SkyWater (SKYT) Piper Sandler 4th Annual Growth Frontiers Conference summary

ATS Business Model and Growth Drivers

• ATS enables customers to fund technology development, resulting in high-margin engineering services and a fab full of innovative capabilities.

• Customers co-invest in both non-recurring engineering (NRE) and equipment, creating a CapEx-light, risk-sharing model that encourages long-term commitment.

• ATS programs transition into wafer services, providing higher-margin, volume production as the company owns the developed IP and acts as the sole fabricator.

• Advanced packaging and heterogeneous integration are key differentiators, offering comprehensive, secure solutions for customers in sensitive industries.

• Customer-funded CapEx model has driven over $350M in outside investment, supporting capacity expansion and modernization.

Strategic Developments and Market Positioning

• Completed acquisition of Fab 25, adding over $300M in annual revenue and expanding U.S. 200mm foundry market share to 17%.

• Fab 25 acquisition expected to double revenue scale and adjusted EBITDA, with a multi-year supply agreement exceeding $1B.

• Now the largest exclusively U.S.-based pure-play 200mm foundry, with a fourfold increase in domestic market share.

• Strategic focus on U.S. semiconductor sovereignty, supply chain security, and next-generation technology platforms.

• Positioned to benefit from reshoring, supply chain security, and growth in edge AI, IoT, and quantum computing.

Financial Performance and Outlook

• Q2 2025 revenue was $59.1M, at the upper end of guidance, with ATS development revenue as the main driver.

• Non-GAAP gross margin for Q2 2025 was 19.5%, exceeding expectations; adjusted EBITDA was $2.3M.

• Q3 2025 guidance: total revenue $133M +/- $5M, with Fab 25 expected to contribute $75M-$80M.

• Annualized baseline outlook for 2026: revenue over $600M and adjusted EBITDA above $60M.

• Ongoing close management of operating expenses, with full-year non-GAAP OpEx expected to rise ~5% organically.