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  Title	SkyWater Technology Reports Third Quarter 2024 Results
  ID	4005837
  External ID	7286806389
  Author	Unknown
  Published Date	Nov. 8, 2024, 3:26 p.m.
  Summary	Record Revenues with Increased Gross Margin and Earnings SkyWater Technology, Inc. (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the third quarter 2
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  URL	https://au.advfn.com/stock-market/nasdaq/skyt/stock-news/94864293/skywater-technology-reports-third-quarter-2024-res
  Sentiment	Negative: 0.01702    Neutral: 0.02680    Positive: 0.95618
  Relevance	0.04188

• Content Details

  Content ID	2283317
  Key	23af9c9e-c5c7-42fe-ab39-e602a245443a
  Content	Record Revenues with Increased Gross Margin and Earnings SkyWater Technology, Inc. (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the third quarter 2024 ended September 29, 2024. Financial Highlights for Q3 2024: Gross margin increased to 21.6% on a GAAP basis, compared to 19.8% in Q3 2023, and increased to 22.3% on a non-GAAP basis, compared to 20.4% in Q3 2023. Net income to shareholders of $1.5 million, or $0.03 per diluted share on a GAAP basis, and net income to shareholders of $3.6 million, or $0.08 per diluted share on a non-GAAP basis, compared to net loss to shareholders of $7.6 million, or $(0.16) per diluted share on a GAAP basis, and net loss to shareholders of $2.2 million, or $(0.05) per diluted share on a non-GAAP basis in Q3 2023. Adjusted EBITDA of $11.0 million, or 11.7% of revenue, compared to $8.3 million, or 11.6% of revenue in Q3 2023. “I’m pleased to announce a strong third quarter for SkyWater, with new records achieved in both revenues and earnings,” commented Thomas Sonderman, CEO. “With further improvements in operational efficiencies and strong execution on a significant A&D program, we achieved upside in gross margins and adjusted EBITDA during the quarter. Looking ahead, we expect a return to sequential growth in Q4 in our Advanced Technology Services (ATS) business, which we expect will result in an overall robust revenue growth year for SkyWater in 2024. We are encouraged by a strong pipeline of A&D customer demand, increasing momentum in multiple emerging commercial programs, and a continued cadence of customer-funded CapEx investments. As we look ahead to 2025, with our current visibility we are forecasting year-over-year growth for our ATS business, an improving quarterly run rate for Wafer Services, and continued positive momentum in margins and operational leverage.” Recent Business Highlights: Achieved 9th straight record revenue quarter driven by over $30 million in customer-funded CapEx investments. This unprecedented level of investment by our customers is expected to significantly bolster our capabilities and capacity in both Minnesota and Florida, enabling strong future revenue growth potential in the years to come. Strong gross margin and earnings performance for Q3 exceeded expectations, driven by our continued focus on operational efficiencies and improved execution on a significant A&D program, which enabled us to deliver key milestones with lower-than-expected costs and recover the majority of the $8 million cost accrual recorded in Q1. Continuing our leadership in critical semiconductor technologies, SkyWater has been selected as a key performer on multiple Microelectronics (ME) Commons projects. These projects are focused on scalable low-power microtechnology technologies for AI hardware and other applications. The ME Commons is an important element of the CHIPS Act, supporting emerging technologies for national security. Continued momentum in our commercial ATS business culminated in a new multi-year supply agreement with NanoDx, Inc., a pioneer of in vitro diagnostic and biosensing applications. Exciting progress in Florida included the appointment of Bassel Haddad, SVP and GM of our advanced packaging business, where he is charged with building and scaling this important new growth vector for SkyWater. During the quarter, we continued to place orders for new tooling, funded by the $120 million award announced earlier in the year. Q3 2024 Summary: GAAP In millions, except per share data ATS development revenue (1) Wafer Services revenue Combined ATS development and Wafer Services revenue Tools revenue (2) Total revenue * Gross profit * Gross margin * Net income (loss) to shareholders Basic income (loss) per share Diluted income (loss) per share Net income (loss) margin to shareholders Non-GAAP In millions, except per share data Non-GAAP gross profit Non-GAAP gross margin * Non-GAAP net income (loss) to shareholders Non-GAAP basic income (loss) per share $0.08 Non-GAAP diluted income (loss) per share Adjusted EBITDA Adjusted EBITDA margin __________________ Q3 2024 Results: Revenue of $93.8 million increased 31% year-over-year. ATS development revenue of $56.4 million increased 5% year-over-year. Wafer Services revenue of $6.7 million decreased 54% compared to the third quarter of 2023. Tools revenue was $30.7 million in the third quarter of 2024 compared to $3.2 million in the third quarter of 2023. GAAP gross profit was $20.2 million, or 21.6% of total revenue, compared to gross profit of $14.1 million, or 19.8% of total revenue, in the third quarter of 2023. Non-GAAP gross profit was $20.9 million, or 22.3% of total revenue, compared to non-GAAP gross profit of $14.6 million, or 20.4% of total revenue, in the third quarter of 2023. In the third quarter of 2024 we successfully modified a significant customer contract that resulted in a decrease in our estimate of future costs to complete their program. Gross margin for the third quarter of 2024 benefited from the $5.6 million reversal of the remaining loss accrual, which was initially established at $8.0 million in the first quarter of 2024 for this program. GAAP operating expenses were $15.5 million, compared to $18.3 million in the third quarter of 2023. Non-GAAP operating expenses were $14.1 million, compared to $13.4 million in the third quarter of 2023. GAAP net income to shareholders was $1.5 million, or $0.03 per diluted share, compared to a net loss to shareholders of $7.6 million, or $(0.16) per diluted share, in the third quarter of 2023. Non-GAAP net income to shareholders was $3.6 million, or $0.08 per diluted share, compared to a non-GAAP net loss to shareholders of $2.2 million, or $(0.05) diluted per share, in the third quarter of 2023. : Adjusted EBITDA was $11.0 million, or 11.7% of total revenue, compared to $8.3 million, or 11.6% of total revenue, in the third quarter of 2023. A reconciliation between GAAP and non-GAAP financial measures is contained in the tables included in the section titled “Non-GAAP Financial Measures.” Q4 2024 Financial Outlook For the fourth quarter of 2024, we expect total revenue to be in the range of $72 million to $76 million, of which approximately $11 million is expected to be tools revenue. We expect GAAP diluted EPS to be in the range of $(0.12) to $(0.06) and non-GAAP diluted EPS to be in the range of $(0.10) to $(0.04). This outlook for non-GAAP diluted EPS excludes anticipated equity-based compensation expense of approximately $2.0 million. Non-GAAP diluted EPS 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 on Thursday, November 7, 2024, at 3:30 p.m. CT to discuss its third quarter 2024 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com. About SkyWater Technology SkyWater (NASDAQ: SKYT) is a U.S.-based semiconductor manufacturer and a DMEA-accredited Category 1A Trusted Supplier. SkyWater’s Technology as a Service model streamlines the path to production for customers with development services, volume production and heterogeneous integration solutions in its U.S. facilities. This pioneering model enables innovators to co-create the next wave of technology within diverse categories including mixed-signal CMOS, read-out ICs, rad-hard ICs, MEMS, superconducting ICs, photonics and advanced packaging. SkyWater serves the growing markets of aerospace & defense, automotive, biomedical, industrial and quantum computing. For more information, visit: www.skywatertechnology.com. Cautionary Statement Regarding Preliminary Results The Company’s results for the third quarter ended September 29, 2024 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. 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 presentation, 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; 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 in a competitive labor market; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of tariffs; our ability to raise additional capital or financing; our ability to accurately forecast demand; 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; our ability to meet our long-term growth targets; 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 15, 2024 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
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  Publisher Name	Advanced Financial Network
  Publisher URL	https://www.advfn.com
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  Trust Flow Score	61
  Citation Flow Score	45

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