8-K: SkyWater Achieves Record Q3 2025, Boosted by Quantum & Texas

SkyWater Technology reported record financial results for the third quarter of 2025, exceeding expectations across all metrics, driven by strong quantum computing customer growth and better-than-forecast performance from its newly acquired Texas operations.

Summary

• Total consolidated revenue reached a record $150.7 million for Q3 2025, a 60.7% increase year-over-year and 155% sequentially.
• The newly acquired SkyWater Texas operations (Fab 25) contributed $86.6 million in wafer services revenue, exceeding initial forecasts for its first full quarter.
• GAAP net income to shareholders was $144.0 million, or $2.95 per diluted share, significantly up from $1.5 million ($0.03 per diluted share) in Q3 2024, primarily due to a $110.8 million bargain purchase gain from the Fab 25 acquisition and a $31.8 million income tax benefit.
• Non-GAAP net income to shareholders increased to $11.5 million, or $0.24 per diluted share, compared to $3.6 million ($0.08 per diluted share) in Q3 2024.
• Adjusted EBITDA grew 135% year-over-year to $25.8 million, with an Adjusted EBITDA margin of 17.1%, up from 11.7% in Q3 2024.
• Revenues from quantum computing customers reached a new quarterly record, with four new Advanced Technology Services (ATS) engagements signed since Q2 2025, including with SQC and QuamCore.
• Anticipate exceeding 30% growth in ATS revenues from quantum customers in fiscal 2025.
• Legacy SkyWater revenue decreased 32% year-over-year to $64.1 million, primarily due to an 88% decrease in Tools revenue to $3.7 million.
• Q4 2025 financial outlook projects total consolidated revenue between $155.0 million and $165.0 million, with GAAP diluted loss per share ranging from $(0.21) to $(0.09).

Sentiment

Score: 9

Explanation: The company reported record financial results, significantly exceeding expectations across all key metrics. Strong growth drivers in quantum computing and better-than-forecast performance from the new Texas operations indicate robust operational execution and strategic success. While a large portion of net income is from a one-time gain, underlying non-GAAP metrics and Adjusted EBITDA also show substantial improvement. The positive outlook for Q4 and future years reinforces a very strong sentiment.

Positives

• Achieved record total consolidated revenue of $150.7 million, significantly exceeding prior periods.
• SkyWater Texas (Fab 25) operations performed significantly stronger than initially forecast, contributing $86.6 million in revenue and favorable gross margin and earnings.
• Quantum computing customer revenues reached a new quarterly record, with four new ATS engagements signed and an expectation of over 30% growth in quantum-related ATS revenues for fiscal 2025.
• GAAP net income to shareholders surged to $144.0 million, driven by a $110.8 million bargain purchase gain from the Fab 25 acquisition and a $31.8 million income tax benefit.
• Non-GAAP net income to shareholders increased 219% year-over-year to $11.5 million.
• Adjusted EBITDA grew 135% year-over-year to $25.8 million, with Adjusted EBITDA margin expanding to 17.1% from 11.7%.
• Gross margin improved to 24.0% GAAP and 24.6% non-GAAP, up 240 bps and 230 bps respectively year-over-year.
• ATS demand accelerated into Q3, resulting in stronger development revenues than forecast for the quarter.

Negatives

• Legacy SkyWater total revenue decreased 32% year-over-year to $64.1 million.
• Legacy SkyWater Tools revenue saw an 88% year-over-year decrease to $3.7 million.
• Legacy SkyWater ATS development revenue decreased 4% year-over-year to $54.2 million.
• Legacy SkyWater Wafer services revenue decreased 7% year-over-year to $6.2 million.

Risks

• Ability to continue operating fabrication facilities at full capacity.
• Ability to appropriately respond to changing technologies on a timely and cost-effective basis.
• Customer relationships and ability to retain and expand them.
• Ability to accurately predict future revenues for budgeting and expense adjustment.
• Dependence on largest customers and ability to diversify customer base.
• Ability to integrate Fab 25 operations and risks associated with its operation.
• Performance and reliability of third-party suppliers and manufacturers.
• Ability to procure tools, materials, and chemicals.
• Ability to control costs, including operating and capital expenses.
• Size and growth potential of markets for solutions, and ability to expand presence.
• Level of demand in customer end markets.
• Ability to attract, train, and retain key qualified personnel.
• Adverse litigation judgments, settlements, or other litigation-related costs.
• Changes in trade policies, including tariffs.
• Ability to raise additional capital or financing.
• Ability to accurately forecast demand.
• Changes in local, regional, national, and international economic or political conditions, including inflation, interest rates, recession, or hostilities.
• Level and timing of U.S. government program funding.
• Ability to maintain compliance with certain U.S. government contracting requirements.
• Regulatory developments in the United States and foreign countries.
• Ability to protect intellectual property rights.

Future Outlook

Management anticipates continued strong growth in the coming years, projecting Q4 2025 total consolidated revenue between $155.0 million and $165.0 million. The company expects to exceed 30% growth in ATS revenues from quantum customers in fiscal 2025 and plans for Advanced Packaging customer prototype builds in Florida later next year, following tool installations scheduled for completion in early-2026.

Management Comments

• "We're pleased to report financial results for the third quarter that exceeded our expectations across all metrics."
• "Revenues from multiple quantum computing customers reached a new quarterly record, and we are on track to exceed 30% growth in our ATS revenues from quantum customers in fiscal 2025."
• "We have signed four new quantum customers since the second quarter, building significant momentum as we establish SkyWater as the foundry partner of choice for this emerging growth end market."
• "We believe our exclusively U.S. focus and Trusted status as a pure-play foundry partner make us the ideal manufacturing partner for multiple quantum computing technologies, and we expect to announce continued momentum in the coming quarters."
• "We are very pleased to report financial results for our first full quarter of Texas operations that were significantly stronger than initially forecast."
• "At the same time, we witnessed an acceleration of program timing within our aerospace and defense end markets, which led to stronger ATS development revenues in the quarter, compared to forecast."
• "We believe 2025 is a transformative year for SkyWater, and anticipate continued strong growth ahead in the coming years."

Industry Context

SkyWater Technology operates as the largest exclusively U.S.-based, pure-play semiconductor foundry, positioning itself as a trusted partner for commercial and federal defense programs. The company is capitalizing on emerging growth markets like quantum computing, where its U.S. focus and Trusted status are key differentiators. The acquisition of Fab 25 in Texas significantly expands its operational footprint and capacity, aligning with broader industry trends towards strengthening domestic semiconductor supply chains and advanced manufacturing capabilities.

Stakeholder Impact

• Shareholders are positively impacted by record revenue, significant net income (including a bargain purchase gain), and strong non-GAAP performance, leading to higher diluted EPS.
• Customers in quantum computing and aerospace/defense benefit from new engagements and accelerated program execution, with future advanced packaging capabilities enhancing offerings.
• Employees may see increased opportunities due to operational expansion in Texas and Florida, though the risk of attracting and retaining key personnel is noted.
• Government programs are impacted by budget approval delays, but SkyWater's trusted status and U.S.-based operations remain strategically important for national infrastructure and supply chain resilience.

Next Steps

• Continue building momentum in quantum computing, with expectations for continued announcements in coming quarters.
• Complete tool installations for Advanced Packaging facilitization in Florida operations by early-2026.
• Initiate customer prototype builds in Florida Advanced Packaging operations later next year.
• Finalize purchase accounting for the Fab 25 acquisition over the next several quarters, which may impact the bargain purchase gain.

Key Dates

Recommendation

SkyWater Technology's Q3 2025 results are exceptionally strong, marked by record revenue and significant profitability, largely driven by the successful integration of its Texas operations and robust growth in the quantum computing sector. The company exceeded expectations across all metrics, demonstrating effective strategic execution and strong market positioning as a pure-play U.S. semiconductor foundry. Despite some declines in legacy revenue segments, the overall trajectory is highly positive, supported by a strong outlook for Q4 and beyond. The strategic focus on high-growth areas like quantum and advanced packaging, coupled with its trusted status, positions SkyWater for continued outperformance. This report signals a transformative period with substantial upside potential for investors.

Keywords

semiconductor foundry, quantum computing, Fab 25, Advanced Technology Services, ATS, wafer services, financial results, Q3 2025, SkyWater Technology, semiconductor manufacturing, aerospace and defense, advanced packaging, trusted foundry