SkyWater Technology Reports Third Quarter 2024 Results

Record Revenues with Increased Gross Margin and Earnings

BLOOMINGTON, Minn. — (BUSINESS WIRE) — November 7, 2024 — SkyWater Technology, Inc. (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the third quarter 2024 ended September 29, 2024.

Financial Highlights for Q3 2024:

  • Revenue increased 31% year-over-year to a record $93.8 million.
  • Gross margin increased to 21.6% on a GAAP basis, compared to 19.8% in Q3 2023, and increased to 22.3% on a non-GAAP basis, compared to 20.4% in Q3 2023.
  • Net income to shareholders of $1.5 million, or $0.03 per diluted share on a GAAP basis, and net income to shareholders of $3.6 million, or $0.08 per diluted share on a non-GAAP basis, compared to net loss to shareholders of $7.6 million, or $(0.16) per diluted share on a GAAP basis, and net loss to shareholders of $2.2 million, or $(0.05) per diluted share on a non-GAAP basis in Q3 2023.
  • Adjusted EBITDA of $11.0 million, or 11.7% of revenue, compared to $8.3 million, or 11.6% of revenue in Q3 2023.

“I’m pleased to announce a strong third quarter for SkyWater, with new records achieved in both revenues and earnings,” commented Thomas Sonderman, CEO. “With further improvements in operational efficiencies and strong execution on a significant A&D program, we achieved upside in gross margins and adjusted EBITDA during the quarter. Looking ahead, we expect a return to sequential growth in Q4 in our Advanced Technology Services (ATS) business, which we expect will result in an overall robust revenue growth year for SkyWater in 2024. We are encouraged by a strong pipeline of A&D customer demand, increasing momentum in multiple emerging commercial programs, and a continued cadence of customer-funded CapEx investments. As we look ahead to 2025, with our current visibility we are forecasting year-over-year growth for our ATS business, an improving quarterly run rate for Wafer Services, and continued positive momentum in margins and operational leverage.”

Recent Business Highlights:

  • Achieved 9th straight record revenue quarter driven by over $30 million in customer-funded CapEx investments. This unprecedented level of investment by our customers is expected to significantly bolster our capabilities and capacity in both Minnesota and Florida, enabling strong future revenue growth potential in the years to come.
  • Strong gross margin and earnings performance for Q3 exceeded expectations, driven by our continued focus on operational efficiencies and improved execution on a significant A&D program, which enabled us to deliver key milestones with lower-than-expected costs and recover the majority of the $8 million cost accrual recorded in Q1.
  • Continuing our leadership in critical semiconductor technologies, SkyWater has been selected as a key performer on multiple Microelectronics (ME) Commons projects. These projects are focused on scalable low-power microtechnology technologies for AI hardware and other applications. The ME Commons is an important element of the CHIPS Act, supporting emerging technologies for national security.
  • Continued momentum in our commercial ATS business culminated in a new multi-year supply agreement with NanoDx, Inc., a pioneer of in vitro diagnostic and biosensing applications.
  • Exciting progress in Florida included the appointment of Bassel Haddad, SVP and GM of our advanced packaging business, where he is charged with building and scaling this important new growth vector for SkyWater. During the quarter, we continued to place orders for new tooling, funded by the $120 million award announced earlier in the year.

Q3 2024 Summary:

GAAP

 

 

 

 

 

 

 

 

 

In millions, except per share data

Q3 2024

 

Q3 2023

 

Y/Y *

 

Q2 2024

 

Q/Q *

 

 

 

 

 

 

 

 

 

 

ATS development revenue (1)

$56.4

 

$53.9

 

5%

 

$61.7

 

(9)%

Wafer Services revenue

$6.7

 

$14.5

 

(54)%

 

$5.8

 

16%

Combined ATS development and Wafer Services revenue

$63.1

 

$68.4

 

(8)%

 

$67.4

 

(6)%

Tools revenue (2)

$30.7

 

$3.2

 

847%

 

$25.9

 

19%

Total revenue *

$93.8

 

$71.6

 

31%

 

$93.3

 

1%

Gross profit *

$20.2

 

$14.1

 

43%

 

$17.1

 

18%

Gross margin *

21.6%

 

19.8%

 

180 bps

 

18.3%

 

330 bps

Net income (loss) to shareholders

$1.5

 

$(7.6)

 

NM

 

$(1.9)

 

NM

Basic income (loss) per share

$0.03

 

$(0.16)

 

NM

 

$(0.04)

 

NM

Diluted income (loss) per share

$0.03

 

$(0.16)

 

NM

 

$(0.04)

 

NM

Net income (loss) margin to shareholders

1.6%

 

(10.6)%

 

1,220 bps

 

(2.0)%

 

360 bps

__________________

 

NM - Not meaningful

 

* 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, 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.

Non-GAAP

 

 

 

 

 

 

 

 

 

In millions, except per share data

Q3 2024

 

Q3 2023

 

Y/Y *

 

Q2 2024

 

Q/Q *

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross profit

$20.9

 

$14.6

 

43%

 

$17.6

 

19%

Non-GAAP gross margin *

22.3%

 

20.4%

 

190 bps

 

18.9%

 

340 bps

Non-GAAP net income (loss) to shareholders

$3.6

 

$(2.2)

 

NM

 

$0.8

 

(363)%

Non-GAAP basic income (loss) per share

$0.08

 

$(0.05)

 

NM

 

$0.02

 

300%

Non-GAAP diluted income (loss) per share

$0.08

 

$(0.05)

 

NM

 

$0.02

 

300%

Adjusted EBITDA

$11.0

 

$8.3

 

33%

 

$8.1

 

35%

Adjusted EBITDA margin

11.7%

 

11.6%

 

10 bps

 

8.7%

 

300 bps

__________________

 

NM - Not meaningful

 

* Amounts calculated based on figures reported in thousands.


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