Q3 2026 TTM Technologies Inc Earnings Call

October 22, 2026

Operator: Good day, and welcome to TTM Technologies' Q3 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

Operator: Good day, and welcome to TTM Technologies' Q3 2026 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #2: Good day. And welcome to TTM TECHNOLOGIES' third quarter 2026 earnings call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session.

Speaker #2: To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised.

Operator: To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Sean Hannan, Vice President of Investor Relations. Please go ahead.

Speaker #2: To withdraw your question, press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Sean Hannon, Vice President of Investor Relations.

Speaker #2: Please go ahead.

Sean Hannan: Greetings, everyone. Welcome, and thank you for joining us today. I am Sean Hannan, Vice President of Investor Relations for TTM. With me on the call are Edwin Roks, our President and Chief Executive Officer, and Dan Boehle, our Executive Vice President and Chief Financial Officer. Before we get started, I would like to remind everyone today that the call contains forward-looking statements, including statements related to TTM's future business outlook.

Speaker #3: Greetings, everyone. Welcome, and thank you for joining us today. I'm Sean Hannon, Vice President of Investor Relations for TTM. With me on the call are Edwin Roks, our President and Chief Executive Officer, and Dan Bailey, our Executive Vice President and Chief Financial Officer.

Speaker #3: Before we get started, I'd like to remind everyone today that the call contains forward-looking statements, including statements related to TTM's future business outlook. Actual results could differ materially from these forward-looking statements due to one or more risks and uncertainties, including the risk factors we provide in our filings with the Securities Exchange Commission, which we encourage you to review.

Sean Hannan: Actual results could differ materially from these forward-looking statements due to one or more risks and uncertainties, including the risk factors we provide in our filings with the Securities and Exchange Commission, which we encourage you to review. These forward-looking statements represent management's expectations and assumptions based on currently available information.

Speaker #3: These forward-looking statements represent management's expectations and assumptions based on currently available information. TTM does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events, or other circumstances except as required by law.

Sean Hannan: TTM does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events, or other circumstances, except as required by law. We will also discuss on this call certain non-GAAP financial measures, such as adjusted EBITDA.

Speaker #3: We will also discuss, on this call, certain non-GAAP financial measures such as adjusted EBITDA. Such measures should not be considered as a substitute for the measures prepared and presented in accordance with GAAP.

Sean Hannan: Such measures should not be considered as a substitute for the measures prepared and presented in accordance with GAAP, and we direct you to the reconciliations between GAAP and non-GAAP measures included in the company's earnings release, which is available on the investor relations section of TTM's website at investors.ttm.com. We have also posted on the website an earnings presentation that we will refer to during the call. Here is Edwin.

Speaker #3: And we direct you to the reconciliations between GAAP and non-GAAP measures, included in the company's earnings release, which is available on the Investor Relations section of TTM's website at investors.ttm.com.

Speaker #3: We have also posted an earnings presentation on the website, which we will refer to during the call. Here is Edwin.

Edwin Roks: Thank you, Sean. Good afternoon, everyone, and thank you for joining us for our Q3 2026 conference call. At TTM Technologies, we are focused on designing and manufacturing complex advanced interconnect products and printed circuit boards, in addition to what we term as up-the-chain products and solutions, such as sophisticated RF modules, resulting in subsystems and fully integrated mission systems for communications and sensing purposes. Core to the design of all our products and solutions, as well as the strategy of our business, is the innovative focus to satisfy next-generation needs for our customers and end markets, particularly regarding SWaP, or size, weight, and power.

Edwin Roks: Thank you, Sean. Good afternoon, everyone, and thank you for joining us for our Q3 2026 Conference Call. At TTM Technologies, we are focused on designing and manufacturing complex advanced interconnect products and printed circuit boards, in addition to what we term as up-the-chain products and solutions, such as sophisticated RF modules, resulting in subsystems and fully integrated mission systems for communications and sensing purposes.

Speaker #4: Thank you, Sean. Good afternoon, everyone. And thank you for joining us for our third quarter 2026 conference call. At TTM TECHNOLOGIES, we are focused on designing and manufacturing complex, advanced, interconnected products and printed circuit boards in addition to what we term up as up-to-chain products and solutions such as sophisticated RF modules, resulting in subsystems and fully integrated mission systems for communications and sensing purposes.

Edwin Roks: Core to the design of all our products and solutions, as well as the strategy of our business, is the innovative focus to satisfy next-generation needs for our customers and end markets, particularly regarding SWaP, or size, weight, and power.

Speaker #4: Core to the design of all our products and solutions, as well as the strategy of our business, is the innovative focus to safely address next-generation needs for our customers and end markets.

Speaker #4: Particularly regarding SWaP, or size, weight, and power. We believe the future of electronics lies in speed to market, high reliability, and efficient technology integration, and we consequently engage early with our customers—often multiple years in advance—as part of their program roadmaps to ensure these alignments, while also enabling optimal management of their complex supply chains.

Edwin Roks: We believe the future of electronics lies in speed to market, high reliability, and efficient technology integration, and we consequently engage early with our customers, often multiple years in advance as part of their program roadmaps to ensure this alignment, while also enabling optimal management of their complex supply chains. It continues to be a very successful year for TTM so far. Our Q3 sets another new record with over $1.2 billion in revenue, and we expect to close out the year strong, aided by increased shipments of our end-to-end product offerings for data center and networking end market, in addition to continuing strong demand for TTM's aerospace and defense business and product offerings. Proposal activity in our aerospace and defense business remain at all-time highs with a record backlog of $2 billion. We already have visibility into roughly 65% of our projected A&D revenue for 2027.

Speaker #4: It continues to be a very successful year for TTM so far. Our third quarter sets another new record with over 1.2 billion in revenue and we expect to close out the year strong aided by increased shipments of our M+M product offerings for data center and networking end market in addition to continuing strong demand for TTM's aerospace and defense business and product offerings.

Edwin Roks: Our Q3 sets another new record with over $1.2 billion in revenue, and we expect to close out the year strong, aided by increased shipments of our end-to-end product offerings for data center and networking end market, in addition to continuing strong demand for TTM's aerospace and defense business and product offerings.

Edwin Roks: Proposal activity in our aerospace and defense business remain at all-time highs with a record backlog of $2 billion. We already have visibility into roughly 65% of our projected A&D revenue for 2027.

Speaker #4: Proposal activity in our aerospace and defense business remain at all-time highs with a record backlog of 2 billion, we already have visibility into roughly 65% of our projected AMD revenue for 2027.

Edwin Roks: Our medical, industrial, and instrumentation and automotive end markets also outperformed our expectation year to date. With all our business performing well in 2026 to date, we are increasing our full year 2026 revenue guidance from $4.47 to $4.49 billion. Since our last quarterly earnings call, we have had many exciting developments here at TTM, and we continue to execute our long-term business strategy focused on projected value creation for our customers and shareholders. As we framed at our Investor Day in May, TTM continues to invest in organic growth opportunities and technological advancements across our product offerings for all our end markets, in addition to strategic M&A to enhance our capabilities and add diversification and longer-term structural enhancements. To that end, we discussed three key strategic directives. First, investment in capacity and innovative technology for advanced interconnect.

Speaker #4: Our medical industrial and instrumentation and automotive end markets also are performed our expectation year to date. With all our business performing well in 2026 to date, we are increasing our full year 2026 revenue guidance from 4.47 to 4.49 billion.

Speaker #4: Since our last quarterly earnings call, we have had many exciting developments here at TTM, and we continue to execute our long-term business strategy focused on projected value creation for our customers and shareholders.

Edwin Roks: As we framed at our Investor Day in May, TTM continues to invest in organic growth opportunities and technological advancements across our product offerings for all our end markets, in addition to strategic M&A to enhance our capabilities and add diversification and longer-term structural enhancements. To that end, we discussed three key strategic directives. First, investment in capacity and innovative technology for advanced interconnect.

Speaker #4: As we framed at our investor day in May, TTM continues to invest in organic growth opportunities and technological advancements across our product offerings for all our end markets.

Speaker #4: In addition to strategic M&A, we aim to enhance our capabilities and add diversification, as well as longer-term structural enhancements. To that end, we discussed three key strategic directives.

Speaker #4: First, investment in capacity and innovative technology for advanced interconnect. As previously disclosed in this area, we have invested or committed to invest over $1.3 billion in capacity expansion in the 2025 to 2029 timeframe, across both our data center and networking, and aerospace and defense end markets.

Edwin Roks: As previously disclosed in this area, we have invested or committed to invest over $1.3 billion in capacity expansion in the 2025 to 2029 timeframe across both our data center and networking and aerospace and defense end markets. While our commercial segment is currently the primary target for these investments, our model has proven over time that our investments in our commercial technology advances provide critical value to leverage into our A&D offerings as that end market continues to modernize. Last week, we announced an additional $400 million planned investment that is expected to begin in Q4 2026 and continue into early 2028. This would primarily support revenue production focused on the 2028 period. The basis of this additional investment provides critical commercial data center and networking end market customer support in their strong demands and road mapping requirements to utilize our unique end-to-end product approach.

Speaker #4: While our commercial segment is currently the primary target for these investments, our model has proven over time that our investments in our commercial technology advances provide critical value to leverage into our AMD offerings, as that end market continues to modernize.

Edwin Roks: Last week, we announced an additional $400 million planned investment that is expected to begin in Q4 2026 and continue into early 2028. This would primarily support revenue production focused on the 2028 period. The basis of this additional investment provides critical commercial data center and networking end market customer support in their strong demands and road mapping requirements to utilize our unique end-to-end product approach.

Speaker #4: Last week, we announced an additional $400 million planned investment that is expected to begin in the fourth quarter of 2026 and continue into early 2028.

Speaker #4: And this would primarily support revenue production focused on the 2028 period. The basis of this initial investment provides critical commercial data center and networking end market customer support in their strong demands and roadmap and requirements to utilize our unique M+M product approach.

Edwin Roks: Recall, the majority of our customer business in this market currently is with our industry-leading, innovative, established, and critical AI players. We remind investors that our fundamental business model has been, continues to be, what we discussed at the Investor Day, and that is to pursue a very disciplined, risk-reduced, brownfield expansion approach for internal organic investments, with the expectations to fund these efforts from operating cash without any anticipated needs to access our borrowing facilities. These investments have been given substantial forethought, are purposeful, aligned with our customers, and not simply reactive to the strong demand environment. Our commitment to these investments is driven by our confidence in our projected cash flows, supported by our visibility to the anticipated strong demand requirements of our differentiated and advancing technologies.

Speaker #4: Recall, the majority of our customer business in this market currently is with our industry-leading, innovative, established, and critical AI players. The remaining investors, and that fundamental business model, has been—and continues to be—what we discussed at the Investor Day, and that is to pursue a very disciplined, risk-reduced brownfield expansion approach for internal organic investments, with the expectation to fund these efforts from operating cash without any anticipated need to access our borrowing facilities.

Edwin Roks: These investments have been given substantial forethought, are purposeful, aligned with our customers, and not simply reactive to the strong demand environment. Our commitment to these investments is driven by our confidence in our projected cash flows, supported by our visibility to the anticipated strong demand requirements of our differentiated and advancing technologies.

Speaker #4: These investments have received substantial forethought, are purposeful, aligned with our customers, and are not simply reactive to the strong demand environment. Our commitment to these investments is driven by our confidence in our projected cash flows, supported by our visibility into the anticipated strong demand requirements for our differentiated and advancing technologies.

Edwin Roks: We are also in the early stages of investing in a new innovation center in the Eau Claire, Wisconsin facility, very close to our existing technology center in Chippewa Falls, Wisconsin. This facility will spearhead our intensifying R&D activities focused on pioneering technological advances such as mSAP, SAP, passives, and advanced optics, among other technologies. Second, recall that we are extremely focused on our diversified business model, and that as part of this, we have pursued our initial geographic expansion in the European region. in June, we announced our intention to acquire two well-established European companies, Swiss Technology Group and ILFA, to begin this effort. We have since closed the Swiss Technology Group acquisition, now called TTM GS Swiss, and we believe we are nearing the close of ILFA. On Monday, we announced the planned acquisition of Ophir Optics, which would establish a presence in Israel and Romania.

Speaker #4: We are also in the early stages of investing in a new innovation center in the Eau Claire, Wisconsin facility. Very close to our existing technology center in Chippewa Falls, Wisconsin.

Speaker #4: This facility will spearhead our intensifying R&D activities focused on pioneering technological advancements such as MSAP, SAP, passives, and embedded optics, among other technologies. Second, recall that we are extremely focused on our diversified business model, and that as part of this, we've pursued our initial geographic expansion in the European region.

Edwin Roks: Second, recall that we are extremely focused on our diversified business model, and that as part of this, we have pursued our initial geographic expansion in the European region. in June, we announced our intention to acquire two well-established European companies, Swiss Technology Group and ILFA, to begin this effort.

Speaker #4: In June, we announced our attention to acquire two well-established European companies. Switch Technology Group and ILFA. To begin this effort. We've since closed the Switch Technology Group acquisition, now called TTM GS Swiss, and we believe we're nearing the close of ILFA.

Edwin Roks: We have since closed the Swiss Technology Group acquisition, now called TTM GS Swiss, and we believe we are nearing the close of ILFA. On Monday, we announced the planned acquisition of Ophir Optics, which would establish a presence in Israel and Romania.

Speaker #4: On Monday, we announced the planned acquisition of Ophir Optics. Which would establish a presence in Israel and Romania. I'll share some additional comments on Ophir Optics in a few moments.

Edwin Roks: I will share some additional comments on Ophir Optics in a few moments. Additionally, we engaged last week in plans to acquire two small but strategic printed circuit board companies under the Merlin PCB Group holding company in the United Kingdom. We are excited that all these transactions are both strategic from a technology and capability standpoint and also in terms of adding international diversification to our business information model. Finally, our third strategic directive is investment in what we call up-the-chain of vertical product solutions that focus on communication and sensing. In line with this directive, we acquired Epiq Solutions, which has closed on 30 September. We are excited to welcome the Epiq team members into TTM as we continue the integration activities.

Speaker #4: Additionally, we engaged last week in plans to acquire two small but strategic printed circuit board companies under the Merlin PCB Group holding company. In the United Kingdom.

Edwin Roks: We are excited that all these transactions are both strategic from a technology and capability standpoint and also in terms of adding international diversification to our business information model. Finally, our third strategic directive is investment in what we call up-the-chain of vertical product solutions that focus on communication and sensing.

Speaker #4: We are excited that all these transactions are both strategic from a technology and capability standpoint and also in terms of adding international diversification to our business and financial model.

Speaker #4: Finally, our third strategic directive is investment in what we call up-the-chain or vertical product solutions with focus on communication and sensing. In line with this directive, we acquired Epic Solutions which is closed on September 30th.

Edwin Roks: In line with this directive, we acquired Epiq Solutions, which has closed on 30 September. We are excited to welcome the Epiq team members into TTM as we continue the integration activities.

Speaker #4: We are excited to welcome the Epic team members into TTM as we continue the integration activities. The announced plan to acquire Ophir Optics also supports the team up the chain, and both these companies bring a unique set of competencies that will deliver differentiated and high-value solutions to our end markets.

Edwin Roks: The announced plan to acquire Ophir Optics also supports the theme of up-the-chain, and both these companies bring a unique set of competencies that will deliver differentiated and high-value solutions to our end markets. I now provide a few additional comments on the proposed acquisition of Ophir Optics before we move on to discuss our operating results of the quarter. Ophir Optics is a global leader in precision infrared thermal imaging and laser optics solutions for defense, homeland security, and industrial applications with locations in Israel and Romania. With Ophir’s market-leading advanced infrared and laser optical components, we can offer our customers solutions, and we can combine these optics with our other in-house modalities and our interconnect capabilities. This applies for both A&D and industrial applications.

Speaker #4: I now provide a few additional comments on the proposed acquisition of Ophir Optics before we move on to discuss our operating results of the quarter.

Edwin Roks: Ophir Optics is a global leader in precision infrared thermal imaging and laser optics solutions for defense, homeland security, and industrial applications with locations in Israel and Romania.

Speaker #4: Ophir Optics is a global leader in precision infrared thermal imaging and laser optics solutions for defense, homeland security, and industrial applications, with locations in Israel and Romania.

Edwin Roks: With Ophir’s market-leading advanced infrared and laser optical components, we can offer our customers solutions, and we can combine these optics with our other in-house modalities and our interconnect capabilities. This applies for both A&D and industrial applications.

Speaker #4: With Ophir's market-leading advanced infrared and laser optical components, we can offer our customers solutions where we can and we can combine these optics with our other in-house modalities and/or interconnect capabilities.

Speaker #4: This applies to both AMD and industrial applications. In AMD, we expect to have the opportunity to combine infrared optics and RF radar systems to offer customers a highly integrated and very small form factor mission subsystem for unmanned and counter-unmanned area systems.

Edwin Roks: In A&D, we expect to have the opportunity to combine infrared optics and RF radar systems to offer customers a highly integrated and very small form factor mission subsystem for unmanned and counter unmanned aerial systems, both critical to modernized defense priorities. On top of that, Epiq will add processing capabilities. Optics and processing are the key differentiators in any optical sensing system. Consequently, we expect the potential combined offerings of Epiq Solutions and Ophir Optics can advance a common strategy, moving up the defense value chain and bringing together complementary software-defined radios and infrared capabilities. Both are keys to expanding our role in mission-critical sensing modalities such as surveillance, reconnaissance, communications, and electronic warfare. In industrial, this proposed acquisition provides laser optical subsystems used for shaping laser beams in industrial cutting, welding, and PCB drilling machines. We are very excited for the opportunities ahead.

Speaker #4: Both critical to modernize defense priorities. On top of that, Epic will add processing capabilities. Optics and processing are the key differentiators in any optical sensing system.

Edwin Roks: On top of that, Epiq will add processing capabilities. Optics and processing are the key differentiators in any optical sensing system. Consequently, we expect the potential combined offerings of Epiq Solutions and Ophir Optics can advance a common strategy, moving up the defense value chain and bringing together complementary software-defined radios and infrared capabilities.

Speaker #4: Consequently, we expect the potential combined offerings of Epic Solutions and Ophir Optics can advance the common strategy moving up the defense value chain and bringing together complementary software-defined radios and infrared capabilities.

Edwin Roks: Both are keys to expanding our role in mission-critical sensing modalities such as surveillance, reconnaissance, communications, and electronic warfare. In industrial, this proposed acquisition provides laser optical subsystems used for shaping laser beams in industrial cutting, welding, and PCB drilling machines. We are very excited for the opportunities ahead.

Speaker #4: Both are keys to expanding our role in mission-critical sensing modalities such as surveillance, reconnaissance, communications, and electronic warfare. In industrial, this proposed acquisition provides laser optical subsystems used for shaping laser beams in industrial cutting, welding, and PCB drilling machines.

Speaker #4: We are very excited for this opportunity ahead. From a financial perspective, the proposed acquisition of Ophir Optics is projected to incrementally benefit our financial model by adding more high-margin, long-cycle business to our mix.

Edwin Roks: From a financial perspective, the proposed acquisition of Ophir Optics is projected to incrementally benefit our financial model by adding more high margin, long-cycle business to our mix. Let me go through the financial highlights with you. We are acquiring Ophir Optics business for an all-cash purchase of $650 million as a carve-out from MKS. The transaction is expected to be funded through a combination of cash on hand and borrowings under TTM's existing revolving credit facility. At this time, we believe it is important to convey to all our shareholders that we do not have any current incremental needs or plans to come to the financial markets to access capital. On timing, we expect to close this in Q2 2027, subject to regulatory approvals and other customary closing conditions.

Speaker #4: Let me go through the financial highlights with you. We are acquiring Ophir Optics business for an all-cash purchase of 650 million as a carve-out from MKS.

Edwin Roks: The transaction is expected to be funded through a combination of cash on hand and borrowings under TTM's existing revolving credit facility. At this time, we believe it is important to convey to all our shareholders that we do not have any current incremental needs or plans to come to the financial markets to access capital.

Speaker #4: The transaction is expected to be funded through a combination of cash on hand and borrowings under TTM's existing revolving credit facility. And at this time, we believe it's important to convey to all our shareholders that we do not have any current incremental needs or plans to come to the financial markets to access capital.

Edwin Roks: On timing, we expect to close this in Q2 2027, subject to regulatory approvals and other customary closing conditions. Ophir Optics experiencing strong revenue growth and margin expansion, and the transaction is expected to be immediately accretive to our adjusted EBITDA margins and our non-GAAP diluted EPS.

Speaker #4: On timing, we expect to close this in the second quarter of 2027, subject to regulatory approvals and other customary closing conditions. Ophir Optics is experiencing strong revenue growth and margin expansion, and the transaction is expected to be immediately accretive to our adjusted EBITDA margins and our non-GAAP diluted EPS.

Edwin Roks: Ophir Optics experiencing strong revenue growth and margin expansion, and the transaction is expected to be immediately accretive to our adjusted EBITDA margins and our non-GAAP diluted EPS. The transaction multiple is estimated to be roughly 10 times the expected Ophir Optics full year 2027 adjusted EBITDA without synergies. TTM's net leverage at closing is expected to be less than 2 times adjusted last 12 months EBITDA, and therefore, within our targeted leverage range. I will now move on to an overview of our business highlights from the quarter. Then we will follow up with a summary on our Q3 2026 financial performance, our Q4, and full year 2026 guidance, and our initial preliminary guidance for 2027.

Edwin Roks: The transaction multiple is estimated to be roughly 10 times the expected Ophir Optics full year 2027 adjusted EBITDA without synergies. TTM's net leverage at closing is expected to be less than 2 times adjusted last 12 months EBITDA, and therefore, within our targeted leverage range.

Speaker #4: The transaction multiple is estimated to be roughly 10 times the expected Ophir Optics full-year 2027 adjusted EBITDA, without synergies. TTM's net leverage at closing is expected to be less than 2 times adjusted last 12 months EBITDA, and therefore within our targeted leverage range.

Edwin Roks: I will now move on to an overview of our business highlights from the quarter. Then we will follow up with a summary on our Q3 2026 financial performance, our Q4, and full year 2026 guidance, and our initial preliminary guidance for 2027.

Speaker #4: I'll now move on to an overview of our business highlights from the quarter. Then we'll follow up with a summary on our Q3 2026 financial performance, our Q4, and full year 2026 guidance, and our initial preliminary guidance for 2027.

Edwin Roks: From a demand standpoint, product developments with our partners, bookings and backlogs, and broader signals in both AI and defense remain strong and are expected to provide very healthy growth momentum for the remainder of this year, and as we look in 2027. We interact very closely with our customers and strategic partners and jointly engage in very diligent conversations to plan for the future, make thoughtful investments, and take a disciplined approach to vet our outlook, which we believe provides us with a lot of optimism, as will be evidenced in the guidance that Dan will share shortly. We delivered an excellent Q3 2026, and as always, I would like to thank our employees for delivering these results. We achieved sales of $1.2 billion and non-GAAP EPS of $1.46 per diluted share, both above our guidance and both all-time quarterly highs.

Speaker #4: From a demand standpoint, product development with our partners, bookings and backlog, and broader signals in both AI and defense remain strong and are expected to provide very healthy growth momentum for the remainder of this year and as we look in 2027.

Edwin Roks: We interact very closely with our customers and strategic partners and jointly engage in very diligent conversations to plan for the future, make thoughtful investments, and take a disciplined approach to vet our outlook, which we believe provides us with a lot of optimism, as will be evidenced in the guidance that Dan will share shortly.

Speaker #4: We interact very closely with our customers and strategic partners and jointly engage in very diligent conversations to plan for the future, make thoughtful investments, and take a disciplined approach to vet our outlook. We believe this provides us with a lot of optimism, as will be evidenced in the guidance that Daniel will share shortly.

Edwin Roks: We delivered an excellent Q3 2026, and as always, I would like to thank our employees for delivering these results. We achieved sales of $1.2 billion and non-GAAP EPS of $1.46 per diluted share, both above our guidance and both all-time quarterly highs.

Speaker #4: We delivered an excellent third quarter of 2026, and as always, I would like to thank our employees for delivering these results. We achieved sales of $1.2 billion and non-GAAP EPS of $1.46 per diluted share, both above our guidance and both all-time quarterly highs.

Edwin Roks: Sales for consolidated TTM grew 60% year-on-year, reflecting demand strength in our data center and networking end markets driven by AI, while our medical, industrial, and instrumentation sales almost doubled from a year ago. The Aerospace and Defense end markets experienced very strong double-digit growth. The company's adjusted EBITDA margin was 20.1% in Q3 2026, up an impressive 400 basis points year-over-year and over 350 basis points sequentially, reflecting positive mix impacts and operational excellence. Non-GAAP EPS of $1.46 per diluted share was 118% improvement year-on-year. The Aerospace and Defense end market represented 34% of Q3 2026 sales. Sales in the Aerospace and Defense market grew 21% year-on-year in Q3, with the vast majority of our facilities performing at strong levels.

Speaker #4: Sales for consolidated TTM grew 60% year-on-year reflecting demand strength in our data center and networking end markets driven by AI while our medical industrial and instrumentation sales almost doubled from a year doubled from a year ago.

Speaker #4: And aerospace and defense end markets experienced very strong double-digit growth. The company's adjusted EBITDA margin was 20.1% in the third quarter of 2026, up an impressive 400 basis points year-on-year and over 350 basis points sequentially.

Edwin Roks: The company's adjusted EBITDA margin was 20.1% in Q3 2026, up an impressive 400 basis points year-over-year and over 350 basis points sequentially, reflecting positive mix impacts and operational excellence. Non-GAAP EPS of $1.46 per diluted share was 118% improvement year-on-year.

Speaker #4: Reflecting positive mix impacts and operational excellence. Non-GAAP EPS of $1.46 per diluted share was 118% improvement year-on-year. The aerospace and defense end market represented 34% of third quarter 2026 sales.

Edwin Roks: The Aerospace and Defense end market represented 34% of Q3 2026 sales. Sales in the Aerospace and Defense market grew 21% year-on-year in Q3, with the vast majority of our facilities performing at strong levels.

Speaker #4: Sales in the aerospace and defense market grew 21% year-on-year in the third quarter with the vast majority of our facilities performing at strong levels.

Edwin Roks: The sales growth in the defense market continues to be the result of positive tailwinds in defense budgets, our strong strategic program alignment, and key bookings for new and ongoing programs. Our ability to support sustained long-term growth is also very encouraging and further enabled by our recent strategic acquisitions. Our focus on product innovation is tracking well against our internal roadmaps for many new capabilities, including unique advancements in printed circuit board technologies for materials that enable high frequency in support of all our applications. During Q3 2026, our A&D team's effective execution continued in securing another strong bookings quarter, capturing business related to the Surface Ship Surveillance 5-6 radar, the APS-143 maritime surveillance radar, Golden Dome, and a number of projected priority restricted programs.

Speaker #4: The sales growth in the defense market continues to be the result of positive tailwinds in defense budgets, our strong strategic program alignment, and key bookings for new and ongoing programs.

Speaker #4: Our ability to support sustained long-term growth is also very encouraging and further enabled by our recent strategic acquisitions. Our focus on product innovation is tracking well against our internal roadmaps for many new capabilities including unique advancements in printed circuit board technologies for materials that enable high-frequency in support of all our applications.

Edwin Roks: Our focus on product innovation is tracking well against our internal roadmaps for many new capabilities, including unique advancements in printed circuit board technologies for materials that enable high frequency in support of all our applications.

Edwin Roks: During Q3 2026, our A&D team's effective execution continued in securing another strong bookings quarter, capturing business related to the Surface Ship Surveillance 5-6 radar, the APS-143 maritime surveillance radar, Golden Dome, and a number of projected priority restricted programs.

Speaker #4: During the third quarter of 2026, our A&D teams effective execution continued in securing another strong bookings quarter. Capturing business related to the service chip surveillance by six radar the APS 143 maritime surveillance radar Golden Dome and a number of projected priority restricted programs.

Edwin Roks: A&D's book-to-bill ratio was roughly 1.6 for the quarter, which led to total program backlog of $2 billion, a record level, up from just under $1.5 billion a year ago. Within our backlog, we are excited to report that we have strong momentum in securing new business from new primes, as well as restricted programs. Restricted programs are incredibly sticky and very difficult for competitors to try and displace. For Q4 2026, we expect this end market to represent approximately 31% of our total sales and continue to delivering both year-on-year and sequential growth. For the full year 2026, we now expect this end market to deliver approximately 20% growth compared to 2025, including contributions from acquired businesses of roughly 80% on organic basis. Sales in the data center and networking end market represented 41% of Q3 2026 sales.

Speaker #4: A&D's book-to-bill ratio was roughly 1.6 for the quarter which led to program which led to total program backlog of 2 billion a record level up from just under 1.5 billion a year ago.

Speaker #4: Within our backlog, we are excited to report that we have strong momentum securing new business from neoprimes as well as restricted programs. Restricted programs are incredibly sticky and very difficult for competitors to to try in this place.

Edwin Roks: For Q4 2026, we expect this end market to represent approximately 31% of our total sales and continue to delivering both year-on-year and sequential growth. For the full year 2026, we now expect this end market to deliver approximately 20% growth compared to 2025, including contributions from acquired businesses of roughly 80% on organic basis. Sales in the data center and networking end market represented 41% of Q3 2026 sales.

Speaker #4: For the fourth quarter of 2026, we expect this end market to represent approximately 31% of our total sales and continue to deliver both year-on-year and sequential growth.

Speaker #4: For the full year 2026, we now expect this end market to deliver approximately 20% growth compared to 2025. Including contributions from acquired businesses are roughly 80% on our on organic basis.

Speaker #4: Sales in the data center and networking end market represented 41% of third-quarter 2026 sales. This end market experienced 115% year-on-year growth in the third quarter, reflecting the strong ramp of our high-technology M+M asymmetrical printed circuit boards and continued demand strength from data center and networking customers.

Edwin Roks: This end market experienced 115% year-on-year growth in Q3, reflecting the strong ramp of our high technology N+M asymmetrical printed circuit boards, and continued demand strength from data center and networking customers. For Q4 2026, we expect this end market to represent approximately 49% of net sales as our N+M boards continue to experience strong uptake at customers. For the full year 2026, we continue to expect sales in this end market to be more than double year-on-year. The medical, industrial, and instrumentation end market represented 18% of the Q3 2026 sales. This end market saw year-on-year growth of 97% during Q3, aided by price adjustments to fully capture the value add of our technology, in addition to particular demand strength in instrumentation for automatic test equipment supporting AI solutions.

Speaker #4: For the fourth quarter of 2026, we expect this end market to represent approximately 49% of net sales, as our M+M boards continue to experience strong uptake at customers.

Edwin Roks: For the full year 2026, we continue to expect sales in this end market to be more than double year-on-year. The medical, industrial, and instrumentation end market represented 18% of the Q3 2026 sales. This end market saw year-on-year growth of 97% during Q3, aided by price adjustments to fully capture the value add of our technology, in addition to particular demand strength in instrumentation for automatic test equipment supporting AI solutions.

Speaker #4: For the full year 2026, we continue to expect sales in this end market to be more than double year-on-year. The medical, industrial, and instrumentation end market represented 18% of third quarter 2026 sales.

Speaker #4: This end market saw year-on-year growth of 97% during the third quarter aided by spite of adjustments to fully capture the value add of our technology in addition to particular demand strength in instrumentation for automatic test equipment supporting AI solutions.

Edwin Roks: For Q4 2026, we expect the medical, industrial, and instrumentation end market to represent approximately 14% of total sales, growing roughly 90% year-on-year. For the full 2026, we now expect sales in this end market to grow nearly 70% year-on-year. Automotive sales represented 7% of Q3 2026 sales and was up 11% year-on-year. We continue to be very selective in this market to focus on the higher value add products that carry margin profiles consistent with our financial goals. Given conversations with customers, we are seeing additional share opportunities as some competitors reduce their market participation, while long-term business cycles are showing signs of migrating back towards our advanced capabilities.

Speaker #4: For the fourth quarter of 2026, we expect the medical industrial and instrumentation end market to represent approximately 40% of total sales growing roughly 90% year-on-year for the full 2026 we now expect sales in this end market to grow nearly 70% year-on-year.

Speaker #4: Automotive sales represented 7% of third quarter 2026 sales and were up 11% year-on-year. We continue to be very selective in this market to focus on higher value-add products that carry margin profiles consistent with our financial goals.

Edwin Roks: We continue to be very selective in this market to focus on the higher value add products that carry margin profiles consistent with our financial goals. Given conversations with customers, we are seeing additional share opportunities as some competitors reduce their market participation, while long-term business cycles are showing signs of migrating back towards our advanced capabilities.

Speaker #4: Based on conversations with customers, we're seeing additional share opportunities as some competitors have reduced their market participation. Meanwhile, long-term business cycles are showing signs of migrating back towards our advanced capabilities.

Edwin Roks: For Q4 2026, we expect the automotive end market to represent about 6% of total sales, which reflects encouraging double-digit growth as we diligently push out the challenges of supply chain materials availability discussed last quarter. For the full year 2026, we now expect sales in this end market to improve mid-single digits versus our prior expectations for a mid-single digit decline year-on-year. The overall book-to-bill was a remarkable 2.1 for Q3 2026, with the commercial reporting segment at 2.5 and the A&D reporting segment at 1.6. At the end of Q3 2026, the 90-day backlog, which is subject to cancellations, was $1.3 billion compared to $610 million a year ago, a 111% increase year-on-year. Dan will summarize the financial performance in more detail. Dan?

Speaker #4: For the fourth quarter of 2026, we expect the automotive end market to represent about 6% of total sales, which reflects encouraging double-digit growth as we digitally push out the challenge of supply chain materials availability discussed last quarter.

Speaker #4: For the full year 2026, we now expect sales in this end market to improve mid-single digits versus our prior expectations for mid-single digit decline year-on-year.

Edwin Roks: The overall book-to-bill was a remarkable 2.1 for Q3 2026, with the commercial reporting segment at 2.5 and the A&D reporting segment at 1.6. At the end of Q3 2026, the 90-day backlog, which is subject to cancellations, was $1.3 billion compared to $610 million a year ago, a 111% increase year-on-year. Dan will summarize the financial performance in more detail. Dan?

Speaker #4: The overall book-to-bill was a remarkable 2.1 for the third quarter of 2026 with commercial reporting segment at 2.5 and the A&D reporting segment at 1.6.

Speaker #4: At the end of the third quarter of 2026, the 90-day backlog which is subject to cancellations was 1.3 billion compared to 610 million a year ago.

Speaker #4: At 111% increase year-on-year. Now then we'll summarize the financial performance in more detail. Dan?

Dan Boehle: Thanks, Edwin, and good afternoon, everyone. I will review our financial results for Q3 2026 that were included in the press release distributed today. Key financial highlights are also summarized in the earnings presentation posted on our website. For the third quarter, net sales were $1.2 billion compared to $753 million in Q3 2025. The 60% year-over-year increase was due to growth across all our end markets, and most notably, continued strength in data center and networking, medical, industrial, and instrumentation, and aerospace and defense. GAAP operating income for Q3 2026 was $162.3 million, compared to GAAP operating income for Q3 2025 of $71.9 million. On a GAAP basis, net income in Q3 2026 was $84.8 million, or $0.79 per diluted share.

Speaker #1: Thanks, Edwin. And good afternoon, everyone. I'll review our financial results for the third quarter of 2026 that were included in the press release distributed today.

Speaker #1: Key financial highlights are also summarized in the earnings presentation posted on our website. For the third quarter, net sales were 1.2 billion dollars. Compared to 753 million dollars in the third quarter of 2025.

Dan Boehle: The 60% year-over-year increase was due to growth across all our end markets, and most notably, continued strength in data center and networking, medical, industrial, and instrumentation, and aerospace and defense. GAAP operating income for Q3 2026 was $162.3 million, compared to GAAP operating income for Q3 2025 of $71.9 million. On a GAAP basis, net income in Q3 2026 was $84.8 million, or $0.79 per diluted share.

Speaker #1: The 60% year-over-year increase was due to growth across all our end markets and most notably continued strength in data center and networking medical industrial and instrumentation and aerospace and defense.

Speaker #1: Gap operating income for the third quarter of 2026 was 162.3 million dollars. Compared to gap operating income for the third quarter of 2025 of 71.9 million dollars.

Speaker #1: On a gap basis, net income in the third quarter of 2026 was 84.8 million dollars or 79 cents per diluted share. This compares to gap net income for the third quarter of 2025 of 53.1 million dollars or 50 cents per diluted share.

Dan Boehle: This compares to GAAP net income for Q3 2025 of $53.1 million, or $0.50 per diluted share. The remainder of my comments will focus on our non-GAAP financial performance. Our non-GAAP performance excludes M&A-related costs, restructuring costs, certain non-cash expense items such as amortization of intangibles, impairment of goodwill, stock-based compensation, gains on the sale of property, unrealized gains or losses on foreign exchange, and other unusual or infrequent items. We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparisons with expectations in prior periods. Gross margin in Q3 2026 was 24.8%, an increase of 330 basis points from 21.5% in Q3 2025.

Speaker #1: The remainder of my comments will focus on our non-gap financial performance. Our non-gap performance excludes M&A related costs, restructuring costs, certain non-cash expense items such as amortization of intangibles, impairment of goodwill, stock-based compensation, gains on the sale of property, unrealized gains or losses on foreign exchange, and other unusual or improved good items.

Dan Boehle: We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparisons with expectations in prior periods. Gross margin in Q3 2026 was 24.8%, an increase of 330 basis points from 21.5% in Q3 2025.

Speaker #1: We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparisons with expectations and prior periods.

Speaker #1: Gross margin in the third quarter of 2026 was 24.8% an increase of 330 basis points from 21.5% in the third quarter of 2025. The year-on-year increase was due primarily to higher sales volume and favorable product mix.

Dan Boehle: The year-on-year increase was due primarily to higher sales volume and favorable product mix, particularly in the data center and networking and Aerospace & Defense end markets, in addition to execution improvements at our facility in Penang, which we continue to expect to approach breakeven in Q4 2026. Selling and marketing expense was $23.2 million in Q3, or 1.9% of net sales, versus $20.5 million, or 2.7% of net sales a year ago. Q3 general and administrative expense was $57.3 million, or 4.8% of net sales, compared to $42.1 million, or 5.6% of net sales a year ago. Q3 research and development expense was $9.5 million, or just under 1% of net sales, compared to $6.9 million, or just under 1% of net sales in the prior year.

Speaker #1: Particularly in the data center, networking, and aerospace and defense end markets, in addition to execution improvements at our facility in Penang, which we continue to expect will approach break-even in the fourth quarter of 2026.

Dan Boehle: Selling and marketing expense was $23.2 million in Q3, or 1.9% of net sales, versus $20.5 million, or 2.7% of net sales a year ago. Q3 general and administrative expense was $57.3 million, or 4.8% of net sales, compared to $42.1 million, or 5.6% of net sales a year ago. Q3 research and development expense was $9.5 million, or just under 1% of net sales, compared to $6.9 million, or just under 1% of net sales in the prior year.

Speaker #1: Selling and marketing expense was 23.2 million dollars in the third quarter or 1.9% of net sales. Versus 20.5 million dollars or 2.7% of net sales a year ago.

Speaker #1: Third quarter general administrative expense was 57.3 million dollars or 4.8% of net sales. Compared to 42.1 million dollars or 5.6% of net sales a year ago.

Speaker #1: Third quarter research and development expense was $9.5 million, or just under 1% of net sales, compared to $6.9 million, or just under 1% of net sales in the prior year.

Dan Boehle: Our operating margin in Q3 2026 was 17.4%, a 510-basis point improvement from 12.3% in the same quarter last year. The increase in the period was due both to the improvement in gross margin as well as operating leverage resulting from selling general and administrative expense discipline. Adjusted EBITDA was $242.3 million in Q3 2026, a record quarterly adjusted EBITDA margin of 20.1% and up a full 400 basis points year-over-year. This compares to adjusted EBITDA of $120.9 million in Q3 2025, with an associated adjusted EBITDA margin of 16.1%. Interest expense was $12.1 million in Q3 2026, compared to $9.9 million in the same quarter last year. Interest and other income was $3.1 million in Q3 2026, compared to $2.5 million in the same quarter of last year.

Speaker #1: Our operating margin in the third quarter of 2026 was 17.4% a 510 basis point improvement from 12.3% in the same quarter last year. The increase in the period was due both to the improvement in gross margin as well as operating leverage resulting from selling general and administrative expense discipline adjusted EBITDA was 242.3 million dollars in the third quarter of 2026.

Dan Boehle: Adjusted EBITDA was $242.3 million in Q3 2026, a record quarterly adjusted EBITDA margin of 20.1% and up a full 400 basis points year-over-year. This compares to adjusted EBITDA of $120.9 million in Q3 2025, with an associated adjusted EBITDA margin of 16.1%. Interest expense was $12.1 million in Q3 2026, compared to $9.9 million in the same quarter last year. Interest and other income was $3.1 million in Q3 2026, compared to $2.5 million in the same quarter of last year.

Speaker #1: A record quarterly adjusted EBITDA margin of 20.1% and up a full 400 basis points year over year. This compares to adjusted EBITDA of 120.9 million dollars in the third quarter of 2025 with an associated adjusted EBITDA margin of 16.1%.

Speaker #1: Interest expense was 12.1 million dollars in the third quarter of 2026 compared to 9.9 million dollars in the same quarter last year. Interest in other income was 3.1 million dollars in the third quarter of 2026 compared to 2.5 million dollars in the same quarter of last year.

Dan Boehle: Realized foreign exchange loss in Q3 2026 totaled $4.1 million as compared to $1.8 million in the same quarter last year, driven by the weakening of the US dollar. Our effective tax rate was 19.5% in Q3 2026, resulting in tax expense of $38.2 million. This compares to an effective tax rate of 15%, or a tax expense of $12.5 million in the same quarter last year. Q3 2026 non-GAAP net income was $157.8 million, or $1.46 per diluted share. This compares to Q3 2025 non-GAAP net income of $71 million, or $0.67 per diluted share. Cash flow provided by operating activities was $154.7 million in Q3 2026, which compares to cash flow provided by operating activities of $141.8 million in the same quarter last year.

Speaker #1: Realized foreign exchange loss in the third quarter of 2026 totaled $4.1 million, as compared to $1.8 million in the same quarter last year, driven by the weakening of the US dollar.

Speaker #1: Our effective tax rate was 19.5% in the third quarter of 2026 resulted in tax expense of 38.2 million dollars. This compares to an effective tax rate of 15% or a tax expense of 12.5 million dollars in the same quarter last year.

Dan Boehle: Q3 2026 non-GAAP net income was $157.8 million, or $1.46 per diluted share. This compares to Q3 2025 non-GAAP net income of $71 million, or $0.67 per diluted share. Cash flow provided by operating activities was $154.7 million in Q3 2026, which compares to cash flow provided by operating activities of $141.8 million in the same quarter last year.

Speaker #1: Third quarter 2026 non-gap net income was 157.8 million dollars. A $1.46 per diluted share. This compares to third quarter 2025 non-gap net income of 71 million dollars or 67 cents per diluted share.

Speaker #1: Cash flow provided by operating activities was 154.7 million dollars in the third quarter of 2026 which compares to cash flow provided by operating activities of 141.8 million dollars in the same quarter last year.

Dan Boehle: Free cash flow in Q3 2026 was $74.8 million, as compared to free cash flow of $42.6 million in Q3 of last year. Now we will provide our financial guidance for Q4 2026, an update to our outlook for the full year of 2026, and an initial preliminary expectation for full year 2027. We project net sales for Q4 2026 to be in the range of $1.42 billion to $1.44 billion, and non-GAAP earnings to be in the range of $1.77 to $1.83 per diluted share. These projected results include the contributions of recently closed transactions and associated financing. However, they exclude any contribution or impact from pending acquisitions. Consequently, we now expect full year 2026 sales of approximately $4.47 billion to $4.49 billion, and non-GAAP earnings in the range of $4.97 to $5.03 per diluted share.

Speaker #1: Free cash flow in the third quarter of 2026 was $74.8 million, as compared to free cash flow of $42.6 million in the third quarter of last year.

Speaker #1: Now we'll provide our financial guidance for the fourth quarter of 2026, an update to our outlook for the full year of 2026, and an initial preliminary expectation for the full year 2027.

Speaker #1: We project net sales for the fourth quarter of 2026 to be in the range of 1.42 billion dollars to 1.44 billion dollars and non-gap earnings to be in the range of $1.77 to $1.83 per diluted share.

Dan Boehle: These projected results include the contributions of recently closed transactions and associated financing. However, they exclude any contribution or impact from pending acquisitions. Consequently, we now expect full year 2026 sales of approximately $4.47 billion to $4.49 billion, and non-GAAP earnings in the range of $4.97 to $5.03 per diluted share.

Speaker #1: These projected results include the contributions of recently closed transactions and associated financing however they exclude any contribution or impact from pending acquisitions. Consequently we now expect full year 2026 sales of approximately 4.47 billion dollars to 4.49 billion dollars and non-gap earnings in the range of $4.97 to $5.03 per diluted share.

Dan Boehle: These full-year 2026 projections also include the contributions of recently closed transactions and associated financing but exclude any contribution or impact from pending acquisitions. The Q4 2026 non-GAAP diluted EPS forecast is based on a diluted share count of approximately 107.8 million shares, which includes the dilutive effect of outstanding stock options and other stock awards. Our expected full-year 2026 non-GAAP EPS forecast is based on a diluted share count of 107.5 million shares, similarly including the effect of outstanding stock options and other stock awards. We expect SG&A expense to be approximately 6.7% of net sales in the fourth quarter and R&D expenditures to be approximately 1% of net sales. We expect interest expense of approximately $33.9 million, interest income of approximately $3.0 million, and realized foreign exchange and other non-operating expenses of approximately $4.7 million. We estimate our effective tax rate will be between 15% and 19%.

Speaker #1: These full year 2026 projections also include the contributions of recently closed transactions and associated financing but exclude any contribution or impact from pending acquisitions.

Speaker #1: The fourth quarter 2026 non-gap diluted EPS forecast is based on a diluted share count of approximately 107.8 million shares which includes the dilutive effect of outstanding stock options and other stock awards.

Dan Boehle: Our expected full-year 2026 non-GAAP EPS forecast is based on a diluted share count of 107.5 million shares, similarly including the effect of outstanding stock options and other stock awards. We expect SG&A expense to be approximately 6.7% of net sales in the fourth quarter and R&D expenditures to be approximately 1% of net sales.

Speaker #1: Our expected full year 2026 non-gap EPS forecast is based on a diluted share count of 107.5 million shares similarly including the effect of outstanding stock options and other stock awards.

Speaker #1: We expect SG&A expense to be approximately 6.7% of net sales in the fourth quarter, and R&D expenditures to be approximately 1% of net sales.

Dan Boehle: We expect interest expense of approximately $33.9 million, interest income of approximately $3.0 million, and realized foreign exchange and other non-operating expenses of approximately $4.7 million. We estimate our effective tax rate will be between 15% and 19%.

Speaker #1: We expect interest expense of approximately $33.9 million, interest income of approximately $3.0 million, and realized foreign exchange and other non-operating expenses of approximately $4.7 million.

Speaker #1: We estimate our effective tax rate will be between 15 and 19%.

Dan Boehle: Further, we expect to record depreciation of approximately $39.7 million, amortization of intangibles of approximately $12.1 million, stock-based compensation expense of approximately $18.7 million, and non-cash interest expense of approximately $0.9 million. Looking to the preliminary full-year 2027 forecast, we are providing our initial net sales forecast to be in the range of approximately $6.5 billion to $6.75 billion.

Speaker #2: Further we expect to record depreciation of approximately 39.7 million dollars amortization of intangibles of approximately 12.1 million dollars stock-based decompensation expense of approximately 18.7 million dollars and non-cash interest expense of approximately 0.9 million dollars.

Speaker #2: Looking to the preliminary full year 2027 forecast we are providing our initial net sales forecast to be in the range of approximately 6.5 billion dollars to 6.75 billion dollars.

Dan Boehle: Non-GAAP net income is expected to be in the range of $8.10 to $8.90 per diluted share based on a diluted share count of 108.1 million shares, including the effect of outstanding stock options and other stock awards. Our initial 2027 full-year forecast includes contributions from recently closed acquisitions and associated financing costs, while excluding any contribution or impact from pending acquisitions. Finally, I would like to announce that we are scheduled to participate in the Bank of America Leveraged Finance Conference in Boca Raton, Florida, on 1 December, and the UBS TMT Conference in Scottsdale, Arizona, on 2 December. That concludes our prepared remarks, so I will turn it back to you, Sharee, for the Q&A session.

Speaker #2: A non-gap net income is expected to be in the range of $8.10 to $8.90 per diluted share based on a diluted share count of 108.1 million shares.

Speaker #2: Including the effect of outstanding stock options and other stock awards, our initial 2027 full-year forecast includes contributions from recently closed acquisitions and associated financing costs.

Speaker #2: While excluding any contribution or impact from pending acquisitions.

Dan Boehle: Finally, I would like to announce that we are scheduled to participate in the Bank of America Leveraged Finance Conference in Boca Raton, Florida, on 1 December, and the UBS TMT Conference in Scottsdale, Arizona, on 2 December. That concludes our prepared remarks, so I will turn it back to you, Sharee, for the Q&A session.

Speaker #1: And finally I'd like to announce that we are scheduled to participate in the Bank of America Leverage Finance Conference in Boca Raton, Florida on December 1st and the UBS TMT Conference in Scottsdale, Arizona on December 2nd.

Speaker #1: That concludes our prepared remarks so I'll turn it back to you Sharif for the Q&A session.

Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, press *11 again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Steven Fox with Fox Advisors. Your line is open.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Steven Fox with Fox Advisors. Your line is open.

Speaker #3: Thank you. As a reminder to ask a question please press star 11 on your telephone and wait for your name to be announced. So withdraw your question press star 11 again.

Speaker #3: Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster.

Speaker #3: And our first question will come from the line of Stephen Fox with Fox Advisors. Your line is open.

Steven Fox: Hi. Good morning. I guess for my first question, I was wondering if we could sort of dig into the N+M results to date and expectations going forward. Can you give us a sense for how much of the quarter was driven by the new product, where you think you are in terms of ramping yields, et cetera, and then how broad-based the product is expected to be used? I am just trying to understand how dominant this is becoming within your traditional PCB sales. Then I had a follow-up.

Steven Fox: Good morning. I guess for my first question, I was wondering if we could sort of dig into the N+M results to date and expectations going forward. Can you give us a sense for how much of the quarter was driven by the new product, where you think you are in terms of ramping yields, et cetera, and then how broad-based the product is expected to be used? I am just trying to understand how dominant this is becoming within your traditional PCB sales. Then I had a follow-up.

Speaker #4: Hi, good morning. For my first question, I was wondering if we could sort of dig into the N plus M results to date and expectations going forward.

Speaker #4: can you give us a sense for how much of the quarter was driven by the new product where you think you are in terms of ramping yields et cetera and then how broad-based you know the product is expected to be used.

Speaker #4: I'm just trying to understand how dominant this is becoming within your traditional PCB sales. And I had a follow-up.

Edwin Roks: Yeah, Steve. Steve, good morning. Yes, happy to do that. Our N+M program will be a substantial part of our data center networking group, as you know. Ramp-ups are going really well. It is currently about 30% of the data center networking activities, and it will grow next year to about 50% of that group. Ramp-up is going really well. We have three major programs. Two of them are doing really well. One of them is, let us say, a bit moving to the right. This has nothing to do, by the way, with any technical issue, has nothing to do with our performance. It basically has to do with the program schedule of that customer, which is a normal thing with these big programs. So far, we are getting very positive feedback on our N+M program. There are more N+M programs coming.

Speaker #1: Yeah Steve Steve good morning. Yes happy happy to do that. Our our N plus M program is there'll be a substantial part of the of our data center and networking group as as you as you know.

Speaker #1: Ramp-ups are are coming coming really well. It's it's currently about about 30% of the of the of the data center and networking activities and it will grow in next year to about about 50% of that of that group.

Speaker #1: ramp-up is going really well. We we have three major programs two of them are are doing doing really well. One of them is let's say a bit a bit moving to the right.

Edwin Roks: Two of them are doing really well. One of them is, let us say, a bit moving to the right. This has nothing to do, by the way, with any technical issue, has nothing to do with our performance. It basically has to do with the program schedule of that customer, which is a normal thing with these big programs. So far, we are getting very positive feedback on our N+M program. There are more N+M programs coming.

Speaker #1: this has nothing to do by the way with any technical issue. Has nothing to do with with with our performance. It's it basically has to do with with the program schedule that of that customer.

Speaker #1: Which is which is which is a normal thing with these wave programs. So far we're getting very very positive feedback on our N plus M program.

Speaker #1: There are more N plus M programs coming. I mentioned before that this will be five to ten programs, or all around.

Edwin Roks: I mentioned before, this will be the 5 to 10 programs all around. So that is going well. Yeah, Steve, there will always be a bit of fluctuation in these programs. These programs are so big, so there will always be a bit of fluctuation. There is also a bit of pull forward to Q3. I can tell you some of the things are even enhanced, so that will be a fact. But again, currently about 30% of the data center networking business going in the next year to about 50%. So that technology is working really well.

Speaker #1: So that that's going that's going well. yeah Steve there will always be a bit of fluctuation in these programs. These these programs are so big so there will always be a bit of of fluctuation.

Edwin Roks: There is also a bit of pull forward to Q3. I can tell you some of the things are even enhanced, so that will be a fact. But again, currently about 30% of the data center networking business going in the next year to about 50%. So that technology is working really well.

Speaker #1: There is also a bit of pull-forward to Q3. I can tell you some of the things are even enhanced, so that will be a fact.

Speaker #1: But again, currently about 30% of the data center and networking business is going, and in the next year, it will be about 50%. So that technology is working really well.

Steven Fox: Great. That is helpful. Then just to be crystal clear on all the M&A you have done and how you are planning to finance it, can you sort of talk about where this leaves you? What is the potential for more M&A once you close all these deals? Just big picture thoughts on balance sheet, since you have been pretty active in the acquisition market the last few months. Thanks.

Speaker #4: Great that's helpful. And then just to be crystal clear you on the on all the M and A you've done and how you're planning to finance it.

Speaker #4: Can you sort of talk about where this leaves you like what what what's the potential for more M and A once you close all these deals and just big picture thoughts on balance sheets since you've you've been pretty active in in the acquisition market the last few months.

Speaker #4: Thanks.

Dan Boehle: Yeah, Steve, this is Dan. I will take that. Thanks for the question. Yeah, I think this will be the end of the big stuff for a while. There may be a few little things that we have announced, a few that we need to close. One of those kind of medium size, the other is smaller. We will focus on strengthening our balance sheet, getting our leverage back down now. We have got a lot of strong cash flow coming in next year. We will have positive free cash flow to continue to fund our capital expenditures as well as start paying down that debt.

Speaker #1: Yeah Steve this is Dan. I'll take that. Thanks for the question. yeah I think you know this this will be the end of the big stuff for a while.

Speaker #1: you know there may be a a a few little things that you know we've announced a few that we need to close. and and they're you know one of those kind of medium size.

Speaker #1: Yeah they're smaller. so we'll we'll focus on you know strengthening our balance sheet and our leverage back down now. we've got a lot of strong cash flow coming in next year.

Dan Boehle: We will focus on strengthening our balance sheet, getting our leverage back down now. We have got a lot of strong cash flow coming in next year. We will have positive free cash flow to continue to fund our capital expenditures as well as start paying down that debt.

Speaker #1: We'll have positive free cash flow to continue to fund our capital expenditures as well as start paying down that debt. but in our Q4 guide you know so the difference between where we were last quarter and this quarter we do have two of the businesses that have closed or expected to close in this this period or closed right at the end of Q3 into Q4.

Dan Boehle: But in our Q4 guide, the difference between where we were last quarter and this quarter, we do have two of the businesses that have closed or are expected to close in this period or close right at the end of Q3 into Q4, will impact positively on our EBITDA. But we did raise significant debt for the purchase of Epiq, as well as to finance the Ophir project that we just announced. So that has an increase of interest expense for about $20 million a quarter. So that drags on our EPS. You look at the change in EPS guidance from last quarter to where we are now, up from the transactions, but then offset by the debt.

Dan Boehle: In our Q4 guide, the difference between where we were last quarter and this quarter, we do have two of the businesses that have closed or are expected to close in this period or close right at the end of Q3 into Q4, will impact positively on our EBITDA. But we did raise significant debt for the purchase of Epiq, as well as to finance the Ophir project that we just announced.

Speaker #1: we'll impact you know positively on our EBITDA but you know we did raise significant ca debt for the purchase of Epic. as well as to finance the it Ophir product that we just announced.

Dan Boehle: That has an increase of interest expense for about $20 million a quarter. So that drags on our EPS. You look at the change in EPS guidance from last quarter to where we are now, up from the transactions, but then offset by the debt.

Speaker #1: So so that has an increase of interest expense for about $20 million a quarter. so that drags on our EPS. And so you look at the the change in EPS guidance from last quarter to where we are now.

Speaker #1: Up from the transactions, but then offset by the debt.

Steven Fox: Great. That is really helpful. Thank you.

Speaker #4: Great, that's really helpful. Thank you.

Operator: Thank you. One moment for our next question. That will come from the line of Will Stein with Truist. Your line is open.

Speaker #3: One moment for our next question. That will come from the line of Will Stein with Truist. Your line is open.

Will Stein: Thanks for taking my questions. First, I want to recognize and say congratulations on the great results overall. I want to also recognize that the data center networking end market came about 10% below your prior guidance in Q3. I am hoping you can help us understand what happened there. Was it supply or material availability or yield or something else?

Speaker #5: Thanks for taking my questions. First, I want to recognize and say congratulations on the great results overall. But I also want to acknowledge that the data center networking end market came about 10% below your prior guidance in Q3.

Speaker #5: And so I'm hoping you can help us understand what happened there. Was it supply, or, you know, material availability, or yield, or something else?

Edwin Roks: Hi, Will. Good morning. No, none of these things. These things basically have to do with project timing on the customer side. Again, these large customers, these big customers we have, they have multiple programs, and there are always fluctuations in these programs. Some of them move to the left, some of them move a bit to the right. Again, there are no technical issues. Ramp is going well. Yield numbers are where they should be. Again, they have always multiple suppliers. So there is always a bit of, let us say, everybody has to be in that same window technology-wise. So that is sometimes hurting us also a bit. Two out of these three programs we initially had are doing really well. The third one is ramping up now. That will be in ramp-up in the H2 of Q4, fully in production in Q1. So that is going smooth.

Edwin Roks: Will. Good morning. No, none of these things. These things basically have to do with project timing on the customer side. Again, these large customers, these big customers we have, they have multiple programs, and there are always fluctuations in these programs. Some of them move to the left, some of them move a bit to the right.

Speaker #1: I will. Good good morning. no not none of these things. these these things basically have to do with project timing. on the customer side.

Speaker #1: again these these large customers these big customers we have they have multiple programs and there are always fluctuations in these programs. Some of them moved to the left.

Speaker #1: Some of them move a bit to the right. Again, there are no technical issues. Ramp is going well. Yield numbers are where they should be.

Edwin Roks: Again, there are no technical issues. Ramp is going well. Yield numbers are where they should be. Again, they have always multiple suppliers. So there is always a bit of, let us say, everybody has to be in that same window technology-wise. That is sometimes hurting us also a bit.

Speaker #1: again they have always multiple suppliers. So there is always a bit of let's say everybody has to be in that same window. Technology wise.

Speaker #1: So that's sometimes hurting us a bit. But again, two out of these three programs we initially had are doing really well.

Edwin Roks: Two out of these three programs we initially had are doing really well. The third one is ramping up now. That will be in ramp-up in the H2 of Q4, fully in production in Q1. So that is going smooth. It is like I said before, there are more N+M programs coming. There will always be a fluctuation, and we always try to be as accurate as possible in our guidance. There are no major issues there.

Speaker #1: The third one is ramping up now. That will that will be in in in in in in ramp up in the second half of Q4.

Speaker #1: Fully in production in Q1. So that's going smooth. And it's like I said before there are more N plus M pro programs coming. but again there will always be a fluctuation and we always try to be as accurate as possible in in our guidance.

Edwin Roks: It is like I said before, there are more N+M programs coming. There will always be a fluctuation, and we always try to be as accurate as possible in our guidance. There are no major issues there.

Speaker #1: But again, there are no major issues there.

Will Stein: Appreciate that. As a follow-up, Edwin, last quarter, I believe you told us that N+M would be approximately $200 million in Q3 and approximately $400 million in Q4. It sounds like in Q3, that might have been a little light, but I am not entirely sure. Maybe you can update both these numbers for us, please.

Speaker #4: Appreciate that. as a follow up Edwin last quarter I believe you told us that N plus M would be approximately $200 million in Q3 and approximately $400 million in Q4.

Speaker #4: It sounds like in Q3, that might have been a little light, but I'm not entirely sure. Maybe you can update both these numbers for us, please.

Edwin Roks: Yeah, sure. In Q3, of the full data center and networking business, it was about 30% of our business was based on N+M. So call it, let's say, 31% of $400 million, something like that. In Q4, we expect about the same percentage, about 30% out of, let's say, the $700 million data center and networking forecast. So these are about the numbers. The ramp-up is going well. Is it exactly the $200 and the $400? No, probably not. It will be slightly more than $200 and slightly below the $400. But again, like I said, next year it's about 50% of the full data center and networking business. So things are just fluctuating a bit. But again, no big deal there.

Speaker #1: Yeah sure. in in in Q3 of the of the full data center and networking business it was about 30% of of our business was was based on N plus M.

Speaker #1: So call it let's say 31% of $400 million something like that. in in Q4 we expect about the same percentage about 30% out of let's say the a a $700 million data center and networking forecast.

Edwin Roks: These are about the numbers. The ramp-up is going well. Is it exactly the $200 and the $400? No, probably not. It will be slightly more than $200 and slightly below the $400. But again, like I said, next year it's about 50% of the full data center and networking business. So things are just fluctuating a bit. But again, no big deal there.

Speaker #1: So these are about the numbers. So the ramp up is going well. Is it exactly the $200 and the $400? No probably not. It will be slightly more than $200 and slightly below the $400.

Speaker #1: But again, like I said, next year it's about 50% of the full data center and networking business. So things are just fluctuating a bit.

Speaker #1: But but again no no no big deal there.

Will Stein: Thank you.

Speaker #4: Thank you.

Operator: Thank you. One moment for our next question. That will come from the line of Mike Crawford with B. Riley Securities. Your line is open.

Speaker #3: Thank you. One moment for our next question. And that will come from the line of Mike Crawford with B. Riley Securities. Your line is open.

Mike Crawford: Thank you. Can you give some color on supply availability of key materials like CCL and T-glass? Also how you match any increasing prices with quotes?

Speaker #6: Thank you. Can you give some color on supply availability of key materials like CCL and T-glass, and also how you match any increasing prices with quotes?

Edwin Roks: Yeah, sure, Mike. Lead times, let's say, are in the order of 12 weeks, sometimes a bit longer, sometimes 24 weeks, sometimes even a bit longer, depending on the materials. So far, I think we are handling this very well. On the A&D side, I think everything is solid. On the data center networking side, it's an ongoing activity. Yes, lead times are going up, but we are also, let's say, these programs are getting bigger, so we have much more visibility on these things. If you look at the cost, yes, the costs are going up. But so far, let's say we are very transparent with our customers, and the customers will take these price increases. It's like I said, the N+M is having higher ASPs, so that's helping us a lot. So price increases, yes, the customers will absorb that.

Speaker #1: Yeah su sure Mark. lead times let's say are let's say in in the order of let's say 12 weeks. Sometimes a bit longer. Sometimes 24 weeks.

Speaker #1: Sometimes even a bit longer depending on the on the materials. so far I think we're handling this very well. on the A and D side I think everything is is solid.

Speaker #1: On the on the data center and networking side we it's it's a it's an ongoing activity. Yes lead times are going up but we are also let's say these programs are getting bigger.

Speaker #1: So, we have much more visibility on these things. If you look at the costs, yes, the costs are going up. But so far, let's say we are very transparent with our customers, and the customers will take these price increases.

Edwin Roks: If you look at the cost, yes, the costs are going up. But so far, let's say we are very transparent with our customers, and the customers will take these price increases. It's like I said, the N+M is having higher ASPs, so that's helping us a lot. So price increases, yes, the customers will absorb that.

Speaker #1: It and it's like I said you know the N plus M is is is is having if having a higher ASPs. So that's that's helping us a lot.

Speaker #1: So price increases yes the the the the customers will absorb that.

Mike Crawford: Okay, and then just to follow up related, the higher ASPs for the N+M, we understand that, but would you say that's higher than corporate average gross margin? I guess related

Mike Crawford: Okay, and then just to follow up related, the higher ASPs for the N+M, we understand that, but would you say that's higher than corporate average gross margin? I guess related where do you see gross and EBITDA margins progressing throughout 2027?

Speaker #6: okay and then just to follow up related. The the higher ASPs for the N plus M you know we understand that. But would you say that's higher than corporate average gross margin?

Speaker #6: And I guess related where.

Edwin Roks: Yes

Mike Crawford: Where do you see gross and EBITDA margins progressing throughout 2027?

Speaker #1: Yes.

Speaker #6: Do you see gross and EBITDA margins progressing throughout 2027?

Edwin Roks: Yes. These ASPs are going faster than our cost. That has to do with the complexity of the boards. The complexity is increasing a lot for these boards. So basically, it's all about the value. I rather don't talk about cost and ASP. I rather think about the value. We're taking much more value in these data centers and networking configurations. So that's helping us a lot. It's about a factor of four if you compare it with, let's say, conventional architectures. N+M is really adding a lot, let's say, in complexity. Of course, the customers are willing to pay for that.

Speaker #1: Yes yes yes. These these these ASPs are going are going faster than than than our cost. and and that has to do with the the complexity of the boards.

Speaker #1: the the complexity is is is increasing a lot for these these boards. So so basically it's all about the value. I I rather don't talk about cost and ASP.

Speaker #1: I rather think about the value we're taking much more value in these in these data centers and networking configurations. So that's that's helping us a lot.

Edwin Roks: We're taking much more value in these data centers and networking configurations. So that's helping us a lot. It's about a factor of four if you compare it with, let's say, conventional architectures. N+M is really adding a lot, let's say, in complexity. Of course, the customers are willing to pay for that.

Speaker #1: It's about it's about the factor four. If you compare it with let's say conventional architectures N plus M is really is really adding a lot.

Speaker #1: Let's say in in complexity and and of course the customers are willing to pay for that.

Mike Crawford: Thank you.

Speaker #6: oh thank you.

Edwin Roks: Yeah.

Dan Boehle: Mike, maybe I will just add. You mentioned about EBITDA. Our EBITDA margins will be increasing. Our gross margin on that N+M product is significantly higher than our corporate average. As that becomes more of the mix, our gross margin as well as our EBITDA margins will be increasing more than 200 basis points in the next year.

Speaker #7: Yeah, yeah, Mike. Maybe I'll just add—you mentioned EBITDA, right? So yes, our EBITDA margins will be increasing, and our gross margin on that N plus M product.

Speaker #7: It is significantly higher than our corporate average. And so, as that becomes more of the mix, our gross margin as well as our EBITDA margins will be increasing.

Speaker #7: You know, more than 200 basis points in the next year.

Mike Crawford: All right. Thank you, Dan.

Speaker #6: All right. Thank you Dan.

Speaker #7: Sure.

Operator: One moment for our next question. That will come from the line of Ruben Roy with Stifel. Your line is open.

Speaker #3: One moment for our next question. And that will come from the line of Ruben Roy with Stifel. Your line is open.

Ruben Roy: Yes. Thank you. Edwin, I wanted to first follow up on Will's question on the N+M shift. If you think about Q4 and the guide there with $700 million of revenue for DC, how much is that coming from acceleration in customer demand versus maybe recovering some of the push to the right N+M? Maybe you could start there. Thank you.

Speaker #5: Yes thank you. Edwin I wanted to fo first follow up on Will's question. On the N plus M shift. If you think about Q4 and the the guide there with $700 million of revenue for DC how much is that coming from acceleration and customer demand versus maybe you know recovering some of the the you know push the right N plus M?

Speaker #5: Maybe you could start there. Thank you.

Edwin Roks: Yeah. Hi, Ruben. These are indeed programs, and like I said, they move a bit. It's like I said, it's about 32% of the $670 million in commercial, sorry, in C&C, what we call C&C, data centers and networking, is coming from N+M. Again, these programs are ramping up. These programs are doing well. Again, the feedback is very, very positive from these larger customers, that basically more N+M programs are coming in.

Edwin Roks: Yeah. Ruben. These are indeed programs, and like I said, they move a bit. It's like I said, it's about 32% of the $670 million in commercial, sorry, in C&C, what we call C&C, data centers and networking, is coming from N+M. Again, these programs are ramping up. These programs are doing well. Again, the feedback is very, very positive from these larger customers, that basically more N+M programs are coming in.

Speaker #1: Yeah these are hi Ruben. These are these are indeed programs and and like I said they they they they they move a bit. it's it's like I said it's about 30 32% of the of the $670 million in in in in commercial in sorry in C and C what we call C and C data centers and networking.

Speaker #1: is is coming from N plus M. again these programs are are ramping up. These programs are doing well. and again the the the the feedback is very very positive from from these larger customers.

Speaker #1: That basically that more N plus M programs are coming in.

Ruben Roy: Okay. Then on the $400 million capacity expansion, it sounds like that will be fully operational in 2028. Can you talk about what kind of customer volume visibility you have against that increased commitment? Are customers committing to programs against that spend? Thank you.

Speaker #5: Okay. And then on the $400 million capacity expansion it sounds like that'll be fully operational in 2028. Can can you talk about what kind of customer volume visibility you have against that increased commitment and our our customers committing to programs against that that spend?

Edwin Roks: Yeah. Happy to do that. The $400 million is going on top of something we addressed earlier, a $1.2 billion expansion, let's say, over multiple years till 2029. The $400 million, I would say, is more allocated to N+M. So I would say the $400 million is pure N+M, rounding numbers here. Yeah? You have to think about our brownfield approach. So basically, what we are very good at, and you see it in China, and I gave several examples during the investor meetings, is that we love brownfields. So basically, buildings close to our existing plants, we are going to utilize for additional capacity. We do that very, very fast, and we can follow the market much more accurate. So that's basically all of that. It's a lot of equipment, Ruben, which we are installing there to grow our N+M.

Speaker #5: Thank you.

Speaker #1: Yeah. Yeah happy to do that. the the the $400 million is going on top of something we we addressed earlier. 1.2 billion expansion let's say over over over multiple years till 2029.

Speaker #1: The $400 million, I would say, is more allocated to N plus M. So, I would say the $400 million is pure N plus M—rounding numbers here.

Speaker #1: Yeah. you have to you have to think about our brownfield approach. So basically what we're very good at and and and you see it in China and I gave several examples during the in investor investor meetings.

Edwin Roks: Basically, what we are very good at, and you see it in China, and I gave several examples during the investor meetings, is that we love brownfields. So basically, buildings close to our existing plants, we are going to utilize for additional capacity. We do that very, very fast, and we can follow the market much more accurate.

Speaker #1: is that we we love brownfield. So basically buildings close to our existing plants you know we are going to utilize for for additional capacity.

Speaker #1: We do that very very fast and and we can we can follow the market much much more accurate. So that's that's basically all of that.

Edwin Roks: That's basically all of that. It's a lot of equipment, Ruben, which we are installing there to grow our N+M. It's like I said, C&C, our data center networking business, 50% of that will be N+M. That's going really well. The technology is really doing what it should do.

Speaker #1: it's it's a lot of equipment. Ruben which we we are installing there to to grow our N plus M. It's like I said C and C our data center and networking business 50% of that will be N plus M.

Edwin Roks: It's like I said, C&C, our data center networking business, 50% of that will be N+M. So that's going really well. The technology is really doing what it should do.

Speaker #1: So that's that that's going really well. The technology is is is is really doing what it should do.

Ruben Roy: Great. Thanks, Edwin.

Speaker #5: Great. Thanks Edwin.

Operator: One moment for our next question. That will come from the line of Jim Ricchiuti with Needham. Your line is open.

Speaker #3: One moment for our next question. And that will come from the line of Jim Rashoudi with Needham. Your line is open.

Jim Ricchiuti: Thank you. Good morning. Hopefully, can you hear me okay?

Speaker #8: Hi. Thank you. Good morning. Hopefully you can hear me okay?

Edwin Roks: Yeah. Good. We can hear you.

Speaker #1: Yeah Jim we can hear you.

Jim Ricchiuti: Great. I wanted to just ask you about the preliminary 2027 guidance. Edwin, relative to your earlier expectations, the growth that you are expecting now for 2027, how much of that is due to perhaps higher N+M expectations for data center, or possibly how much is due to higher organic growth in the A&D business?

Speaker #8: great. so I wanted to just ask you about the preliminary 2027 guidance. you know relative Edwin relative to your earlier expectations you know the growth that you're expecting now for 2027 how much of that is due to perhaps higher N plus M expectations for data center or possibly how much is due to higher organic growth in the A and D business?

Edwin Roks: Yeah. If you look at the starting, Jim, with the numbers, let's say for this year, the $4.4 billion, $4.5 billion, let's say, is a 48% growth year-over-year. This is a number we are going to repeat next year. Again, next year we will grow 50%. A substantial part of that growth will be N+M. The interesting thing, Jim, is that all the different end markets are growing. If you look at our medical industrial instrumentation business, it is growing a lot, and it will continue to grow next year. Even if you look at our automotive business, it is growing year-over-year. And of course, our aerospace and defense business is growing a lot next year.

Speaker #1: Yeah. So so if you if you look at starting here with the numbers let's say for this year the the the 4.4 4.5 billion let's say is is a is a is a 48 percent growth year over year.

Speaker #1: Yeah. this is this is a number we are going to we're going to going to repeat next year. Yeah. And again next year we will grow 50%.

Speaker #1: a substantial part of that growth will be N plus M. the interesting thing Jim is that all the different end markets are growing. So if you look at our medical industrial instrumentation business it's growing a lot.

Edwin Roks: The interesting thing, Jim, is that all the different end markets are growing. If you look at our medical industrial instrumentation business, it is growing a lot, and it will continue to grow next year. Even if you look at our automotive business, it is growing year-over-year. And of course, our aerospace and defense business is growing a lot next year.

Speaker #1: And it will continue to grow next year. Even if you look at our automotive business, it's growing year over year.

Speaker #1: and of course our aerospace and defense business is growing a lot next year. So that's it is just a matter that data center and network is growing so fast that it doesn't look like the others are growing.

Edwin Roks: It is just a matter that data center networking is growing so fast that it does not look like the others are growing, but I can tell you it is growing over 20%. These are big numbers. Yes, we are confident with the numbers we predicted for 2027.

Speaker #1: But I can tell you it's growing over 20%. Yeah. That that is that is these are these are big big big numbers. So yes we we are confident with the numbers we we predicted for for 2027.

Jim Ricchiuti: Got it. A follow-up question relates to the M&A activity. So we have Epiq, other smaller M&A that you have done, and the pending Ophir acquisition. If we look out to next year after Ophir closes, how much of the A&D business is going to be non-PCB in nature now?

Speaker #8: Got it. A follow-up question relates to the M&A activity. So, we have Epic, other smaller M&A that you've done, and the pending Ophir acquisition.

Speaker #8: If we look out to next year, after Ophir closes, how much of the A and D business is going to be non-PCB in nature now?

Edwin Roks: At the moment, if you look at our aerospace and defense business, about half of them is what we call up-the-chain. So our, let's say, sensing and communication activities. If we look at Epiq, and Ophir, by the way, they are very complementary. If you look at Epiq, let's say that is more the processing, and Ophir, we are very happy with that one as well. That is more the optical side. If you have the optical side and, let's say, the processing under control and you are sensor agnostic, you basically can make full sensing systems, which are very consistently used in complementary to our radar activity. So that is going well.

Speaker #1: at at the moment if you look at our aerospace and defense business about half of them is what we call up the chain. So our let's say sensing and communication activities.

Speaker #1: if we look at if we look at Epic yeah and Ophir by the way they're very very complementary. Yeah. If you look at Epic let's say that's more the processing and Ophir we're very happy with that.

Speaker #1: That one as well. That's more the optical side. If you if you if you have the optical side and let's say the processing under control and your sensor agnostic you basically can make full sensing systems which are very consistently used in in in in complementary to to our radar activities.

Edwin Roks: If you have the optical side and, let's say, the processing under control and you are sensor agnostic, you basically can make full sensing systems, which are very consistently used in complementary to our radar activity, so that is going well.

Speaker #1: So that's that's going well. if you look at the numbers all of our acquisitions and of course Ophir will only add let's say the the the second part of the year because we only close it let's say in hopefully in Q2.

Edwin Roks: If you look at the numbers, all of our acquisitions, and of course, Ophir will only add, let's say, the second part of the year because we only close it, let's say, hopefully in Q2, at the end of Q2. So we have only one H2 of Ophir. Then I would say if you add up all these acquisitions, it is about $0.5 billion in sales. Of the $6.75 billion, $6.5 billion for next year. So that is about the ratio.

Speaker #1: At the end of Q2. So we have only one half year of that of Ophir. Then I would say if you add up all these acquisitions it's about half a billion in sales.

Speaker #1: of the of the 6.6.75 6.5 for next year so that that's about that's about the ratio.

Jim Ricchiuti: Got it. Thank you.

Speaker #8: Got it. Thank you.

Edwin Roks: Yeah. Okay.

Speaker #1: Yeah. Okay.

Operator: Thank you. One moment for our next question. We do have a follow-up question from Will Stein with Truist. Your line is open.

Speaker #3: Thank you. One moment for our next question. And we do have a follow-up question from Will Stein with Truist. Your line is open.

Will Stein: Great. Thanks for taking the follow-up. I wanted to ask about Ophir. When we look at the EBITDA multiples cited in your press release and in the seller's press release, one conclusion is that EBITDA is growing very significantly, or you expect it to grow very significantly from 2026 to 2027. What is driving that? Is that backlog that is already in place, or is that stuff that you expect to get design wins after the close? Any color to sort of explain this to me?

Speaker #7: Great, thanks for taking the follow-up. I wanted to ask about Ophir. When we look at the EBITDA multiples cited in your press release and in the seller's press release, one conclusion is that EBITDA is growing very significantly, or you expect it to grow very significantly from 2026 to 2027.

Speaker #7: what's driving that? Is that backlog that's already in place or is that stuff that you expect to get design wins after the close? Any any color to sort of explain this to me?

Edwin Roks: Yes, Will. That is a very good question. Yes, you gave the answer yourself. The thing is, if we look at the bookings for 2027, Ophir is over 85% booked with new things coming in. By the way, they have a tendency that they always beat their forecast, by the way. So, 2027, 85% booked. The 10.3 we addressed as being the multiple EBITDA over the price we pay is probably even a bit more conservative. I think it was a very nice deal for us, around 10 times. So we are very happy with that. It is like I said, the synergies are not taking into the business case at all. The synergies will be huge because this is giving us the optical system. We have the processing. We can be sensor-agnostic. That basically means we can make a full optical system.

Speaker #1: Yeah. Have you yes yes Will. It's it's a very good question. And and and you you you yes you gave the answer. yourself. The thing is the thing is if we look at if we look at the bookings for 2027 Ophir's is over 85% booked.

Speaker #1: With new things coming in, by the way—they have a tendency that they always beat their forecast, by the way. So, for 2027, 80–85% is booked.

Speaker #1: the 10.3 we addressed as being the multiple EBITDA over over over over the price we pay. is is probably even a bit more conservative.

Speaker #1: we did I think it was it was a very very very nice deal for us. around 10 times. So we're we're very happy with that.

Edwin Roks: I think it was a very nice deal for us, around 10 times. So we are very happy with that. It is like I said, the synergies are not taking into the business case at all. The synergies will be huge because this is giving us the optical system. We have the processing. We can be sensor-agnostic. That basically means we can make a full optical system. It is a very nice acquisition for us.

Speaker #1: And it's like I said, the synergies are not taken into the business case at all. But the synergies will be huge because this is giving us the optical system.

Speaker #1: We have the processing. We can be sensor agnostic. That basically means we can have full make a full optical system. So it's a very nice acquisition for us.

Edwin Roks: It is a very nice acquisition for us.

Will Stein: Then, as a follow-up, you have now given us a preliminary view on 2027. Normally, when you have guided revenue, you have given us some breakdown by end market. I wonder if you are willing to do that in this case for 2027, how we should think about each end market as percentage of revenues.

Speaker #7: And then as a follow up you've now given us a preliminary view on 2027. Normally when you have guided revenue you've given us some breakdown on by end market.

Speaker #7: I wonder if you're willing to do that in this case for 2027 how we should think about each end market as percentage of revenues?

Edwin Roks: It is a bit early for that, Will. But of course, we will provide more color. Again, only a few quarters ago, we gave only, let us say, forecast for the next quarter. Now, let us say we are giving a bit more guidance for the full year. You have an idea what our data center and networking business is doing, how that will grow. Our aerospace and defense business will do better and better. Let us say, looking at the munition side, looking at the Golden Dome side, a lot of radar. So that will do better and better. It is a bit early to give that exact split, but we wanted to give some guidance for 2027, and showing that we are maintaining that growth.

Speaker #1: It's it's it's a it's a it's a bit it's a bit early for for that for that will. But but but but but of course we we we will provide more color.

Speaker #1: Again the the we again only a few quarters ago we gave only let's say forecast for the next quarter. Now let's say we are giving a bit more guidance for the for the full year.

Speaker #1: You have an idea of what our data center and networking business is doing and how that will grow. Our aerospace and defense business will do better and better.

Edwin Roks: Our aerospace and defense business will do better and better. Let us say, looking at the munition side, looking at the Golden Dome side, a lot of radar. So that will do better and better. It is a bit early to give that exact split, but we wanted to give some guidance for 2027, and showing that we are maintaining that growth.

Speaker #1: Let's say looking at the munitions side. Looking at looking at at the Golden Dome side. a lot of radar. So that will do better and better.

Speaker #1: it's a it's a bit early to give that exact split. But we wanted to give some some guidance for for 2027 and and and s showing that we are maintaining maintaining that growth.

Dan Boehle: Yeah, Will, I think we have done that in the past in the Q4 call, and so we will be able to give that in the next call.

Speaker #8: Yeah. Well I think we've done that in the past in the in the fourth quarter call. And so we will we'll we'll strive to give that.

Speaker #8: We will be able to give that in the next call.

Will Stein: Thank you.

Speaker #7: Thank you.

Operator: Thank you. I am showing no further questions in the queue at this time. I will turn the call back over to Mr. Edwin Roks for any closing remarks.

Speaker #3: Thank you. I'm showing no further questions in the queue at this time. I'll turn the call back over to Mr. Edwin Rocks for any closing remarks.

Edwin Roks: Yeah, thank you. This has been a good call. I thank you, operator. Let's summarize with a few items. First of all, we are experiencing very strong growth. We delivered very strong sales growth in Q3 of about 60% year-on-year, resulting in an all-time high of $1.2 billion for quarterly revenue, driven by increase in our data center and networking, medical, industrial, instrumentation, aerospace, and defense markets. Basically, all the markets helped there. Second, our adjusted EBITDA for the second quarter of 20.1% reflected strong operating improvements and overall performance, leading to another all-time high record in non-GAAP EPS. As a result, $1.46 per diluted share, and expect to continue building on this operating performance in the coming quarters.

Speaker #1: Yeah. Thank you. this this has been has been a good call. So I I thank you operator. And now let's say summarize with with a few items.

Speaker #1: First of all we are experiencing strong very strong growth. we delivered very strong sales growth in Q3 of about 60% year on year. Resulting in an all time high of 1.2 billion dollars for for quarterly revenue.

Speaker #1: Driven by increase in our data center and networking medical industrial instrumentation aerospace and defense market. Basically all the markets helped there. Second our adjusted EBITDA for the second quarter of 20.1% reflected strong operating improvements and overall performance leading to another all time high record in non GAAP EPS as a result 1.46 per diluted share.

Edwin Roks: Second, our adjusted EBITDA for the second quarter of 20.1% reflected strong operating improvements and overall performance, leading to another all-time high record in non-GAAP EPS. As a result, $1.46 per diluted share, and expect to continue building on this operating performance in the coming quarters.

Speaker #1: And we expect to continue building on this operating performance in the coming quarters. And third we continue to generate solid cash flows from operations which is used to our source to invest in our organic operations and to support projected or continued growth.

Edwin Roks: Third, we continue to generate solid cash flows from operations, which is used to our source to invest in our organic operations, and this supports projected or continued growth. In closing, and I said it before, I would like to thank all our employees of TTM, our customers, our suppliers, and our shareholders for continued support, and thank you very much. Goodbye.

Speaker #1: In closing and I said it before I would like to thank all our employees of TTM our customers our suppliers and our shareholders for continued support.

Speaker #1: And thank you very much. Goodbye.

Operator: Thank you all for participating. This concludes today's program. You may now disconnect.