-up inefficiencies elevated.
The trajectory of AI-driven data center demand, which grew to 40% of sales, and whether that demand sustains as new industry capacity comes online and customer investment patterns evolve.
The outcome of the pending STG acquisition, expected to close in Q3 2026, and the impact of the associated on reported foreign-exchange results.
improved to 21.1% from 20.3% due to higher sales volume, favorable product mix, and improved operational execution.
increased 77% to $109.1M, with expanding to 10.9% from 8.5%, despite a $16.5M rise in operating expenses from higher labor and acquisition costs.
The Commercial led growth with sales up 57.1% to $621.6M and reaching 18.1%, while the A&D segment grew 14.2% with margin improving to 16.7%.
rose to $118.2M from $87.1M; the company expects full-year 2026 of $345M-$365M for capacity expansion and has $913.9M available under its new RCF.
Quantitative and Qualitative Disclosures About Market Risk
The company entered a deal-contingent cross-currency swap to hedge CHF exposure from the pending STG acquisition.
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A forward-starting USD/CHF was executed to economically mitigate foreign-exchange risk tied to the planned STG acquisition, expected to close in Q3 2026.
As of June 29, 2026, the swap carried a net of $14.0 million, with principal exchanges of $381 million and CHF 306 million effective September 30, 2026.
Under the swap, the company will receive 6.00% USD interest and pay 3.025% CHF interest semiannually from March 2027 through the September 2033 maturity.
76.5% of total debt was fixed-rate; a hypothetical 100-basis-point increase in variable rates would raise annual interest cost by approximately $2.3 million.
An effectively fixed $250 million of variable-rate debt, leaving $480 million in variable-rate instruments at a weighted average rate of 5.36%.
From time to time, we may become a party to various legal proceedings arising in the ordinary course of our business. There can be no assurance that we will prevail in any such litigation. We believe that the amount of any reasonably possible or probable loss for known matters w…
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From time to time, we may become a party to various legal proceedings arising in the ordinary course of our business. There can be no assurance that we will prevail in any such litigation. We believe that the amount of any reasonably possible or probable loss for known matters would not be material to our financial statements; however, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on our financial condition, results of operations, or cash flows in a particular period.
The sole material change in risk factors this quarter is heightened foreign-exchange exposure, including a new deal-contingent USD/CHF swap.
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A portion of cash, assets, and liabilities is held in non-USD currencies, so exchange-rate moves can reduce funds available for operations or debt repayment.
Revenues, expenses, and costs are denominated in RMB, MYR, CHF, and the Euro, and unhedged fluctuations could raise costs or lower reported .
The proposed STG acquisition introduced a deal-contingent USD/CHF , adding specific CHF exposure.