Record Revenues and Continued Year-over-Year Increase in Gross Margin

BLOOMINGTON, Minn. — (BUSINESS WIRE) — August 7, 2023 — SkyWater Technology (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the second quarter of 2023, ended July 2, 2023.

Highlights for Q2 2023:

• Revenue increased 47% year-over-year to a record $69.8 million.
• Gross margin increased to 23.9% on a GAAP basis, compared to 4.4% in Q2 2022, and increased to 24.7% on a non-GAAP basis, compared to 5.6% in Q2 2022.
• Net loss to shareholders of $8.6 million, or $(0.19) per share on a GAAP basis, and net loss to shareholders of $6.4 million, or $(0.14) per share on a non-GAAP basis, compared to net loss to shareholders of $13.0 million, or $(0.32) per share on a GAAP basis, and net loss to shareholders $10.8 million, or $(0.27) per share on a non-GAAP basis in Q2 2022.
• Adjusted EBITDA of $6.5 million, or 9.3% of revenue, compared to $(1.6) million, or (3.4)% of revenue in Q2 2022.

“We are pleased to report continued momentum in the second quarter and strong financial results, including another record revenue quarter, which exceeded our expectations and approached the $70 million level,” commented Thomas Sonderman, SkyWater president and chief executive officer. “Testament to our improved operating performance and execution over the last several quarters, our trailing-twelve-month revenues now total $253 million, an increase of 50% over the prior 12-month period. Now a little more than halfway through the year, it’s evident that our ATS revenue growth is proving itself to be relatively decoupled from the macro weakness affecting the overall semiconductor industry, and our diversified portfolio of products, customers, and end markets, as well as improved operational execution, provides us with increased confidence in our ability to achieve our long-term annual revenue growth objective of 25% in 2023.”

Q2 Business Highlights:

• Record revenues exceeded expectations due to continued strong customer demand, the expansion of multiple key Advanced Technology Services (ATS) programs year to date, and a $3.6 million pull-in of revenues that resulted from the restructuring of one ATS contract.
• Gross margin expansion continues to reflect strong flow-through performance on the year-on-year revenue growth.
• Continued progress on the productization and qualification of SkyWater’s 90nm RadHard platform, in preparation for the planned production ramp in 2025.
• Growing engagement with multiple commercial ATS customers, particularly in the bio-health and advanced computing end markets, each of which could contribute multiple-$M of revenue for SkyWater in 2023.
• Continued progress proceeding through the application process for CHIPS Act funding, as we believe we are well-positioned to be a major beneficiary in the years to come, both at our existing sites in Minnesota and Florida, as well as our innovative and transformative partnership with Purdue University and the State of Indiana.

Q2 2023 Summary: