Dear Colleagues, Customers, Shareholders, and Partners,
This past quarter, SkyWater reported record revenues of $442.1 million for fiscal year 2025 — 29% year-over-year growth — alongside record gross profit, net income to shareholders, and Adjusted EBITDA of $53.2 million, a 57% increase over the prior year. These results are not a destination. They are a marker of momentum, and they make this the right moment to speak directly to the people and organizations who make SkyWater’s mission possible.
As I’ve traveled to our facilities and met with customers, employees, and partners, one theme emerges clearly: the structural case for domestic semiconductor manufacturing has never been stronger, and SkyWater’s position within it has never been more defined. Now is the right moment to reaffirm our long-term focus and how we will continue to serve you.
We are entering a new chapter defined by increased resources and strategic relevance. This is not a departure from who we are. It is an expansion of what we are built to do. Semiconductors are the new steel. America’s strength — in defense, infrastructure, industry, and daily life—depends on silicon, which forms the backbone of our most critical systems.
Our Foundation Remains Strong
From national defense and energy grids to transportation safety and medical advancements, America’s future hinges on a secure, domestic semiconductor ecosystem, not in the distant future, but today.
It depends on mature, proven technologies engineered for uncompromising reliability for controlling vehicle brakes, aircraft guidance, factory automation, surgical sensors, and more. These mission-critical applications demand secure, trusted, U.S.-based manufacturing.
For this reason, SkyWater remains a U.S.-based semiconductor foundry focused on being a trusted supplier of foundational technologies for today’s critical industries as well as a partner for developing the transformative technologies of tomorrow. We are committed to serving our broad ecosystem of customers, remaining structurally independent in how we operate and protect our customers.
Furthermore, our Technology-as-a-Service (TaaS) model continues unchanged. We partner with customers to translate innovation into manufacturable reality, while our infrastructure and firewalls ensure that intellectual property is protected, compartmentalized, and secure. That operating discipline is foundational to our reputation and central to our future.
Scaling Our Capacity and Reach
Our mission is to lead where domestic expertise is essential and offshore providers fall short. Advanced packaging and quantum computing represent particularly important areas of momentum.
Quantum computing is a clear example of this momentum. In 2025, we expanded to eight active customer programs, building on multiple longstanding collaborations and driving quantum-related ATS revenue growth of over 30% for the year. These partnerships are advancing diverse quantum approaches across various distinct technological modalities, from prototype to scalable, secure, U.S.-based production.
Advanced packaging is a cornerstone of our growth strategy, the essential layer that enables systems to become smarter, smaller, and more robust. And while domestic capacity for advanced packaging remains limited and vulnerable, SkyWater is building it onshore, embedded within our ATS model, with solutions engineered for manufacturability from the outset. Advanced Packaging facilitization in Florida progressed ahead of plan in Q4, with both ATS and Tools revenue exceeding earlier expectations. This approach compresses customer timelines, secures supply chains, and directly resolves bottlenecks in defense, automotive, industrial, and high-performance computing sectors.
Within all of this capability, we are ideally positioned to help more customers cross the critical bridge from breakthrough innovation to durable, secure deployment, ensuring American ingenuity is not only invented here, but built, scaled, and sustained here as well.
Proven Ability to Scale
In 2025, we executed one of the most transformative moves in our history: acquiring Infineon’s Fab 25 in Austin, Texas, completed on June 30, 2025. This significantly increased our 200mm capacity and enhanced our ability to support customers across the full lifecycle of development to volume production. This acquisition also propelled us to become the largest U.S. semiconductor foundry free of foreign controlling ownership.
The results speak for themselves: Fab 25 contributed $175.6 million in total revenue in its first two quarters as part of SkyWater, exceeding our earlier expectations on revenue, gross margin, net income, and Adjusted EBITDA.
This expanded capacity allows us to:
- Accelerate commercialization pathways for critical technologies
- Provide greater supply assurance for defense and industrial programs
- Support higher-volume foundational-node production domestically
As the U.S. federal government and commercial industry increasingly prioritize onshore manufacturing for mission-critical systems, SkyWater’s role becomes more strategically relevant.
With Fab 25, we strengthened trusted production for defense, automotive, and industrial customers while accelerating and monetizing ATS as a primary growth driver and a key differentiator. We also enhanced U.S.-based enablement through licensing partnerships with Infineon, facilitating secure onshore commercialization of proven mixed-signal IP and capabilities.
This supports a deliberately balanced strategy: bolstering foundational-node production while commercializing next-generation technologies in advanced packaging and quantum manufacturing.
Why This Chapter Matters
Recent executive action under Section 232 has reinforced the strategic importance of semiconductors to the United States’ economic and national security. The January 2026 proclamation explicitly recognized the essential role chips play across key markets and affirmed the need to strengthen domestic manufacturing capacity.
Heightened focus on China, increased supply chain scrutiny, and evolving federal direction around onshore sourcing for mission-critical applications are reshaping how semiconductor capacity is evaluated. As policymakers continue to prioritize secure supply chains and domestic production, foundational-node manufacturing is increasingly recognized as essential to national resiliency. For defense-related and other mission-critical systems, secure domestic manufacturing is imperative to ensuring operational readiness and long-term national security. This imperative is especially acute for the quantum industry, where maintaining a secure, onshore U.S. semiconductor supply chain is critical to safeguarding sensitive capabilities and preserving long-term technological leadership.
2026 is a defining year for how America secures the silicon foundation of its critical systems. SkyWater’s expanded resources, enduring operating model, and disciplined execution position us at the center of that shift as a purpose-built participant in America’s semiconductor future.
To our customers, team members, and partners: thank you for your continued trust. We are entering this next chapter with clarity, focus, and confidence.
Thomas Sonderman
CEO, SkyWater Technology
Non-GAAP Financial Measures
We provide non-GAAP financial information that our management regularly evaluates to provide additional insight to investors and to supplement our results reported using U.S. generally accepted accounting principles (GAAP). In our quarterly earnings releases and other investor materials, we provide non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling, general and administrative expense, non-GAAP net income (loss) to shareholders, non-GAAP net income (loss) to shareholders per basic share and non-GAAP net income (loss) per diluted share. We also provide earnings before interest, income taxes, depreciation and amortization (EBITDA), adjusted EBITDA and adjusted EBITDA margin as supplemental non-GAAP measures. We define adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization and certain other items that we do not view as indicative of our ongoing performance, including equity-based compensation expense; net income attributable to noncontrolling interests; restructuring costs; transaction and integration costs; sale process costs; and bargain purchase gain.
Our management uses these non-GAAP financial measures to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe these non-GAAP financial measures are useful performance measures to our investors because they provide a baseline for analyzing trends in our business and exclude certain items that may not be indicative of our core operating results. The non-GAAP financial measures disclosed in this letter should not be viewed as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP. In addition, because these non-GAAP financial measures are not determined in accordance with GAAP, other companies, including our peers, may calculate their non-GAAP financial measures differently than we do. As a result, the non-GAAP financial measures presented in this letter may not be directly comparable to similarly titled measures presented by other companies.
We believe these non-GAAP financial measures are useful performance measures to our investors because they allow for an effective evaluation of our operating performance when compared to other companies, including our peers, without regard to financing methods or capital structures. We exclude the items listed above from net income (loss) in arriving at adjusted EBITDA and adjusted EBITDA margin because the amounts of these items can vary substantially within our industry depending on the accounting methods and policies used, book values of assets, capital structures, and the methods by which assets were acquired. These non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP.
Certain items excluded from these non-GAAP financial measures are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic cost bases of depreciable assets, none of which are reflected in these non-GAAP financial measures.
Our presentation of these non-GAAP financial measures should not be construed as an indication that our results will be unaffected by the items excluded from adjusted EBITDA and adjusted EBITDA margin. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items, and other similar items, from these non-GAAP financial measures should not be interpreted as implying that these items are non-recurring, infrequent or unusual, unless otherwise expressly indicated.
The following tables present a reconciliation of the most directly comparable financial measures, calculated and presented in accordance with GAAP, to our non-GAAP financial measures.
Fiscal Year 2025 Reconciliation of GAAP Net Income to Adjusted EBITDA
(1) Represents non-cash equity-based compensation expense.
(2) Represents severance, separation, and other termination benefits related to the reorganization of the manufacturing and operations teams.
(3) Represents incremental expenses incurred in connection with the Company’s evaluation of IonQ’s offer to acquire the Company, including legal, accounting, and other advisory fees.
(4) Represents transaction and integration costs associated with our June 30, 2025 acquisition of Fab 25, including legal fees, professional services fees, consultant fees, and other costs to effectuate the closing of the transaction and integration of the acquired business.
(5) Represents net income attributable to noncontrolling interests arising from our variable interest entity (VIE), which was formed for the purpose of purchasing the land and building of our primary operating facility in Bloomington, Minnesota. Since interest expense is added back to net loss to shareholders in our adjusted EBITDA financial measure, we also add back the net income attributable to noncontrolling interests as its net income is derived from interest the VIE charges SkyWater.
(6) Represents the bargain purchase gain recognized for the acquisition of Fab 25 on June 30, 2025. The total consideration paid by SkyWater to acquire Fab 25 was less than the fair value of the net assets acquired and necessitated the recognition of the bargain purchase gain pursuant to GAAP. The amount of the bargain purchase gain is impacted by the fair values assigned to the net assets acquired in purchase accounting. Values in this regard, as well as related tax impacts, are preliminary in nature as of the date of this release and are subject to finalization by the second quarter of fiscal 2026 as allowed by GAAP.