My view on SkyWater Technology ( SKYT ) has shifted since I last rated it. Back then, I called it a Hold . I was worried about how much the company needed to execute just right, andWith over 15 years of experience in the markets and a degree in economics, I focus on breaking down companies with clarity and discipline. My goal is to give individual investors a straightforward, honest view—what’s working, what isn’t, and where the risks and opportunities actually are. I don’t chase narratives. I follow the nu ...

SkyWater Technology is a U.S.-based semiconductor foundry specializing in advanced process development and manufacturing for diverse end markets. The company leverages its engineering capabilities to co-create custom solutions with clients, targeting applications that require high reliability and specialized performance. SkyWater Technology's flexible business model and focus on innovation position it as a strategic partner for industries with demanding technology needs.What is the status of Manko's remaini ...

The SkyWater Deal: IonQ's Bid for Quantum Supremacy By MarketBeat.com Author Leo Miller Stock Markets Published 03/20/2026, 12:00 PM The SkyWater Deal: IonQ's Bid for Quantum Supremacy View all comments (0)0 MarketBeat.com Articles(6560)| My Homepage Follow IONQ-0.28% Gold prices on pace for weekly loss as Iran war dents rate cut bets UBS remains confident in U.S. stocks, sees S&P 500 hitting 7,700 Oil gyrates as U.S. looks to lift crude supply - what's moving markets Super Micro shares plunge after co-foun ...

Financial Performance - Revenue increased by $99.9 million, or 29%, to $442.1 million for fiscal year 2025, compared to $342.3 million for fiscal year 2024[278]. - Gross profit for fiscal year 2025 was $86.9 million, representing a 25% increase from $69.6 million in fiscal year 2024[277]. - Net income attributable to SkyWater Technology, Inc. was $118.9 million for fiscal year 2025, compared to a net loss of $6.8 million in fiscal year 2024[277]. - Adjusted EBITDA increased by $18.9 million, or 55%, to $53.2 million in fiscal year 2025, primarily due to the addition of Fab 25 and growth in the advanced compute end market[291]. - Net income attributable to SkyWater Technology increased by $125.7 million, from a loss of $6.8 million in fiscal year 2024 to a profit of $118.9 million in fiscal year 2025[290]. - Adjusted EBITDA for the fiscal year ended December 28, 2025, was $53,163, compared to $34,281 for the previous year[368]. - The company recorded net income attributable to SkyWater Technology, Inc. of $118,910 for the fiscal year ended December 28, 2025, compared to a loss of $6,793 the previous year[368]. Revenue Sources - Advanced Technology Services (ATS) development revenue decreased by $26.1 million, or 11%, primarily due to a $41.8 million reduction in aerospace and defense market revenue[279]. - Tools revenue decreased by $47.9 million, or 62%, from $76.8 million in fiscal year 2024 to $28.9 million in fiscal year 2025[280]. - SkyWater Texas Wafer services revenue increased by $175.3 million due to the Fab 25 acquisition, with $17.9 million representing non-cash revenue from the Supply Agreement[282]. - Legacy SkyWater revenue decreased by $75.4 million, or 22%, from $342.3 million in fiscal year 2024 to $266.8 million in fiscal year 2025[293]. - The SkyWater Texas segment generated $175.3 million in revenue for fiscal year 2025, with a gross profit of $40.0 million and a net income of $137.7 million[299][301]. Acquisition and Investments - The total purchase consideration for the Fab 25 acquisition was $206.5 million, including a $120.0 million fair value of the off-market component of the Supply Agreement[273]. - A bargain purchase gain of $111.7 million was recognized in conjunction with the Fab 25 acquisition, reflecting the excess value of net assets acquired[288]. - The company entered into a definitive agreement to be acquired by IonQ, expected to close in the second or third quarter of 2026[270]. - The company submitted an application for funding through the CHIPS and Science Act for modernization and equipment upgrades, with a potential of up to $16 million in funding[273]. - Net cash used in investing activities increased to $113.0 million in fiscal year 2025, reflecting investments in Fab 25 and manufacturing capabilities[312]. Expenses and Liabilities - Cost of revenue rose by $82.6 million, or 30%, in fiscal year 2025, primarily due to $135.3 million higher cost of sales from the inclusion of Fab 25 operations[283]. - Selling, general and administrative expenses increased by $26.9 million, or 56%, in fiscal year 2025 compared to fiscal year 2024, primarily due to costs related to the Fab 25 acquisition and one-time transaction costs[286]. - Interest expense rose by $4.9 million, or 55%, from $8.8 million in fiscal year 2024 to $13.7 million in fiscal year 2025, driven by increased borrowing for the Fab 25 acquisition[287]. - The Company incurred $10.1 million in debt issuance costs related to the Amended Loan Agreement, amortized as additional interest expense[318]. Cash Flow and Financing - Net cash used in operating activities was $28.9 million in fiscal year 2025, a decrease of $47.5 million from $18.5 million of net cash provided in fiscal year 2024[311]. - The Company entered into an Amended Loan Agreement increasing borrowing capacity from $130 million to $350 million, with a maturity date extended to June 30, 2030[316][317]. - The Amended Loan Agreement allows for unfunded capital expenditures to increase from $15 million to $44 million for 2025, enhancing liquidity[317]. - As of December 28, 2025, the Company had borrowings of $195.5 million and availability of $55.7 million under the Revolver[318]. - The outstanding balance of the company's Revolver was $195.5 million as of December 28, 2025, with a variable interest rate of 8.2%[372]. Tax and Regulatory Matters - The income tax benefit for fiscal year 2025 was $28.0 million, a significant increase from an expense of $0.2 million in fiscal year 2024, due to the realization of deferred tax assets from the Fab 25 acquisition[289]. - The company recognized a non-recurring tax benefit of $23,200 for the year ended December 28, 2025, primarily due to taxable temporary differences from the Fab 25 acquisition[355]. - Future tax rate changes could materially affect recorded deferred tax assets and liabilities[357]. Risk Management - Market risk exposure is primarily related to potential changes in the fair value of debt due to fluctuations in market interest rates[370]. - A 100 basis point increase in the interest rate would result in an additional annual interest expense of $2.0 million based on the current outstanding balance[372]. - Ongoing credit evaluations are performed regarding the financial condition of customers related to trade receivables[371]. - The assessment for the allowance for credit losses is based on historical write-offs, recoveries, and current and future economic conditions[371].

Core Thesis - SkyWater Technology, Inc. (SKYT) is positioned for significant growth, targeting revenue increases from approximately $342 million in 2024 to over $600 million by 2026, with a long-term goal of reaching $1.7 billion by 2035 [2] Company Overview - SkyWater operates as a pure-play technology foundry in the semiconductor sector, providing development, manufacturing, and packaging services in the U.S. [2] - The company is focusing on becoming a foundational partner for next-generation computing, particularly in superconducting integrated circuits and photonics [3] Competitive Advantage - SkyWater's "Technology as a Service" (TaaS) model differentiates it from traditional contract manufacturers, allowing for co-development of chips within its fabrication environment [3] - The company's "Trusted" status with the U.S. Department of Defense creates a strong competitive moat, particularly for government and defense-related programs [4] Financial Performance - Operating leverage is beginning to emerge, with GAAP gross margins reaching 24% in Q3 2025, and margins are expected to expand as the business transitions from R&D-heavy programs to higher-volume wafer services [4] - Strategic investments, such as the acquisition of Fab 25 for approximately $93 million, have significantly increased revenue capacity [5] Market Position and Future Outlook - The company is capital intensive but is well-positioned to benefit from government initiatives like the CHIPS and Science Act, which could lead to a significant valuation rerating [5] - SkyWater's stock price has appreciated by approximately 148.6% since previous bullish coverage, indicating strong market confidence in its long-term revenue scaling and operating leverage [7]

Core Thesis - SkyWater Technology, Inc. (SKYT) is positioned for significant growth, targeting revenue increases from approximately $342 million in 2024 to over $600 million by 2026, with a long-term goal of reaching $1.7 billion by 2035 [2] Company Overview - SkyWater operates as a pure-play technology foundry in the semiconductor sector, providing development, manufacturing, and packaging services in the U.S. [2] - The company is focusing on becoming a foundational partner for next-generation computing, particularly in superconducting integrated circuits and photonics [3] Competitive Advantage - SkyWater's "Technology as a Service" (TaaS) model differentiates it from traditional contract manufacturers, allowing for co-development of chips within its fabrication environment [3] - The company's "Trusted" status with the U.S. Department of Defense creates a strong competitive moat, particularly for government and defense-related programs [4] Financial Performance - Operating leverage is beginning to emerge, with GAAP gross margins reaching 24% in Q3 2025, and margins are expected to expand as the business transitions from R&D-heavy programs to higher-volume wafer services [4] - Strategic investments, such as the acquisition of Fab 25 for approximately $93 million, have significantly increased revenue capacity [5] Market Position and Future Outlook - The company is capital intensive but is well-positioned to benefit from government initiatives like the CHIPS and Science Act, which could lead to a significant valuation rerating [5] - SkyWater's stock price has appreciated by approximately 148.6% since previous bullish coverage, indicating strong market confidence in its long-term revenue scaling and operating leverage [7]

Financial Performance - SkyWater Technology reported record revenues of $442.1 million for fiscal year 2025, reflecting a 29% year-over-year growth driven by the acquisition of Fab 25[3]. - The company achieved a total consolidated revenue of $171.0 million in Q4 2025, a 127% increase compared to Q4 2024[4]. - SkyWater's gross profit for fiscal year 2025 was $86.9 million, representing a 25% increase from the previous year, with a gross margin of 19.7%[7]. - The net income to shareholders for fiscal year 2025 was $118.9 million, compared to a net loss of $6.8 million in fiscal year 2024[7]. - SkyWater's Adjusted EBITDA for fiscal year 2025 was $53.2 million, a 57% increase year-over-year, with an Adjusted EBITDA margin of 12.0%[10]. - For the fiscal year ended December 28, 2025, SkyWater reported total revenue of $442.1 million, a 29.3% increase from $342.3 million in the previous year[27]. - The gross profit for the same period was $86.9 million, representing a gross margin of 19.7%, compared to $69.6 million and a gross margin of 20.3% in the prior year[27]. - Net income for the fiscal year ended December 28, 2025, was $123,451,000, a significant improvement from a net loss of $2,517,000 in the previous year[29]. - Total revenue for Q4 2025 was $82,071,000, compared to $64,127,000 in Q3 2025, reflecting a 28% increase quarter-over-quarter[30]. - GAAP revenue for the three-month period ended December 28, 2025, was $171,040,000, an increase from $150,741,000 in the previous quarter, representing a growth of 13.6%[34]. - GAAP gross profit for the same period was $25,556,000, resulting in a GAAP gross margin of 14.9%, down from 24.0% in the previous quarter[34]. - Non-GAAP gross profit for the fiscal year ended December 28, 2025, was $91,328,000, up from $72,015,000 in the previous fiscal year[34]. - Adjusted EBITDA for the fiscal year ended December 28, 2025, was $53.168 million, compared to $34.282 million in the previous fiscal year[37]. Operational Highlights - The company completed 2025 with eight commercial ATS engagements in quantum computing, with quantum-related ATS revenues increasing by over 30%[3]. - SkyWater Texas generated $175.6 million in revenue for fiscal year 2025, primarily from wafer services[12]. - In Q4 2025, SkyWater's tools revenue increased by 95% year-over-year, contributing to a total legacy revenue of $82.1 million[4]. - The company incurred research and development expenses of $14.6 million for the fiscal year, slightly down from $15.0 million in the previous year, indicating a focus on cost management[27]. - Research and development expenses for the three-month period were $3,634,000, slightly down from $4,370,000 in the previous quarter[34]. - The company plans to continue focusing on research and development, as indicated by the significant investments in technology licenses and software[29]. Financial Position - The company’s cash and cash equivalents increased to $23.2 million from $18.8 million year-over-year, reflecting improved liquidity[24]. - Accounts receivable rose to $100.1 million, up from $52.4 million, indicating a substantial increase in sales and customer commitments[24]. - SkyWater's total assets grew to $733.8 million, a significant increase from $311.8 million in the previous year, highlighting strong growth in the company's asset base[24]. - The company reported a bargain purchase gain of $111.7 million during the fiscal year, contributing positively to the income statement[27]. - SkyWater's total liabilities increased to $538.0 million from $250.3 million, primarily due to increased short-term financing and long-term contract liabilities[24]. - Cash flows from operating activities showed a net cash outflow of $24,149,000 for the fiscal year, contrasting with a net inflow of $18,460,000 in the prior year[29]. - The company incurred $86,466,000 in cash for acquisitions during the fiscal year, indicating a strategic focus on growth through mergers and acquisitions[29]. - The company reported a total of $551,298,000 in proceeds from draws on the revolving line of credit, up from $346,500,000 in the previous year, indicating increased liquidity[29]. Expenses and Costs - Selling, general, and administrative expenses increased to $74.9 million from $48.0 million, reflecting higher operational costs associated with growth initiatives[27]. - Selling, general, and administrative expenses for the three-month period were $21,847,000, compared to $23,997,000 in the previous quarter, indicating a decrease of 9.0%[34]. - The company incurred restructuring costs of $1,403,000 during the three-month period, consistent with the previous quarter[35]. - Equity-based compensation expenses of $2,596,000 for the three-month period, compared to $2,664,000 in the previous quarter[35]. - Depreciation and amortization expenses rose to $13.859 million, up from $12.186 million in the prior quarter[37]. Acquisition and Future Plans - The company announced a definitive agreement for IonQ to acquire SkyWater for $35.00 per share, expected to close in Q2 or Q3 2026[2]. - The company plans to finalize the fair values assigned to the net assets acquired in the Fab 25 purchase by the second quarter of fiscal 2026[37].

Core Viewpoint - IonQ Inc. has secured a defense contract under the Missile Defense Agency's SHIELD program, which may help counter recent negative allegations from a short seller, as the company prepares for an important earnings report [1][3]. Group 1: Contract and Business Operations - The SHIELD program has a total ceiling of $151 billion, and IonQ is among over 2,400 companies eligible for future task orders [1]. - IonQ specializes in building quantum computers and offers access through cloud platforms like Amazon Web Services and Microsoft Azure [2]. - The company has previously collaborated with DARPA and the Air Force Research Laboratory, enhancing its capabilities in satellite imagery, optical communications, and precision timing [4]. Group 2: Stock Performance and Analyst Insights - IonQ's stock has declined nearly 28% in the past month due to a report from Wolfpack Research alleging that up to 86% of its 2022-2024 revenue relies on Pentagon earmarks that have been eliminated [3]. - Morgan Stanley analyst Joseph Moore reduced his price target for IonQ from $58 to $35 but maintained an Equal Weight rating, while the average analyst target remains above $70 [4]. Group 3: Earnings Expectations - Polymarket traders estimate a 78% chance that IonQ will exceed the Street consensus GAAP EPS of -$0.47 in the upcoming earnings report [5]. - Revenue for Q4 is projected to be $40.35 million, reflecting a year-over-year increase of approximately 245% [5]. - IonQ has pre-announced full-year revenue expectations at the high end of its guidance range of $106-$110 million [5]. Group 4: Future Considerations - Investors are particularly interested in management's guidance and how they address the Wolfpack allegations, as well as the breakdown of organic quantum revenue versus subsidiary contributions [6]. - IonQ is also in the process of finalizing its $1.8 billion acquisition of SkyWater Technology, expected to close in Q2 or Q3 2026 [6]. - The stock is currently 64% below its 52-week high, and a strong earnings report with credible guidance could lead to a significant stock price recovery [7].

Core Viewpoint - SkyWater Technology has appointed Christine Dunbar as senior vice president of sales and solutions engineering to enhance customer acquisition and growth across its core platforms [1] Company Developments - Christine Dunbar will report directly to President and COO John Sakamoto in her new role [1] - The appointment comes as SkyWater aims to build on its commercial momentum in the semiconductor foundry market [1]

Core Viewpoint - SkyWater Technology, the largest U.S.-based pure-play semiconductor foundry, will report its fiscal fourth quarter and full-year 2025 financial results on February 25, 2026, after market close [1] Company Information - SkyWater Technology is recognized as the largest U.S.-based pure-play semiconductor foundry [1] - The company is currently undergoing a pending acquisition by IonQ, which will affect its earnings webcast plans [1]