SkyWater (SKYT) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 delivered record revenue of $342.3M, up 19% year-over-year, with record gross profit and positive non-GAAP EPS, driven by strong ATS development revenue and significant customer CapEx co-investment.

• Q4 2024 revenue reached $75.5M, at the upper end of guidance, with gross margin of 26.6% and positive EPS of $0.04; full-year revenue was a record $342M, up 19% year-over-year.

• Announced acquisition of Infineon's Fab 25 in Austin, expected to add $300M in annual revenue, double capacity, and immediately boost adjusted EBITDA and free cash flow.

• Major milestones included the launch of the ThermaView platform for thermal imaging, a preliminary $16M CHIPS Act award, and a $120M DOD contract for advanced packaging in Florida.

• Positive non-GAAP EPS achieved for both Q4 and FY2024, marking the first full year of non-GAAP profitability.

Financial highlights

• Q4 2024 total revenue was $75.5M, down 5% year-over-year; ATS revenue grew 4% YoY, Wafer Services declined 64% YoY.

• FY2024 ATS development revenue rose 13% YoY to $238.6M; Wafer Services revenue fell 56% YoY to $26.9M; Tools revenue surged 424% to $76.8M.

• Q4 2024 non-GAAP gross margin was 26.6% (up 920bps YoY); FY2024 non-GAAP gross margin was 21.0% (down 100bps YoY due to tools revenue mix).

• FY2024 adjusted EBITDA was $34.3M (10.0% margin), up 142% YoY; Q4 adjusted EBITDA was $10.2M (13.5% margin).

• FY2024 net loss narrowed to $6.8M from $30.8M in FY2023; positive cash flow from operations of $15M.

Outlook and guidance

• 2025 revenue for combined ATS and Wafer Services expected to grow ~5% ±2% year-over-year, with tools revenue forecast at $30M, mostly in the second half.

• Gross margin for core business expected to expand into the 30s in H2 2025, with full-year non-GAAP gross margin in the 23%-27% range.

• Q1 2025 revenue guidance: $59-$63M, with gross margin of 19%-23% and EPS loss of $0.10-$0.16.

• Anticipates return to profitability in H2 2025 and slightly positive non-GAAP EPS for the year.

• Fab 25 acquisition, expected to close mid-2025, will add ~$300M annual revenue and >$90M adjusted EBITDA, with combined revenue >$600M.