Company Performance - SkyWater Technology, Inc. reported a quarterly loss of $0.08 per share, which was better than the Zacks Consensus Estimate of a loss of $0.13, representing an earnings surprise of 38.46% [1] - The company posted revenues of $61.3 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.40%, but down from $79.64 million year-over-year [2] - Over the last four quarters, SkyWater Technology has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Movement and Outlook - SkyWater Technology shares have declined approximately 47.5% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.08 on $69 million in revenues, and -$0.07 on $309.2 million in revenues for the current fiscal year [7] Industry Context - The Electronics - Semiconductors industry, to which SkyWater Technology belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact SkyWater Technology's stock performance [5][6]

Financial Data and Key Metrics Changes - The first quarter revenue was $61.3 million, slightly above the midpoint of guidance, with combined ATS and Wafer Services revenue at $60.1 million and Tools revenue at $1.2 million [24] - Q1 gross margin exceeded expectations at 24.2%, benefiting from a $2 million favorable reversal of a warranty accrual recorded last year [24] - Adjusted EBITDA for Q1 was $4 million, stronger than forecast due to favorable gross margin performance and lower operating expenses [24][25] - The company ended the quarter with $51 million in cash, an increase of $32 million from year-end, primarily driven by advanced payments for tool purchases [25] Business Line Data and Key Metrics Changes - Wafer Services revenue was driven by the recently launched ThermoView platform, which contributed significantly to Q1's revenue [7][9] - New products accounted for over half of Q1's wafer services revenue, indicating a shift from a 90% legacy mix to an expected 60% new and 40% legacy mix by year-end [9][54] - ATS experienced a softer quarter due to budget delays and extended negotiations in Washington, impacting near-term revenue outlook [9][17] Market Data and Key Metrics Changes - The advanced compute segment became the second largest end market after aerospace and defense, with over 90% of revenues from this segment related to quantum technology development [14][15] - The company expects solid ATS growth beginning in Q3, driven by anticipated funding releases later in 2025 [19] Company Strategy and Development Direction - The acquisition of Infineon's Fab 25 is a strategic move to expand 200mm foundry capacity in the U.S., aimed at enhancing domestic semiconductor manufacturing capabilities [11][12] - The company is focused on transitioning technologies efficiently to production, particularly in the advanced thermal imaging market [8][9] - The strategic rationale includes meeting the multidimensional needs of semiconductor sovereignty in the U.S. and supporting high-growth sectors like automotive and medical devices [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of ATS revenue in the second half of 2025, despite current budgetary uncertainties [19][20] - The company anticipates a strong second half of 2025 with significant sequential growth in both Q3 and Q4, driven by ongoing ramp-up of the Advanced Packaging business [22][30] - Management remains optimistic about achieving positive non-GAAP EPS for the year, with expectations for gross margins to expand into the 30s in the second half [23][31] Other Important Information - The company plans to participate in three investor conferences in Q2 and is in the early stages of planning a Capital Markets Day at Fab 25 in Austin [5][6] - The impact of tariffs is being monitored, with no significant downward revisions in demand forecast from major customers [20][27] Q&A Session Summary Question: Confidence in ATS recovery amid budget volatility - Management highlighted the $300 million investment by the U.S. government and the alignment of programs with national security as key factors for confidence in funding approval [36][38] Question: Size of advanced computing market and collaboration with SciQuantum - Advanced computing currently represents about 10% of the business, with 90% tied to quantum computing [42][44] Question: Ramp of ThermoView business and market size - ThermoView is expected to drive growth in wafer services, with a projected market size of $9 billion [53] Question: Update on RadHard program and budget impact - The RadHard program continues to evolve, with technology gaining robustness, but is subject to reassessment due to budgetary stalemate [71][74]

Financial Data and Key Metrics Changes - First quarter revenue was $61.3 million, slightly above the midpoint of guidance, with combined ATS and Wafer Services revenue at $60.1 million and Tools revenue at $1.2 million [22] - Q1 gross margin exceeded expectations at 24.2%, benefiting from a $2 million favorable reversal of a warranty accrual [22] - Adjusted EBITDA for Q1 was $4 million, stronger than forecast due to favorable gross margin performance and lower operating expenses [22][23] - The company ended the quarter with $51 million in cash, an increase of $32 million from year-end, primarily driven by advanced payments for tool purchases [23] Business Line Data and Key Metrics Changes - Wafer Services revenue was driven by the newly launched ThermoView platform, which is expected to fuel most of Wafer Services' growth in 2025 [6][7] - New products accounted for over half of Q1's wafer services revenue, with a shift from a 90% legacy mix to an expected 60% new and 40% legacy mix by year-end [7][51] - ATS experienced a softer quarter due to budget delays and extended negotiations in Washington, impacting near-term revenue outlook [7][14] Market Data and Key Metrics Changes - Advanced compute grew to become the second largest end market after aerospace and defense, with over 90% of revenues from this segment related to quantum technology development [12] - The company expects solid ATS growth beginning in Q3, driven by anticipated funding releases [17] Company Strategy and Development Direction - The acquisition of Infineon's Fab 25 is a strategic move to expand 200mm foundry capacity in the U.S., aimed at enhancing domestic semiconductor manufacturing capabilities [9][10] - The company is focused on diversifying its revenue base and advancing its mission as an essential enabler of America's semiconductor onshoring strategy [11] - The company aims for positive non-GAAP EPS for the year, with expectations for significant gross margin expansion in the second half of 2025 [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of ATS revenue in the second half of 2025, despite current budgetary uncertainties [14][17] - The company is proactively managing costs and aligning execution plans to capitalize on anticipated second-half growth [20] - Management noted that the current tariff policy has not led to downward revisions in demand forecasts from major customers [18][25] Other Important Information - The company plans to participate in three investor conferences in Q2 and is in the early stages of planning a Capital Markets Day at Fab 25 in Austin [4][5] - The expected revenue range for Q2 is $55 million to $60 million, with ATS revenues projected between $49 million and $53 million [20][30] Q&A Session Summary Question: Confidence in ATS recovery amid budget volatility - Management highlighted the $300 million investment by the U.S. government in capability creation, aligning with national security agendas, as a source of confidence for program funding [34][36] Question: Timeline for government funding recovery - Management expects good transparency regarding funding by the end of Q2, with discussions around an omnibus bill ongoing [39] Question: Size of advanced computing market - Advanced computing currently represents about 10% of the business, with 90% tied to quantum computing [40][43] Question: Ramp of ThermoView business - ThermoView is expected to drive growth in wafer services, with a projected market size of $9 billion [51] Question: Impact of packaging facility on revenue - The majority of tools revenue in 2025 will come from the Florida facility, with traditional ATS revenue expected to begin in 2026 [60] Question: Update on RadHard program - The technology is evolving towards qualification, with government funding reassessed in terms of priority [70][71]

Financial Performance - SkyWater's Q1 2025 total revenue was $61.3 million[55], a 23% decrease year-over-year[55] - Combined ATS and Wafer Services revenue was $60.1 million[55], a 16% decrease year-over-year[55] - Q1 2025 GAAP gross margin was 23.3%[57], a 700 basis points increase year-over-year[57] - Q1 2025 non-GAAP gross margin was 24.2%[57], a 733 basis points increase year-over-year[57] - Adjusted EBITDA was $4.0 million[59], an 18% decrease year-over-year[59] Revenue Breakdown - ATS development revenue was $52.5 million[55], a 14% decrease year-over-year[55] - Wafer Services revenue was $7.5 million[55], a 25% decrease year-over-year[55] - Tools revenue was $1.2 million[55], an 85% decrease year-over-year[55] Business Outlook - The company maintains its full-year revenue guidance range of 5% growth for combined ATS and Wafer Services[51] - Q2 2025 total revenues are expected to be in the range of $55 to $60 million[51] - The company expects Tools revenue for the full year to be approximately $30 million[66]

Financial Performance - Total revenue for Q1 2025 was $61.3 million, a decrease of 23% compared to Q1 2024[5] - ATS development revenue was $52.5 million, down 14% year-over-year, while Wafer Services revenue decreased by 25% to $7.5 million[5] - Gross profit increased to $14.3 million, representing a gross margin of 23.3%, up from 16.3% in Q1 2024[5] - The net loss to shareholders was $7.3 million, or $(0.15) per diluted share, compared to a net loss of $5.7 million, or $(0.12) per diluted share in Q1 2024[5] - Adjusted EBITDA for Q1 2025 was $4.0 million, with an adjusted EBITDA margin of 6.6%[9] - Total revenue for Q1 2025 was $61,296, a decrease of 18.8% from $75,487 in Q4 2024 and a decrease of 22.9% from $79,636 in Q1 2024[21] - Gross profit for Q1 2025 was $14,257, down from $19,297 in Q4 2024, but up from $12,980 in Q1 2024[21] - Net loss attributable to SkyWater Technology, Inc. for Q1 2025 was $7,345, compared to a net loss of $679 in Q4 2024 and a net loss of $5,729 in Q1 2024[21] - Non-GAAP net loss to shareholders remained unchanged at $(3.7) million, with a non-GAAP basic loss per share of $(0.08) in both Q1 2025 and Q1 2024[6] - The company reported a net loss margin of (12.0)% for the three-month period ended March 30, 2025, compared to (0.9)% in the previous quarter[37] - Net loss per common share for the three-month period ended March 30, 2025, was $(0.15) on a GAAP basis and $(0.08) on a non-GAAP basis[35] Revenue Projections - The company expects Q2 2025 total revenue to range between $55 million and $60 million, with diluted net loss per share projected between $(0.20) and $(0.26)[9] - The company anticipates year-over-year revenue growth in both ATS and Wafer Services if federal budget delays are resolved[3] Cash and Liabilities - Cash and cash equivalents increased to $51,234 at the end of Q1 2025, up from $18,844 at the end of Q4 2024[23] - Total current liabilities decreased to $127,324 in Q1 2025 from $154,327 in Q4 2024[21] - Long-term liabilities increased to $140,003 in Q1 2025 from $95,958 in Q4 2024[21] Operating Expenses - Operating income for Q1 2025 was a loss of $4,022, compared to an operating income of $2,653 in Q4 2024[21] - Research and development expenses for Q1 2025 were $3,249, down from $4,214 in Q4 2024[21] - GAAP selling, general, and administrative expenses increased to $15,030 thousand for the three-month period ended March 30, 2025, compared to $12,430 thousand in the previous quarter[33] - The company incurred transaction costs of $1,810 thousand in the three-month period ended March 30, 2025, related to anticipated acquisitions[39] Acquisition and Growth - Strong sequential growth in Wafer Services was driven by demand for the new ThermaView platform from leading defense customers[4] - The acquisition of Infineon's Fab 25 is progressing, supported by a $1 billion supply agreement, aimed at enhancing domestic foundry capacity[4] Share Information - The company reported a weighted average of 47,791 shares used in computing net loss per common share for Q1 2025[21] - The weighted-average common shares outstanding for the three-month period ended March 30, 2025, were 47,791 thousand[35]

SkyWater Technology, Inc. (SKYT) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the sy ...

Core Viewpoint - SkyWater Technology (SKYT) is expected to report first-quarter 2025 results on May 7, with anticipated revenues between $59 million and $63 million, reflecting a 23.3% year-over-year decline [1][2]. Revenue Expectations - Total revenues for the first quarter are projected to be between $59 million and $63 million, including $1 million from tool revenues and $6 million from Wafer Services revenues [1]. - The Zacks Consensus Estimate for first-quarter 2025 revenues is $61.05 million [1]. Earnings Projections - Non-GAAP earnings are expected to be between 10-16 cents per share for the first quarter of 2025 [1]. - The consensus estimate for the bottom line indicates a loss of 13 cents per share, which is a wider loss compared to the year-ago quarter's loss of 8 cents [2]. Performance Drivers - SkyWater is anticipated to benefit from improved wafer services revenues due to product innovation and strategic conversions from Advanced Technology Services (ATS) to wafer services [3]. - The company is expected to gain from early traction with ThermaView solutions, supported by Raytheon Vision Systems, which positions SkyWater to meet growing demand in defense, industrial, and healthcare markets [4]. - The acquisition of Fab 25 is projected to add $300 million in annual wafer service revenues and significantly enhance domestic manufacturing capacity, contributing to stronger customer confidence and operational gains [5]. Challenges - Uncertainty regarding the U.S. federal government budget and ongoing negotiations may negatively impact SkyWater's performance, particularly affecting ATS revenues [6]. Earnings Model Insights - According to the Zacks model, SkyWater currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating a lower likelihood of an earnings beat [7].

Company Overview - Skywater Technology (NASDAQ: SKYT) is a US-based foundry specializing in mature-node chip manufacturing for aerospace, defense, and industrial applications [1] Market Position - The company operates in a strategically important sub-segment of the chip market, highlighting its relevance in critical industries [1] Strategic Focus - The new administration's policies may influence the company's operations and market dynamics, although specific details are not provided [1]

Company Performance - SkyWater Technology, Inc. (SKYT) closed at $6.21, reflecting a +1.8% change from the previous day, outperforming the S&P 500's daily loss of 0.23% [1] - The stock has decreased by 25.97% over the past month, which is worse than the Computer and Technology sector's loss of 16.18% and the S&P 500's loss of 12.13% [1] Earnings Projections - The upcoming earnings disclosure projects an earnings per share (EPS) of -$0.13, indicating a 62.5% decrease from the same quarter last year [2] - Revenue is estimated to be $61.05 million, reflecting a 23.34% decrease compared to the same quarter of the previous year [2] Full Year Estimates - For the full year, the Zacks Consensus Estimates predict an EPS of -$0.07 and revenue of $309.2 million, showing changes of -216.67% and -9.66% from the previous year, respectively [3] - Recent changes to analyst estimates suggest a trend in business performance, with positive revisions indicating analyst optimism regarding the company's profitability [3] Zacks Rank and Industry Performance - SkyWater Technology, Inc. currently holds a Zacks Rank of 1 (Strong Buy), which has historically outperformed with an average annual gain of +25% since 1988 [5] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 65, placing it in the top 27% of over 250 industries [6]

Core Viewpoint - SkyWater Technology (SKYT) has experienced significant stock underperformance, losing 37.7% over the past 12 months, compared to the S&P 500's gain of 9.5% and the Zacks Electronics – Semiconductors industry's growth of 0.9% [1][2] Company Performance - The decline in SKYT's stock is linked to negative sentiment in the semiconductor sector, with concerns about the sustainability of the AI trend impacting investor confidence [2] - Wafer Services revenues fell by 56% to $26.9 million in 2024, primarily due to ongoing weakness in the automotive and industrial sectors [2] Strategic Initiatives - To improve its market position, the company is acquiring Infineon's Fab 25, a 200mm chip manufacturing facility in Austin, TX, which is expected to generate approximately $300 million in annual Wafer Services revenues [4] - SkyWater has launched ThermaView Solutions to penetrate the thermal imaging market, aiming for long-term revenue growth in its Wafer Services segment [5] - The product mix in Wafer Services is projected to shift from 90% legacy products and 10% new products in 2024 to 60% new products in 2025 [5] Competitive Landscape - SkyWater competes with major players like Tower Semiconductor, GlobalFoundries, and ON Semiconductor, which have seen stock declines of 3.2%, 32%, and 48.7% respectively over the past year [6] - The company differentiates itself by focusing on specialized, high-value chip production and benefits from being a Department of Defense-accredited foundry, allowing access to government contracts [7] Financial Guidance - For Q1 2025, SKYT anticipates a non-GAAP loss per share between 10-16 cents and revenues between $59-$63 million, reflecting a year-over-year revenue decline of 23.34% [8] Recent Performance - SKYT has outperformed Zacks Consensus Estimates for earnings in three of the last four quarters, with an average surprise of 179.29% [9] Long-term Outlook - Strategic moves like the acquisition of Fab 25 and the launch of ThermaView demonstrate the company's commitment to growth and innovation, positioning it favorably in the evolving semiconductor market [11] - Support from the CHIPS Act and partnerships with companies like Quantum-Si Incorporated and NanoDx further enhance its long-term potential [11] Investment Potential - SKYT holds a Zacks Rank 1 (Strong Buy) and a Growth Score of A, indicating a strong investment opportunity according to Zacks' methodology [12]