Financial Data and Key Metrics Changes - Total revenue for Q4 2024 reached $75 million, exceeding guidance, with tools revenue of $12 million and combined ATS and Wafer Services revenue of $64 million [11][38] - Full year revenues totaled a record $342 million, up 19% from fiscal 2023 [12] - Reported gross margin for Q4 was nearly 27%, contributing to a positive EPS of $0.04 for the quarter and $0.06 for the full year [12][45] - Full year gross margin was 21%, down from 22% in 2023, primarily due to tools revenue impacting margins [42] Business Line Data and Key Metrics Changes - ATS business experienced a strong 13% revenue growth compared to 2023, while Wafer Services revenue declined significantly due to weakness in automotive and industrial segments [13] - Advanced compute was the second largest end market in 2024, with over 90% of revenues related to quantum computing technologies [14] - Tools revenue reached a record $77 million in 2024, reflecting unprecedented customer-funded CapEx investments [15] Market Data and Key Metrics Changes - The aerospace and defense sector showed significant strength in 2024, driving the majority of ATS revenue growth [13] - The automotive market saw a decline in revenue, while the BioHealth sector experienced growth [14] Company Strategy and Development Direction - The company announced the acquisition of Infineon's Fab 25 in Austin, aiming to expand domestic manufacturing capabilities and become a leading pure-play domestic foundry service provider by the end of the decade [8][9] - The acquisition is expected to contribute approximately $300 million in annual Wafer Services revenue and strengthen the company's financial foundation [29][32] - The transition of Fab 25 to a customer-driven foundry model is anticipated to enhance service offerings and align with long-term industry trends [34] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for 2025 due to ongoing budget negotiations and expected timing of program allocations, forecasting combined ATS and Wafer Services revenue growth of approximately 5% [25][101] - The company expects a significant rebound in ATS revenues in Q2 2025, with continued sequential growth anticipated in Q3 and Q4 [27][49] - Management highlighted the importance of the CHIPS Act funding as an accelerant for growth plans [16] Other Important Information - The company plans to hold a Capital Markets Day post-acquisition to provide more details on the financial benefits and long-term strategic vision for Fab 25 [37] - The acquisition is expected to double the workforce in the U.S. across three strategic manufacturing centers: Minnesota, Florida, and Texas [32] Q&A Session Summary Question: Clarification on Fab 25's gross profit contribution - Management confirmed that the initial supply agreement with Infineon will provide the output they currently receive, with plans to diversify over time [62][63] Question: Customer revenue profile post-acquisition - Infineon is expected to become the largest customer, with a secured supply agreement allowing for diversification and growth [64][65] Question: Back-end processing for Fab 25 - Currently, Infineon uses traditional OSATs for back-end assembly, but there are opportunities for the Florida fab to contribute in the future [66][68] Question: Quantum computing revenue percentage - Quantum computing accounted for about 10% of revenues in Q4 2024 [70] Question: Product applications for Fab 25 - The fab will support various applications, including ASICs, PMICs, and NOR flash, with a focus on 65-nanometer technology [75][76] Question: Wafer services revenue outlook - Management anticipates wafer services revenue will return to growth, with a mix shifting towards new products [20][80] Question: Supply agreement details - The supply agreement includes parameters like take-or-pay, with plans to run the fab at full utilization for Infineon [89][90] Question: Gross margin sustainability - The strong gross margin in Q4 was driven by a combination of ATS business mix and cost deferrals, but similar levels are not expected to repeat [92][93]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 reached $75 million, exceeding guidance, with tools revenue of $12 million and combined ATS and Wafer Services revenue of $64 million [11][38] - Full year revenues totaled a record $342 million, up 19% from fiscal 2023 [12] - Reported gross margin for Q4 was nearly 27%, contributing to a positive EPS of $0.04 for the quarter and $0.06 for the full year [12][45] - Full year gross margin was 21%, compared to 22% in 2023, with combined ATS and Wafer Services gross margin increasing from 22.5% in 2023 to 25.8% in 2024 [42][43] Business Line Data and Key Metrics Changes - ATS business experienced a strong 13% revenue growth compared to 2023, while Wafer Services revenue declined significantly due to weakness in automotive and industrial segments [13] - Advanced compute was the second largest end market, with over 90% of revenues related to quantum computing technologies [14] - Tools revenue reached a record $77 million in 2024, reflecting unprecedented customer-funded CapEx investments [15] Market Data and Key Metrics Changes - The aerospace and defense sector showed significant strength in 2024, driving the majority of ATS revenue growth [13] - The automotive market saw a decline in revenue, while the BioHealth sector experienced growth [14] Company Strategy and Development Direction - The acquisition of Infineon's Fab 25 in Austin is a strategic move to expand domestic manufacturing capabilities and become a leading pure-play domestic foundry service provider for foundational semiconductors [8][9] - The acquisition is expected to contribute approximately $300 million in annual Wafer Services revenue and balance the revenue mix between ATS and Wafer Services [29][32] - The company aims to transition Fab 25 to a customer-driven foundry model, enhancing service offerings and expanding the total addressable market by over $3 billion [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for 2025 due to ongoing budget negotiations and expected timing of program allocations, forecasting combined ATS and Wafer Services revenue growth of approximately 5% [25][101] - The company anticipates a significant rebound in ATS revenues in Q2 2025, with continued growth expected in the second half of the year [26][49] - Management highlighted the importance of the CHIPS Act funding as an accelerant for growth plans [16] Other Important Information - The company plans to hold a Capital Markets Day post-acquisition to provide more details on the financial benefits and long-term strategic vision for Fab 25 [37] - The acquisition structure is capital efficient, with an $80 million purchase price and a strong adjusted EBITDA expected from the transaction [30][31] Q&A Session Summary Question: Clarification on Fab 25's gross profit contribution - Management confirmed that the initial supply agreement with Infineon is to provide products at current output levels, with plans to diversify over time [62][63] Question: Customer revenue profile post-acquisition - Infineon is expected to become the largest customer, enhancing the strategic partnership [64][65] Question: Back-end processing for Fab 25 - Currently done with traditional OSATs, but opportunities exist for future capabilities in Florida [66][68] Question: Quantum computing revenue percentage - Quantum computing accounted for about 10% of revenues in Q4 2024 [70] Question: Mix between ATS and Wafer Services in the future - Management expects a more balanced mix, with wafer services likely to increase due to the Fab 25 acquisition [78][82] Question: Supply agreement details and capacity fungibility - The supply agreement includes take-or-pay contracts, and there is potential to backfill capacity if needed [88][90] Question: Gross margin sustainability - The strong gross margin in Q4 was driven by a combination of ATS business mix and cost deferrals, but not expected to repeat at the same levels [92][93] Question: Yearly outlook adjustments based on defense budgets - Management is taking a conservative approach due to uncertainties in budget allocations, but remains confident in the critical programs [101] Question: Efficiencies and excess capacity from Fab 25 - Transitioning from IDM to foundry is expected to drive efficiencies and allow for new customer engagements [105]

SkyWater Technology, Inc. (SKYT) came out with quarterly earnings of $0.04 per share, beating the Zacks Consensus Estimate of a loss of $0.07 per share. This compares to loss of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 157.14%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced earnings of $0.08, delivering a surprise of 500%.Over the last four quarters, ...

Revenue Performance - Revenue for Q4 2024 was $75.5 million, a decrease of 5% year-over-year, while total revenue for fiscal year 2024 reached a record $342.3 million, an increase of 19% year-over-year[4][17]. - Total revenue for the fiscal year ended December 29, 2024, was $342.3 million, an increase from $286.7 million in 2023[30]. - Total revenue for Q4 2024 was $75,487,000, a decrease from $93,817,000 in Q3 2024, indicating a 19.5% decline quarter-over-quarter[34]. - For Q1 2025, SkyWater expects total revenue to be in the range of $59 million to $63 million, with GAAP diluted net loss per share projected between $(0.14) to $(0.20)[18]. Profitability and Margins - Gross margin for Q4 2024 improved to 25.6% on a GAAP basis and 26.6% on a non-GAAP basis, compared to 15.2% and 17.4% respectively in Q4 2023[4][11]. - Adjusted EBITDA for fiscal year 2024 was $34.3 million, representing 10.0% of revenue, down from $37.2 million or 13.0% of revenue in fiscal year 2023[13]. - Adjusted EBITDA for the fiscal year ended December 29, 2024, was $34,282,000, with an adjusted EBITDA margin of 10.0%[47]. - Non-GAAP gross profit for the three-month period was $20,065,000, with a non-GAAP gross margin of 26.6%[43]. Net Loss and Earnings Per Share - The net loss to shareholders for Q4 2024 was $0.7 million, or $(0.01) per diluted share on a GAAP basis, a significant improvement from a net loss of $10.3 million, or $(0.22) per diluted share in Q4 2023[4][16]. - GAAP net loss to shareholders was $6.8 million, or $(0.14) per diluted share, significantly improved from a net loss of $30.8 million, or $(0.68) per diluted share, in 2023; non-GAAP net income was $2.7 million, or $0.06 per diluted share, compared to a non-GAAP net loss of $7.7 million, or $(0.17) per diluted share, in 2023[20]. - The net loss for the fiscal year ended December 29, 2024, was $2,517,000, a significant improvement from a net loss of $25,093,000 for the previous year[33]. - For the three-month period ended December 29, 2024, SkyWater reported a net loss of $679,000, compared to a net income of $1,512,000 for the previous quarter, reflecting a significant decline in performance[46]. Operating Expenses - GAAP operating expenses were $63.1 million, a decrease from $74.1 million in 2023, while non-GAAP operating expenses increased slightly to $56.0 million from $54.7 million in 2023[20]. - GAAP research and development expense increased to $4,214,000 for the three-month period, up from $3,431,000 in the previous quarter[43]. - Non-GAAP research and development expense for the fiscal year was $14,698,000, significantly higher than $9,050,000 in the previous year[43]. Cash Flow and Assets - Net cash provided by operating activities increased to $15,244,000, compared to $10,081,000 in the prior year, reflecting a 51.5% year-over-year growth[33]. - Total current assets decreased to $132.1 million from $146.4 million as of December 31, 2023[28]. - Cash and cash equivalents at the end of the fiscal year were $18,844,000, slightly up from $18,382,000 at the beginning of the fiscal year[33]. - The company experienced a net cash used in investing activities of $18,479,000, compared to $10,489,000 in the previous year, indicating increased investment outflows[33]. Strategic Initiatives - SkyWater launched the ThermaView℠ platform, targeting a $9 billion market for thermal imaging applications, enhancing its position in the semiconductor ecosystem[6]. - The company announced a preliminary $16 million CHIPS funding award, expected to be combined with $19 million in state incentives to enhance production capabilities[6]. - The company plans to continue expanding its Technology as a Service model to enhance production capabilities and market reach[22]. - Significant progress was made in transitioning multiple ATS development programs into production, including partnerships with Lumotive and NanoDX[6].

Company Performance - SkyWater Technology, Inc. (SKYT) closed at $10.39, reflecting a -1.42% change from the previous day, which is less than the S&P 500's daily loss of 0.43% [1] - Over the past month, shares of SkyWater Technology have decreased by 8.82%, underperforming the Computer and Technology sector's gain of 0.32% and the S&P 500's gain of 2.6% [1] Upcoming Earnings - The company's earnings report is scheduled for February 26, 2025, with projected earnings per share (EPS) of -$0.07, indicating a 250% decrease from the same quarter last year [2] - The Zacks Consensus Estimate for revenue is projected at $74.1 million, down 6.38% from the year-ago period [2] Analyst Estimates - Recent changes in analyst estimates for SkyWater Technology are crucial as they reflect short-term business trends [3] - Upward revisions in estimates indicate analysts' positive outlook on the company's operations and profit generation capabilities [3] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have delivered an average annual return of +25% since 1988 [5] - Currently, SkyWater Technology holds a Zacks Rank of 3 (Hold), with no changes in the Zacks Consensus EPS estimate over the past month [5] Industry Context - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 134, placing it in the bottom 47% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable, particularly for SkyWater Technology, Inc. (SKYT) [1][4]. Group 1: Analyst Recommendations - SkyWater Technology has an average brokerage recommendation (ABR) of 1.60, indicating a position between Strong Buy and Buy, with 60% of recommendations being Strong Buy and 20% being Buy [2]. - The ABR suggests a buying opportunity for SkyWater Technology, but relying solely on this information may not be advisable due to the limited success of brokerage recommendations in guiding investors [4][9]. Group 2: Limitations of Brokerage Recommendations - Brokerage analysts often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell recommendations [5][9]. - The interests of brokerage firms may not align with those of retail investors, resulting in limited insight into future stock price movements [6]. Group 3: Zacks Rank vs. ABR - The Zacks Rank, a proprietary stock rating tool, is considered a more reliable indicator of near-term price performance, based on earnings estimate revisions, and is distinct from the ABR [7][10]. - The Zacks Rank is timely and reflects changes in earnings estimates quickly, while the ABR may not always be up-to-date [11]. Group 4: Current Earnings Estimates for SKYT - The Zacks Consensus Estimate for SkyWater Technology remains unchanged at -$0.05, indicating steady analyst views on the company's earnings prospects [12]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for SkyWater Technology, suggesting caution despite the Buy-equivalent ABR [13].

Company Performance - SkyWater Technology, Inc. (SKYT) closed at $9.27, reflecting a -0.43% change from the previous trading day's closing, underperforming the S&P 500 which lost 0.27% [1] - Over the past month, shares of SkyWater Technology experienced a loss of 17.83%, significantly trailing the Computer and Technology sector's gain of 1.69% and the S&P 500's gain of 4.27% [2] Upcoming Financial Results - SkyWater Technology is set to announce its earnings on February 26, 2025, with projected earnings of -$0.07 per share, indicating a year-over-year decline of 250% [3] - The Zacks Consensus Estimate for revenue is projected at $74.1 million, down 6.38% from the same period last year [3] Analyst Estimates and Rankings - Recent modifications to analyst estimates for SkyWater Technology are crucial as they reflect changing near-term business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [4] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks SkyWater Technology at 3 (Hold), with no changes in the Zacks Consensus EPS estimate over the past month [6] Industry Context - The Electronics - Semiconductors industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 152, placing it in the bottom 40% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - SkyWater Technology, Inc. (SKYT) closed at $10.14, reflecting a -0.98% change from the previous day's closing price, underperforming the S&P 500's gain of 0.36% [1] - Over the past month, shares of SkyWater Technology have decreased by 17.29%, lagging behind the Computer and Technology sector's performance of 0% and the S&P 500's increase of 2.11% [1] Earnings Forecast - The upcoming earnings report for SkyWater Technology is anticipated to show an EPS of -$0.07, representing a 250% decline compared to the same quarter last year [2] - Revenue is projected to be $74.1 million, indicating a 6.38% decrease from the corresponding quarter of the previous year [2] Analyst Estimates - Recent changes in analyst estimates for SkyWater Technology reflect current business trends, with positive revisions indicating optimism regarding the company's profitability [3] - The Zacks Rank system, which evaluates these estimate changes, currently ranks SkyWater Technology at 3 (Hold) [5] Industry Context - SkyWater Technology operates within the Electronics - Semiconductors industry, which is part of the Computer and Technology sector [6] - This industry holds a Zacks Industry Rank of 79, placing it in the top 32% of over 250 industries, suggesting a favorable position compared to lower-ranked industries [6]

Company Performance - SkyWater Technology, Inc. (SKYT) closed at $9.97, reflecting a +1.74% change from the previous day's closing price, outperforming the S&P 500's 0.72% gain [1] - The stock has decreased by 37.54% over the past month, underperforming the Computer and Technology sector's loss of 1.35% and the S&P 500's gain of 1.02% [1] Earnings Forecast - The upcoming earnings disclosure is anticipated to show an EPS of -$0.07, representing a 250% decline compared to the same quarter last year [2] - Quarterly revenue is projected to be $74.1 million, down 6.38% from the previous year [2] Analyst Projections - Recent shifts in analyst projections for SkyWater Technology, Inc. should be monitored, as they reflect near-term business trends [3] - Positive estimate revisions indicate analyst optimism regarding the company's business and profitability [3] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have delivered an average annual return of +25% since 1988 [5] - SkyWater Technology, Inc. currently holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate remaining unchanged over the last 30 days [5] Industry Overview - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 85, placing it in the top 34% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Group 1 - The semiconductor industry is becoming increasingly competitive, particularly due to the growing AI race [1] - Major players in the semiconductor market include Nvidia, TSMC, and Qualcomm, but there are also less-known companies like Navitas and Canadian Solar that are noteworthy [1] - The focus remains on companies with strong fundamentals and growth potential within the technology, infrastructure, and internet services sectors [1]