SkyWater (SKYT) 27th Annual ICR Conference 2025 summary

Company Overview and Differentiation

• Operates as a technology foundry, monetizing R&D and high-volume manufacturing, integrating emerging technologies like MEMS, superconducting films, and photonics into a CMOS foundation.

• Maintains over 50 active engagements, split between DOD and commercial customers, driving innovation in volume manufacturing.

• Positioned as the only 100% U.S. investor-owned pure-play foundry on 200 mm front-end manufacturing, leveraging domestic trends and next-gen technologies for growth.

• Focuses on high-growth end markets, including defense, industrial, and medical sectors, with unique technology services and advanced packaging capabilities.

• Strategic partnerships in quantum computing and AI, including collaborations with D-Wave and PsiQuantum, drive scalable innovation.

Growth Strategy and Investment

• Pursues a CapEx-light model, leveraging customer-funded tool investments totaling $200 million from 2024 to 2026, plus $120 million prior and $35 million in state and federal matching, totaling $350 million in external investment.

• Customer-funded CapEx model enables high operating leverage, facility modernization, and capacity expansion.

• Replacing legacy volume with new, higher-margin technologies, aiming for a 5x increase in average selling price.

• Growth strategy includes diversifying the customer base, expanding ATS, co-developing next-gen technologies, and pursuing M&A opportunities.

• Maintains stable debt levels while accelerating innovation and commercialization through customer-funded R&D.

Financial Performance and Outlook

• Achieved record revenue in Q3 2024, with a 9th consecutive quarter of positive adjusted EBITDA.

• Revenue for the last twelve months through Q3 2024 exceeded $300 million, with a 35% three-year CAGR in ATS business.

• Q4 2024 guidance: total revenue $72–$76 million, ATS development revenue $58–$61 million, wafer services $3–$4 million, tools revenue $11 million, and non-GAAP EPS of $(0.10) to $(0.04).

• 2025 expectations include continued strong customer CapEx co-investment, YoY ATS revenue growth, and improving wafer services revenue.

• Analysts are encouraged to model gross margin based on combined ATS and wafer services revenue, with a 50% flow-through above $45 million in quarterly revenue and break-even at $70 million.