SkyWater Shares Jump on Q2 Earnings Beat, Robust Q3 Guidance

Core Insights - SkyWater (SKYT) shares surged 58.7% following the release of its second-quarter 2025 results, driven by better-than-expected performance and strong third-quarter guidance, particularly from the acquisition of Infineon's Fab 25 in Austin, TX [1][9] Financial Performance - In Q2 2025, SkyWater reported a non-GAAP loss of $0.11 per share, exceeding the Zacks Consensus Estimate by 35.29%. This compares to earnings of $0.02 in the same quarter last year and a loss of $0.08 in Q1 2025 [2][9] - Revenues for Q2 2025 were $59.1 million, a decline of 36.7% year-over-year but above the consensus estimate by 3.08%. Sequentially, revenues fell 3.4% [6] - ATS Development revenues, which accounted for 89% of total revenues, decreased 14.7% year-over-year to $52.6 million, while Wafer Services revenues fell 6.9% year-over-year and 28% quarter-over-quarter to $5.4 million [6] Future Guidance - SkyWater anticipates that Fab 25 will approximately double its annual revenue to $300 million and adjusted EBITDA, generating immediate positive free cash flow. For Q3 2025, the company expects revenues between $130 million and $141 million, with Wafer Services revenues projected between $80 million and $86 million [3][9] - The Zacks Consensus Estimate for Q3 revenues is currently $135.5 million, indicating a 44.4% growth compared to the same quarter last year [4] Margin and Expense Outlook - The non-GAAP operating margin for Q3 2025 is expected to be between 11% and 14%, with non-GAAP operating expenses projected to be between $18 million and $20 million. The company expects a loss between $0.20 and $0.14 per share for the same quarter [10] Balance Sheet Overview - As of June 29, 2025, SkyWater had cash and cash equivalents of $49.4 million and long-term debt of $42.1 million. The acquisition of Fab 25 was fully funded by a new senior secured revolving credit facility with a borrowing capacity of up to $350 million [8]