SkyWater Technology Reports Record Third Quarter 2025 Results

BLOOMINGTON, Minn.--( BUSINESS WIRE)--SkyWater Technology, Inc. (NASDAQ: SKYT), the largest exclusively U.S.-based, pure-play semiconductor foundry, today announced financial results for the third quarter 2025 ended September 28, 2025.

“We’re pleased to report financial results for the third quarter that exceeded our expectations across all metrics,” commented Thomas Sonderman, CEO. “Revenues from multiple quantum computing customers reached a new quarterly record, and we are on track to exceed 30% growth in our ATS revenues from quantum customers in fiscal 2025. We have signed four new quantum customers since the second quarter, building significant momentum as we establish SkyWater as the foundry partner of choice for this emerging growth end market. We believe our exclusively U.S. focus and Trusted status as a pure-play foundry partner make us the ideal manufacturing partner for multiple quantum computing technologies, and we expect to announce continued momentum in the coming quarters.

“Furthermore, we are very pleased to report financial results for our first full quarter of Texas operations that were significantly stronger than initially forecast. At the same time, we witnessed an acceleration of program timing within our aerospace and defense end markets, which led to stronger ATS development revenues in the quarter, compared to forecast. We believe 2025 is a transformative year for SkyWater, and anticipate continued strong growth ahead in the coming years.”

Recent Business Highlights:

Q3 2025 Financial Summary:

GAAP

$ in millions, except per share data

Q3 2025

Q3 2024

Y/Y *

Q2 2025

Q/Q *

Legacy SkyWater

ATS development revenue (1)

$54.2

$56.4

(4)%

$52.6

Wafer services revenue

$6.2

$6.7

(7)%

$5.4

15%

Combined ATS development and wafer services revenue *

$60.4

$63.1

(4)%

$58.0

Tools revenue (2)

$3.7

$30.7

(88)%

$1.1

252%

Total Legacy SkyWater revenue *

$64.1

$93.8

(32)%

$59.1

SkyWater Texas

Wafer services revenue

$86.6

$—

Total SkyWater Texas revenue *

$86.6

$—

Total consolidated revenue *

$150.7

$93.8

60.7%

$59.1

155%

Gross profit

$36.2

$20.2

79%

$10.9

232%

Gross margin *

24.0%

21.6%

240 bps

18.5%

550 bps

Net income (loss) to shareholders

$144.0

$1.5

$(10.0)

Basic net income (loss) per share

$2.98

$0.03

$(0.21)

Diluted net income (loss) per share

$2.95

$0.03

$(0.21)

Net income (loss) margin to shareholders

95.5%

1.6%

(16.9)%

* Amounts calculated based on figures reported in thousands

NM - Not meaningful

Non-GAAP

$ in millions, except per share data

Q3 2025

Q3 2024

Y/Y *

Q2 2025

Q/Q *

Non-GAAP gross profit

$37.1

$20.9

78%

$11.5

223%

Non-GAAP gross margin *

24.6%

22.3%

230 bps

19.5%

510 bps

Non-GAAP net income (loss) to shareholders

$11.5

$3.6

219%

$(5.5)

(309)%

Non-GAAP basic income (loss) per share

$0.24

$0.08

58%

$(0.11)

(209)%

Non-GAAP diluted income (loss) per share

$0.24

$0.08

$(0.11)

Adjusted EBITDA

$25.8

$11.0

135%

$2.3

Adjusted EBITDA margin

17.1%

11.7%

540 bps

3.9%

1,320 bps

* Amounts calculated based on figures reported in thousands

NM - Not meaningful

(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.

Q3 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.”

Q4 2025 Financial Outlook:

Our current expectations of fourth quarter financial results reflect the following ranges:

$ in millions, except per share data

Low-End Range

High-End Range

Legacy SkyWater

ATS development revenue

$48.0

—

$52.0

Wafer services revenue

$6.0

—

$7.0

Combined ATS development and wafer services revenue

$54.0

—

$59.0

Tools revenue

$17.0

—

$18.0

Total Legacy SkyWater revenue

$71.0

—

$77.0

SkyWater Texas

Wafer services revenue

$84.0

—

$88.0

Total SkyWater Texas revenue

$84.0

—

$88.0

Total consolidated revenue

$155.0

—

$165.0

GAAP gross margin %

16.5%

—

19.5%

Non-GAAP gross margin %

17.0%

—

20.0%

GAAP operating expenses

$28.5

—

$29.5

Non-GAAP operating expenses

$23.0

—

$24.0

GAAP diluted loss per share

$(0.21)

—

$(0.09)

Non-GAAP diluted loss per share

$(0.08)

—

$0.04

The outlook for non‑GAAP gross margin, operating expenses, and diluted net loss per share excludes anticipated equity-based compensation expense of approximately $2.4 million, or $0.05 per share (with an estimated $1.6 million in operating expenses and the remaining $0.8 million in cost of revenue), and estimated transaction-related costs of approximately $3.8 million, or $0.08 per share (all of which is included in operating expenses). Non-GAAP diluted net loss per share should be considered in addition to, but not as a substitute for, our financial information presented in accordance with GAAP.

Investor Webcast

SkyWater will host a conference call today, Wednesday, November 5, 2025, at 3:30 p.m. CT (4:30 p.m. ET) to discuss its third quarter 2025 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com.

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 third quarter and nine-months ended September 28, 2025 are preliminary, unaudited and subject to the finalization of the Company’s third 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

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: our goals and strategies; our future business development, financial condition and results of operations; our ability to continue operating 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; 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 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 Report on Form 10-Q the Company filed with the SEC on August 07, 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.

SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

September 28,

2025

December 29,

2024

(in thousands, except per share data)

Assets

Current assets

Cash and cash equivalents

30,895

18,844

Accounts receivable (net of allowance for credit losses of $68 and $398, respectively)

85,056

54,332

Contract assets (net of allowance for credit losses of $18 and $42, respectively)

51,326

20,890

Inventory

20,304

14,535

Prepaid expenses and other current assets

51,044

23,476

Total current assets

238,625

132,077

Property and equipment, net

517,484

165,431

Intangible assets, net

8,967

7,779

Other assets

21,953

8,488

Total assets

787,029

313,775

Liabilities and shareholders’ equity

Current liabilities

Current portion of long-term debt

6,179

5,073

Accounts payable

72,518

29,590

Accrued expenses

41,532

36,829

Short-term financing, net of unamortized debt issuance costs

143,367

27,669

Contract liabilities

92,278

55,166

Total current liabilities

355,874

154,327

Long-term liabilities

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

34,262

34,704

Long-term contract liabilities

163,563

51,901

Deferred income tax liability, net

7,903

632

Other long-term liabilities

25,679

8,721

Total long-term liabilities

231,407

95,958

Total liabilities

587,281

250,285

Shareholders’ equity

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

—

Common stock, $0.01 par value per share (200,000 shares authorized; 48,508 shares issued and outstanding as of September 28, 2025 and 47,704 shares issued and outstanding as of December 29, 2024, respectively)

489

478

Additional paid-in capital

199,592

189,132

Accumulated deficit

(7,276

)

(131,996

)

Total shareholders’ equity, SkyWater Technology, Inc.

192,805

57,614

Noncontrolling interests

6,943

5,876

Total shareholders’ equity

199,748

63,490

Total liabilities and shareholders’ equity

787,029

313,775

SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

Three-Month Period Ended

Nine-Month Period Ended

September

28, 2025

June 29,

2025

September

29, 2024

September

28, 2025

September

29, 2024

(in thousands, except share data)

Revenue

150,741

59,063

93,817

271,100

266,782

Cost of revenue

114,520

48,164

73,582

209,723

216,453

Gross profit

36,221

10,899

20,235

61,377

50,329

Research and development expense

4,370

3,368

3,431

10,987

10,825

Selling, general, and administrative expense

23,997

14,009

12,095

53,036

35,598

Operating income (loss)

7,854

(6,478

)

4,709

(2,646

)

3,906

Other income (expense)

Bargain purchase gain

110,790

—

110,790

—

Interest expense

(5,322

)

(1,637

)

(1,988

)

(8,771

)

(6,859

)

Income (loss) before income taxes

113,322

(8,115

)

2,721

99,373

(2,953

)

Income tax (benefit) expense

(31,830

)

742

(30,704

)

Net income (loss)

145,152

(8,857

)

2,628

130,077

(2,960

)

Less: net income attributable to noncontrolling interests

1,139

1,121

1,116

3,387

3,154

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

144,013

(9,978

)

1,512

126,690

(6,114

)

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

2.98

(0.21

)

0.03

2.64

(0.13

)

Weighted average shares used in computing net income (loss) per common share, basic

48,275

48,091

47,523

48,052

47,339

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

2.95

(0.21

)

0.03

2.62

(0.13

)

Weighted average shares used in computing net income (loss) per common share, diluted

48,770

48,091

47,640

48,334

47,339

SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine-Month Period Ended

September 28,

2025

September 29,

2024

As Restated

(in thousands)

Cash flows from operating activities

Net income (loss)

130,077

(2,960

)

Adjustments to reconcile net income (loss) to net cash flows provided by operating activities

Bargain purchase gain

(110,790

)

—

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

(8,571

)

—

Depreciation and amortization expense

21,525

13,295

Gain on sale of property and equipment

—

(55

)

Accretion of investment tax credits

(681

)

—

Amortization of debt issuance costs included in interest expense

1,184

1,322

Equity-based compensation expense

6,825

6,105

Deferred income taxes

(29,962

)

(301

)

Provision for credit losses

428

262

Changes in operating assets and liabilities, net of the effect of acquisitions

Accounts receivable and contract assets

(38,599

)

5,624

Inventory

911

Prepaid expenses, other current assets, and other assets

(30,142

)

2,164

Accounts payable and accrued expenses

28,516

(6,386

)

Contract liabilities, current and long-term

37,263

(806

)

Income tax receivable and payable

—

564

Net cash provided by operating activities

7,107

19,739

Cash flows from investing activities

Acquisition

(86,466

)

—

Purchase of software and licenses

(2,256

)

(1,953

)

Purchases of property and equipment

(18,237

)

(7,261

)

Net cash used in investing activities

(106,959

)

(9,159

)

Cash flows from financing activities

Proceeds from draws on the revolving line of credit

394,330

251,000

Repayment of draws on the revolving line of credit

(283,681

)

(251,463

)

Proceeds from tool financings

—

1,298

Repayment of tool financing advanced payments

—

(920

)

Proceeds from sale leaseback transaction

4,599

—

Principal payments on long-term debt

(4,192

)

(3,248

)

Cash paid for principal on finance leases

(411

)

(520

)

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

3,627

2,433

Cash paid on licensed technology obligations

—

(2,500

)

Contributions from noncontrolling interest

625

324

Distributions to noncontrolling interest

(2,994

)

(4,682

)

Net cash provided by (used in) financing activities

111,903

(8,278

)

Net change in cash and cash equivalents

12,051

2,302

Cash and cash equivalents, beginning of period

18,844

18,382

Cash and cash equivalents, end of period

30,895

20,684

Supplemental GAAP Financial Information by Quarter

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Q3 2024

Q2 2024

Q1 2024

(in thousands)

Legacy SkyWater

ATS development revenue (1)

54,196

52,605

52,535

59,401

56,390

61,669

61,185

Wafer services revenue

6,245

5,411

7,527

4,371

6,718

5,780

9,992

Combined ATS development and wafer services revenue

60,441

58,016

60,062

63,772

63,108

67,449

71,177

Tools revenue (2)

3,686

1,047

1,234

11,715

30,709

25,880

8,459

Total Legacy SkyWater revenue

64,127

59,063

61,296

75,487

93,817

93,329

79,636

Cost of revenue, excluding tools

41,428

47,283

46,009

46,516

43,105

51,346

58,396

Cost of tools revenue (2)

3,743

881

1,030

9,674

30,477

24,869

8,260

Total Legacy SkyWater cost of revenue

45,171

48,164

47,039

56,190

73,582

76,215

66,656

Legacy SkyWater gross profit, excluding tools

19,013

10,733

14,053

17,256

20,003

16,103

12,781

Tools gross profit

(57

)

166

204

2,041

232

1,011

199

Legacy SkyWater gross profit

18,956

10,899

14,257

19,297

20,235

17,114

12,980

SkyWater Texas

Wafer services revenue

86,614

—

Cost of revenue

69,349

—

SkyWater Texas gross profit

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) attributable to SkyWater Technology, Inc. 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 net income attributable to noncontrolling interests; equity-based compensation expense; management transition expense; transaction and integration costs, tax benefits from the release of tax valuation allowances, and bargain purchase gains. 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.

SKYWATER TECHNOLOGY, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

Three-Month Period Ended

Nine-Month Period Ended

September

28, 2025

June 29, 2025

September

29, 2024

September

28, 2025

September

29, 2024

(in thousands)

GAAP revenue

150,741

59,063

93,817

271,100

266,782

GAAP cost of revenue

114,520

48,164

73,582

209,723

216,453

Equity-based compensation expense (1)

(895

)

(626

)

(565

)

(2,088

)

(1,524

)

Management transition expense (3)

—

(97

)

—

(97

)

Non-GAAP cost of revenue

113,625

47,538

72,920

207,635

214,832

GAAP gross profit

36,221

10,899

20,235

61,377

50,329

GAAP gross margin

24.0

18.5

21.6

22.6

18.9

Equity-based compensation expense (1)

895

626

565

2,088

1,524

Management transition expense (3)

—

Non-GAAP gross profit

37,116

11,525

20,897

63,465

51,950

Non-GAAP gross margin

24.6

19.5

22.3

23.4

19.5

GAAP research and development expense

4,370

3,368

3,431

10,987

10,825

Equity-based compensation expense (1)

(142

)

(113

)

(69

)

(338

)

(266

)

Non-GAAP research and development expense

4,228

3,255

3,362

10,649

10,559

GAAP selling, general, and administrative expense

23,997

14,009

12,095

53,036

35,598

Equity-based compensation expense (1)

(1,627

)

(1,543

)

(1,384

)

(4,399

)

(4,315

)

Management transition expense (3)

—

(664

)

Transaction and integration costs (4)

(3,087

)

(2,171

)

—

(7,068

)

—

Non-GAAP selling, general, and administrative expense

19,283

10,295

10,711

41,569

30,619

GAAP net income (loss) to common shareholders

144,013

(9,978

)

1,512

126,690

(6,114

)

Equity-based compensation expense (1)

2,664

2,282

2,018

6,825

6,105

Management transition expense (3)

—

761

Transaction and integration costs (4)

3,087

2,171

—

7,068

—

Tax benefit from release of tax valuation allowances (2)

(27,486

)

—

(27,486

)

—

Bargain purchase gains (6)

(110,790

)

—

(110,790

)

—

Non-GAAP net income (loss) to common shareholders

11,488

(5,525

)

3,627

2,307

752

Three-Month Period Ended

Nine-Month Period Ended

September

28, 2025

June 29, 2025

September

29, 2024

September

28, 2025

September

29, 2024

(in thousands)

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

Cost of revenue

895

626

565

2,088

1,524

Research and development expense

142

113

338

266

Selling, general and administrative expenses

1,627

1,543

1,384

4,399

4,315

2,664

2,282

2,018

6,825

6,105

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

Cost of revenue

—

Research and development expense

—

Selling, general and administrative expenses

—

664

—

761

Three-Month Period Ended

September 28, 2025

Nine-Month Period Ended

September 28, 2025

GAAP

Non-GAAP

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

11,488

126,690

2,307

Denominator:

Weighted-average common shares outstanding, basic

48,275

48,052

Net income per common share, basic

2.98

0.24

2.64

0.05

Weighted-average common shares outstanding, diluted

48,770

48,334

Net income per common share, diluted

2.95

0.24

2.62

0.05

Three-Month Period Ended

June 29, 2025

GAAP

Non-GAAP

Computation of net loss per common share, basic

(in thousands, except per share data)

Numerator:

Net loss to common shareholder

(9,978

)

(5,525

)

Denominator:

Weighted-average common shares outstanding, basic and diluted

48,091

Net loss per common share, basic and diluted

(0.21

)

(0.11

)

Three-Month Period Ended

September 29, 2024

Nine-Month Period Ended

September 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) common shareholder

1,512

3,627

(6,114

)

752

Denominator:

Weighted-average common shares outstanding, basic

47,523

47,339

Net income (loss) per common share, basic

0.03

0.08

(0.13

)

0.02

Weighted-average common shares outstanding, diluted

47,640

47,339

47,481

Net income (loss) per common share, diluted

0.03

0.08

(0.13

)

0.02

Three-Month Period Ended

Nine-Month Period Ended

September

28, 2025

June 29, 2025

September

29, 2024

September

28, 2025

September

29, 2024

(in thousands)

Net income (loss) to common shareholders (GAAP)

144,013

(9,978

)

1,512

126,690

(6,114

)

Net income (loss) margin to common shareholders

95.5

(16.9

1.6

46.7

(2.3

Interest expense

5,322

1,637

1,988

8,771

6,859

Income tax expense (benefit) (2)

(31,830

)

742

(30,704

)

Depreciation and amortization, net

12,186

4,301

4,166

20,844

13,295

EBITDA

129,691

(3,298

)

7,759

125,601

14,047

Equity-based compensation expense (1)

2,664

2,282

2,018

6,825

6,105

Management transition expense (3)

—

761

Transaction and integration costs (4)

3,087

2,171

—

7,068

—

Net income attributable to noncontrolling interests (5)

1,139

1,121

1,116

3,387

3,154

Bargain purchase gains (6)

(110,790

)

—

(110,790

)

—

Adjusted EBITDA

25,791

2,276

10,990

32,091

24,067

Adjusted EBITDA margin

17.1

3.9

11.7

9.0

(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 preliminary 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 in the next several quarters as allowed by GAAP. Changes in values are to be expected and could be significant as this work is finalized. Any adjustments recognized to finalize purchase accounting will impact the amount of the bargain purchase gain arising from the acquisition and will be reflected on a prospective basis in future quarters.