SkyWater Shares Jump on Q2 Earnings Beat, Robust Q3 Guidance

SkyWater SKYT shares have jumped 58.7% since it reported second-quarter 2025 results on Aug. 6. The momentum can be attributed to better-than-expected results as well as robust third-quarter guidance driven by strong contribution from Infineon’s flagship Fab 25 in Austin, TX, the acquisition of which SkyWater completed in the reported quarter.

In the second quarter of 2025, SKYT reported a non-GAAP loss of 11 cents per share, surpassing the Zacks Consensus Estimate by 35.29%. The company reported earnings of 2 cents in the year-ago quarter and a loss of 8 cents in the first quarter of 2025. 

The company now expects Fab 25 to approximately double the annual level of revenues ($300 million) and adjusted EBITDA, and generate immediate positive free cash flow. For the third quarter of 2025, SkyWater expects revenues between $130 million and $141 million. Wafer Services revenues are expected to be between $80 million and $86 million. ATS Development revenues are expected in the $48 million to $52 million range.

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $135.5 million, suggesting 44.4% growth from the figure reported in the year-ago quarter.
 

SkyWater Technology, Inc. Price, Consensus and EPS Surprise

SkyWater Technology, Inc. price-consensus-eps-surprise-chart | SkyWater Technology, Inc. Quote

SkyWater shares have climbed 2% year to date, underperforming the Zacks Computer & Technology sector’s 13.8% return.

SkyWater Q2 Quarter Details

Revenues of $59.1 million declined 36.7% year over year but beat the consensus mark by 3.08%. Sequentially, revenues fell 3.4%.

ATS Development revenues (89% of revenues) fell 14.7% year over year to $52.6 million, which was almost unchanged sequentially. Wafer Services revenues (9.1% of revenues) fell 6.9% year over year and 28% quarter over quarter to $5.4 million. Tools revenues (1.9% of revenues) plunged 95.8% year over year and 8.3% sequentially to $1.1 million.

SkyWater’s second-quarter non-GAAP gross margin expanded 60 basis points (bps) to 19.5%. However, sequentially, gross margin contracted 470 bps.

In the reported quarter, research and development expenses were $3.3 million, down 1.1% year over year but up 2.8% sequentially. Selling, general, and administrative expenses rose 0.5% year over year but declined 14.1% sequentially to $10.3 million.

SkyWater’s Balance Sheet Details

As of June 29, 2025, SKYT had cash and cash equivalents of $49.4 million.

Long-term debt as of June 29, 2025, was $42.1 million.

In the reported quarter, SkyWater completed the acquisition of Infineon’s flagship Fab 25 in Austin, TX, which was entirely funded by a new senior secured revolving credit facility providing borrowing capacity of up to $350 million.

SKYT Provides Q3 Margin and Loss Guidance

The non-GAAP operating margin is expected between 11% and 14% for the third quarter of 2025. The non-GAAP operating expenses are expected to be between $18 million and $20 million.

SkyWater expects a loss between 20 cents and 14 cents per share for the third quarter of 2025.

Zacks Rank & Stocks to Consider

SkyWater currently carries a Zacks Rank #3 (Hold).

Lumentum LITE, Cisco Systems CSCO and Vipshop VIPS are some stocks worth considering in the broader Zacks Computer and Technology sector. While Vipshop currently sports a Zacks Rank #1, Cisco and Lumentum carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lumentum shares have jumped 38.5% year to date. Lumentum is set to report its second-quarter 2025 results on Aug. 12.

Cisco Systems shares have appreciated 21.3% year to date. Cisco is set to report its fourth-quarter fiscal 2025 results on Aug. 13.

Vipshop shares are up 13.9% year to date. Vipshop is set to report its second-quarter 2025 results on Aug. 14.

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This article originally published on Zacks Investment Research (zacks.com).

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