SkyWater Technology Reports Record Third Quarter 2025 Results

SkyWater Technology, Inc. (NASDAQ:SKYT), the largest exclusively U.S.-based, pure-play semiconductor foundry, today announced financial results for the third quarter 2025 ended September 28, 2025.

"We're pleased to report financial results for the third quarter that exceeded our expectations across all metrics," commented Thomas Sonderman, CEO. "Revenues from multiple quantum computing customers reached a new quarterly record, and we are on track to exceed 30% growth in our ATS revenues from quantum customers in fiscal 2025. We have signed four new quantum customers since the second quarter, building significant momentum as we establish SkyWater as the foundry partner of choice for this emerging growth end market. We believe our exclusively U.S. focus and Trusted status as a pure-play foundry partner make us the ideal manufacturing partner for multiple quantum computing technologies, and we expect to announce continued momentum in the coming quarters.

"Furthermore, we are very pleased to report financial results for our first full quarter of Texas operations that were significantly stronger than initially forecast. At the same time, we witnessed an acceleration of program timing within our aerospace and defense end markets, which led to stronger ATS development revenues in the quarter, compared to forecast. We believe 2025 is a transformative year for SkyWater, and anticipate continued strong growth ahead in the coming years."

Recent Business Highlights:

• Strong momentum in quantum computing. Four new ATS (Advanced Technology Services) engagements with quantum computing companies have been signed since the second quarter, including with named customers SQC and QuamCore. With strong sequential ATS revenue growth reported for the third quarter, we expect to exceed 30% revenue growth in quantum computing related revenues in 2025.

• Significant upside recognized in first quarter of Texas operations. Both the revenue and profitability of our newly-acquired operations in Texas ("Fab 25") exceeded our expectations. As a result of the acquisition of Fab 25, we now operate as two distinct reportable segments, which are Legacy SkyWater and SkyWater Texas. Third quarter revenue for SkyWater Texas was higher than expected and reflects the effects of purchase accounting, which has not been finalized, as well as additional revenue generated from higher than expected wafer production levels experienced immediately post-acquisition. The upside in SkyWater Texas revenue likewise resulted in favorable gross margin and earnings performance.

• Acceleration of ATS demand into Q3. Third quarter ATS revenues came in stronger than forecast due to the timing of program execution during the quarter. Our expectations for full-year ATS development revenues remain consistent with our prior August forecast, as the U.S. Government budget approvals remain delayed.

• Advanced Packaging revenues starting to ramp in Florida. Advanced Packaging facilitization progressed well during the third quarter. Tool installations are ramping and currently scheduled for completion in early-2026, readying our Florida operations for customer prototype builds expected later next year.

Q3 2025 Financial Summary:

Q3 2025 Results:

• Revenue: Legacy SkyWater revenue of $64.1 million decreased 32% compared to the third quarter of 2024, and is inclusive of $54.2 million of ATS development revenue, $6.2 million of Wafer Services revenue, and $3.7 million of Tools revenue. Legacy SkyWater ATS development revenue decreased 4% compared to the third quarter of 2024. Legacy SkyWater Wafer Services revenue decreased by 7% compared to the third quarter of 2024. Legacy SkyWater Tools revenue decreased by 88% compared to the third quarter of 2024. SkyWater Texas revenue was $86.6 million and is composed of Wafer Services revenue which includes revenues recognized on the off-market component of the supply agreement recorded in the preliminary purchase accounting for Fab 25.

• Gross Profit: GAAP gross profit was $36.2 million, or 24.0% of total revenue, compared to gross profit of $20.2 million, or 21.6% of total revenue, in the third quarter of 2024. Non-GAAP gross profit was $37.1 million, or 24.6% of total revenue, compared to non-GAAP gross profit of $20.9 million, or 22.3% of total revenue, in the third quarter of 2024. Tools revenue negatively impacted non-GAAP gross margin by 70 bps, compared to 1,050 bps in the third quarter of 2024.

• Operating Expenses: GAAP operating expenses were $28.4 million, compared to $15.5 million in the third quarter of 2024. Non-GAAP operating expenses were $23.5 million, compared to $14.1 million in the third quarter of 2024.

• Net Income: GAAP net income to shareholders inclusive of a preliminary $110.8 million bargain purchase gain related to the Fab 25 acquisition was $144.0 million, or $2.95 per diluted share, compared to a net income to shareholders of $1.5 million, or $0.03 per diluted share, in the third quarter of 2024. Non-GAAP net income to shareholders was $11.5 million, or $0.24 per diluted share, compared to a non-GAAP net income to shareholders of $3.6 million, or $0.08 per diluted share, in the third quarter of 2024. GAAP net income in the third quarter of 2025 was positively impacted by income tax benefit of $31.8 million, $27.5 million of which related to the release of a tax valuation allowance and the remaining $4.3 million, equivalent to $0.09 per share, related to tax benefits realized on post-acquisition deferred tax assets realization.

• Adjusted EBITDA: Adjusted EBITDA was $25.8 million, or 17.1% of total revenue, compared to $11.0 million, or 11.7% of total revenue, in the third quarter of 2024.

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

Q4 2025 Financial Outlook:

Our current expectations of fourth quarter financial results reflect the following ranges:

The outlook for non‑GAAP gross margin, operating expenses, and diluted net loss per share excludes anticipated equity-based compensation expense of approximately $2.4 million, or $0.05 per share (with an estimated $1.6 million in operating expenses and the remaining $0.8 million in cost of revenue), and estimated transaction-related costs of approximately $3.8 million, or $0.08 per share (all of which is included in operating expenses). 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, November 5, 2025, at 3:30 p.m. CT (4:30 p.m. ET) to discuss its third quarter 2025 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com.

About SkyWater Technology

SkyWater Technology (NASDAQ:SKYT) is securing America's silicon foundation as the largest exclusively U.S.-based, pure-play semiconductor foundry. A trusted partner to both commercial customers and federal defense programs, SkyWater's Technology as a Service model empowers innovators to bring emerging technologies like quantum computing and next-generation systems from concept to reality. With state-of-the-art facilities in Minnesota, Florida, and Texas, SkyWater specializes in foundational nodes and advanced packaging to support the nation's critical infrastructure, strengthen supply chain resilience, and ensure long-term U.S. technology leadership. SkyWater is a DMEA-accredited Category 1A Trusted Foundry. To learn more, visit www.skywatertechnology.com.

Cautionary Statement Regarding Preliminary Results

The Company's results for the third quarter and nine-months ended September 28, 2025 are preliminary, unaudited and subject to the finalization of the Company's third 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.

Revision to Historical Financial Statements

In the accompanying financial information, the Company has revised the beginning accumulated deficit balance as of January 1, 2024, the first day of the Company's 2024 fiscal year, downward by $1.970 million to reflect the correction of overstatements of ATS development revenue from the Company's 2022 and 2023 fiscal years. These revenue overstatements were immaterial to the consolidated financial statements of the Company for each respective fiscal year, as well as immaterial in the aggregate.

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, our ability to integrate the operations of the Fab 25 facility with our operations and risks associated with operating the Fab 25 facility; 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 14, 2025 and the Quarterly Report on Form 10-Q the Company filed with the SEC on August 07, 2025 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.

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) attributable to SkyWater Technology, Inc. before interest expense, income tax expense (benefit), depreciation and amortization, and certain other items that we do not view as indicative of our ongoing performance, including net income attributable to noncontrolling interests; equity-based compensation expense; management transition expense; transaction and integration costs, tax benefits from the release of tax valuation allowances, and bargain purchase gains. 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.

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SkyWater Investor Contact: Claire McAdams | [email protected]

SkyWater Media Contact: Tammy Swanson | [email protected]