TTM Technologies (TTMI) Q3 2026 earnings review
TTM Technologies raises its 2027 plan, while buyouts lift debt
Circuit-board and defense-electronics maker TTM Technologies grew sales and profit margins to record highs while taking on debt for an acquisition spree. Third-quarter revenue rose 60% from a year ago to $1.20 billion, and adjusted EBITDA margin crossed 20% for the first time as factory costs fell as a share of sales. Chief executive Edwin Roks initiated a 2027 revenue forecast of $6.50 billion to $6.75 billion, which stands 48% above the 2026 plan by our math.
| Revenue | $1.20B +60% from a year ago (plan was $1.10–1.14B) |
|---|---|
| Profit per share, excluding one-offs | $1.46 +118% from a year ago (plan was $1.21–1.27) |
| Total book-to-bill ratio | 2.13 1.49 last quarter and 1.15 a year ago |
| 2027 revenue outlook | New: $6.50–6.75B +48% vs 2026 plan (replaces 15–20% target) |
⚖️ Verdict: 🟢 Bullish
The story got better because the 2027 outlook and a 2.13 book-to-bill ratio show orders expanding well beyond the fourth-quarter server ramp. Defense backlog hit $2.0 billion and industrial sales nearly doubled, broadening growth beyond data centers. Two cautions: Data Center missed its 49% third-quarter mix target, and five acquisitions pushed net debt leverage to 2.8x — above the 1.5x to 2.0x target — before a $650 million optics purchase closes.
The question now is how much of the 2027 growth comes from existing factories versus newly acquired businesses and debt-funded deals. Either surging orders in server and defense boards are driving organic expansion, or acquisitions are masking a fourth-quarter plateau in server shipments. The conference call breakdown of acquired revenue and the 90-day backlog will settle it.
🐂 Bull Case
New 2027 Plan Beats the Old Target by Over $1 Billion
TTM Technologies makes printed circuit boards, the wiring plates inside computers and radar systems, and had promised 15% to 20% annual sales growth for 2027 from businesses it already owned. That old target pointed to about $5.2 billion next year, which looked cautious beside its fourth-quarter run rate. This quarter, chief executive Edwin Roks issued a preliminary 2027 forecast that leaves the old number far behind.
- 2027 revenue plan: $6.50 billion to $6.75 billion, up 48% at the middle of the range from the 2026 plan
- 2027 profit per share plan, excluding one-offs: $8.10 to $8.90, up 70% at the middle of the range
- Total book-to-bill ratio (new orders divided by sales billed): 2.13, up from 1.49 last quarter and 1.15 a year ago
- Implied third-quarter orders: $2.56 billion by our math, or $1.36 billion more than TTM shipped
This matters because the 2027 outlook stands 16% above the fourth-quarter annualised sales pace by our math, proving management does not expect an order drop after the initial artificial-intelligence server buildout. The company also backed that demand with $237.1 million of factory spending over the first nine months. What to watch: how much of the 2027 revenue plan comes from newly acquired Swiss Technology Group (STG) and Epiq Solutions when management breaks out the organic share on the call. A small acquisition share would confirm that core circuit-board demand is driving the 48% jump.
Lower Production Costs Lifted Profit Margins Above 20%
"Our margin expansion efforts are producing results as evidenced by adjusted EBITDA margin exceeding 20% for the first time," chief executive Edwin Roks said. Adjusted EBITDA — earnings before interest, taxes, depreciation, amortisation and one-offs — reached 20.1% of sales, up 4.0 percentage points from a year ago and 3.5 points from last quarter as higher-priced server boards scaled up.
The gain came from the factory floor, because the cost of making products fell by 3.4 percentage points of revenue from a year ago, lifting gross margin excluding one-offs by 3.3 points to 24.8%. Selling and marketing costs also shrank by 0.8 points of sales to 2.1%, while general and administrative overhead rose 0.8 points to 7.3% on deal costs and stock pay, leaving operating margin excluding one-offs up 5.1 points at 17.4%. What to watch: fourth-quarter gross margin excluding one-offs. Another step up would show factory yields on new data-center boards are beating rising raw-material costs.
Defense Backlog Reached $2 Billion as Industrial Sales Nearly Doubled
Roks said that "All key markets contributed to our 60% year on year growth with Data Center & Networking up 115%, Medical, Industrial & Instrumentation up 97%, and Aerospace & Defense up 21%." Aerospace and Defense, which sells radar assemblies and military circuit boards, added $300 million to its multi-year program backlog this quarter, taking the total to $2.0 billion — up 37% from $1.46 billion a year ago.
Medical, Industrial and Instrumentation — boards for hospital equipment, factory tools and testing devices — accounted for 18% of total sales, or about $217 million by our math, beating the 13% share TTM had forecast. That broad growth matters because non-AI markets generated $110 million of sequential revenue growth, reducing reliance on server customers. What to watch: whether defense program backlog stays at or above $2.0 billion in the fourth quarter. Holding that level would lock in multi-year defense growth through 2028.
🐻 Bear Case
An Acquisition Wave Pushes Debt Leverage Above Target
TTM shifted from an organic growth plan to an acquisition spree that expands its product lines while adding significant debt. Roks said these deals "broaden our offering in differentiated, long-cycle products" and that cash flow lets the group "comfortably handle the leverage from recent acquisitions and capital investments". In recent weeks, the circuit-board maker closed STG in Switzerland and radio-frequency specialist Epiq Solutions, and announced a $650 million cash deal for MKS's Ophir Optics unit plus two British factories, Merlin Circuit and Merlin Flex.
- Total gross debt at quarter-end: $1.64 billion, up from $973 million in the second quarter
- Net debt (debt minus cash): $768 million by our math, up from $466 million last quarter
- Net debt to pro-forma adjusted EBITDA on September 30 (after Epiq closed): 2.8x, up from 0.9x in the second quarter
- Ophir Optics purchase price: $650 million, or 10.3x expected 2027 adjusted EBITDA, funded with cash and credit-line borrowings
This matters because 2.8x leverage sits well above TTM's 1.5x to 2.0x target, and the $650 million Ophir bill is still ahead while German target ILFA GmbH also awaits closing in the fourth quarter. Roks expects leverage to return "within our targeted range of 1.5-2.0x" by the time Ophir closes, which requires rapid profit growth before writing the check. What to watch: net leverage at year-end and the closing date for Ophir Optics. Any slowdown in cash generation would leave TTM carrying over $2 billion of gross debt into a cyclical industry.
Data Center Missed Its Mix Target and the Q4 Plan Got No Lift
Data Center and Networking — circuit boards for artificial-intelligence servers and switches — is the core growth engine, and management had forecast it would reach 49% of third-quarter sales as new asymmetric server boards ramped up. While the group grew 115% from a year ago, its share only rose one point from last quarter to 41% of sales, or $494 million by our math — short of the $539 million to $559 million that 49% of the third-quarter outlook implied.
The fourth-quarter outlook also raises a question about the server ramp and the newly closed deals. Management raised the full-year 2026 sales plan by $80 million at the middle of the range — matching the $84 million third-quarter beat — so the fourth-quarter sales forecast of $1.42 billion to $1.44 billion is unchanged from the $1.43 billion implied three months ago, even though it now includes "contributions from our closed STG and Epiq acquisition and associated financing costs". Meanwhile, the fourth-quarter profit plan of $1.77 to $1.83 per share sits 11% below the $2.02 implied by last quarter's full-year target by our math. What to watch: fourth-quarter Data Center and Networking revenue and the disclosed revenue from STG and Epiq. If acquisitions supplied the fourth-quarter step-up, underlying server board shipments slowed.
Risks this quarter didn't answer
Five standing concerns and watch items cannot be read from the earnings release alone, while one-off charges widened the gap between standard accounting and management's preferred profit numbers.
- 90-day backlog: not in the release after reaching $901 million last quarter; the conference call remarks will show if short-term orders grew alongside the 2.13 book-to-bill.
- Customer concentration: two buyers made up 26% of first-half sales; the quarterly filing's footnote will show whether Data Center growth increased reliance on those two accounts.
- Raw material tightness: copper-clad laminate and specialized glass cloth supply were not mentioned; the call will test whether higher material costs are pinching fourth-quarter margins.
- Factory startups in Penang and Syracuse: the release gives no yield or breakeven figures for Malaysia or New York; the call will show if Penang hit its late-2026 breakeven goal.
- Currency, hedges and tax spikes: TTM booked $6.1 million of derivative losses, $4.7 million of foreign-exchange losses, and a 40.2% GAAP tax rate ($56.9 million on $141.7 million of pre-tax profit); the filing will detail the tax charge and China asset exposure.
💲 Other KPIs
Free cash flow — operating cash minus factory spending — rose 76% from a year ago to 6.2% of sales, up from $46.0 million last quarter and negative $85.1 million in the first quarter. Operating cash flow reached $154.7 million while capital spending was $79.9 million, or 6.6% of sales versus 13.2% a year ago.
Uncollected customer bills ($836.4 million) plus contract assets — work completed for defense and custom buyers not yet billed ($793.6 million) — grew 23.8% from last quarter by our math, outpacing the 19.9% rise in sales. That working-capital build tied up cash during the third-quarter production surge, though rising accounts payable ($1,032.7 million) offset the drain.
Diluted shares matched the 107.7 million plan, up 1.8% from 105.8 million a year ago and unchanged from 107.6 million in the second quarter. The manufacturer did not report any share buybacks as it directed cash and credit lines toward factories and acquisitions, while stock-based compensation more than doubled from a year ago to $24.1 million.
🔮 Guidance
Unchanged against the prior implied plan. The outlook points to 85% growth from a year ago and 19% from the third quarter at the middle of the range, matching the $1.43 billion that last quarter's full-year plan left for Q4 by our math, but now includes STG and Epiq. If the 5.9% four-quarter average beat holds, sales would reach $1.51 billion by our math.
Cut against what the prior full-year plan implied. The middle of the range ($1.80) is up 157% from $0.70 a year ago and 23% above the third quarter's $1.46, but sits 11% below the $2.02 that last quarter's ~$5.00 full-year target left for the fourth quarter by our math. The range includes financing costs from the STG and Epiq acquisitions.
Raised. The middle of the range moved up $80 million to $4.48 billion, or 54% growth from 2025. It is the second raise this year after the jump from ~$3.42 billion (15%–20% growth) at the start of the year to $4.40 billion last quarter. The $80 million raise passes through the $84 million third-quarter beat while adding closed acquisitions.
Held. The $5.00 middle of the range represents 103% growth over 2025's $2.46 and formalizes last quarter's statement that profit would approach $5.00. Keeping the full-year number at $5.00 after a $0.22 third-quarter beat means fourth-quarter profit absorbs new acquisition interest costs.
Raised. TTM's first dollar forecast for 2027 calls for 48% growth at the $6.625 billion middle of the range over the 2026 plan, replacing a 15% to 20% organic target that pointed to roughly $5.2 billion. The plan includes closed deals (STG and Epiq) and excludes pending acquisitions (Ophir Optics, ILFA, and Merlin).
Raised. The $8.50 middle of the range calls for 70% profit growth over the 2026 plan, after 2026 already achieved the old 2027 goal of doubling 2025's $2.46 per share. By our math, profit growing 70% on 48% sales growth requires operating margins to expand again in 2027 despite financing costs on the closed deals.
❓ Key Questions
How much do STG and Epiq add to the 2026 and 2027 plans?
The fourth-quarter sales plan ($1.43 billion at the middle of the range) matches what last quarter's full-year target implied before adding STG and Epiq. Investors need the acquired revenue and interest cost in Q4 and 2027 to calculate underlying growth.
Why did Data Center reach 41% of sales instead of the 49% plan?
Third-quarter Data Center and Networking sales were about $494 million by our math, below the $539 million to $559 million implied by last quarter's 49% mix forecast. Management should clarify whether server board shipments shifted into Q4 or medical and industrial orders simply grew faster.
What was the 90-day backlog at the end of the third quarter?
Total book-to-bill jumped to 2.13, implying $2.56 billion of orders by our math, while defense backlog rose $300 million. Disclosing the 90-day backlog figure (which was $901 million in Q2) will show how much of the order surge ships within three months.
How will leverage fall from 2.8x to 1.5–2.0x before Ophir closes?
Net leverage jumped from 0.9x in Q2 to 2.8x on September 30 after buying Epiq and STG, with $650 million for Ophir Optics plus ILFA and Merlin still to pay. Management has not given the closing date or the debt-paydown schedule.
What drove the 40.2% GAAP tax rate in the third quarter?
TTM recorded a $56.9 million GAAP tax charge on $141.7 million of pre-tax income, compared to an $8.8 million charge a year ago, and removed $18.7 million of it from non-GAAP results. The release does not explain whether cash taxes are rising.