SKYT SkyWater Technology Inc

Record Fiscal Year Revenue, Gross Profit and EPS

SkyWater Technology, Inc. (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the fourth quarter and full fiscal year 2024 ended December 29, 2024.

Financial Highlights for Q4 2024:

• Revenue decreased (5)% year-over-year to $75.5 million.
• Gross margin increased to 25.6% on a GAAP basis, compared to 15.2% in Q4 2023, and increased to 26.6% on a non-GAAP basis, compared to 17.4% in Q4 2023.
• Net loss to shareholders of $0.7 million, or $(0.01) per diluted share on a GAAP basis, and net income to shareholders of $1.9 million, or $0.04 per diluted share on a non-GAAP basis, compared to net loss to shareholders of $10.3 million, or $(0.22) per diluted share on a GAAP basis, and net loss to shareholders of $1.1 million, or $(0.02) per diluted share on a non-GAAP basis in Q4 2023.
• Adjusted EBITDA of $10.2 million, or 13.5% of revenue, compared to $10.6 million, or 13.4% of revenue in Q4 2023.

Financial Highlights for Fiscal Year 2024:

• Revenue increased 19% year-over-year to a record $342.3 million.
• Gross margin decreased to 20.3% on a GAAP basis, compared to 20.7% in fiscal year 2023, and decreased to 21.0% on a non-GAAP basis, compared to 22.0% in fiscal year 2023.
• Net loss to shareholders of $6.8 million, or $(0.14) per diluted share on a GAAP basis, and net income to shareholders of $2.7 million, or $0.06 per diluted share on a non-GAAP basis, compared to net loss to shareholders of $30.8 million, or $(0.68) per diluted share on a GAAP basis, and net loss to shareholders $7.7 million, or $(0.17) per diluted share on a non-GAAP basis in fiscal year 2023.
• Adjusted EBITDA of $34.3 million, or 10.0% of revenue, compared to $37.2 million, or 13.0% of revenue in fiscal year 2023.

“Our financial results for fiscal year 2024 demonstrate the strength of our highly differentiated, technology foundry business model, within a dynamic and growing domestic semiconductor ecosystem,” commented Thomas Sonderman, CEO. “In the nearly four years since our IPO, we have successfully transformed a mature fabrication facility into a monetized Advanced Technology Services (ATS) business, which has grown to a scale that supported record revenues and profitability for SkyWater in 2024. The past year has also brought a number of key milestones establishing SkyWater as ‘America’s Foundry,’ including the launch of our ThermaView℠ platform, initial terms of our CHIPS funding award, multiple ATS customers beginning initial phases of production at SkyWater Minnesota, and significant progress preparing our Florida operations for advanced fan-out wafer-level production. For the year ahead, we are driving for continued top-line momentum in ATS as well as a rebound in our Wafer Services business from current levels, which we expect will be supported by an increasing mix of new products and customers as we progress through the year. We expect the growing revenue momentum through the year will result in the expansion of our gross margins, continued strong adjusted EBITDA, and another positive year for non-GAAP EPS for fiscal 2025.”

Significant Highlights of the Past Year:

• Record financial results for fiscal 2024. SkyWater achieved record revenues and gross profit, strong adjusted EBITDA, and positive non-GAAP earnings per share for fiscal 2024, driven primarily by strong growth in ATS development revenues compared to fiscal 2023.
• Launch of ThermaView℠ Solutions. SkyWater recently launched its first platform dedicated to read-out IC (ROIC) and microbolometer solutions for thermal imaging applications. With the increasing demand for advanced infrared sensing, ThermaView positions SkyWater as a key supplier in a rapidly-growing $9 billion market spanning defense, industrial, and medical applications.
• Announced preliminary CHIPS funding award. SkyWater signed a preliminary memorandum of terms with the CHIPS for America program late in 2024. The proposed $16 million CHIPS program award is expected to be combined with $19 million in incentives from the State of Minnesota’s Forward Fund in order to augment the substantial outside funding already awarded to SkyWater to date, accelerating our plans to enhance production capabilities at our Minnesota facility.
• Unprecedented level of customer CapEx co-investment. Nearly $77 million in Tools revenue recognized in fiscal 2024 marks a strong start to an anticipated multi-year period of record levels of customer CapEx co-investment. Tool installations during 2024 were primarily focused on adding advanced capabilities and increased capacity within our Minnesota operations in support of future growth ahead for multiple strategic programs, including the installation of a first-of-its-kind Multibeam e-beam lithography system.
• Strong progress transitioning multiple ATS development programs into production. SkyWater’s strategy to collaborate closely with multiple customers as they transition ATS development programs into production yielded positive progress over the year. We launched production with optical sensing pioneer Lumotive, executed a multi-year supply agreement with NanoDX, and advanced Quantum-Si’s state-of-the-art proteome sequencing technology into production during 2024.
• Exciting progress in Florida operations supported by transformational $120 million contract award. Initial tool deliveries in support of our fan-out wafer-level packaging platform in Florida commenced in 2024, marking an important milestone as we accelerate the tooling and facilitization of our Florida operations in preparation for an expected 2025 ramp in Advanced Packaging revenues. We were pleased to announce the appointment of GM Bassel Haddad during 2024 to lead our Advanced Packaging operations, which we expect will be a compelling new revenue growth vector for SkyWater, beginning in 2025.

Q4 2024 Summary:

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

In millions, except per share data

Q4 2024

 

Q4 2023

 

Y/Y *

 

Q3 2024

 

Q/Q *

 

 

 

 

 

 

 

 

 

 

ATS development revenue (1)

$59.4

 

$57.2

 

4%

 

$56.4

 

5%

Wafer Services revenue

$4.4

 

$12.0

 

(64)%

 

$6.7

 

(35)%

Combined ATS development and Wafer Services revenue

$63.8

 

$69.2

 

(8)%

 

$63.1

 

1%

Tools revenue (2)

$11.7

 

$9.9

 

18%

 

$30.7

 

(62)%

Total revenue *

$75.5

 

$79.2

 

(5)%

 

$93.8

 

(20)%

Gross profit

$19.3

 

$12.0

 

61%

 

$20.2

 

(5)%

Gross margin *

25.6%

 

15.2%

 

1,040 bps

 

21.6%

 

400 bps

Net income (loss) to shareholders

$(0.7)

 

$(10.3)

 

93%

 

$1.5

 

(145)%

Basic income (loss) per share

$(0.01)

 

$(0.22)

 

94%

 

$0.03

 

(145)%

Diluted income (loss) per share

$(0.01)

 

$(0.22)

 

94%

 

$0.03

 

(145)%

Net income (loss) margin to shareholders

(0.9)%

 

(13.0)%

 

1,210 bps

 

1.6%

 

(250) bps

Non-GAAP

 

 

 

 

 

 

 

 

 

In millions, except per share data

Q4 2024

 

Q4 2023

 

Y/Y *

 

Q3 2024

 

Q/Q *

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross profit

$20.1

 

$13.8

 

45%

 

$20.9

 

(4)%

Non-GAAP gross margin *

26.6%

 

17.4%

 

920 bps

 

22.3%

 

430 bps

Non-GAAP net income (loss) to shareholders

$1.9

 

$(1.1)

 

281%

 

$3.6

 

(47)%

Non-GAAP basic income (loss) per share

$0.04

 

$(0.02)

 

278%

 

$0.08

 

(47)%

Non-GAAP diluted income (loss) per share

$0.04

 

$(0.02)

 

278%

 

$0.08

 

(47)%

Adjusted EBITDA

$10.2

 

$10.6

 

(3)%

 

$11.0

 

(7)%

Adjusted EBITDA margin

13.5%

 

13.4%

 

10 bps

 

11.7%

 

180 bps

__________________

* Amounts calculated based on figures reported in thousands

(1)

ATS development revenue represents GAAP revenue primarily derived from process development services, tool installation and qualification services, facility and tool access, leases where SkyWater serves as lessor, and security services.

(2)

Tools revenue represents GAAP revenue primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of our fabs and is used to complete ATS customer programs.

Q4 2024 Results:

• Revenue: Revenue of $75.5 million decreased (5)% compared to the fourth quarter of 2023. ATS development revenue of $59.4 million increased 4% compared to the fourth quarter of 2023. Wafer Services revenue of $4.4 million decreased (64)% compared to the fourth quarter of 2023. Tools revenue of $11.7 million increased 18% compared to the fourth quarter of 2023.
• Gross Profit: GAAP gross profit was $19.3 million, or 25.6% of total revenue, compared to gross profit of $12.0 million, or 15.2% of total revenue, in the fourth quarter of 2023. Non-GAAP gross profit was $20.1 million, or 26.6% of total revenue, compared to non-GAAP gross profit of $13.8 million, or 17.4% of total revenue, in the fourth quarter of 2023. Tools revenue negatively impacted non-GAAP gross margin by 170 bps, compared to 130 bps in the fourth quarter of 2023.
• Operating Expenses: GAAP operating expenses were $16.6 million, compared to $18.0 million in the fourth quarter of 2023. Non-GAAP operating expenses were $14.8 million, compared to $10.5 million in the fourth quarter of 2023.
• Net Income (Loss): GAAP net loss to shareholders was $0.7 million, or $(0.01) per diluted share, compared to a net loss to shareholders of $10.3 million, or $(0.22) per diluted share, in the fourth quarter of 2023. Non-GAAP net income to shareholders was $1.9 million, or $0.04 per diluted share, compared to a non-GAAP net loss to shareholders of $1.1 million, or $(0.02) per diluted share, in the fourth quarter of 2023.
• Adjusted EBITDA: Adjusted EBITDA was $10.2 million, or 13.5% of total revenue, compared to $10.6 million , or 13.4% of total revenue, in the fourth quarter of 2023.

Fiscal Year 2024 Summary:

GAAP

 

 

 

 

 

In millions, except per share data

FY2024

 

FY2023

 

Y/Y *

 

 

 

 

 

 

ATS development revenue (1)

$238.6

 

$210.9

 

13%

Wafer Services revenue

$26.9

 

$61.1

 

(56)%

Combined ATS development and Wafer Services revenue

$265.5

 

$272.0

 

(2)%

Tool revenue (2)

$76.8

 

$14.7

 

424%

Total revenue *

$342.3

 

$286.7

 

19%

Gross profit

$69.6

 

$59.3

 

17%

Gross margin *

20.3%

 

20.7%

 

(40) bps

Net loss to shareholders

$(6.8)

 

$(30.8)

 

78%

Basic and diluted loss per share

$(0.14)

 

$(0.68)

 

79%

Net loss margin to shareholders

(2.0)%

 

(10.7)%

 

870 bps

Non-GAAP

 

 

 

 

 

In millions, except per share data

FY2024

 

FY2023

 

Y/Y *

 

 

 

 

 

 

Non-GAAP gross profit

$72.0

 

$63.0

 

14%

Non-GAAP gross margin *

21.0%

 

22.0%

 

(100) bps

Non-GAAP net income (loss) to shareholders

$2.7

 

$(7.7)

 

135%

Non-GAAP basic income (loss) per share

$0.06

 

$(0.17)

 

135%

Non-GAAP diluted income (loss) per share

$0.06

 

$(0.17)

 

135%

Adjusted EBITDA

$34.3

 

$37.2

 

(8)%

Adjusted EBITDA margin

10.0%

 

13.0%

 

(300) bps

_______________

* Amounts calculated based on figures reported in thousands.

(1)

ATS development revenue represents GAAP revenue primarily derived from process development services, tool installation and qualification services, facility and tool access, leases where SkyWater serves as lessor, and security services.

(2)

Tools revenue represents GAAP revenue primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of our fabs and is used to complete ATS customer programs.

Fiscal Year 2024 Results:

• Revenue: Revenue of $342.3 million increased 19% year-over-year. ATS development revenue of $238.6 million increased 13% year-over-year. Wafer Services revenue of $26.9 million decreased (56)% year-over-year. Tools Revenue of $76.8 million (22% of total revenue) increased significantly compared to $14.7 million (5% of total revenue) in 2023.
• Gross Profit: GAAP gross profit was $69.6 million, or 20.3% of total revenue, compared to gross profit of $59.3 million, or 20.7% of total revenue, in 2023. Non-GAAP gross profit was $72.0 million, or 21.0% of total revenue, compared to non-GAAP gross profit of $63.0 million, or 22.0% of total revenue, in 2023. Tools Revenue negatively impacted non-GAAP gross margin by 480bp in 2024 compared to 50bp in 2023.
• Operating Expenses: GAAP operating expenses were $63.1 million, compared to $74.1 million in 2023. Non-GAAP operating expenses were $56.0 million, compared to $54.7 million in 2023.
• Net Income (Loss): GAAP net loss to shareholders was $6.8 million, or $(0.14) per diluted share, compared to a net loss to shareholders of $30.8 million, or $(0.68) per diluted share, in 2023. Non-GAAP net income to shareholders was $2.7 million, or $0.06 per diluted share, compared to a non-GAAP net loss to shareholders of $7.7 million, or $(0.17) per diluted share, in 2023.
• Adjusted EBITDA: Adjusted EBITDA was $34.3 million, or 10.0% of total revenue, compared to $37.2 million, or 13.0% of total revenue, in 2023.

A reconciliation between GAAP and non-GAAP financial measures is contained in the tables below in the section titled “Non-GAAP Financial Measures.”

Q1 2025 Financial Outlook:

For the first quarter of 2025, we expect total revenue to be in the range of $59 million to $63 million, of which approximately $1 million is expected to be tools revenue. We expect GAAP diluted net loss per share to be in the range of $(0.14) to $(0.20) and non-GAAP diluted net loss per share to be in the range of $(0.10) to $(0.16).

This outlook for non‑GAAP diluted net loss per share excludes anticipated equity-based compensation expense of approximately $2 million, or $0.04 per share. Non-GAAP diluted net loss per share should be considered in addition to, but not as a substitute for, our financial information presented in accordance with GAAP.

Investor Webcast

SkyWater will host a conference call today, Wednesday, February 26, 2025, at 7:30 a.m. CT (8:30 a.m. ET) to discuss its fourth quarter and fiscal year 2024 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com.

About SkyWater Technology

SkyWater (NASDAQ: SKYT) is a U.S.-based semiconductor manufacturer and a DMEA-accredited Category 1A Trusted Supplier. SkyWater’s Technology as a Service model streamlines the path to production for customers with development services, volume production and heterogeneous integration solutions in its U.S. facilities. This pioneering model enables innovators to co-create the next wave of technology within diverse categories including mixed-signal CMOS, read-out ICs, rad-hard ICs, MEMS, superconducting ICs, photonics and advanced packaging. SkyWater serves the growing markets of aerospace and defense, automotive, biomedical, industrial and quantum computing. For more information, visit: www.skywatertechnology.com.

Cautionary Statement Regarding Preliminary Results

The Company’s results for the fourth quarter and fiscal year ended December 29, 2024 are preliminary, unaudited and subject to the finalization of the Company’s fourth quarter review and full-year audit and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The Company cautions that actual results may differ materially from those described in this press release.

SkyWater Technology Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Company’s current expectations or forecasts of future events, rather than past events and outcomes, and such statements are not guarantees of future performance. Forward-looking statements include all statements other than statements of historical fact contained in this press release, including information or predictions concerning the Company’s future business, results of operations, financial performance, plans and objectives, competitive position, market trends, and potential growth and market opportunities. In some cases, you can identify forward-looking statements by words such as “intends,” “estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,” “expects,” “believes,” “should,” “could,” “may,” “will,” “targets,” “projects,” “seeks” or the negative of these terms or other comparable terminology.

Forward-looking statements are subject to risks, uncertainties and assumptions, which may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Key factors that could cause the Company’s actual results to be different than expected or anticipated include, but are not limited to: our goals and strategies; our future business development, financial condition and results of operations; our ability to continue operating our fabrication facilities at full capacity; our ability to appropriately respond to changing technologies on a timely and cost-effective basis; our customer relationships and our ability to retain and expand our customer relationships; our ability to accurately predict our future revenues for the purpose of appropriately budgeting and adjusting our expenses; our expectations regarding dependence on our largest customers; our ability to diversify our customer base and develop relationships in new markets; the performance and reliability of our third-party suppliers and manufacturers; our ability to procure tools, materials, and chemicals; our ability to control costs, including our operating and capital expenses; the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets; the level of demand in our customers’ end markets; our ability to attract, train and retain key qualified personnel; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of or increase in tariffs; our ability to raise additional capital or financing; our ability to accurately forecast demand; changes in local, regional, national and international economic or political conditions, including those resulting from increases in inflation and interest rates, a recession, or intensified international hostilities; the level and timing of U.S. government program funding; our ability to maintain compliance with certain U.S. government contracting requirements; regulatory developments in the United States and foreign countries; our ability to protect our intellectual property rights; and other factors discussed in the “Risk Factors” section of the annual report on Form 10-K the Company filed with the SEC on March 15, 2024 and in other documents that the Company files with the SEC, which are available at http://www.sec.gov. The Company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

 

SKYWATER TECHNOLOGY, INC.

Consolidated Balance Sheets

(Unaudited)

 

 

December 29, 2024

 

December 31, 2023

 

 

 

 

 

(in thousands, except per share data)

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

18,844

 

 

$

18,382

 

Accounts receivable (net of allowance for credit losses of $398 and $180, respectively)

 

54,332

 

 

 

65,961

 

Contract assets (net of allowance for credit losses of $42 and $99, respectively)

 

20,890

 

 

 

29,666

 

Inventory

 

14,535

 

 

 

15,341

 

Prepaid expenses and other current assets

 

23,476

 

 

 

17,025

 

Total current assets

 

132,077

 

 

 

146,375

 

Property and equipment, net

 

172,705

 

 

 

159,367

 

Intangible assets, net

 

7,779

 

 

 

5,672

 

Other assets

 

8,488

 

 

 

5,342

 

Total assets

$

321,049

 

 

$

316,756

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

Current liabilities

 

 

 

Current portion of long-term debt

$

5,073

 

 

$

3,976

 

Accounts payable

 

29,590

 

 

 

19,614

 

Accrued expenses

 

36,829

 

 

 

48,291

 

Short-term financing, net of unamortized debt issuance costs

 

27,669

 

 

 

22,765

 

Contract liabilities

 

55,166

 

 

 

49,551

 

Total current liabilities

 

154,327

 

 

 

144,197

 

Long-term liabilities

 

 

 

Long-term debt, less current portion and net of unamortized debt issuance costs

 

34,704

 

 

 

36,098

 

Long-term contract liabilities

 

51,901

 

 

 

65,754

 

Deferred income tax liability, net

 

701

 

 

 

679

 

Other long-term liabilities

 

8,652

 

 

 

9,327

 

Total long-term liabilities

 

95,958

 

 

 

111,858

 

Total liabilities

 

250,285

 

 

 

256,055

 

Shareholders’ equity

 

 

 

Preferred stock, $0.01 par value per share (80,000 shares authorized, zero shares issued and outstanding as of December 29, 2024 and December 31, 2023)

 

—

 

 

 

—

 

Common stock, $0.01 par value per share (200,000 shares authorized; 47,704 and 47,028 shares issued and outstanding as of December 29, 2024 and December 31, 2023, respectively)

 

478

 

 

 

470

 

Additional paid-in capital

 

189,132

 

 

 

178,473

 

Accumulated deficit

 

(131,996

)

 

 

(125,203

)

Total shareholders’ equity, SkyWater Technology, Inc.

 

57,614

 

 

 

53,740

 

Noncontrolling interests

 

13,150

 

 

 

6,961

 

Total shareholders’ equity

 

70,764

 

 

 

60,701

 

Total liabilities and shareholders’ equity

$

321,049

 

 

$

316,756

 

 

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Operations

(Unaudited)

 

 

Three-Month Period Ended

 

Fiscal Year Ended

 

December 29, 2024

 

September 29, 2024

 

December 31, 2023

 

December 29, 2024

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

Revenue

$

75,487

 

 

$

93,817

 

$

79,154

 

 

$

342,269

 

 

$

286,682

 

Cost of revenue

 

56,190

 

 

 

73,582

 

 

67,143

 

 

 

272,643

 

 

 

227,390

 

Gross profit

 

19,297

 

 

 

20,235

 

 

12,011

 

 

 

69,626

 

 

 

59,292

 

Research and development expense

 

4,214

 

 

 

3,431

 

 

2,872

 

 

 

15,040

 

 

 

10,169

 

Selling, general, and administrative expense

 

12,430

 

 

 

12,095

 

 

15,092

 

 

 

48,026

 

 

 

63,911

 

Operating income (loss)

 

2,653

 

 

 

4,709

 

 

(5,953

)

 

 

6,560

 

 

 

(14,788

)

Interest expense

 

1,978

 

 

 

1,988

 

 

2,898

 

 

 

8,837

 

 

 

10,826

 

Income (loss) before income taxes

 

675

 

 

 

2,721

 

 

(8,851

)

 

 

(2,277

)

 

 

(25,614

)

Income tax expense (benefit)

 

234

 

 

 

93

 

 

(450

)

 

 

240

 

 

 

(521

)

Net income (loss)

 

441

 

 

 

2,628

 

 

(8,401

)

 

 

(2,517

)

 

 

(25,093

)

Less: net income attributable to noncontrolling interests

 

1,120

 

 

 

1,116

 

 

1,924

 

 

 

4,276

 

 

 

5,663

 

Net income (loss) attributable to SkyWater Technology, Inc.

$

(679

)

 

$

1,512

 

$

(10,325

)

 

$

(6,793

)

 

$

(30,756

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common shareholders, basic

$

(0.01

)

 

$

0.03

 

$

(0.22

)

 

$

(0.14

)

 

$

(0.68

)

Weighted average shares outstanding, basic

 

47,659

 

 

 

47,523

 

 

47,020

 

 

 

47,396

 

 

 

45,507

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common shareholders, diluted

$

(0.01

)

 

$

0.03

 

$

(0.22

)

 

$

(0.14

)

 

$

(0.68

)

Weighted average shares outstanding, diluted

 

47,659

 

 

 

47,640

 

 

47,020

 

 

 

47,396

 

 

 

45,507

 

 

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Cash Flows

(Unaudited)

 

 

Fiscal Year Ended

 

December 29, 2024

 

December 31, 2023

 

 

 

 

 

(in thousands)

Cash flows from operating activities

 

 

 

Net loss

$

(2,517

)

 

$

(25,093

)

Adjustments to reconcile net loss to net cash flows provided by operating activities

 

 

 

Depreciation and amortization

 

18,693

 

 

 

28,930

 

Accretion of investment tax credits

 

(449

)

 

 

—

 

Gain on sale of property and equipment

 

(55

)

 

 

—

 

Write-off of capital projects in process

 

—

 

 

 

1,262

 

Amortization of debt issuance costs included in interest expense

 

1,676

 

 

 

1,755

 

Equity-based compensation expense

 

8,168

 

 

 

6,860

 

Warranty expense

 

5,455

 

 

 

4,200

 

Deferred income taxes

 

22

 

 

 

(560

)

Provision for credit losses

 

203

 

 

 

38

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable and contract assets, net

 

20,202

 

 

 

(33,371

)

Inventories

 

805

 

 

 

(1,944

)

Prepaid expenses and other assets

 

(9,595

)

 

 

(8,221

)

Accounts payable and accrued expenses

 

(19,127

)

 

 

17,073

 

Contract liabilities, current and long-term

 

(8,237

)

 

 

19,152

 

Net cash provided by operating activities

 

15,244

 

 

 

10,081

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of software and technology licenses

 

(3,319

)

 

 

(1,871

)

Proceeds from sale of property and equipment

 

55

 

 

 

—

 

Purchases of property and equipment

 

(15,215

)

 

 

(8,618

)

Net cash used in investing activities

 

(18,479

)

 

 

(10,489

)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from draws on the revolving line of credit

 

346,500

 

 

 

259,350

 

Repayment of draws on the revolving line of credit

 

(339,114

)

 

 

(297,649

)

Proceeds from tool financings

 

1,298

 

 

 

9,012

 

Repayment of tool financing advanced payments

 

(920

)

 

 

—

 

Principal payments on long-term debt

 

(4,834

)

 

 

(2,356

)

Cash paid for principal on finance leases

 

(646

)

 

 

(935

)

Proceeds from the issuance of common stock pursuant to equity compensation plans

 

2,499

 

 

 

2,305

 

Proceeds from the issuance of common stock under the ATM

 

—

 

 

 

20,398

 

Cash paid on licensed technology obligations

 

(3,000

)

 

 

(2,350

)

Contributions from noncontrolling interest

 

7,534

 

 

 

1,098

 

Distributions to noncontrolling interest

 

(5,620

)

 

 

(108

)

Net cash provided by (used in) financing activities

 

3,697

 

 

 

(11,235

)

Net increase (decrease) in cash and cash equivalents

 

462

 

 

 

(11,643

)

Cash and cash equivalents - beginning of fiscal year

 

18,382

 

 

 

30,025

 

Cash and cash equivalents - end of fiscal year

$

18,844

 

 

$

18,382

 

Supplemental Financial Information by Quarter

 

Q4 2024

 

Q3 2024

 

Q2 2024

 

Q1 2024

 

Q4 2023

 

Q3 2023

 

Q2 2023

 

Q1 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

ATS development revenue (1)

$

59,401

 

$

56,390

 

 

$

61,669

 

$

61,185

 

$

57,170

 

$

53,891

 

$

52,073

 

$

47,770

Wafer Services revenue

 

4,371

 

 

6,718

 

 

 

5,780

 

 

9,992

 

 

12,048

 

 

14,490

 

 

16,802

 

 

17,788

Combined ATS development and Wafer Services revenue

 

63,772

 

 

63,108

 

 

 

67,449

 

 

71,177

 

 

69,218

 

 

68,381

 

 

68,875

 

 

65,558

Tools revenue (2)

 

11,715

 

 

30,709

 

 

 

25,880

 

 

8,459

 

 

9,936

 

 

3,243

 

 

936

 

 

536

Total revenue

$

75,487

 

$

93,817

 

 

$

93,329

 

$

79,636

 

$

79,154

 

$

71,624

 

$

69,811

 

$

66,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tools revenue (2)

$

11,715

 

$

30,709

 

 

$

25,880

 

$

8,459

 

$

9,936

 

$

3,243

 

$

936

 

$

536

Cost of tools revenue (2)

 

9,674

 

 

30,477

 

 

 

24,869

 

 

8,260

 

 

9,125

 

 

2,861

 

 

290

 

 

484

Tools gross profit

$

2,041

 

$

232

 

 

$

1,011

 

$

199

 

$

811

 

$

382

 

$

646

 

$

52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue impact of modified customer contracts (3)

$

—

 

$

—

 

 

$

—

 

$

—

 

$

—

 

$

—

 

$

3,601

 

$

—

Cost of revenue impact of modified customer contracts (3)

 

—

 

 

(5,616

)

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

Favorable gross profit impact of modified customer contracts

$

—

 

$

5,616

 

 

$

—

 

$

—

 

$

—

 

$

—

 

$

3,601

 

$

—

__________________

(1)

ATS development revenue represents GAAP revenue primarily derived from process development services, tool installation and qualification services, facility and tool access, leases where SkyWater serves as lessor, and security services.

(2)

Tools revenue and cost of tools revenue represents GAAP revenue and cost primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of our fabs and is used to complete ATS customer programs.

(3)

SkyWater accounts for the impacts of customer contract modifications in accordance with GAAP. Customer contract modifications that add or eliminate performance obligations and thereby change the scope of our customer programs often impact the revenue and/or cost of revenue associated with performance on customer programs. Significant impacts resulting from the effects of executed contract modifications include:

• In the first quarter of 2024, we recorded a $8,004 charge to recognize future estimated losses for one significant customer program based on anticipated cost increases to complete the customer’s program. In the third quarter of 2024, we successfully modified the customer contract, which resulted in a decrease in our estimate of future costs to complete their program. The remaining $5,616 loss accrual recorded at the time the contract was modified was released, which reduced cost of revenue for the three-month period ended September 29, 2024.
• In the second quarter of 2023 we terminated certain arrangements with a customer, the effects of which allowed SkyWater to recognize into revenue prior collected amounts deferred in contract liabilities.

Non-GAAP Financial Measures

We provide non-GAAP financial information that our management regularly evaluates to provide additional insight to investors and to supplement our results reported using U.S. generally accepted accounting principles (GAAP). We provide non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling, general and administrative expense, non-GAAP net income (loss) to shareholders, non-GAAP net income (loss) to shareholders per basic share and non-GAAP net income (loss) per diluted share. Our management uses these non-GAAP financial measures to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe these non-GAAP financial measures are useful performance measures to our investors because they provide a baseline for analyzing trends in our business and exclude certain items that may not be indicative of our core operating results. The non-GAAP financial measures disclosed in this earnings release should not be viewed as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP. In addition, because these non-GAAP financial measures are not determined in accordance with GAAP, other companies, including our peers, may calculate their non-GAAP financial measures differently than we do. As a result, the non-GAAP financial measures presented in this earnings release may not be directly comparable to similarly titled measures presented by other companies.

We also provide earnings before interest, income taxes, depreciation and amortization (EBITDA), adjusted EBITDA and adjusted EBITDA margin as supplemental non-GAAP measures. We define adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, equity-based compensation expense and certain other items that we do not view as indicative of our ongoing performance, including net income attributable to noncontrolling interests; management transition expense; business transformation costs; CHIPS Act specialist fees; restructuring costs; and transaction costs. Our management uses EBITDA, adjusted EBITDA and adjusted EBITDA margin to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe these non-GAAP financial measures are useful performance measures to our investors because they allow for an effective evaluation of our operating performance when compared to other companies, including our peers, without regard to financing methods or capital structures. We exclude the items listed above from net income (loss) in arriving at adjusted EBITDA and adjusted EBITDA margin because the amounts of these items can vary substantially within our industry depending on the accounting methods and policies used, book values of assets, capital structures, and the methods by which assets were acquired. These non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP. Certain items excluded from these non-GAAP financial measures are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic cost bases of depreciable assets, none of which are reflected in these non-GAAP financial measures. Our presentation of these non-GAAP financial measures should not be construed as an indication that our results will be unaffected by the items excluded from adjusted EBITDA and adjusted EBITDA margin. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items, and other similar items, from these non-GAAP financial measures should not be interpreted as implying that these items are non-recurring, infrequent or unusual, unless otherwise expressly indicated.

The following tables present a reconciliation of the most directly comparable financial measures, calculated and presented in accordance with GAAP, to our non-GAAP financial measures.

 

Three-Month Period Ended

 

Fiscal Year Ended

 

December 29, 2024

 

September 29, 2024

 

December 31, 2023

 

December 29, 2024

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

GAAP revenue

$

75,487

 

 

$

93,817

 

 

$

79,154

 

 

$

342,269

 

 

$

286,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of revenue

$

56,190

 

 

$

73,582

 

 

$

67,143

 

 

$

272,643

 

 

$

227,390

 

Equity-based compensation expense (1)

 

(589

)

 

 

(565

)

 

 

(313

)

 

 

(2,113

)

 

 

(1,555

)

Management transition expense (2)

 

—

 

 

 

(97

)

 

 

—

 

 

 

(97

)

 

 

(705

)

Business transformation costs (3)

 

—

 

 

 

—

 

 

 

(806

)

 

 

—

 

 

 

(806

)

Restructuring costs (5)

 

(179

)

 

 

—

 

 

 

(679

)

 

 

(179

)

 

 

(679

)

Non-GAAP cost of revenue

$

55,422

 

 

$

72,920

 

 

$

65,345

 

 

$

270,254

 

 

$

223,645

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

19,297

 

 

$

20,235

 

 

$

12,011

 

 

$

69,626

 

 

$

59,292

 

GAAP gross margin

 

25.6

%

 

 

21.6

%

 

 

15.2

%

 

 

20.3

%

 

 

20.7

%

Equity-based compensation expense (1)

 

589

 

 

 

565

 

 

 

313

 

 

 

2,113

 

 

 

1,555

 

Management transition expense (2)

 

—

 

 

 

97

 

 

 

—

 

 

 

97

 

 

 

705

 

Business transformation costs (3)

 

—

 

 

 

—

 

 

 

806

 

 

 

—

 

 

 

806

 

Restructuring costs (5)

 

179

 

 

 

—

 

 

 

679

 

 

 

179

 

 

 

679

 

Non-GAAP gross profit

$

20,065

 

 

$

20,897

 

 

$

13,809

 

 

$

72,015

 

 

$

63,037

 

Non-GAAP gross margin

 

26.6

%

 

 

22.3

%

 

 

17.4

%

 

 

21.0

%

 

 

22.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

4,214

 

 

$

3,431

 

 

$

2,872

 

 

$

15,040

 

 

$

10,169

 

Equity-based compensation expense (1)

 

(76

)

 

 

(69

)

 

 

134

 

 

 

(342

)

 

 

(464

)

Restructuring costs (5)

 

—

 

 

 

—

 

 

 

(655

)

 

 

—

 

 

 

(655

)

Non-GAAP research and development expense

$

4,138

 

 

$

3,362

 

 

$

2,351

 

 

$

14,698

 

 

$

9,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP selling, general, and administrative expense

$

12,430

 

 

$

12,095

 

 

$

15,092

 

 

$

48,026

 

 

$

63,911

 

Equity-based compensation expense (1)

 

(1,397

)

 

 

(1,384

)

 

 

(1,008

)

 

 

(5,713

)

 

 

(4,841

)

Management transition expense (2)

 

(141

)

 

 

—

 

 

 

—

 

 

 

(806

)

 

 

(130

)

Business transformation costs (3)

 

—

 

 

 

—

 

 

 

(5,341

)

 

 

—

 

 

 

(11,363

)

CHIPS Act specialist fees (4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,320

)

Restructuring costs (5)

 

(9

)

 

 

—

 

 

 

(587

)

 

 

(9

)

 

 

(587

)

Transaction costs (6)

 

(220

)

 

 

—

 

 

 

—

 

 

 

(220

)

 

 

—

 

Non-GAAP selling, general, and administrative expense

$

10,663

 

 

$

10,711

 

 

$

8,156

 

 

$

41,278

 

 

$

45,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss) to shareholders

$

(679

)

 

$

1,512

 

 

$

(10,325

)

 

$

(6,793

)

 

$

(30,756

)

Equity-based compensation expense (1)

 

2,062

 

 

 

2,018

 

 

 

1,187

 

 

 

8,168

 

 

 

6,860

 

Management transition expense (2)

 

141

 

 

 

97

 

 

 

—

 

 

 

903

 

 

 

835

 

Business transformation costs (3)

 

—

 

 

 

—

 

 

 

6,147

 

 

 

—

 

 

 

12,169

 

CHIPS Act specialist fees (4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,320

 

Restructuring costs (5)

 

188

 

 

 

—

 

 

 

1,921

 

 

 

188

 

 

$

1,921

 

Transaction costs (6)

 

220

 

 

 

—

 

 

 

—

 

 

 

220

 

 

 

—

 

Non-GAAP net income (loss) to shareholders

$

1,932

 

 

$

3,627

 

 

$

(1,070

)

 

$

2,686

 

 

$

(7,651

)

 

Three-Month Period Ended

 

Fiscal Year Ended

 

December 29, 2024

 

September 29, 2024

 

December 31, 2023

 

December 29, 2024

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

Equity-based compensation expense allocation in the consolidated statements of operations (1):

 

 

 

 

 

 

 

 

 

Cost of revenue

$

589

 

$

565

 

$

313

 

 

$

2,113

 

$

1,555

Research and development expense

 

76

 

 

69

 

 

(134

)

 

 

342

 

 

464

Selling, general, and administrative expense

 

1,397

 

 

1,384

 

 

1,008

 

 

 

5,713

 

 

4,841

 

$

2,062

 

$

2,018

 

$

1,187

 

 

$

8,168

 

$

6,860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management transition expense allocation in the consolidated statements of operations (2):

 

 

 

 

 

 

 

 

 

Cost of revenue

$

—

 

$

97

 

$

—

 

 

$

97

 

$

705

Selling, general, and administrative expense

 

141

 

 

—

 

 

—

 

 

 

806

 

 

130

 

$

141

 

$

97

 

$

—

 

 

$

903

 

$

835

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business transformation costs allocation in the consolidated statements of operations (3):

 

 

 

 

 

 

 

 

 

Cost of revenue

$

—

 

$

—

 

$

806

 

 

$

—

 

$

806

Selling, general, and administrative expense

 

—

 

 

—

 

 

5,341

 

 

 

—

 

 

11,363

 

$

—

 

$

—

 

$

6,147

 

 

$

—

 

$

12,169

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chips Act specialist fees allocation in the consolidated statement of operations (4):

 

 

 

 

 

 

 

 

 

Cost of revenue

$

—

 

$

—

 

$

—

 

 

$

—

 

$

—

Selling, general, and administrative expense

 

—

 

 

—

 

 

—

 

 

 

—

 

 

1,320

 

$

—

 

$

—

 

$

—

 

 

$

—

 

$

1,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs allocation in the consolidated statements of operations (5):

 

 

 

 

 

 

 

 

 

Cost of revenue

$

179

 

$

—

 

$

679

 

 

$

179

 

$

679

Research and development expense

 

—

 

 

—

 

 

655

 

 

 

—

 

 

655

Selling, general, and administrative expense

 

9

 

 

—

 

 

587

 

 

 

9

 

 

587

 

$

188

 

$

—

 

$

1,921

 

 

$

188

 

$

1,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction costs allocation in the consolidated statement of operations (6):

 

 

 

 

 

 

 

 

 

Cost of revenue

$

—

 

$

—

 

$

—

 

 

$

—

 

$

—

Research and development expense

 

—

 

 

—

 

 

—

 

 

 

—

 

 

—

Selling, general, and administrative

 

220

 

 

—

 

 

—

 

 

 

220

 

 

—

 

$

220

 

$

—

 

$

—

 

 

$

220

 

$

—

 

Three-Month Period Ended

December 29, 2024

 

Fiscal Year Ended

December 29, 2024

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

 

 

 

 

 

 

 

Computation of net income (loss) per common share, basic and diluted:

(in thousands, except per share data)

Numerator:

 

 

 

 

 

 

 

Net income (loss) attributable to SkyWater Technology, Inc.

$

(679

)

 

$

1,932

 

 

$

(6,793

)

 

$

2,686

 

Denominator:

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

47,659

 

 

 

47,659

 

 

 

47,396

 

 

 

47,396

 

Net income (loss) per common share, basic

$

(0.01

)

 

$

0.04

 

 

$

(0.14

)

 

$

0.06

 

Weighted-average common shares outstanding, diluted

 

47,659

 

 

 

47,939

 

 

 

47,396

 

 

 

47,560

 

Net income (loss) per common share, diluted

$

(0.01

)

 

$

0.04

 

 

$

(0.14

)

 

$

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Month Period Ended

September 29, 2024

 

 

 

GAAP

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Computation of net income per common share, basic and diluted:

(in thousands, except per share data)

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income attributable to SkyWater Technology, Inc.

$

1,512

 

 

$

3,627

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

47,523

 

 

 

47,523

 

 

 

 

 

Net income per common share, basic

$

0.03

 

 

$

0.08

 

 

 

 

 

Weighted-average common shares outstanding, diluted

 

47,640

 

 

 

47,640

 

 

 

 

 

Net income per common share, diluted

$

0.03

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Month Period Ended

December 31, 2023

 

Fiscal Year Ended

December 31, 2023

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

 

 

 

 

 

 

 

Computation of net loss per common share, basic and diluted:

(in thousands, except per share data)

Numerator:

 

 

 

 

 

 

 

Net loss attributable to SkyWater Technology, Inc.

$

(10,325

)

 

$

(1,070

)

 

$

(30,756

)

 

$

(7,651

)

Denominator:

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic and diluted

 

47,020

 

 

 

47,020

 

 

 

45,507

 

 

 

45,507

 

Net loss per common share, basic and diluted

$

(0.22

)

 

$

(0.02

)

 

$

(0.68

)

 

$

(0.17

)

 

Three-Month Period Ended

 

Fiscal Year Ended

 

December 29, 2024

 

September 29, 2024

 

December 31, 2023

 

December 29, 2024

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

Net income (loss) to shareholders (GAAP)

$

(679

)

 

$

1,512

 

 

$

(10,325

)

 

$

(6,793

)

 

$

(30,756

)

Net income (loss) margin to shareholders

 

(0.9

)%

 

 

1.6

%

 

 

(13.0

)%

 

 

(2.0

)%

 

 

(10.7

)%

 

 

 

 

 

 

 

 

 

 

Interest expense

 

1,978

 

 

 

1,988

 

 

 

2,898

 

 

 

8,837

 

 

 

10,826

 

Income tax (benefit) expense

 

234

 

 

 

93

 

 

 

(450

)

 

 

240

 

 

 

(521

)

Depreciation and amortization expense

 

4,949

 

 

 

4,166

 

 

 

7,279

 

 

 

18,243

 

 

 

28,930

 

EBITDA

 

6,482

 

 

 

7,759

 

 

 

(598

)

 

 

20,527

 

 

 

8,479

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense (1)

 

2,062

 

 

 

2,018

 

 

 

1,187

 

 

 

8,168

 

 

 

6,860

 

Management transition expense (2)

 

141

 

 

 

97

 

 

 

—

 

 

 

903

 

 

 

835

 

Business transformation costs (3)

 

—

 

 

 

—

 

 

 

6,147

 

 

 

—

 

 

 

12,169

 

CHIPS Act specialist fees (4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,320

 

Restructuring costs (5)

 

188

 

 

 

—

 

 

 

1,921

 

 

 

188

 

 

 

1,921

 

Transaction costs (6)

 

220

 

 

 

—

 

 

 

—

 

 

 

220

 

 

 

—

 

Net income attributable to noncontrolling interests (7)

 

1,120

 

 

 

1,116

 

 

 

1,924

 

 

 

4,276

 

 

 

5,663

 

Adjusted EBITDA

$

10,213

 

 

$

10,990

 

 

$

10,581

 

 

$

34,282

 

 

$

37,247

 

Adjusted EBITDA margin

 

13.5

%

 

 

11.7

%

 

 

13.4

%

 

 

10.0

%

 

 

13.0

%

__________________

(1)

Represents non-cash equity-based compensation expense.

(2)

Represents the cost of severance, separation, and other termination benefits related to the reorganization of the manufacturing, sales, marketing, and operations leadership team.

(3)

Represents expenses related to long-term transformation activities focused on improvement in automation and operational efficiency and includes project-based management consulting fees.

(4)

Represents the costs of project-based specialist fees related to our CHIPS Act application process.

(5)

Represents severance, separation, and other termination benefits related to the reorganization of the manufacturing and operations teams.

(6)

Represents the cost of consulting and professional services incurred to evaluate significant transactions that may, or may not, be executed by SkyWater.

(7)

Represents net income attributable to noncontrolling interests arising from our variable interest entity (VIE), which was formed for the purpose of purchasing the land and building of our primary operating facility in Bloomington, Minnesota. Since interest expense is added back to net income (loss) to shareholders in our adjusted EBITDA financial measure, we also add back the net income attributable to noncontrolling interests as its net income is derived from interest the VIE charges SkyWater.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226976538/en/

SkyWater Investor Contact: Claire McAdams | claire@headgatepartners.com SkyWater Media Contact: Lauri Julian | Media@SkyWaterTechnology.com