Record Revenues for Q1 2023

BLOOMINGTON, Minn. — (BUSINESS WIRE) — May 8, 2023 — SkyWater Technology (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the first quarter 2023, ended April 2, 2023.

Highlights for Q1 2023:

• Revenue increased 37% year-over-year to a record $66.1 million.
• Gross margin increased to 24.9% on a GAAP basis, compared to (2.0)% in Q1 2022, and increased to 25.8% on a non-GAAP basis, compared to 1.1% in Q1 2022.
• Net loss to shareholders of $4.3 million, or $(0.10) per share on a GAAP basis, and net loss to shareholders of $2.5 million, or $(0.06) per share on a non-GAAP basis, compared to net loss to shareholders of $16.6 million, or $(0.42) per share on a GAAP basis, and net loss to shareholders $13.0 million, or $(0.33) per share on a non-GAAP basis in Q1 2022.
• Adjusted EBITDA of $8.1 million, or 12.3% of revenue, compared to $(4.8) million, or (10.0)% of revenue in Q1 2022.

“We are pleased to report a strong start to 2023, as we set another record for quarterly revenues,” commented Thomas Sonderman, SkyWater president and chief executive officer. “Q1 revenues exceeded our expectations going into the quarter, chiefly due to increased demand and urgency on multiple existing aerospace and defense programs. As we continue to demonstrate our ability to execute on several critical programs, in Q1 we were awarded extensions and expansions of several key contract awards, and as a result we have entered 2023 with an increased program scope on multiple defense initiatives. While this accelerated demand from government programs has been partially offset by further weakening in the commercial business environment year to date, our diversified portfolio and strong execution in the quarter provides us with continued confidence in our ability to approach our long-term annual revenue growth objective of 25% in 2023, in spite of the overall macro headwinds and softening semiconductor demand environment.”

Q1 Business Highlights:

• Record revenues exceeded expectations due to accelerated demand and expanded scope of multiple U.S. government contract awards year to date.
• Gross margin expansion ahead of schedule as a result of flow-through performance ahead of expectations, with strong adjusted EBITDA equal to 12% of quarterly revenues.
• Continued to make progress on the productization and qualification of SkyWater’s 90nm RadHard platform to prepare for the planned production ramp in 2025.
• Expanded development agreement with PsiQuantum to produce silicon photonic chips that will become part of future quantum computing systems.
• Continued confidence in securing CHIPS Act funding to further expand the capabilities at our existing sites in Minnesota and Florida, while transforming the industry with our unique Purdue partnership.

Q1 2023 Summary: