TTM Technologies (TTMI) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales reached $605.1 million, up 10.7% year-over-year, driven by strong demand in aerospace & defense and data center computing, particularly from generative AI, while automotive and networking remained soft.

• GAAP net income was $26.4 million ($0.25 per diluted share), up from $6.8 million ($0.07 per share) in Q2 2023; non-GAAP EPS was $0.39, exceeding guidance.

• Cash flow from operations totaled $41.9 million, supporting share repurchases and maintaining a net leverage ratio of 1.4x.

• The company repurchased 1.39 million shares for $25.1 million in Q2, with $41 million remaining on buyback authorization.

• Refinanced $346.5 million term loan, lowering interest rate by 50 basis points and expected to save $1.7 million annually.

Financial highlights

• Q2 2024 net sales were $605.1 million, up from $546.5 million in Q2 2023; adjusted EBITDA was $84.6 million (14% of sales), up from $74.7 million (13.7%).

• Gross margin improved to 19.4% from 18.0% year-over-year; operating margin rose to 6.4% from 3.9%.

• Free cash flow for Q2 was $31.9 million; net capex was $10 million, aided by property sales.

• Book-to-bill ratio at 1.11, up from 1.04 in Q2 2023; backlog increased to $633.5 million.

• Top five customers accounted for 42% of sales; one customer over 10%.

Outlook and guidance

• Q3 2024 revenue guidance: $580–$620 million; non-GAAP EPS expected at $0.37–$0.43.

• SG&A expected at 9.8% of net sales, R&D at 1.4%, interest expense at $11.3 million, and effective tax rate between 10–14%.

• Penang facility to contribute limited revenue in Q3, with break-even delayed by two quarters due to extended customer audits.

• 2024 capital expenditures expected at $190–$210 million, including investment in a new advanced PCB facility in Syracuse, NY.

• Management expects continued strong demand in aerospace, defense, and data center computing, with ongoing softness in automotive and networking.