PCB manufacturing company TTM Technologies (NASDAQ:TTMI) announced better-than-expected revenue in Q1 CY2025, with sales up 13.8% year on year to $648.7 million. The company expects next quarter’s revenue to be around $670 million, close to analysts’ estimates. Its non-GAAP profit of $0.50 per share was 26.9% above analysts’ consensus estimates.

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TTM Technologies (TTMI) Q1 CY2025 Highlights:

Revenue: $648.7 million vs analyst estimates of $620 million (13.8% year-on-year growth, 4.6% beat) Adjusted EPS: $0.50 vs analyst estimates of $0.40 (26.9% beat) Adjusted EBITDA: $99.48 million vs analyst estimates of $83.93 million (15.3% margin, 18.5% beat) Revenue Guidance for Q2 CY2025 is $670 million at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q2 CY2025 is $0.52 at the midpoint, above analyst estimates of $0.48 Operating Margin: 7.7%, up from 3% in the same quarter last year Free Cash Flow was -$73.88 million compared to -$5.4 million in the same quarter last year Market Capitalization: $3.03 billion

StockStory’s Take

TTM Technologies’ Q1 results were driven by elevated demand in aerospace and defense, as well as strong contributions from data center computing and networking segments. CEO Tom Edman credited the company’s diversification efforts and operational execution for delivering above-seasonal growth, noting, “Revenue grew 14% year-on-year, representing better than seasonal trends due to demand strength from our aerospace and defense, data center computing, networking, and medical, industrial, and instrumentation end markets.”

Looking ahead, management highlighted ongoing momentum in defense programs and AI-related markets, while also acknowledging uncertainties from tariffs and geopolitical factors. Edman emphasized that the company’s manufacturing footprint and customer diversification position TTM to navigate potential tariff impacts, stating, “We have significantly reshaped the company over the last 10 years through diversification of end markets, as well as our manufacturing footprint.”

Key Insights from Management’s Remarks

Management attributed Q1’s outperformance primarily to robust demand in select end markets and improved operational leverage, while addressing the evolving geopolitical and regulatory environment shaping the company’s risk profile.

Aerospace and Defense Demand: The aerospace and defense segment accounted for 47% of sales, supported by a $1.55 billion program backlog. Management cited solid government budgets and strong program alignment, with significant bookings for missile defense-related projects like Javelin and LTAMs. AI-Driven Data Center Momentum: The data center computing business, representing 21% of sales, saw 15% year-on-year growth, propelled by customer investments in generative AI infrastructure. Management expects continued strength from AI-related demand. Networking Market Recovery: Networking revenues grew 53% year-on-year due to increased switch-related demand, marking the strongest performance in several quarters. New product introductions and ongoing AI trends contributed to the rebound. Penang Facility Ramp: The new Malaysia facility contributed initial revenue and is progressing through customer qualifications, particularly among data center and networking clients. Management targets breakeven by the end of Q3 as volume ramps. Tariff and Policy Navigation: Management explained that only 3-4% of revenues are at direct risk from U.S.-China tariffs, with mitigation strategies in place via alternative manufacturing locations. However, indirect impacts, such as broader economic slowdown or changes in customer behavior, remain less predictable.

Story Continues

Drivers of Future Performance

Management’s outlook for the next quarter and beyond is centered on continued strength in defense and AI-related markets, expansion of new manufacturing capacity, and vigilant monitoring of tariff and economic risks.

Defense and Commercial Pipeline: Sustained demand in aerospace and defense, alongside pipeline opportunities in missile defense and radar systems, is expected to support revenue visibility through multi-year government programs. AI and Data Center Expansion: Growth in generative AI-related hardware and networking is forecast to drive incremental sales, especially as major U.S. technology firms accelerate domestic manufacturing investments. Tariff and Supply Chain Risks: The company is closely monitoring potential disruptions from tariffs and shifting trade policies, with flexibility in sourcing and manufacturing footprint viewed as key to mitigating these uncertainties.

Top Analyst Questions

William Stein (Truist Securities): Asked about Penang facility revenue ramp and margin drag; management detailed initial revenue, ongoing ramp, and breakeven expectations by end of Q3. William Stein (Truist Securities): Probed the slight sequential decline in aerospace and defense backlog; management attributed this to normal fluctuations and strong operational execution reducing past dues. Jim Ricchiuti (Needham & Co.): Sought clarity on customer qualifications at Penang and vertical mix; management noted four anchor customers with a current focus on data center and networking clients. Ruben Roy (Stifel): Inquired about potential pull-forward demand due to tariffs in data center and networking; management reported no unusual order patterns and described customer behavior as steady. Mike Crawford (B. Riley Securities): Requested estimates of global manufacturing capacity and potential upside from defense spending bills; management highlighted TTM’s leadership in North America and expected benefits from missile defense allocations.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will be watching (1) the revenue ramp and margin inflection at the Penang facility, (2) the pace of customer program wins in aerospace, defense, and AI-related infrastructure, and (3) management’s ability to navigate tariff-related supply chain risks. Progress in the Syracuse facility build-out and U.S. government defense spending trends will also be important markers for tracking execution against strategic priorities.

TTM Technologies currently trades at a forward P/E ratio of 14.3×. Should you load up, cash out, or stay put? The answer lies in our free research report.

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