SkyWater Technology, Inc.

Third-quarter 2025 revenue was $150.7 million, up from guidance by $15 million at the midpoint and above the high end by more than $9 million. Q3 gross margin was 24.6%, adjusted EBITDA was $25.8 million, and EPS was $0.24; the company also cited a GAAP tax benefit of $31.8 million, including a $27.5 million noncash benefit from reversing the deferred tax asset valuation allowance. For Q4, SkyWater guided total revenue to $155 million to $165 million, with ATS revenue of $48 million to $52 million, Minnesota wafer services revenue of $6 million to $7 million, tools revenue of $17 million to $18 million, gross margin of 17% to 20%, and adjusted EBITDA of $16 million to $22 million. It also said Q4 EPS is expected to range from a loss of $0.08 per share to income of $0.04 per share, and it now expects full-year tools revenue of $23 million to $24 million. Management said its baseline 2026 view remains at least $600 million of revenue and at least $60 million of adjusted EBITDA, and it believes that outlook may prove conservative.

Thomas Sonderman said the quarter showed broad outperformance, with upside from Texas, ATS, and quantum all flowing through to profitability. He emphasized SkyWater’s strategy of being a U.S.-based foundry for both defense and quantum customers, saying the company is building a “Quantum foundry” model and a domestic manufacturing platform that customers trust. His tone was upbeat and confident, especially around the Fab 25 integration, the growing quantum pipeline, and the company’s long-term 2026 targets.

Steve Manko highlighted the main financial drivers: Texas wafer services revenue of nearly $87 million, about $9 million above midpoint expectations, with roughly $4 million of extra gross profit from higher WIP and purchase accounting effects. He said Q3 gross margin benefited from near-100% profit pass-through revenue plus lower warranty accruals, an STI accrual reversal, and lower tariff exposure; he also noted about $20 million of gross profit upside in the quarter, with roughly $8 million expected to continue into Q4 and an estimated ongoing Texas gross profit uplift of about $5 million per quarter. On the balance sheet, debt ended Q3 at $184 million, cash was $31 million, capital expenditures were less than $2 million, and PP&E additions were $356 million; he also said quarterly OpEx should run around $23 million to $24 million going into 2026.

Analysts pressed on the jump in gross margin and whether Q4 guidance implied a lower normalized margin after tool revenue effects; Manko explained that Q3 included unusually favorable items, while 2026 gross margin expectations have been lifted to the mid- to upper-teens. Questions on the new Quantum wins focused on whether growth could stay above 30% and how packaging helps win customers; Sonderman said the company expects similar growth next year and that its combination of front-end fabrication and advanced packaging is a key differentiator. On Fab 25, management said performance is better than expected because the fab came with high WIP and the take-or-pay structure provides runway, while A&D questions centered on government funding delays and the shutdown; Sonderman said uncertainty remains, but the long-term pipeline and programs like ThermaView, RadHard, and AP are progressing.