Good day and welcome to TTM Technologies' third quarter 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Shawn Hannon, Vice President of Investor Relations. Please go ahead.

Greetings, everyone. Welcome and thank you for joining us today. I'm Shawn 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. Before we get started, I'd like to remind everyone today that the call contained 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. TGM 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 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.

Thank you, Shawn. 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 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. 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. 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 and market customer support in their strong demands and road mapping 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. will remind investors that our fundamental business model 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. 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 M-SAP, 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. 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 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 sending. 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 Off-Air Optics also supports the team of Up to 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 OVS 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 area 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 OVA 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. 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 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. 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. OV Optics experiencing strong revenue growth and margin expansion, and the transaction is expected to be immediately accretive to our adjusted EBDA margins and our no-gap diluted EPS. The transaction multiple is estimated to be roughly 10 times the expected OVA Optics full year 2027 adjusted EBDA without synergies. TTM's net leverage at closing is expected to be less than two times adjusted last 12 months EBDA 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 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 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 service chip surveillance Pi-6 radar, the APS-143 maritime surveillance radar, Golden Dome, and a number of projected priority restricted programs. 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 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 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. 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 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 ampersand 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-present 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 global 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 chalice 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 mid-single digit decline year-on-year. The overall book-to-bill was a remarkable 2.1 for the third quarter of 2026, with the commercial reporting segment at 2.5 and the A&D reporting second 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-on-year. Now, Dan will 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 price 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. GAAP operating income for the third quarter of 2026 was $162.3 million compared to GAAP operating income for the third quarter of 2025 of $71.9 million. On a GAAP basis, net income in the third quarter of 2026 was $84.8 million or 79 cents per diluted share. This compares to GAAP net income for the third quarter of 2025 of $53.1 million or 50 Cents Prediluted 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 the 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 Penang, which we continue to expect to approach breakeven 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 or 2.7% of net sales a year ago. Third quarter 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. 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. 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, and others. 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 $71 million or $0.67 per diluted share. Cash flow provided by operating activities was $154.7 million in the third quarter of 2026, which compares to cash flow provided by operating activities of $141.8 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 litre of 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%. 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. A non-GAAP net income is expected to be in the range of $8.10 and more. 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 TMP 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.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, press star 1-1 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. and our first question will come from the line of Stephen Fox with Fox Advisors. Your line is open.

Hi, good morning. I guess 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. 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. I'm just trying to understand, like, how dominant this is becoming within your traditional PCB sales. And I had a follow-up.

Yeah, Steve, good morning. Yes, happy to do that. Our M plus M program 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 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're getting very, very positive feedback on our end-present program. There are more end-present programs coming. I mentioned before, this will be the five to 10 programs all around. So 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 will be a fact. But again, currently about 30% 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 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? 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 this will be the end of the big stuff for a while. There may be a few little things that we've announced a few that we need to close. and they're, you know, one of those kind of medium size, the other smaller. So we'll focus on, you know, strengthening our balance sheet, getting 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, 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 period or closed right at the end of Q3 into Q4 will 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.

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

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

I 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's always a bit of, let's say, everybody has to be in that same window, technology-wise. So that's sometimes hurting us also a bit. But again, 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 second half of Q4, fully in production in Q1. So that's going smooth. And it's like I said before, there are more end-to-end programs coming. But again, there will always be a fluctuation, and we always try to be as accurate as possible in our guidance. But again, there are no major issues there.

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. 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.

Yeah, sure. In Q3, of the full data center and networking business, it was about 30% of our business was based on M plus 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, 700 million data center and networking forecasts 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.

Thank you. One moment for our next question. and that will come from the line of Mike Crawford with B Raleigh Securities. Your line is open.

Thank you. Can you give some color on supply availability of key materials like CCL and tea glass and also how you match any increasing prices with quotes?

Yeah, 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 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. And it's like I said, the M plus M is having higher ASPs, so that's helping us a lot. So price increases, yes, the customers will absorb that.

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

Yes, yes, yes. These ASPs are going faster than our costs. And 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 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. 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 more than 200 basis points in the next year.

All right. Thank you, Dan.

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

Yes, thank you. Edwin, I wanted to first follow up on Will's question on the N plus 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, you know, recovering some of the, you know, push the right N plus M? You can start there. Thank you.

Yeah, 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 CNC, what we call CNC, data centers and networking, is coming from M2M. 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 M plus M 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 spend. Thank you.

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 of 2029. The $400 million, I would say, is more allocated to M plus M. So I would say the $400 million is pure M plus M, rounding numbers here. You have to think about our brownfield approach. So basically, what we're 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 We can follow the market much, 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 Amplizem. It's like I said, CNC, our data center networking business, 50% of that will be Amplizem. So that's going really well. The technology is really doing what it should do.

Great. Thanks, Edwin.

One moment for our next question. And that will come from the line of Jim Rusciutti with Needham. Your line is open.

Hi, thank you. Good morning. Hopefully, you can hear me okay? Yeah, Jim. Good to hear you. Great. So, I wanted to just ask you about the preliminary 2027 guidance. Yeah, 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&D business?

Yeah, so if you look at the numbers, let's say for this year, the 4.4, 4.5 Let's say is a 48% growth year over year. This is a number we are going to repeat next year. And again, next year we will grow 50%. A substantial part of that growth will be M 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 and it will continue to grow in next year. Even if you look at our automotive business, it's growing 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 smaller 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 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 Epic and Ophir, by the way, they are very complementary. If you look at Epic, let's say that's more the processing, and Ophir, we're very happy with that one as well. that's more the optical side. If you have the optical side and let's say the processing under control and you're sensor agnostic you basically can make full sensing systems which are very consistently used in complementary to our radar activity. So 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 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 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 of the 6.75, 6.5 for next year. So that's about the ratio. Got it. Thank you.

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.

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 26 to 27. 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 color to sort of explain this to you?

Yes, Will, that's a very good question. And yes, you get the answer yourself. The thing is, if you look at the bookings for 2027, Ophir's 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 27, 85% booked. The 10.3 we addressed as being the multiple EBITDA over the price we pay is probably even a bit more conservative. We did, I think it was a very, very, very nice deal for us around 10 times. So we're very happy with that. And it's like I said, the synergies are not taking into the business case at all, but 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. So it's a very nice acquisition for us.

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 by end market. I wonder if you're willing to do that in this case for 2027, how we should think about each end market as percentage and revenues.

It's a bit early for that, but of course we will provide more color. 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 full year. You have an idea what our data center networking business is doing, how that will grow. Our aerospace and defense business will do better and better Let's say looking at the munitions side, looking at the Golden Dome side, a lot of radar. So that will do better and better. It's a bit early to give that exact split, but we wanted to give some guidance for 27 and showing that we are maintaining that growth.

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

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

Yeah, thank you. This has been a good call, so I thank you, operator. And now, let's 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 quality revenue, driven by increase in our data center networking, medical, industrial, instrumentation, aerospace, and defense markets. Basically, all the markets helped 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 no-gap 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 continuous support and thank you very much. Goodbye.

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