8-K: TTM Technologies Reports Strong Q4 and Fiscal Year 2024 Results, Driven by Aerospace & Defense and Data Center Growth

TTM Technologies announces positive Q4 and fiscal year 2024 results, driven by growth in Aerospace & Defense and Data Center Computing, with revenue and non-GAAP EPS exceeding guidance.

Summary

• TTM Technologies reported its fourth quarter and fiscal year 2024 results on February 5, 2025.
• Net sales for Q4 2024 were $651.0 million, compared to $569.0 million in Q4 2023.
• GAAP net income for Q4 2024 was $5.2 million, or $0.05 per diluted share, including a $32.6 million goodwill impairment charge.
• Non-GAAP net income for Q4 2024 was $62.8 million, or $0.60 per diluted share.
• Adjusted EBITDA for Q4 2024 was $108.7 million, or 16.7% of sales, compared to $80.9 million, or 14.2% of sales for Q4 2023.
• For the full year 2024, net sales increased to $2.4 billion from $2.2 billion in 2023, a 9.4% increase.
• GAAP net income for 2024 was $56.3 million, or $0.54 per diluted share, including a $32.6 million goodwill impairment charge.
• Non-GAAP net income for 2024 was $178.4 million, or $1.71 per diluted share.
• Adjusted EBITDA for 2024 was $352.5 million, or 14.4% of net sales, compared to $298.2 million, or 13.4% of net sales, for 2023.
• The company estimates Q1 2025 revenues to be in the range of $600 million to $640 million, and non-GAAP net income to be between $0.37 and $0.43 per diluted share.
• The company's A&D program backlog reached a record $1.56 billion.
• Data Center Computing revenues reached a record 22% of total company revenues.

Sentiment

Score: 8

Explanation: The report is positive, highlighting strong revenue growth, increased profitability, and strategic investments in key growth areas. The company's outlook for Q1 2025 is also favorable.

Positives

• TTM Technologies experienced revenue growth of 9.4% for the full year 2024.
• The company's Aerospace and Defense revenues grew 12% year-over-year.
• TTM Technologies opened a new manufacturing facility in Penang, Malaysia.
• Construction began on a new ultra-HDI manufacturing facility in Syracuse, New York.
• The company generated $236.9 million in operating cash flow in 2024.
• TTM Technologies refinanced its Term Loan and returned $34.5 million to shareholders through stock buybacks.
• Operating margins were double digit for the second consecutive quarter.
• The company maintains a solid balance sheet with a net leverage ratio of 1.2x.

Negatives

• GAAP operating income for the fourth quarter of 2024 included a $32.6 million goodwill impairment charge related to the RF&S Components segment.
• GAAP net income for the fourth quarter of 2024 included a $32.6 million goodwill impairment charge related to the RF&S Components segment.

Risks

• The company's actual results may differ from preliminary results due to the completion of financial closing procedures and other developments.
• The company faces risks related to general market and economic conditions, including interest rates, currency exchange rates, and consumer spending.
• Demand for TTM's products, market pressures on prices, warranty claims, and changes in product mix could impact results.
• Contemplated significant capital expenditures and related financing requirements pose a risk.
• TTM's dependence on a small number of customers is a risk factor.

Future Outlook

For the first quarter of 2025, TTM estimates revenues will be in the range of $600 million to $640 million, and non-GAAP net income will be in the range of $0.37 to $0.43 per diluted share.

Management Comments

• We delivered a solid quarter with revenues and non-GAAP EPS above the high end of the guided range.
• Revenues reflected the fourth consecutive quarter of year on year growth due to demand strength in our Aerospace and Defense, Data Center Computing and Networking end markets, the latter two being driven by generative AI, said Tom Edman, CEO of TTM.
• Operating margins were double digit for the second consecutive quarter and reflected continued solid execution.
• In addition, cash flow from operations was a healthy 13.2% of revenues enabling the company to maintain a solid balance sheet with a net leverage ratio of 1.2x, concluded Mr. Edman.
• Our employees delivered outstanding results in 2024 for TTM.
• Revenue growth of 9.4% was driven by generative AI in the Data Center Computing market and continued strength in the Aerospace and Defense market.
• Revenue fall through, favorable product mix, and improved execution helped to grow margins and non-GAAP EPS year on year, continued Edman.
• We continue to execute on our strategic priorities by growing Aerospace and Defense revenues 12% year on year, opening a new manufacturing facility in Penang, Malaysia supporting customer supply chain resiliency needs and starting construction on a new ultra-HDI manufacturing facility in Syracuse, New York.
• Finally, in 2024, we generated $236.9 million in operating cash flow which enabled us to strengthen our balance sheet, refinance our Term Loan, and return $34.5 million of capital to our shareholders through our stock buy back program.

Industry Context

TTM Technologies' results reflect the ongoing demand for advanced PCB solutions in key growth sectors like Aerospace & Defense and Data Center Computing, particularly driven by generative AI applications. This aligns with broader industry trends of increasing investment in these areas.

Comparison to Industry Standards

• TTM's growth in the Aerospace and Defense sector aligns with the general upswing in defense spending globally, similar to companies like Lockheed Martin and RTX.
• The company's focus on Data Center Computing and generative AI mirrors the strategies of other technology manufacturers like Nvidia and Intel, who are also benefiting from the increased demand for high-performance computing solutions.
• TTM's adjusted EBITDA margin of 14.4% is comparable to that of other PCB manufacturers such as Sanmina and Jabil, although specific comparisons would require a deeper dive into product mix and customer base.

Stakeholder Impact

• Shareholders benefit from increased profitability and a stock buyback program.
• Employees contributed to the company's strong performance.
• Customers benefit from TTM's investments in new manufacturing facilities and advanced technologies.
• Suppliers may see increased demand due to TTM's growth.

Key Dates