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01/10 05:52
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates strong financial performance with a 14% revenue increase and improved margins, alongside positive guidance for Q1 2025. The share buyback program further boosts shareholder confidence. Despite challenges in the Penang facility and competitive pressures, the overall sentiment remains positive due to strong growth in key sectors like aerospace and defense, and networking. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8% over the next two weeks.
Revenue $648,700,000 (up 14% year-over-year) due to growth in aerospace and defense, data center computing, networking, and medical industrial and instrumentation end markets, partially offset by declines in the automotive end market.
GAAP Operating Income $50,300,000 (up from $17,100,000 year-over-year) due to increased revenue and improved operational execution.
GAAP Net Income $32,200,000 or $0.31 per diluted share (up from $10,500,000 or $0.10 per diluted share year-over-year) reflecting higher sales volume.
Non-GAAP Operating Margin 10.5% (up 340 basis points year-over-year) due to increased gross margins and steady selling, general and administrative costs.
Gross Margin 20.8% (up from 18.8% year-over-year) due to higher sales volume and improved operational execution.
Adjusted EBITDA $99,500,000 or 15.3% of net sales (up from $70,500,000 or 12.4% of net sales year-over-year) reflecting increased revenue and operational efficiency.
Cash Flow from Operations Net cash usage of $10,700,000 primarily due to timing of receivables.
Net Capital Spending $63,200,000, related to the Malaysia facility and new facility in Syracuse.
Cash and Cash Equivalents $411,300,000 at the end of Q1 2025.
Net Debt to Last Twelve Months EBITDA 1.3.
Book to Bill Ratio 1.1, indicating a healthy demand environment.
Aerospace and Defense Revenue Contribution 47% of total sales, up from 46% year-over-year, with a program backlog of approximately $1,550,000,000.
Automotive Revenue Contribution 11% of total sales, down from 13% year-over-year due to inventory adjustments and soft demand.
Networking Revenue Contribution 8% of total sales, up from 6% year-over-year, with a 53% growth attributed to increased demand.
Medical Industrial Instrumentation Revenue Contribution 13% of total sales, returning to 5% year-on-year growth as inventories normalized.
Penang Facility Revenue: In Q1, the Penang facility generated approximately $2,200,000 in revenue.
Syracuse Facility Progress: External construction of the Syracuse facility is largely complete, with equipment installation expected to begin in summer 2025.
Aerospace and Defense Revenue: Aerospace and defense represented 47% of total sales in Q1, with a program backlog of approximately $1,550,000,000.
Data Center Computing Growth: Data center computing accounted for 21% of total sales, with a 15% year-on-year growth.
Networking Revenue Growth: Networking sales grew 53% year-on-year, accounting for 8% of total revenue.
Non-GAAP Operating Margin: Non-GAAP operating margin reached 10.5%, up 340 basis points year-on-year.
Book to Bill Ratio: The overall book to bill ratio was 1.1 for the quarter.
Diversification Strategy: TTM has diversified its manufacturing footprint, reducing exposure to consumer markets and increasing focus on aerospace and defense.
Government Spending Outlook: The fiscal year 2025 defense budget is projected to be around $150,000,000,000, with further increases expected in 2026.
Tariff Impact on Revenue: Only 3% to 4% of revenues represent direct imports from China into the US, with customers responsible for paying tariffs. No significant changes in customer behavior observed.
Tariff Impact on Materials and Equipment: TTM is responsible for paying tariffs on imports into the US, with approximately 11% of revenues sourced from Europe and Asia. Equipment imports from these regions are expected to rise to 29% of global capital spending in 2025.
Indirect Economic Impact: Potential demand weakness due to higher prices or an overall economic slowdown is difficult to predict. TTM models downside and upside scenarios annually.
Geopolitical Environment: The current geopolitical environment may impact TTM, but the company has diversified its manufacturing footprint to mitigate risks.
Defense Budget Uncertainty: The fiscal year 2025 defense budget is under a continuing resolution, with potential increases in defense spending, but uncertainty remains until a reconciliation package is finalized.
Customer Qualification Challenges: Ongoing customer qualifications at the new Penang facility may face challenges as production ramps up.
Competitive Pressures: Competitors in Asia are building facilities to compete, which may impact TTM's market share.
Automotive Market Sensitivity: The automotive sector is more sensitive to tariffs and economic fluctuations, which could impact TTM's revenue.
Revenue Growth: TTM achieved a revenue growth of 14% year on year, driven by strong demand in aerospace and defense, data center computing, and networking markets.
Operating Margin: Non GAAP operating margin reached 10.5%, up 340 basis points year on year, marking the third consecutive quarter of double-digit margins.
Program Backlog: The aerospace and defense program backlog stands at approximately $1,550,000,000, reflecting strong demand.
New Facilities: Progress is being made on new facilities in Penang and Syracuse, with expectations for revenue ramp-up and breakeven points.
Customer Qualifications: TTM is qualifying multiple customers at the Penang facility, with a focus on data center and networking markets.
Q2 Revenue Guidance: Projected net sales for Q2 2025 are expected to be in the range of $650,000,000 to $690,000,000.
Q2 EPS Guidance: Non GAAP earnings for Q2 2025 are expected to be in the range of $0.49 to $0.55 per diluted share.
Capital Expenditures: Estimated capital spending for 2025 includes approximately 29% of global capital spending on equipment imported into the U.S. from Europe and Asia.
Defense Spending Outlook: The defense budget is expected to continue increasing, with discussions indicating a potential $150,000,000,000 range for fiscal year 2025.
Long-term Defense Budget: The president's budget request for 2026 is anticipated to be in the trillion-dollar range, indicating further increases in defense spending.
Share Buyback Program: During the first quarter of twenty twenty five, TTM Technologies bought back 700,000 shares of stock for a total of $17,900,000.
The earnings call indicates strong financial performance with a 22% YoY net sales increase and improved operating income. Despite a slight gross margin decline, the company is making strategic investments in facilities and R&D. The Q&A reveals confidence in capacity and strategic direction, with improved margin forecasts. The aerospace, defense, and data center markets show strong growth, and management's focus on qualitative growth and cash generation is positive. Considering the market cap, the stock price is likely to see a positive movement (2% to 8%) over the next two weeks.
The earnings call shows strong financial performance with increased GAAP operating and net income, and a 15% adjusted EBITDA. Although there are concerns about the breakeven timeline in Malaysia and cost competitiveness in Eau Claire, the company's strong revenue growth, operating margin improvement, and optimistic guidance for Q2 revenue and EPS are positive indicators. The defense sector's growth and customer diversification in the data center segment further bolster confidence. Given the market cap, these factors collectively suggest a positive stock price movement in the next two weeks.
The earnings call summary indicates strong financial performance with a 14% YoY revenue increase and improved margins. The share buyback program suggests confidence in future growth. While there are some risks, such as supply chain challenges and defense budget uncertainty, these are being actively managed. The Q&A reveals positive momentum in data center and networking sectors, and the potential upside from the reconciliation bill. The stock's market cap suggests a moderate reaction, leading to a positive prediction of 2% to 8% increase in stock price.
The earnings call summary indicates strong financial performance with a 14% revenue increase and improved margins, alongside positive guidance for Q1 2025. The share buyback program further boosts shareholder confidence. Despite challenges in the Penang facility and competitive pressures, the overall sentiment remains positive due to strong growth in key sectors like aerospace and defense, and networking. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8% over the next two weeks.
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