SkyWater Technology Reports $61.3 Million Revenue in Q1 2025, Net Loss Increases to $7.3 Million

SkyWater Technology, Inc. reported a revenue of $61.3 million for the first quarter of 2025, a decrease of 23% compared to $79.6 million in the same period last year. The decline was primarily attributed to reduced revenue from its Tool and Advanced Technology Services (ATS) segments, with ATS development revenue falling by 14% due to decreased demand in the aerospace and defense sector. The company also experienced a significant drop in tools revenue, which decreased by $7.2 million, reflecting the completion of several customer investment efforts. Despite the revenue decline, gross profit increased to $14.3 million, up 10% from $13.0 million in the prior year, driven by a reduction in cost of revenue.

SkyWater's net loss attributable to the company rose to $7.3 million for the first quarter of 2025, compared to a loss of $5.7 million in the first quarter of 2024, marking a 28% increase. The increase in net loss was influenced by higher selling, general, and administrative expenses, which surged by 35% to $15.0 million, largely due to costs associated with the anticipated acquisition of Infineon’s Fab 25 facility. Interest expenses also decreased to $1.8 million from $2.4 million, reflecting lower outstanding amounts on the company's lending facility.

In terms of operational developments, SkyWater is in the process of acquiring Infineon Technologies AG’s 200 mm fab in Austin, Texas, with a base purchase price of $80 million. The acquisition is expected to enhance SkyWater's manufacturing capabilities and is subject to customary closing conditions, including regulatory approvals. The company plans to finance this acquisition through debt financing, which is anticipated to close no earlier than May 30, 2025.

SkyWater's cash and cash equivalents increased significantly to $51.2 million as of March 30, 2025, up from $18.8 million at the end of the previous fiscal year. This increase was primarily due to improved cash flow from operations, which provided $56.0 million during the quarter, a substantial turnaround from the $3.9 million used in the same period last year. The company also reported a significant increase in contract liabilities, reflecting a large cash receipt from a customer, which is expected to support future operations.

Looking ahead, SkyWater anticipates that customer-funded capital investments will be a key driver of its growth strategy. The company is focused on expanding its presence in high-growth markets, including aerospace and defense, automotive, and bio-health sectors. However, it remains cautious about potential impacts from macroeconomic conditions and changes in government funding for semiconductor technologies. The company believes it has sufficient liquidity to fund its operations for the next twelve months, supported by its available credit facilities and cash reserves.