Q2 Earnings AUGUST 6, 2025 SkyWater Technology Forward-Looking Statements This presentation contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Company's current expectations or forecasts of future events, rather than past events and outcomes, and such statements are not guarantees of future performance. Forward-looking statements include all statements other than statements of historical fact contained ...

Core Insights - SkyWater Technology (SKYT) achieved a significant turnaround in profitability in Q1 2025, with non-GAAP gross profit increasing to $14.8 million from $13.4 million, resulting in a gross margin of 24.2%, a 730-basis-point improvement year over year [2][10] - The launch of ThermaView in January 2025 has driven a 70% sequential increase in Wafer Services revenues, reaching $7.5 million, indicating a shift in SkyWater's product mix towards new offerings [3][10] - Management anticipates continued growth in Wafer Services throughout 2025, supported by customer ramps and a growing innovation pipeline, alongside the recent acquisition of Fab 25 to expand manufacturing capacity [4][10] Financial Performance - SkyWater expects both GAAP and non-GAAP gross margins to remain in the 23%-27% range for the full year 2025, with potential for further upside due to improved cost control and a more disciplined tools mix [5][10] - The Zacks Consensus Estimate for 2025 revenues is projected at $307.15 million, reflecting a 10.26% decline from 2024, while the estimated loss is pegged at 1 cent per share, indicating a sharp decline of 116.67% year-over-year [12] Competitive Landscape - GlobalFoundries (GFS) reported $1.6 billion in Q1 2025, significantly outpacing SkyWater, with strengths in strategic partnerships and AI-related semiconductor manufacturing [6] - ON Semiconductor (ON) focuses on intelligent power and sensing solutions, leveraging a vertically integrated model that provides cost advantages, particularly in the growing EV market [7] Share Price and Valuation - SkyWater shares have declined 23.3% year to date, contrasting with a 7% return in the broader Zacks Computer and Technology sector and a 13.4% rise in the Electronics – Semiconductors industry [8] - Currently, SkyWater is trading at a forward 12-month Price/Sales ratio of 1.48X compared to the industry's 8.6X, with a Value Score of B [11]

Core Insights - SkyWater Technology (SKYT) shares are currently undervalued with a Value Score of B and a forward 12-month price/sales (P/S) ratio of 1.4X, significantly lower than the industry average of 8.5X [1][7] - The company has seen a strong performance in its newly launched ThermaView platform, which contributed to a 70% quarter-over-quarter increase in Wafer Services revenues, reaching $7.5 million in Q1 2025 [9][11] - The acquisition of Fab 25 enhances SkyWater's foundry capabilities, adding 400,000 wafer starts annually and generating over $1 billion in contracts, which is expected to boost revenues and cash flow immediately [13][14] Financial Performance - SkyWater's stock has outperformed the broader Zacks Computer and Technology sector, with an 11.9% increase over the past month compared to the sector's 6% and the industry's 7.1% growth [9] - For 2025, SkyWater expects a revenue growth range of 5% for combined Advanced Technology Services (ATS) and Wafer Services, with a consensus estimate of $307.15 million, indicating a 10.26% decline from 2024 [18] - The company anticipates second-quarter 2025 revenues between $55-$60 million, with ATS revenues projected at $49-$53 million, reflecting a 38.6% decline from the previous year [19] Market Position and Growth Drivers - The ThermaView platform is positioned in the growing advanced thermal imaging market, projected to reach $9 billion by 2027, indicating long-term growth potential across various sectors [11] - SkyWater's focus on quantum computing is significant, with over 90% of its advanced computing revenues in 2024 related to quantum technology development [15] - The company maintains a Zacks Rank 1 (Strong Buy) and a Growth Score of A, indicating a strong investment opportunity [22]

Core Insights - SkyWater Technology (SKYT) is set to acquire Fab-25 from Infineon Technologies, with the deal expected to close on June 30, 2025, which will enhance its position in U.S. semiconductor manufacturing and meet the rising demand for domestically sourced chips [1][3][8] Group 1: Acquisition Details - The acquisition of Fab-25 is backed by a four-year supply agreement exceeding $1 billion, anticipated to generate $300 million in incremental revenues for fiscal 2025 [2][8] - Fab-25 is a 200 mm CMOS facility that will expand SkyWater's foundry capabilities, supporting critical applications in automotive, industrial, and defense sectors [3][8] - The integration of Fab-25 aligns with national onshoring priorities, enhancing SkyWater's relevance in the evolving global supply chain [3][4] Group 2: Competitive Landscape - SkyWater faces competition from Tower Semiconductor, which specializes in analog and mixed-signal ICs and has a strategic partnership with Semtech to scale SiGe wafer production for AI and 5G applications [5] - GlobalFoundries is another competitor, offering scalable 200 mm and 300 mm wafer production, serving high-demand sectors like automotive and defense, and providing broader industry reach and advanced process diversity [6] Group 3: Financial Performance and Valuation - SkyWater's shares have declined by 34.3% year-to-date, contrasting with the Zacks Electronics – Semiconductors industry's return of 5.2% [7] - The company trades at a forward 12-month price-to-sales ratio of 1.28, significantly lower than the industry's average of 8.18, indicating potential value for investors [9] - The Zacks Consensus Estimate for SkyWater's 2025 loss is projected at 1 cent per share, unchanged over the past 30 days, while the company reported earnings of 6 cents per share in 2024 [10]

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].