SkyWater Technology Reports Fourth Quarter and Full Fiscal Year 2025 Results

BLOOMINGTON, Minn.--( BUSINESS WIRE)--SkyWater Technology, Inc. (NASDAQ: SKYT) today announced financial results for the fourth quarter and full fiscal year 2025 ended December 28, 2025.

Previously Announced Agreement to Acquire SkyWater Technology:

On January 26, 2026, IonQ (NYSE: IONQ), the world’s leading quantum company, and SkyWater Technology, the largest exclusively U.S.-based, pure-play semiconductor foundry, announced they had entered into a definitive agreement pursuant to which IonQ will acquire SkyWater for $35.00 per share in a cash-and-stock transaction. The transaction, which is expected to close in the second or third quarter of 2026, is subject to approval by SkyWater shareholders, receipt of required regulatory approvals and satisfaction of other customary closing conditions.

Recent Business Highlights:

Q4 2025 Summary:

GAAP

$ in millions, except per share data

Q4 2025

Q4 2024

Y/Y *

Q3 2025

Q/Q *

Legacy SkyWater

ATS development revenue (1)

$53.2

$59.4

(10)%

$54.2

(2)%

Wafer services revenue

$6.0

$4.4

37%

$6.2

(4)%

Combined ATS development and wafer services revenue *

$59.2

$63.8

(7)%

$60.4

(2)%

Tools revenue (2)

$22.9

$11.7

95%

$3.7

521%

Total Legacy SkyWater revenue *

$82.1

$75.5

$64.1

28%

SkyWater Texas

Wafer services revenue

$89.0

$—

$86.6

Total SkyWater Texas revenue *

$89.0

$—

$86.6

Total consolidated revenue *

$171.0

$75.5

127%

$150.7

13%

Gross profit

$25.6

$19.3

32%

$36.2

(29)%

Gross margin *

14.9%

25.6%

(42)%

24.0%

(38)%

Net income (loss) to shareholders

$(7.8)

$(0.7)

$144.0

(105)%

Basic income (loss) per share

$(0.16)

$(0.01)

$2.98

(105)%

Diluted income (loss) per share

$(0.16)

$(0.01)

$2.95

(105)%

Net income (loss) margin to shareholders

(4.5)%

(0.9)%

95.5%

(105)%

(1)

ATS development revenue represents GAAP revenue primarily derived from process development services, tool installation and qualification services, facility and tool access, leases where SkyWater serves as lessor, and security services.

(2)

Tools revenue represents GAAP revenue primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of our fabs and is used to complete ATS customer programs.

Non-GAAP

$ in millions, except per share data

Q4 2025

Q4 2024

Y/Y *

Q3 2025

Q/Q *

Non-GAAP gross profit

$27.9

$20.1

39%

$37.1

(25)%

Non-GAAP gross margin *

16.3%

26.6%

(39)%

24.6%

(34)%

Non-GAAP net income (loss) to shareholders

$(1.6)

$1.9

(184)%

$11.5

(114)%

Non-GAAP basic income (loss) per share

$(0.03)

$0.04

(182)%

$0.24

(114)%

Non-GAAP diluted income (loss) per share

$(0.03)

$0.04

(182)%

$0.24

(114)%

Adjusted EBITDA

$21.0

$10.2

112%

$25.8

(16)%

Adjusted EBITDA margin

12.3%

13.5%

(6)%

17.1%

(26)%

Q4 2025 Results:

A reconciliation between GAAP and non-GAAP financial measures is contained in the tables below in the section titled “Non-GAAP Financial Measures.”

Fiscal Year 2025 Summary:

GAAP

$ in millions, except per share data

FY2025

FY2024

Y/Y *

Legacy SkyWater

ATS development revenue (1)

$212.5

$238.6

(11)%

Wafer services revenue

$25.2

$26.9

(6)%

Combined ATS development and wafer services revenue

$237.7

$265.5

(10)%

Tool revenue (2)

$28.9

$76.8

(62)%

Total Legacy SkyWater revenue *

$266.6

$342.3

(22)%

SkyWater Texas

Wafer services revenue

$175.6

$—

Total SkyWater Texas revenue *

$175.6

$—

Total consolidated revenue *

$442.1

$342.3

29%

Gross profit

$86.9

$69.6

25%

Gross margin *

19.7%

20.3%

(3)%

Net income (loss) to shareholders

$118.9

$(6.8)

Basic net income (loss) per share

$2.47

$(0.14)

Diluted net income (loss) per share

$2.44

$(0.14)

Net income (loss) margin to shareholders

26.9%

(2.0)%

(1)

(2)

Non-GAAP

$ in millions, except per share data

FY2025

FY2024

Y/Y *

Non-GAAP gross profit

$91.3

$72.0

27%

Non-GAAP gross margin *

20.7%

21.0%

(2)%

Non-GAAP net income to shareholders

$0.7

$2.7

(73)%

Non-GAAP basic income per share

$0.01

$0.06

(75)%

Non-GAAP diluted income per share

$0.01

$0.06

(75)%

Adjusted EBITDA

$53.2

$34.3

57%

Adjusted EBITDA margin

12.0%

10.0%

21%

Fiscal Year 2025 Results:

A reconciliation between GAAP and non-GAAP financial measures is contained in the tables below in the section titled “Non-GAAP Financial Measures.”

About SkyWater Technology

SkyWater Technology (NASDAQ: SKYT) is securing America’s silicon foundation as the largest exclusively U.S.-based, pure-play semiconductor foundry. A trusted partner to both commercial customers and federal defense programs, SkyWater’s Technology as a Service model empowers innovators to bring emerging technologies like quantum computing and next-generation systems from concept to reality. With state-of-the-art facilities in Minnesota, Florida, and Texas, SkyWater specializes in foundational nodes and advanced packaging to support the nation’s critical infrastructure, strengthen supply chain resilience, and ensure long-term U.S. technology leadership. SkyWater is a DMEA-accredited Category 1A Trusted Foundry. To learn more, visit www.skywatertechnology.com.

Cautionary Statement Regarding Preliminary Results

The Company’s results for the fourth quarter and fiscal year ended December 28, 2025 are preliminary, unaudited and subject to the finalization of the Company’s fourth quarter review and full-year audit and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The Company cautions that actual results may differ materially from those described in this press release.

Revision to Historical Financial Statements

As previously communicated, in the accompanying financial information, the Company has revised the beginning accumulated deficit balance as of January 1, 2024, the first day of the Company’s 2024 fiscal year, downward by $1.970 million to reflect the correction of overstatements of ATS development revenue from the Company’s 2022 and 2023 fiscal years. These revenue overstatements were immaterial to the consolidated financial statements of the Company for each respective fiscal year, as well as immaterial in the aggregate.

SkyWater Technology Forward-Looking Statements

This press release 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 in this press release, including information or predictions concerning the Company’s future business, results of operations, financial performance, plans and objectives, competitive position, market trends, and potential growth and market opportunities. In some cases, you can identify forward-looking statements by words such as “intends,” “estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,” “expects,” “believes,” “should,” “could,” “may,” “will,” “targets,” “projects,” “seeks” or the negative of these terms or other comparable terminology.

Forward-looking statements are subject to risks, uncertainties and assumptions, which may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Key factors that could cause the Company’s actual results to be different than expected or anticipated include, but are not limited to: the inability to consummate the acquisition of SkyWater by IonQ (the “Transaction”) within the anticipated time period, or at all, due to any reason, including the failure to obtain required regulatory approvals or satisfy the other conditions to the consummation of the Transaction; the risk that the Transaction disrupts our current plans and operations or diverts management’s attention from its ongoing business; the effects of the Transaction on our business, operating results, and ability to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom we do business; the risk that our stock price may decline significantly if the Transaction is not consummated; the nature, cost and outcome of any legal proceedings related to the Transaction; our goals and strategies; our future business development, financial condition and results of operations; our ability to operate our fabrication facilities at full capacity; our ability to appropriately respond to changing technologies on a timely and cost-effective basis; our customer relationships and our ability to retain and expand our customer relationships; the timing and amount of funding our customers are able to secure for their purchase commitments; our ability to accurately predict our future revenues for the purpose of appropriately budgeting and adjusting our expenses; our expectations regarding dependence on our largest customers; our ability to diversify and expand our customer base and develop relationships in new markets, our ability to integrate the operations of the Fab 25 facility with our operations and risks associated with operating the Fab 25 facility; the performance and reliability of our third-party suppliers and manufacturers; our ability to procure tools, materials, and chemicals; our ability to control costs, including our operating and capital expenses; the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets; the level of demand in our customers’ end markets; our ability to attract, train and retain key qualified personnel; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of or increase in tariffs; our ability to raise additional capital or financing; our ability to accurately forecast demand; changes in local, regional, national and international economic or political conditions, including those resulting from increases in inflation and interest rates, a recession, or intensified international hostilities; the level and timing of U.S. government program funding; our ability to maintain compliance with certain U.S. government contracting requirements; regulatory developments in the United States and foreign countries; our ability to protect our intellectual property rights; and other factors discussed in the “Risk Factors” section of the Annual Report on Form 10-K the Company filed with the SEC on March 14, 2025 and the Quarterly Reports on Form 10-Q the Company filed with the SEC on August 07, 2025 and November 12, 2025 and in other documents that the Company files with the SEC, which are available at http://www.sec.gov. The Company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

Important Information and Where to Find It

In connection with the Transaction, IonQ intends to file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of IonQ common stock (the “IonQ Shares”) to be issued in the Transaction and a proxy statement for SkyWater’s stockholders (the “Proxy Statement/Prospectus”), and SkyWater intends to file with the SEC the Proxy Statement/Prospectus included in the Registration Statement. The definitive Proxy Statement/Prospectus (if and when available) will be mailed to stockholders of SkyWater. Each of IonQ and SkyWater may also file with or furnish to the SEC other relevant documents regarding the Transaction. This press release is not a substitute for the Registration Statement, the Proxy Statement/Prospectus or any other document that IonQ or SkyWater may file with the SEC or mail to SkyWater’s stockholders in connection with the Transaction. INVESTORS AND SECURITY HOLDERS OF IONQ AND SKYWATER ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING IONQ, SKYWATER, THE TRANSACTION AND RELATED MATTERS. The documents filed by IonQ and SkyWater with the SEC may be obtained free of charge through the website maintained by the SEC at www.sec.gov. The documents filed by IonQ with the SEC also may be obtained free of charge at IonQ’s website at investors.IonQ.com. The documents filed by SkyWater with the SEC also may be obtained free of charge at SkyWater’s website at ir.skywatertechnology.com.

Participants in the Solicitation

IonQ, SkyWater and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of SkyWater in connection with the Transaction under the rules of the SEC. Information about the interests of the directors and executive officers of IonQ and SkyWater and other persons who may be deemed to be participants in the solicitation of stockholders of SkyWater in connection with the Transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the Proxy Statement/Prospectus, which will be filed with the SEC. Information about SkyWater’s directors and executive officers is set forth in SkyWater’s proxy statement for its 2025 Annual Meeting of Stockholders on Schedule 14A filed with the SEC on April 8, 2025, SkyWater’s Annual Report on Form 10-K for the year ended December 29, 2024 and any subsequent filings with the SEC. Information about certain of IonQ’s directors and executive officers is set forth in IonQ’s proxy statement for its 2025 Annual Meeting of Stockholders on Schedule 14A filed with the SEC on April 28, 2025 and any subsequent filings with the SEC. To the extent that holdings of SkyWater’s securities by the directors and executive officers of SkyWater have changed from the amounts set forth in the Annual Meeting Proxy Statement, such changes have been or will be reflected on Statements of Changes in Beneficial Ownership on Form 4 filed with the SEC. Additional information regarding the direct and indirect interests of those persons and other persons who may be deemed participants in the Transaction may be obtained by reading the Proxy Statement/Prospectus regarding the Transaction when it becomes available. Free copies of these documents may be obtained as described above.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

SKYWATER TECHNOLOGY, INC.

Consolidated Balance Sheets

(Unaudited)

Fiscal Year Ended

December 28, 2025

December 29, 2024

(in thousands, except per share data)

Assets

Current assets

Cash and cash equivalents

23,224

18,844

Accounts receivable (net of allowance for credit losses of $80 and $398, respectively)

100,083

52,362

Contract assets (net of allowance for credit losses of $26 and $42, respectively)

17,895

20,890

Inventory

24,600

14,535

Prepaid expenses and other current assets

27,268

23,476

Total current assets

193,070

130,107

Property and equipment, net

511,720

165,431

Intangible assets, net

9,168

7,779

Other assets

19,823

8,488

Total assets

733,781

311,805

Liabilities and shareholders’ equity

Current liabilities

Current portion of long-term debt

5,838

5,073

Accounts payable

34,866

29,590

Accrued expenses

56,613

36,829

Short-term financing, net of unamortized debt issuance costs

184,402

27,669

Contract liabilities

42,494

55,166

Total current liabilities

324,213

154,327

Long-term liabilities

Long-term debt, less current portion and net of unamortized debt issuance costs

33,040

34,704

Long-term contract liabilities

149,046

51,901

Deferred income tax liability, net

6,369

632

Other long-term liabilities

25,296

8,721

Total long-term liabilities

213,751

95,958

Total liabilities

537,964

250,285

Shareholders’ equity

Preferred stock, $0.01 par value per share (80,000 shares authorized, zero shares issued and outstanding as of December 28, 2025 and December 29, 2024)

—

Common stock, $0.01 par value per share (200,000 shares authorized; 48,608 and 47,704 shares issued and outstanding as of December 28, 2025 and December 29, 2024, respectively)

489

478

Additional paid-in capital

202,387

189,132

Accumulated deficit

(15,052

)

(133,966

)

Total shareholders’ equity, SkyWater Technology, Inc.

187,824

55,644

Noncontrolling interests

7,993

5,876

Total shareholders’ equity

195,817

61,520

Total liabilities and shareholders’ equity

733,781

311,805

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Operations

(Unaudited)

Three-Month Period Ended

Fiscal Year Ended

December 28,

2025

September 28,

2025

December 29,

2024

December 28,

2025

December 29,

2024

(in thousands, except per share data)

Revenue

171,040

150,741

75,487

442,139

342,269

Cost of revenue

145,484

114,520

56,190

355,207

272,643

Gross profit

25,556

36,221

19,297

86,932

69,626

Research and development expense

3,634

4,370

4,214

14,621

15,040

Selling, general, and administrative expense

21,847

23,997

12,430

74,882

48,026

Operating income (loss)

7,854

2,653

(2,571

)

6,560

Other income (expense)

Bargain purchase gain

955

110,790

—

111,746

—

Interest expense

(4,942

)

(5,322

)

(1,978

)

(13,714

)

(8,837

)

Income (loss) before income taxes

(3,912

)

113,322

675

95,461

(2,277

)

Income tax expense (benefit)

2,714

(31,830

)

234

(27,990

)

240

Net income (loss)

(6,626

)

145,152

441

123,451

(2,517

)

Less: net income attributable to noncontrolling interests

1,149

1,139

1,120

4,536

4,276

Net income (loss) attributable to SkyWater Technology, Inc.

(7,775

)

144,013

(679

)

118,915

(6,793

)

Net income (loss) per share attributable to common shareholders, basic

(0.16

)

2.98

(0.01

)

2.47

(0.14

)

Weighted average shares outstanding, basic

48,573

48,275

47,659

48,182

47,396

Net income (loss) per share attributable to common shareholders, diluted

(0.16

)

2.95

(0.01

)

2.44

(0.14

)

Weighted average shares outstanding, diluted

48,573

48,770

47,659

48,708

47,396

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Cash Flows

(Unaudited)

Fiscal Year Ended

December 28, 2025

December 29, 2024

(in thousands)

Cash flows from operating activities

Net income (loss)

123,451

(2,517

)

Adjustments to reconcile net income (loss) to net cash flows used in operating activities

Bargain purchase gain

(111,746

)

—

Revenue from off-market component of supply agreement recorded in purchase accounting

(17,909

)

—

Depreciation and amortization expense

35,670

18,693

Accretion of investment tax credits

(967

)

(449

)

Gain on sale of property and equipment

(388

)

(55

)

Amortization of debt issuance costs included in interest expense

1,885

1,676

Equity-based compensation expense

9,422

8,168

Deferred income taxes

(31,495

)

(47

)

Provision for credit losses

447

203

Changes in operating assets and liabilities, net of the effects of a business acquisition

Accounts receivable and contract assets

(22,442

)

20,202

Inventory

(4,263

)

805

Prepaid expenses, other current assets, and other assets

(1,853

)

(9,595

)

Accounts payable and accrued expenses

13,658

(10,387

)

Contract liabilities, current and long-term

(17,619

)

(8,237

)

Net cash (used in) provided by operating activities

(24,149

)

18,460

Cash flows from investing activities

Purchase of software and technology licenses

(2,871

)

(3,319

)

Proceeds from sale of property and equipment

388

Purchases of property and equipment

(29,046

)

(7,941

)

Acquisition

(86,466

)

—

Net cash used in investing activities

(117,995

)

(11,205

)

Cash flows from financing activities

Proceeds from draws on the revolving line of credit

551,298

346,500

Repayment of draws on the revolving line of credit

(393,579

)

(342,329

)

Proceeds from sale leaseback

4,599

—

Proceeds from tool financings

—

1,298

Repayment of tool financing advanced payments

—

(920

)

Principal payments on long-term debt

(5,841

)

(4,834

)

Cash paid for debt issuance costs

(10,098

)

—

Cash paid for principal on finance leases

(1,232

)

(646

)

Proceeds from the issuance of common stock pursuant to equity compensation plans

3,846

2,499

Cash paid on licensed technology obligations

—

(3,001

)

Contributions from noncontrolling interest

625

260

Distributions to noncontrolling interest

(3,094

)

(5,621

)

Net cash provided by (used in) financing activities

146,524

(6,794

)

Net change in cash and cash equivalents

4,380

462

Cash and cash equivalents - beginning of fiscal year

18,844

18,382

Cash and cash equivalents - end of fiscal year

23,224

18,844

Supplemental GAAP Financial Information by Quarter

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Q3 2024

Q2 2024

Q1 2024

(in thousands)

Legacy SkyWater

ATS development revenue (1)

53,209

54,196

52,605

52,535

59,401

56,390

61,669

61,185

Wafer services revenue

5,969

6,245

5,411

7,527

4,371

6,718

5,780

9,992

Combined ATS development and wafer services revenue

59,178

60,441

58,016

60,062

63,772

63,108

67,449

71,177

Tools revenue (2)

22,893

3,686

1,047

1,234

11,715

30,709

25,880

8,459

Total Legacy SkyWater revenue

82,071

64,127

59,063

61,296

75,487

93,817

93,329

79,636

Cost of revenue, excluding tools

54,577

41,428

47,283

46,009

46,516

43,105

51,346

58,396

Cost of tools revenue (2)

25,002

3,743

881

1,030

9,674

30,477

24,869

8,260

Total Legacy SkyWater cost of revenue

79,579

45,171

48,164

47,039

56,190

73,582

76,215

66,656

Legacy SkyWater gross profit, excluding tools

4,601

19,013

10,733

14,053

17,256

20,003

16,103

12,781

Tools gross profit (loss)

(2,109

)

(57

)

166

204

2,041

232

1,011

199

Legacy SkyWater gross profit

2,492

18,956

10,899

14,257

19,297

20,235

17,114

12,980

SkyWater Texas

Wafer services revenue

88,969

86,614

—

Total SkyWater Texas revenue

88,969

86,614

—

Cost of revenue

65,905

69,349

—

SkyWater Texas gross profit

23,064

17,265

—

Revenue impact of modified customer contracts (3)

—

Cost of revenue impact of modified customer contracts (3)

—

(5,616

)

—

Gross profit impact of modified customer contracts (3)

—

5,616

—

(1)

(2)

Tools revenue and cost of tools revenue represents GAAP revenue and cost primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of our fabs and is used to complete ATS customer programs.

(3)

SkyWater accounts for the impacts of customer contract modifications in accordance with GAAP. Customer contract modifications that add or eliminate performance obligations and thereby change the scope of our customer programs often impact the revenue and/or cost of revenue associated with performance on customer programs. In the first quarter of 2024, we recorded a $8,004 charge to recognize future estimated losses for one significant customer program based on anticipated cost increases to complete the customer’s program. In the third quarter of 2024, we successfully modified a significant customer contract, which resulted in a decrease in our estimate of future costs to complete their program. The remaining $5,616 loss accrual recorded at the time the contract was modified was released, which reduced cost of revenue for the three-month period ended September 29, 2024.

Non-GAAP Financial Measures

We provide non-GAAP financial information that our management regularly evaluates to provide additional insight to investors and to supplement our results reported using U.S. generally accepted accounting principles (GAAP). We provide non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling, general and administrative expense, non-GAAP net income (loss) to shareholders, non-GAAP net income (loss) to shareholders per basic share and non-GAAP net income (loss) per diluted share. Our management uses these non-GAAP financial measures to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe these non-GAAP financial measures are useful performance measures to our investors because they provide a baseline for analyzing trends in our business and exclude certain items that may not be indicative of our core operating results. The non-GAAP financial measures disclosed in this earnings release should not be viewed as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP. In addition, because these non-GAAP financial measures are not determined in accordance with GAAP, other companies, including our peers, may calculate their non-GAAP financial measures differently than we do. As a result, the non-GAAP financial measures presented in this earnings release may not be directly comparable to similarly titled measures presented by other companies.

We also provide earnings before interest, income taxes, depreciation and amortization (EBITDA), adjusted EBITDA and adjusted EBITDA margin as supplemental non-GAAP measures. We define adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization and certain other items that we do not view as indicative of our ongoing performance, including equity-based compensation expense; net income attributable to noncontrolling interests; management transition expense; restructuring costs; transaction and integration costs; sale process costs; and bargain purchase gain. Our management uses EBITDA, adjusted EBITDA and adjusted EBITDA margin to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe these non-GAAP financial measures are useful performance measures to our investors because they allow for an effective evaluation of our operating performance when compared to other companies, including our peers, without regard to financing methods or capital structures. We exclude the items listed above from net income (loss) in arriving at adjusted EBITDA and adjusted EBITDA margin because the amounts of these items can vary substantially within our industry depending on the accounting methods and policies used, book values of assets, capital structures, and the methods by which assets were acquired. These non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP. Certain items excluded from these non-GAAP financial measures are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic cost bases of depreciable assets, none of which are reflected in these non-GAAP financial measures. Our presentation of these non-GAAP financial measures should not be construed as an indication that our results will be unaffected by the items excluded from adjusted EBITDA and adjusted EBITDA margin. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items, and other similar items, from these non-GAAP financial measures should not be interpreted as implying that these items are non-recurring, infrequent or unusual, unless otherwise expressly indicated.

The following tables present a reconciliation of the most directly comparable financial measures, calculated and presented in accordance with GAAP, to our non-GAAP financial measures.

Three-Month Period Ended

Fiscal Year Ended

December 28,

2025

September 28,

2025

December 29,

2024

December 28,

2025

December 29,

2024

(in thousands)

GAAP revenue

171,040

150,741

75,487

442,139

342,269

GAAP cost of revenue

145,484

114,520

56,190

355,207

272,643

Equity-based compensation expense (1)

(905

)

(895

)

(589

)

(2,993

)

(2,113

)

Management transition expense (3)

—

(97

)

Restructuring costs (7)

(1,403

)

—

(179

)

(1,403

)

(179

)

Non-GAAP cost of revenue

143,176

113,625

55,422

350,811

270,254

GAAP gross profit

25,556

36,221

19,297

86,932

69,626

GAAP gross margin

14.9

24.0

25.6

19.7

20.3

Equity-based compensation expense (1)

905

895

589

2,993

2,113

Management transition expense (3)

—

Restructuring costs (7)

1,403

—

179

1,403

179

Non-GAAP gross profit

27,864

37,116

20,065

91,328

72,015

Non-GAAP gross margin

16.3

24.6

26.6

20.7

21.0

GAAP research and development expense

3,634

4,370

4,214

14,621

15,040

Equity-based compensation expense (1)

(146

)

(142

)

(76

)

(485

)

(342

)

Non-GAAP research and development expense

3,488

4,228

4,138

14,136

14,698

GAAP selling, general, and administrative expense

21,847

23,997

12,430

74,882

48,026

Equity-based compensation expense (1)

(1,545

)

(1,627

)

(1,397

)

(5,944

)

(5,713

)

Management transition expense (3)

—

(141

)

—

(806

)

Restructuring costs (7)

—

)

—

)

Sale process costs (8)

(153

)

—

(153

)

—

Transaction and integration costs (4)

(2,960

)

(3,117

)

(220

)

(10,058

)

(220

)

Non-GAAP selling, general, and administrative expense

17,189

19,253

10,663

58,727

41,278

GAAP net income (loss) to shareholders

(7,775

)

144,013

(679

)

118,915

(6,793

)

Equity-based compensation expense (1)

2,596

2,664

2,062

9,422

8,168

Management transition expense (3)

—

141

—

903

Restructuring costs (7)

1,403

—

188

1,403

188

Sale process costs (8)

153

—

153

—

Transaction and integration costs (4)

2,960

3,117

220

10,058

220

Tax benefit from release of tax valuation allowances (2)

—

(27,486

)

—

(27,486

)

—

Bargain purchase gain (6)

(955

)

(110,790

)

—

(111,746

)

—

Non-GAAP net income (loss) to shareholders

(1,618

)

11,518

1,932

719

2,686

Three-Month Period Ended

Fiscal Year Ended

December 28,

2025

September 28,

2025

December 29,

2024

December 28,

2025

December 29,

2024

(in thousands)

Equity-based compensation expense allocation in the consolidated statements of operations (1):

Cost of revenue

905

895

589

2,993

2,113

Research and development expense

146

142

485

342

Selling, general, and administrative expense

1,545

1,627

1,397

5,944

5,713

Total equity-based compensation expense

2,596

2,664

2,062

9,422

8,168

Management transition expense allocation in the consolidated statements of operations (3):

Cost of revenue

—

Research and development expense

—

Selling, general, and administrative expense

—

141

—

806

Total management transition expense

—

141

—

903

Restructuring costs allocation in the consolidated statements of operations (7):

Cost of revenue

1,403

—

179

1,403

179

Research and development expense

—

Selling, general, and administrative expense

—

Total restructuring costs

1,403

—

188

1,403

188

Three-Month Period Ended

December 28, 2025

Fiscal Year Ended

December 28, 2025

GAAP

Non-GAAP

GAAP

Non-GAAP

Computation of net income (loss) per common share, basic and diluted:

(in thousands, except per share data)

Numerator:

Net income (loss) to common shareholders

(7,775

)

(1,618

)

118,915

719

Denominator:

Weighted-average common shares outstanding, basic

48,573

48,182

Net income (loss) per common share, basic

(0.16

)

(0.03

)

2.47

0.01

Weighted-average common shares outstanding, diluted

48,573

48,708

Net income (loss) per common share, diluted

(0.16

)

(0.03

)

2.44

0.01

Three-Month Period Ended

September 28, 2025

GAAP

Non-GAAP

Computation of net income per common share, basic and diluted:

(in thousands, except per share data)

Numerator:

Net income to common shareholders

144,013

11,518

Denominator:

Weighted-average common shares outstanding, basic

48,275

Net income per common share, basic

2.98

0.24

Weighted-average common shares outstanding, diluted

48,770

Net income per common share, diluted

2.95

0.24

Three-Month Period Ended

December 29, 2024

Fiscal Year Ended

December 29, 2024

GAAP

Non-GAAP

GAAP

Non-GAAP

Computation of net income (loss) per common share, basic and diluted:

(in thousands, except per share data)

Numerator:

Net income (loss) to common shareholders

(679

)

1,932

(6,793

)

2,686

Denominator:

Weighted-average common shares outstanding, basic

47,659

47,396

Net income (loss) per common share, basic

(0.01

)

0.04

(0.14

)

0.06

Weighted-average common shares outstanding, diluted

47,659

47,939

47,396

47,560

Net income (loss) per common share, diluted

(0.01

)

0.04

(0.14

)

0.06

Three-Month Period Ended

Fiscal Year Ended

December 28,

2025

September 28,

2025

December 29,

2024

December 28,

2025

December 29,

2024

(in thousands)

Net income (loss) to shareholders (GAAP)

(7,775

)

144,013

(679

)

118,915

(6,793

)

Net income (loss) margin to common shareholders

(4.5

95.5

(0.9

26.9

(2.0

Interest expense

4,942

5,322

1,978

13,714

8,837

Income tax expense (benefit)

2,714

(31,830

)

234

(27,990

)

240

Depreciation and amortization, net

13,859

12,186

4,949

34,703

18,243

EBITDA

13,740

129,691

6,482

139,342

20,527

Equity-based compensation expense (1)

2,596

2,664

2,062

9,422

8,168

Management transition expense (3)

—

141

—

903

Restructuring costs (7)

1,403

—

188

1,403

188

Sale process costs (8)

153

—

153

—

Transaction and integration costs (4)

2,960

3,117

220

10,058

220

Net income attributable to noncontrolling interests (5)

1,149

1,139

1,120

4,536

4,276

Bargain purchase gain (6)

(955

)

(110,790

)

—

(111,746

)

—

Adjusted EBITDA

21,046

25,821

10,213

53,168

34,282

Adjusted EBITDA margin

12.3

17.1

13.5

12.0

10.0

(1)

Represents non-cash equity-based compensation expense.

(2)

Represents the tax benefit from the release of tax valuation allowances previously recorded against tax attributes recognized as deferred tax assets. SkyWater releases tax valuation allowances when facts and circumstances change and demonstrate the Company has future sources of taxable income that will allow it to realize its tax attributes.

(3)

Represents the cost of severance, separation, and other termination benefits related to the reorganization of the manufacturing, sales, marketing, and operations leadership team.

(4)

Represents transaction and integration costs associated with our June 30, 2025 acquisition of Fab 25, including legal fees, professional services fees, consultant fees, and other costs to effectuate the closing of the transaction and integration of the acquired business.

(5)

Represents net income attributable to noncontrolling interests arising from our variable interest entity (VIE), which was formed for the purpose of purchasing the land and building of our primary operating facility in Bloomington, Minnesota. Since interest expense is added back to net loss to shareholders in our adjusted EBITDA financial measure, we also add back the net income attributable to noncontrolling interests as its net income is derived from interest the VIE charges SkyWater.

(6)

Represents the bargain purchase gain recognized for the acquisition of Fab 25 on June 30, 2025. The total consideration paid by SkyWater to acquire Fab 25 was less than the fair value of the net assets acquired and necessitated the recognition of the bargain purchase gain pursuant to GAAP. The amount of the bargain purchase gain is impacted by the fair values assigned to the net assets acquired in purchase accounting. Values in this regard, as well as related tax impacts, are preliminary in nature as of the date of this release and are subject to finalization by the second quarter of fiscal 2026 as allowed by GAAP.

(7)

Represents severance, separation, and other termination benefits related to the reorganization of the manufacturing and operations teams.

(8)

Represents incremental expenses incurred in connection with the Company’s evaluation of IonQ’s offer to acquire the Company, including legal, accounting, and other advisory fees.