Thu, May 8, 4:57 PM (4 days ago)
### SkyWater Technology, Inc. (SKYT) Q1 2025 Financial Summary **Financial Health and Performance:** - **Revenue:** $61.3 million, down 23% from $79.6 million in Q1 2024. - **Gross Profit:** $14.3 million, up 10% from $13.0 million in Q1 2024. - **Operating Loss:** $4.0 million, up 83% from $2.2 million in Q1 2024. - **Net Loss:** $7.3 million, up 28% from $5.7 million in Q1 2024. - **Adjusted EBITDA:** $4.0 million, down 18% from $4.9 million in Q1 2024. **Profit Margins:** - **Gross Margin:** Approximately 23.3%. - **Operating Margin:** Approximately -6.5%. **Cash Flow:** - **Operating Cash Flow:** $56.0 million, up from a negative $3.9 million in Q1 2024. - **Investing Cash Flow:** -$15.2 million, up from -$2.1 million in Q1 2024. - **Financing Cash Flow:** -$8.4 million, down from $7.6 million in Q1 2024. **Earnings Changes:** - **Revenue Decline:** Driven by decreases in Tool and ATS revenue. - **Cost of Revenue:** Decreased by $19.6 million due to completion of tool procurement and reduced development costs. - **Selling, General, and Administrative Expenses:** Increased by $3.9 million, primarily due to acquisition-related expenses. **Quarterly Performance Discussion:** - **Revenue Decline:** Primarily due to a decrease in Aerospace & Defense revenue, impacted by U.S. government policy changes and defense spending. - **Operating Loss Increase:** Driven by higher selling, general, and administrative expenses related to the acquisition of Infineon’s Fab 25 facility. - **Cash Flow Improvement:** Significant increase in operating cash flow due to changes in working capital and improved cash collection efforts. **Trends and Uncertainties:** - **Macroeconomic Factors:** Cyclicality, consolidation, and government funding in semiconductor technology. - **Trade Policies:** Potential impacts from tariffs and trade agreements. - **Customer Dependence:** High reliance on a few key customers, with two customers accounting for 53% of revenue in Q1 2025. - **Acquisition of Infineon’s Fab 25:** Expected to close mid-2025, financed through debt. **Future Operations Impact:** - **Liquidity:** Sufficient liquidity to continue operations and meet financial covenants for the next twelve months. - **Capital Expenditures:** Approximately $26.9 million in contractual commitments for capital expenditures. - **Debt Financing:** Revolver with a maximum facility amount of $130 million, maturing in December 2028. **Summary:** SkyWater Technology, Inc. faced a challenging quarter with significant revenue declines and increased operating losses. However, the company demonstrated strong operational cash flow and is positioned to execute its strategic acquisitions and maintain liquidity. The future outlook is influenced by macroeconomic factors, trade policies, and the successful integration of the Fab 25 acquisition.