Third Quarter 2026
Filed Oct 22, 2026TTM reported record third-quarter net sales of $1.2 billion, up 60% year on year, with adjusted EBITDA margin reaching 20.1% and fourth-quarter net-sales guidance of $1.42 billion to $1.44 billion.
Record sales, non-GAAP EPS and adjusted EBITDA were accompanied by year-over-year expansion in gross, operating and adjusted EBITDA margins, strong operating cash flow, a 2.13 total book-to-bill ratio and guidance that calls for higher fourth-quarter sales.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Third Quarter 2026 net salesGAAP | $1.20B | – | up 60% year on year |
| Third Quarter 2026 cost of goods soldGAAP | 912.0M | – | – |
| Third Quarter 2026 gross profitGAAP | $291.9M | – | – |
| Third Quarter 2026 gross marginGAAP | 24.2 % | – | – |
| Third Quarter 2026 selling and marketing expenseGAAP | 25.14M | – | – |
| Third Quarter 2026 general and administrative expenseGAAP | 87.55M | – | – |
| Third Quarter 2026 research and development expenseGAAP | 9.65M | – | – |
| Third Quarter 2026 amortization of definite-lived intangiblesGAAP | 6.89M | – | – |
| Third Quarter 2026 restructuring chargesGAAP | 380K | – | – |
| Third Quarter 2026 total operating expensesGAAP | 129.6M | – | – |
| Third Quarter 2026 operating incomeGAAP | $162.3M | – | – |
| Third Quarter 2026 operating marginGAAP | 13.5 % | – | – |
| Third Quarter 2026 interest expenseGAAP | −12.81M | – | – |
| Third Quarter 2026 realized and unrealized losses on derivative instrumentsGAAP | −6.10M | – | – |
| Third Quarter 2026 other, netGAAP | −1.64M | – | – |
| Third Quarter 2026 income before income taxesGAAP | 141.7M | – | – |
| Third Quarter 2026 income tax provisionGAAP | −56.90M | – | – |
| Third Quarter 2026 net incomeGAAP | $84.80M | – | – |
| Third Quarter 2026 basic earnings per shareGAAP | $ 0.80 | – | – |
| Third Quarter 2026 diluted earnings per shareGAAP | 0.79 | – | – |
| Third Quarter 2026 non-GAAP gross profitnon-GAAP | $299.0M | – | – |
| Third Quarter 2026 non-GAAP gross marginnon-GAAP | 24.8 % | – | – |
| Third Quarter 2026 non-GAAP operating incomenon-GAAP | $209.0M | – | – |
| Third Quarter 2026 non-GAAP operating marginnon-GAAP | 17.4 % | – | – |
| Third Quarter 2026 non-GAAP net incomenon-GAAP | $157.8M | – | – |
| Third Quarter 2026 non-GAAP earnings per diluted sharenon-GAAP | $ 1.46 | – | – |
| Third Quarter 2026 adjusted EBITDAnon-GAAP | $242.3M | – | – |
| Third Quarter 2026 adjusted EBITDA marginnon-GAAP | 20.1 % | – | – |
| Third Quarter 2026 operating cash flowother | $154.7M | – | – |
| Third Quarter 2026 capital expenditures, netother | −79.92M | – | – |
| Third Quarter 2026 free cash flowother | $74.79M | – | – |
| First Three Quarters 2026 net salesGAAP | $3.05B | – | – |
| First Three Quarters 2026 gross profitGAAP | $684.9M | – | – |
| First Three Quarters 2026 gross marginGAAP | 22.4 % | – | – |
| First Three Quarters 2026 operating incomeGAAP | $343.8M | – | – |
| First Three Quarters 2026 operating marginGAAP | 11.3 % | – | – |
| First Three Quarters 2026 net incomeGAAP | $217.8M | – | – |
| First Three Quarters 2026 diluted earnings per shareGAAP | 2.03 | – | – |
| First Three Quarters 2026 non-GAAP net incomenon-GAAP | $344.7M | – | – |
| First Three Quarters 2026 non-GAAP earnings per diluted sharenon-GAAP | $ 3.21 | – | – |
| First Three Quarters 2026 adjusted EBITDAnon-GAAP | $542.0M | – | – |
| First Three Quarters 2026 adjusted EBITDA marginnon-GAAP | 17.7 % | – | – |
| First Three Quarters 2026 operating cash flowother | $272.9M | – | – |
| First Three Quarters 2026 capital expenditures, netother | −237.1M | – | – |
| First Three Quarters 2026 free cash flowother | $35.74M | – | – |
| Cash and cash equivalents as of September 28, 2026GAAP | $876.3M | – | – |
| Short-term debt, including current portion of long-term debt, as of September 28, 2026GAAP | $184M | – | – |
| Long-term debt, net of discount and issuance costs, as of September 28, 2026GAAP | $1.46B | – | – |
| Total stockholders’ equity as of September 28, 2026GAAP | $2.04B | – | – |
| Total book to billother | 2.13 | – | – |
| Total A&D program backlogother | $2B | – | – |
| Net leverage ratio as of September 30, 2026non-GAAP | 2.8x of pro-forma adjusted TTM EBITDA | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Aerospace & Defense operating segmentAerospace & Defense was 34 % of total net sales. | $416.5M | – | up 21% |
| Commercial operating segmentCommercial segment operating income was 166,279 (In thousands). | $787.9M | – | – |
| Data Center and Networking end marketDriven by continued AI demand. | 41 % of total net sales | – | up 115% |
| Medical, Industrial, and Instrumentation end marketManagement cited this market as a contributor to year-on-year growth. | 18 % of total net sales | – | up 97% |
| Automotive end marketEnd-market mix declined from 11 % in the third quarter of 2025. | 7 % of total net sales | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fourth quarter of 2026; full year 2026; preliminary full year 2027 outlook
- RevenueFourth quarter of 2026 net sales: $1.42 billion to $1.44 billion; full year 2026 expected net sales: $4.47 billion to $4.49 billion; preliminary 2027 full year expected net sales: $6.5 billion to $6.75 billion
- NoteFourth quarter of 2026 non-GAAP net income: $1.77 to $1.83 per diluted share
- NoteFull year 2026 expected non-GAAP net income: $4.97 to $5.03 per diluted share
- NotePreliminary 2027 full year expected non-GAAP net income: $8.10 to $8.90 per diluted share
- NoteFourth quarter estimate and full year 2026 outlook include contributions from closed STG and Epiq acquisitions and associated financing costs.
- NoteInitial 2027 full year forecast includes contributions from recently closed acquisitions and associated financing costs while excluding impacts of planned or potential acquisitions that have not been closed.
What drove it
- Net sales were an all-time quarterly record of $1.2 billion, with all key markets contributing to 60% year-on-year growth.
- Data Center and Networking represented 41 % of third-quarter net sales and was driven by continued AI demand.
- Aerospace and Defense represented 34 % of third-quarter net sales, and total A&D program backlog was $2.0 billion.
- Adjusted EBITDA margin reached 20.1 %, exceeding 20 % for the first time, according to management.
- Closed acquisitions of STG and Epiq are included in current guidance.
Concerns
- The release characterizes the financial results as preliminary; actual results disclosed in the Form 10-Q may differ following financial closing procedures, final adjustments and review by the independent registered accounting firm.
- Third-quarter realized and unrealized losses on derivative instruments were (6,103 ) (In thousands).
- The proposed Ophir Optics acquisition is an all-cash $650 million transaction and is expected to be funded with cash on hand, expected future cash flow and revolving-credit-facility borrowings.
- Planned acquisitions of Ophir Optics, Merlin Circuit Technology Ltd., Merlin Flex Ltd. and ILFA GmbH are excluded from current guidance.
- Management cannot provide a reconciliation of forward non-GAAP net income per diluted share to GAAP net income per diluted share without unreasonable effort.
What to watch
- Fourth-quarter net sales delivery against the guided range of $1.42 billion to $1.44 billion.
- Whether adjusted EBITDA margin sustains the third-quarter record of 20.1 %.
- Data Center and Networking demand, which management said was driven by continued AI demand.
- Aerospace and Defense backlog conversion from the reported $2.0 billion total A&D program backlog.
- Closing and financing of the Ophir Optics, Merlin and ILFA transactions, which are excluded from current guidance.
- Leverage progress toward management’s targeted range of 1.5-2.0x.
Balance sheet and cash flow
- Cash and cash equivalents were $ 876,347 (In thousands) as of September 28, 2026, compared to $ 501,234 (In thousands) as of December 29, 2025.
- Accounts receivable, net were 836,362 (In thousands), contract assets were 793,552 (In thousands), and inventories were 325,432 (In thousands) as of September 28, 2026.
- Short-term debt, including current portion of long-term debt, was $ 184,000 (In thousands), and long-term debt, net of discount and issuance costs, was $ 1,459,872 (In thousands) as of September 28, 2026.
- Third-quarter operating cash flow was $ 154,711 (In thousands), capital expenditures, net were (79,921 ) (In thousands), and free cash flow was $ 74,790 (In thousands).
- Following the Epiq Solutions acquisition, management stated net leverage as of September 30, 2026 was 2.8x of pro-forma adjusted TTM EBITDA. Management expects leverage to be within its targeted range of 1.5-2.0x by the expected closing date of the proposed Ophir Optics acquisition.
Analysis
TTM reported a record third quarter, with net sales of $1.2 billion, up 60% year on year from $752.7 million. GAAP operating income was $162.3 million versus $71.9 million, and GAAP net income was $84.8 million, or $0.79 per diluted share, versus $53.1 million, or $0.50 per diluted share. Non-GAAP net income reached $157.8 million, or $1.46 per diluted share, compared with $71.0 million, or $0.67 per diluted share.
Profitability expanded alongside revenue. GAAP gross margin was 24.2% versus 20.8%, GAAP operating margin was 13.5% versus 9.6%, and adjusted EBITDA margin was 20.1% versus 16.1%. Adjusted EBITDA was a record $242.3 million. The release attributes demand strength to all key markets, particularly Data Center and Networking, which represented 41% of sales and was driven by continued AI demand, while Aerospace and Defense represented 34% of sales and had $2.0 billion of program backlog.
Cash generation remained positive, with operating cash flow of $154.7 million and free cash flow of $74.8 million in the quarter. Cash and cash equivalents were $876.3 million as of September 28, 2026. Debt was $184.0 million of short-term debt and $1.46 billion of long-term debt, net of discount and issuance costs. Management said pro-forma net leverage was 2.8x adjusted TTM EBITDA following the Epiq acquisition and expects leverage to be within 1.5-2.0x by the expected closing of the Ophir Optics transaction.
The fourth-quarter outlook calls for net sales of $1.42 billion to $1.44 billion and non-GAAP net income of $1.77 to $1.83 per diluted share. Full-year 2026 guidance calls for $4.47 billion to $4.49 billion of net sales and $4.97 to $5.03 per diluted share of non-GAAP net income. The company also initiated preliminary 2027 guidance for $6.5 billion to $6.75 billion of net sales and $8.10 to $8.90 per diluted share of non-GAAP net income. Current guidance includes STG and Epiq, but excludes the proposed Ophir, Merlin and ILFA transactions.
Management, verbatim
“Once again, we delivered quarterly records for both net sales and non-GAAP EPS,”
Edwin Roks, CEO of TTM
“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%.”
Edwin Roks, CEO of TTM
“Our margin expansion efforts are producing results as evidenced by adjusted EBITDA margin exceeding 20% for the first time.”
Edwin Roks, CEO of TTM
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported income-statement metrics were not provided.
- Dividend and share-repurchase activity were not reported.
- GAAP forward guidance was not provided.
- Forward gross-margin, operating-expense and tax-rate guidance were not provided.
- Individual end-market revenue dollars were not provided; the release provided end-market mix percentages.
- Prior outlook was not provided, so no comparison of actual results with prior guidance is available.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.