0001819974-26-000014
SEC filingRevenue surged 162% to $160.7M, driven by Fab 25 acquisition, but net loss widened 68% to $12.3M on startup costs and non-recurring charges.
For the first quarter of 2026, SkyWater reported total revenue of $160.7 million, a 162% increase from $61.3 million in the prior-year quarter. The growth was overwhelmingly driven by the Fab 25 acquisition completed in June 2025, which contributed $86.3 million in Wafer Services revenue from the new SkyWater Texas segment. Legacy SkyWater revenue increased 21% to $74.4 million, supported by a 702% jump in Tools revenue ($9.9 million) and a 27% rise in Wafer Services ($9.5 million). ATS development revenue grew only 5% as a $27.2 million decline in aerospace and defense revenue — due to U.S. government policy shifts and program terminations — offset strong gains in advanced compute ($19.9 million) and other end markets. Gross profit rose 126% to $32.2 million, but gross margin contracted meaningfully within Legacy SkyWater (from 23% to 18%), driven by a $4.7 million in incremental tool installation costs and negative tool margins. Operating loss widened 31% to $5.3 million, while net loss attributable to SkyWater increased 68% to $12.3 million. Adjusted EBITDA, a non-GAAP measure, grew 222% to $13.0 million, benefitting from the Fab 25 addition and associated off-market supply agreement revenue.
Legacy SkyWater: Revenue grew 21% to $74.4 million, but gross profit fell 9% to $13.0 million, compressing margins. The segment incurred a net loss of $23.1 million, a $17 million increase from the prior year, due to tool margin degradation, $6.9 million in consulting fees from a contract modification, and $3.7 million in transaction and integration costs related to the IonQ merger and Fab 25 acquisition. The Florida facility ramp-up added costs, though these are expected to decline as the site matures.
SkyWater Texas: This new segment, formed via the Fab 25 acquisition, generated $86.3 million in revenue, including $10.2 million of non-cash revenue from the off-market component of the supply agreement with Infineon. Gross profit was $19.1 million (22% margin) and net income was $11.9 million. The segment is a significant growth driver but carries integration and transitional services costs.
Management highlighted several trends affecting the business, including macroeconomic conditions, CHIPS Act funding (up to $16 million federal plus $19 million state), and customer-funded capital investments. The pending acquisition by IonQ, expected to close in Q2/Q3 2026, introduces regulatory uncertainty and prohibits share issuance under the ATM program. Capital expenditures decreased to $10.1 million in Q1 2026 (from $15.2 million a year ago), and the company maintains $22.2 million in cash with $61.8 million available under its $350 million revolving credit facility, which matures in 2030. No specific revenue or earnings guidance was provided, but management expects sufficient liquidity for at least the next twelve months.
As of March 29, 2026, SkyWater held $22.2M in cash and cash equivalents, down slightly from $23.2M at year-end 2025. Total debt stood at $209.5M, comprising $182.4M drawn on the revolver (classified as current due to a lockbox clause), $33.2M in VIE financing, and $6.0M in tool financing loans. Shareholders' equity was $187.9M, including $7.6M in noncontrolling interests. The company's accumulated deficit widened to $(27.4)M from $(15.1)M at December 28, 2025, reflecting the net loss attributable to SkyWater of $12.3M in the quarter.
Total contract liabilities were $178.6M, including $126.8M in contract deferred revenue and $51.8M in supply agreement deferred revenue. The off-market component of the Infineon supply agreement, initially recorded at $120.0M in purchase accounting, was reduced to $92.1M after recognizing $10.2M of revenue in the quarter. Capital expenditure commitments totaled $3.5M, expected to be paid within 12 months. The company also has a $9.1M matching contribution commitment under the Build Back Better grant, with $4.9M unpaid as of quarter-end. Future minimum lease commitments to Oxbow Realty (eliminated in consolidation) total $87.2M, with $28.1M representing the present value of lease payments.
No share buybacks or dividends were disclosed. The company drew $147.5M on its revolver and repaid $164.8M, resulting in a net reduction of $17.3M in short-term financing. Principal payments on long-term debt were $1.4M. Capital expenditures totaled $9.1M (5.6% of revenue), with an additional $27.0M in capital expenditures incurred but not yet paid. A subsequent event in April 2026 involved a $36.6M tool financing sale-leaseback at 11.9% interest.
Following the Fab 25 acquisition, SkyWater reports two segments: Legacy SkyWater ($74.4M revenue, $(17.3)M operating loss) and SkyWater Texas ($86.3M revenue, $12.0M operating income). The Texas segment contributed 53.7% of total revenue and generated positive operating income, while Legacy SkyWater remained unprofitable at the operating level. Geographically, 94.2% of revenue came from the United States, with Canada (2.8%), Hong Kong (0.5%), Israel (0.8%), and others (1.7%) comprising the remainder. Three customers accounted for 78% of revenue in the quarter.
Operating cash flow of $27.9M significantly exceeded the net loss of $11.2M, indicating strong cash generation from non-cash charges and working capital. Key non-cash add-backs included $14.2M of depreciation and amortization, $2.6M of equity-based compensation, and a $10.2M revenue benefit from the off-market component of a supply agreement. However, the $51.4M prior-year contract liability tailwind reversed to a $2.9M headwind, causing the steep year-over-year decline in CFO.
Capital expenditures of $9.1M (down from $14.8M YoY) resulted in negative free cash flow of -$18.2M. The company did not repurchase shares or pay dividends. Financing activities used $18.8M, primarily from net repayments on the revolving credit facility ($17.3M net repayment) and $1.4M in long-term debt payments, partly offset by $2.1M in equity issuance proceeds.
Anomalies include a large $27.0M in capital expenditures incurred but not yet paid (a non-cash investing activity), and $15.0M in investment tax credits not yet received, which may impact future cash flows. Overall, cash and equivalents declined by $1.0M to $22.2M.