TTM Technologies (TTMI) Q3 2026 earnings call transcript

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 Rocks, our President and Chief Executive Officer, and Dan Bailey, our Executive Vice President and Chief Financial Officer. 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 and Exchange Commission, which we encourage you to review. These forward-looking statements represent management's expectations and assumptions based on currently available information. QTM 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. 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 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.

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 interconnect 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.

Core to the design of all our products and solutions, as well as the strategy of our business, is the innovative focus to safely next-generation needs for our customers and end markets. 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 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 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 plus m product offerings for data center and networking and market in addition to continuing strong demand for ttm's aerospace 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. Our medical, industrial, and instrumentation and automotive end markets also have 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.

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've 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. 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 investments that is expected to begin in the fourth quarter of 2026 and continue into early 2028. 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 roadmapping requirements to utilize our unique m plus m product approach recall the majority of our customer business in this market currently is with our industry-leading innovative established and critical ai players we'll remind investors that our fundamental business model has been continuous 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 through the anticipated strong demand requirements of our differentiated and advancing technologies 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, Passage, 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. In June we announced our intention 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. 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. 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 and financial model.

Finally, our third strategic directive is investment in what we call up the chain of vertical product solutions with focus on communication and sensing. In line with this directive, we acquired Epic Solutions, which is closed on September 30th. We are excited to welcome the Epic team members into TTM as we continue the integration activities. The announced plan to acquire Offereo Optics also supports the team 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 Ophiast market leading advanced infrared and laser optical components, we can offer our customers solutions where we can combine these optics with our other in-house modalities and our interconnect capabilities. This applies for 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 aerial systems.

Both critical to modernized defense priorities. On top of that, EPIC will add processing capabilities. Optics and processing are the key differentiators in any optical sensing system. Consequently, we expect the potential combined offerings of epic solutions and OV optics can advance a common strategy moving up the defense value chain and bringing together complementary software-defined radios and infrared capabilities. 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.

From a financial perspective, the proposed acquisition of OphiOptics 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 OphiOptics 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 cadet 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 On timing we expect to close this in the second quarter of 2027 subject to regulatory approvals and other customary closing conditions.

OVIO Optics experiencing strong revenue growth and margin expansion, and the transaction is expected to be immediately treated to our adjusted EBDA margins and our non-GAAP diluted EPS.

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

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.

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. We interact very closely with our customers as 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 third quarter of 2026, and as always, I would like to thank our employees for delivering these results. We achieved a 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. 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. And aerospace and defense end markets experienced very strong double-digit growth. The company's adjusted EVDA 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, reflecting positive mix impacts and operational excellence.

Non-GAAP EPS of $1.46 per diluted share was a 118% improvement year-on-year. The aerospace and defense end market represented 34% of third quarter 2026 sales. 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. 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 for all our applications.

During the third quarter of 2026, our A&D team's effective execution continued in securing another strong bookings quarter, capturing business related to the Surface Chip Surveillance-Py 6 radar, the APS 143 Maritime Surveillance Radar, Golden Dome, and a number of projected priority-restricted programs. A&D's book-to-build ratio was roughly 1.6 for the quarter, which led to the 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 securing new business from new primes as well as restricted programs. Restricted programs are incredibly sticky and very difficult for competitors to try in this place for the fourth quarter of 2026 we expect this end market to represent approximately 31 percent 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 are roughly 80 percent on on an organic basis.

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 and present asymmetrical printed circuit boards and continued demand strength from data center and networking customers. For the fourth quarter of 2026, we expect this end market to represent approximately 49% of net sales as our end percent 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 third quarter 2026 sales. This end market saw year-on-year growth of 97% during the third quarter, aided by spice adjustments to fully capture the value-add of our technology, in addition to particular demand strength in instrumentation for automated test equipment supporting AI solutions. 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. Automotive sales represented 7% of third quarter 2026 sales and was 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. 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. 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.

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-in-year.

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&E reporting segment at 1.6. 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. at 111% increase year in year.

Now, Dan, we'll summarize the financial performance in more detail. Dan?

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. 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 the third quarter of 2025. The 60% year-over-year increase was due to growth across all RN markets, and most notably continued strength in data center and networking, medical, industrial, and instrumentation, and aerospace and defense.

GAP operating income for the third quarter of 2026 was $162.3 million, compared to GAP operating income for the third quarter of 2025 of $71.9 million. On a GAP basis, net income in the third quarter of 2026 was $84.8 million, or $0.79 per diluted share. This compares to GAAP net income for the third quarter of 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 infant good 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 and prior periods. 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, particularly in the data center and networking and aerospace and defense end markets, in addition to execution improvements at our facility in Panay, which we continue to expect to approach break-even in the fourth quarter of 2026. Selling and marketing expense was $23.2 million in the third quarter, or 1.9% of net sales versus $20.5 million for 2.7% of net sales a year ago.

Third quarter general and administrative expense was $57.3 million for 4.8% of net sales, compared to $42.1 million for 5.6% of net sales a year ago. Third quarter research and development expense was $9.5 million for just under 1% of net sales, compared to $6.9 million for just under 1% of net sales in the prior year. 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 in the third quarter of 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 the third quarter of 2025 with an associated adjusted EBITDA margin of 16.1%. Interest expense was $12.1 million in the third quarter of 2026 compared to $9.9 million in the same quarter last year. Interest in other income was $3.1 million in the third quarter of 2026, compared to $2.5 million in the same quarter of last year. 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 U. S. dollar. Our effective tax rate was 19.5% in the third quarter of 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.

Third quarter 2026 non-GAAP net income was $157.8 million, or $1.46 per diluted share. This compares to third quarter 2025 non-GAAP net income of million or per diluted share Cash flow provided by Operating Activities was million in the third quarter of 2026 which compares to cash flow provided by operating activities of million in the same quarter last year. 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.

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 full year 2027. We project net sales for the fourth quarter of 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 literate 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. 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 fourth quarter 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 percent.

Further, we expect to record depreciation of approximately $39.7 million, amortization of intangibles of approximately $12.1 million, stock-based to 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. A non-GAF 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 four-year forecast includes contributions from recently closed acquisitions and associated financing costs, while excluding any contribution or impact from pending acquisitions. 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.

That concludes our prepared remarks, so I'll turn it back to you, Cherie, for the Q&A session.

Yeah, Steve. Steve, good morning. Yes, happy to do that. Our N plus N program is – there will be a substantial part of our data center networking group, as you know. Ramp-ups are going really well. It's currently about 30% of the data center and networking activities, and it will grow next year to about 50% of that group.

The ramp-up is going really well. We have three major programs. Two of them are doing really well. One of them is, let's say, a bit moving to the right. This has nothing to do, by the way, with any technical issue, has nothing to do with with with our performance it basically has to do with with the program schedule that of that customer which is which is which is a normal thing with these big programs so far we're getting very very positive feedback on our and present program there are more and present programs coming I mentioned before the this will be the five to ten programs all around so that's that's going that's 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 that will be a fact but again currently about 30% of the of the data center and networking business going in the next year to about 50% so that technology is working really well great that's helpful and then just to be crystal clear on the on all the M&A you've done and how you're planning to finance it.

Can you sort of talk about where this leaves you? Like, what's the potential for more M&A once you close all these deals? And just big picture thoughts on balance sheets since you've been pretty active in the acquisition market the last few months. Thanks.

Yes, Steve, this is Dan. I'll take that. Thanks for the question. Yeah, I think, you know, this will be the end of the big stuff for a while. You know, there may be a few little things that we've announced a few that we need to close, and they're one of those kind of medium size. The other is smaller. So we'll focus on strengthening our balance sheet and our leverage back down now. We've got a lot of strong cash flow coming in next year. 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, 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 period or closed right at the end of Q3 and Q4.

We'll impact positively on our EBITDA, but we did raise significant debt for the purchase of Epic 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. And so 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.

Great. That's really helpful. Thank you.

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 you know this numbers are yield numbers are where they should be again they have always multiple suppliers so there's always a bit of let's say everybody has to be in that same window technology wise so that's that's sometimes hurting us also a bit but again two out of these three programs we initially initially had are doing really well the third one is ramping up now that will that will be in in in in in ramp up in the second half of Q4 fully in production in Q1 so that's going smooth and it's like I said before there are more and present prayer programs coming but again there will always be a fluctuation and we always try to be as accurate as possible in our guidance but but again there are no major issues there appreciate that as a follow-up and when last quarter I believe you told us that n plus 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 the patent you know not entirely sure maybe you can update both these numbers for us please yeah sure in in in q3 of the full data center networking business it was about 30 percent of of our business was was based on m plus m so call it let's say 31 percent of 400 million something like that in in q4 we expect about the same percentage about 30 percent out of let's say a 700 million data center networking forecast.

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. 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.

Thank you.

yes sure mark lead times let's say are let's say in the order of let's say 12 weeks sometimes a bit longer sometimes 24 weeks sometimes even bit longer depending on the on the materials so far I think we are handling this very well on the and the side I think everything is solid on the on the data center networking sites we it's it's an ongoing activity yes lead times are going up but we are also let's say these programs are getting bigger this 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 and it's like I said you know the end plus M is is is having if they're having a higher ASPs so that's that's helping us a lot so price increases yes the customers will absorb that okay and then just to follow up related that the higher ASPs for the emphasis yeah we understand that but would you say that's higher than corporate average gross margin and I guess related where yes you see gross and EBITDA margins progressing throughout 2027 yes yes yes these these these ASPs are going then our cost and and that has to do with the complexity of the boards the complexity is is is increasing a lot for these these boards so 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 in these data centers and networking configuration.

So that's helping us a lot. It's about a factor four if you compare it with, let's say, conventional architectures. M plus M is really adding a lot, let's say, in complexity. And, of course, the customers are willing to pay for that.

Thank you.

Mike, maybe I'll just add, you mentioned about EBITDA. So, yes, our EBITDA margins will be increasing. Our gross margin on that N plus M product 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, you know, more than 200 basis points in the next year.

All right. Thank you, Dan.

you can start there thank you yeah these are these are these are indeed programs and and like I said they they move a bit it's like I said it's about 30 32 percent of the of the 670 million in in in commercial in sorry in CNC what we call CNC data centers and networking is coming from and was an Again, these programs are ramping up. These programs are doing well.

And, again, the feedback is very, very positive from these larger customers that basically that more and present programs are coming in. Okay. And then on the 400 million capacity expansion, it sounds like that will be fully operational in 28. Can you talk about what kind of customer volume visibility you have against that increased commitment and our customers committing to programs against that that's been thank you yeah yeah I think you do that the 400 million is going on top of something we we addressed earlier a 1.2 billion expansion let's say over over multiple years of 2029 the 400 million is I would say is more allocated to end present so I would say the 400 million is pure and present rounding numbers here yeah you have to you have to think about our brownfield approach so basically what we're very good at and and you see it in china and i gave several examples during the investor investor meetings um is that we we love brownfields so basically buildings close to our existing plants you know we are going to utilize for for additional capacity we do that very very fast and and we can we can follow the market much much more accurate so that's uh that's basically all of that uh it's a lot of equipment uh ruben which we uh we are installing there to to grow our and present it's like i said cnc our data center networking business 50 of that will be and present so that's uh that's going really well the technology is is is really doing what it should do.

Thanks, Edwin.

yeah so so if you look at the starting gym with the numbers that say for this year the the 4.4 4.5 billion let's say is a is a 48 percent growth year over year yeah this is this is a number we are going to wear we're going to going to repeat next year yeah and again next year we will grow 50% a substantial part of that growth will be end pose M the interesting thing Jim is that all the different and markets are growing so if you look at our medical industrial instrumentation business it's growing a lot and it will continue to grow in next year if even if you look at our automotive business is growing over an year over year.

And of course, our aerospace and defense business is growing a lot next year. So it is just a matter that data center network is growing so fast that it doesn't look like the others are growing. But I can tell you, it's growing over 20%. Yeah, these are big, big, big numbers. So yes, we are confident with the numbers we predicted for 2027. Got it. Follow-up question relates to the M&A activity. So we have Epic, other as fuller M&A that you've done and the pending Ophir acquisition. If we look out to next year after Ophir closes, how much the A&D business is going to be non-PCB in nature now? at the moment if you look at our airspace 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 if we look at epic yeah and oh fear by the way they are very very complimentary if you look at epic let's say that's more the processing and oh fear we're very happy with 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 on the control and your sensor agnostic you basically can make full sensing systems which are very consistently used in in in complementary to our radar activity so that's that's going well if you look at the numbers all of our acquisitions and of course OPA will only add let's say the the second part of the year because we only close it let's say in hopefully in q2 at the end of q2 so we have only one half year of that of over here then i would say if you add up all these acquisitions it's about half a billion in sales uh uh of the of the six point six point seven five six point five for next year uh so that that's about that's about the ratio Got it.

Yep. Okay. Thank you.

I think we've done that in the past in the fourth quarter call and so we will strive to give that. We will be able to give that in the next call. Thank you.

Yeah, thank you. That's been a good call so I thank you, operator. and now let's say summarize with a few items. First of all, we are experiencing very strong growth. We deliver 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 increasing our data center and networking, medical, industrial, instrumentation, aerospace and defense markets. Basically, all the markets help there. second our adjusted EBDA 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 and third we continue to generate solid cash flows for operations which is used to our source to invest in our organic operations and to support 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.