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Illiquid
+23.5% yesterday. +6% pre-market.
@theaustinlyons:
https://t.co/4PRcJrUWHr
$SKYT Q3 2025 earnings: Transformation Confirmed: Fab 25 Reshapes the P&L
SkyWater's Q3 marked a structural break from its history. The integration of the newly acquired Fab 25 (Texas) drove a massive revenue surge to $150.7M (+155% QoQ), beating the high end of guidance. More importantly, the deal is proving immediately accretive: Adjusted EBITDA jumped to $25.8M (17.1% margin) from just $2.3M last quarter. However, investors must look past the headline GAAP Net Income of $144M, which is inflated by a one-time $110.8M 'bargain purchase gain' from the acquisition. While the new scale is impressive, organic ATS (Advanced Technology Services) revenue remains lumpy, expected to dip in Q4 due to government funding timing.
๐ ๐๐๐น๐น ๐๐ฎ๐๐ฒ
๐ค๐๐ฎ๐ป๐๐๐บ ๐๐๐ฝ๐ฒ๐ฟ-๐๐ฟ๐ผ๐๐๐ต: The 'Technology as a Service' model is winning in Quantum. Revenue from quantum customers is set to exceed 30% growth in FY25 and again in FY26. SkyWater signed 4 new quantum customers in Q3 alone, validating its position as the 'neutral foundry' for this sector.
๐๐ฎ๐ฏ ๐ฎ๐ฑ ๐๐ฐ๐ผ๐ป๐ผ๐บ๐ถ๐ฐ๐ ๐๐ฒ๐๐๐ฒ๐ฟ ๐ง๐ต๐ฎ๐ป ๐๐ฒ๐ฎ๐ฟ๐ฒ๐ฑ: The Texas facility generated $86.6M in revenue (vs. ~$80M normalized expectation) and contributed significant gross profit. The 'take-or-pay' agreement provides a safety net while SkyWater optimizes the mix.
๐ป ๐๐ฒ๐ฎ๐ฟ ๐๐ฎ๐๐ฒ
๐ข๐ฟ๐ด๐ฎ๐ป๐ถ๐ฐ ๐๐ง๐ฆ ๐ฆ๐๐ฎ๐ด๐ป๐ฎ๐๐ถ๐ผ๐ป: Stripping away the acquisition, Legacy ATS revenue fell 4% YoY. While Q3 saw a pull-in, guidance for Q4 implies a sequential decline to ~$50M. The business remains heavily exposed to erratic DoD funding cycles.
๐๐ฎ๐ฟ๐ป๐ถ๐ป๐ด๐ ๐ค๐๐ฎ๐น๐ถ๐๐ ๐ก๐ผ๐ถ๐๐ฒ: Q3 Gross Margin (24.6%) was boosted by roughly $12M of non-recurring benefits, including 'pure profit' from purchase accounting and warranty reversals. The normalized margin is lower, making the sequential bridge to FY26 profitability harder to model.
โ๏ธ ๐ฉ๐ฒ๐ฟ๐ฑ๐ถ๐ฐ๐
๐ข Bullish. The execution risk of the Fab 25 integration was the primary bear argument, and early results suggest it's going better than planned. The combined entity generates real EBITDA ($60M+ run rate implies safety), effectively de-risking the balance sheet while retaining the high-upside Quantum option.
โ โข โ โข โ
๐ง๐ต๐ฒ๐บ๐ฒ๐
New: ๐ข๐ข ๐๐ฎ๐ฏ ๐ฎ๐ฑ ๐๐ป๐๐ฒ๐ด๐ฟ๐ฎ๐๐ถ๐ผ๐ป ๐ข๐๐๐ฝ๐ฒ๐ฟ๐ณ๐ผ๐ฟ๐บ๐ฎ๐ป๐ฐ๐ฒ
The Texas acquisition is not just adding revenue; it's adding cash flow faster than anticipated. Texas revenue hit $86.6M, driven by higher Work-In-Progress (WIP) levels inherited from Infineon. While this will normalize to ~$80M/quarter in 2026, the gross profit contribution is running ~$5M/quarter higher than initial models due to cost synergies and accounting favorability.
๐ข ๐ค๐๐ฎ๐ป๐๐๐บ ๐๐ผ๐บ๐ฝ๐๐๐ถ๐ป๐ด ๐ฉ๐ฒ๐น๐ผ๐ฐ๐ถ๐๐
Accelerating. SkyWater is cementing itself as the 'picks and shovels' play for Quantum. With 7 active commercial customers (up from 3 previously) and >30% revenue growth projected for FY25 and FY26, this segment is moving from R&D experiments to scalable manufacturing revenue. Naming specific customers like Silicon Quantum Computing and QuamCore adds credibility to the pipeline.
โช ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐๐๐ป๐ฑ๐ถ๐ป๐ด ๐๐ฟ๐ถ๐ฐ๐๐ถ๐ผ๐ป
Stable but frustrating. The Aerospace & Defense (A&D) vertical continues to suffer from U.S. budget delays (Continuing Resolutions). Q3 benefited from a ~$4M revenue pull-in, but this creates a hole in Q4, guiding ATS down sequentially. Until a full federal budget passes, this segment lacks linearity.
New: โช ๐ข๐ป๐ฒ-๐ง๐ถ๐บ๐ฒ ๐ ๐ฎ๐ฟ๐ด๐ถ๐ป ๐๐ป๐ณ๐น๐ฎ๐๐ถ๐ผ๐ป
Quality of earnings check required. Q3 Gross Margin of 24.6% was artificially high. Management identified ~$12M in unique Q3 benefits: revenue recognized at 100% margin due to purchase accounting, warranty accrual reversals, and lower tariff exposure. Backing these out, underlying margins are closer to the high-teens, which aligns with the Q4 guidance o[...]
+23.5% yesterday. +6% pre-market.
@theaustinlyons:
https://t.co/4PRcJrUWHr
$SKYT Q3 2025 earnings: Transformation Confirmed: Fab 25 Reshapes the P&L
SkyWater's Q3 marked a structural break from its history. The integration of the newly acquired Fab 25 (Texas) drove a massive revenue surge to $150.7M (+155% QoQ), beating the high end of guidance. More importantly, the deal is proving immediately accretive: Adjusted EBITDA jumped to $25.8M (17.1% margin) from just $2.3M last quarter. However, investors must look past the headline GAAP Net Income of $144M, which is inflated by a one-time $110.8M 'bargain purchase gain' from the acquisition. While the new scale is impressive, organic ATS (Advanced Technology Services) revenue remains lumpy, expected to dip in Q4 due to government funding timing.
๐ ๐๐๐น๐น ๐๐ฎ๐๐ฒ
๐ค๐๐ฎ๐ป๐๐๐บ ๐๐๐ฝ๐ฒ๐ฟ-๐๐ฟ๐ผ๐๐๐ต: The 'Technology as a Service' model is winning in Quantum. Revenue from quantum customers is set to exceed 30% growth in FY25 and again in FY26. SkyWater signed 4 new quantum customers in Q3 alone, validating its position as the 'neutral foundry' for this sector.
๐๐ฎ๐ฏ ๐ฎ๐ฑ ๐๐ฐ๐ผ๐ป๐ผ๐บ๐ถ๐ฐ๐ ๐๐ฒ๐๐๐ฒ๐ฟ ๐ง๐ต๐ฎ๐ป ๐๐ฒ๐ฎ๐ฟ๐ฒ๐ฑ: The Texas facility generated $86.6M in revenue (vs. ~$80M normalized expectation) and contributed significant gross profit. The 'take-or-pay' agreement provides a safety net while SkyWater optimizes the mix.
๐ป ๐๐ฒ๐ฎ๐ฟ ๐๐ฎ๐๐ฒ
๐ข๐ฟ๐ด๐ฎ๐ป๐ถ๐ฐ ๐๐ง๐ฆ ๐ฆ๐๐ฎ๐ด๐ป๐ฎ๐๐ถ๐ผ๐ป: Stripping away the acquisition, Legacy ATS revenue fell 4% YoY. While Q3 saw a pull-in, guidance for Q4 implies a sequential decline to ~$50M. The business remains heavily exposed to erratic DoD funding cycles.
๐๐ฎ๐ฟ๐ป๐ถ๐ป๐ด๐ ๐ค๐๐ฎ๐น๐ถ๐๐ ๐ก๐ผ๐ถ๐๐ฒ: Q3 Gross Margin (24.6%) was boosted by roughly $12M of non-recurring benefits, including 'pure profit' from purchase accounting and warranty reversals. The normalized margin is lower, making the sequential bridge to FY26 profitability harder to model.
โ๏ธ ๐ฉ๐ฒ๐ฟ๐ฑ๐ถ๐ฐ๐
๐ข Bullish. The execution risk of the Fab 25 integration was the primary bear argument, and early results suggest it's going better than planned. The combined entity generates real EBITDA ($60M+ run rate implies safety), effectively de-risking the balance sheet while retaining the high-upside Quantum option.
โ โข โ โข โ
๐ง๐ต๐ฒ๐บ๐ฒ๐
New: ๐ข๐ข ๐๐ฎ๐ฏ ๐ฎ๐ฑ ๐๐ป๐๐ฒ๐ด๐ฟ๐ฎ๐๐ถ๐ผ๐ป ๐ข๐๐๐ฝ๐ฒ๐ฟ๐ณ๐ผ๐ฟ๐บ๐ฎ๐ป๐ฐ๐ฒ
The Texas acquisition is not just adding revenue; it's adding cash flow faster than anticipated. Texas revenue hit $86.6M, driven by higher Work-In-Progress (WIP) levels inherited from Infineon. While this will normalize to ~$80M/quarter in 2026, the gross profit contribution is running ~$5M/quarter higher than initial models due to cost synergies and accounting favorability.
๐ข ๐ค๐๐ฎ๐ป๐๐๐บ ๐๐ผ๐บ๐ฝ๐๐๐ถ๐ป๐ด ๐ฉ๐ฒ๐น๐ผ๐ฐ๐ถ๐๐
Accelerating. SkyWater is cementing itself as the 'picks and shovels' play for Quantum. With 7 active commercial customers (up from 3 previously) and >30% revenue growth projected for FY25 and FY26, this segment is moving from R&D experiments to scalable manufacturing revenue. Naming specific customers like Silicon Quantum Computing and QuamCore adds credibility to the pipeline.
โช ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐๐๐ป๐ฑ๐ถ๐ป๐ด ๐๐ฟ๐ถ๐ฐ๐๐ถ๐ผ๐ป
Stable but frustrating. The Aerospace & Defense (A&D) vertical continues to suffer from U.S. budget delays (Continuing Resolutions). Q3 benefited from a ~$4M revenue pull-in, but this creates a hole in Q4, guiding ATS down sequentially. Until a full federal budget passes, this segment lacks linearity.
New: โช ๐ข๐ป๐ฒ-๐ง๐ถ๐บ๐ฒ ๐ ๐ฎ๐ฟ๐ด๐ถ๐ป ๐๐ป๐ณ๐น๐ฎ๐๐ถ๐ผ๐ป
Quality of earnings check required. Q3 Gross Margin of 24.6% was artificially high. Management identified ~$12M in unique Q3 benefits: revenue recognized at 100% margin due to purchase accounting, warranty accrual reversals, and lower tariff exposure. Backing these out, underlying margins are closer to the high-teens, which aligns with the Q4 guidance o[...]
Offshore
Illiquid +23.5% yesterday. +6% pre-market. @theaustinlyons: https://t.co/4PRcJrUWHr $SKYT Q3 2025 earnings: Transformation Confirmed: Fab 25 Reshapes the P&L SkyWater's Q3 marked a structural break from its history. The integration of the newly acquiredโฆ
f 17-20%.
๐ด ๐ช๐ผ๐ฟ๐ธ๐ถ๐ป๐ด ๐๐ฎ๐ฝ๐ถ๐๐ฎ๐น ๐ฆ๐๐ฟ๐ฎ๐ถ๐ป
Accounts Receivable ballooned to $85.1M (from $54.3M in Q2), dragging Operating Cash Flow to a modest $7.1M YTD despite the EBITDA surge. Integrating a facility of Fab 25's size requires significant working capital injection, which may constrain near-term free cash flow generation until collections normalize.
New: โช ๐๐น๐ผ๐ฟ๐ถ๐ฑ๐ฎ ๐๐ฑ๐๐ฎ๐ป๐ฐ๐ฒ๐ฑ ๐ฃ๐ฎ๐ฐ๐ธ๐ฎ๐ด๐ถ๐ป๐ด ๐ฅ๐ฎ๐บ๐ฝ
Accelerating. Tool installation in the Florida facility is expediting, with completion expected in early 2026. This is a critical unlocking mechanism for A&D clients who need secure, domestic heterogeneous integration (combining different chips in one package). Revenue contribution is expected to ramp in 2H 2026.
โ โข โ โข โ
๐ข๐๐ต๐ฒ๐ฟ ๐๐ฃ๐๐
๐๐ฑ๐ท๐๐๐๐ฒ๐ฑ ๐๐๐๐ง๐๐ (๐ฎ๐ฑ๐ค๐ฏ): $๐ฎ๐ฑ.๐ด ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Accelerating. A step-change from the $2-4M range seen in H1 2025. This 17.1% margin provides the first concrete proof that the Fab 25 acquisition creates operating leverage, although Q4 guidance suggests a slight normalization to ~$19M.
๐๐๐๐ฃ ๐ก๐ฒ๐ ๐๐ป๐ฐ๐ผ๐บ๐ฒ (๐ฎ๐ฑ๐ค๐ฏ): $๐ญ๐ฐ๐ฐ.๐ฌ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Distorted. Includes a $110.8M 'bargain purchase gain' (buying Fab 25 for less than fair value of assets) and a $31.8M tax benefit. Real economic earnings are better reflected by Non-GAAP Net Income of $11.5M.
๐๐ฒ๐ด๐ฎ๐ฐ๐ ๐ง๐ผ๐ผ๐น๐ ๐ฅ๐ฒ๐๐ฒ๐ป๐๐ฒ (๐ฎ๐ฑ๐ค๐ฏ): $๐ฏ.๐ณ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Reversing. Down 88% YoY from $30.7M in 24Q3. While low-margin, this revenue stream funds CapEx. Guidance suggests a rebound to $17-18M in Q4, indicating the lumpiness is timing-related.
โ โข โ โข โ
๐๐๐ถ๐ฑ๐ฎ๐ป๐ฐ๐ฒ
๐ฎ๐ฑ๐ค๐ฐ ๐ง๐ผ๐๐ฎ๐น ๐ฅ๐ฒ๐๐ฒ๐ป๐๐ฒ: $๐ญ๐ฑ๐ฑ - $๐ญ๐ฒ๐ฑ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Accelerating vs YoY (due to acquisition), but stable sequentially (+6% at midpoint vs Q3). Includes continued elevated Texas revenue ($84-88M) before normalizing in 2026.
๐ฎ๐ฑ๐ค๐ฐ ๐๐ฒ๐ด๐ฎ๐ฐ๐ ๐๐ง๐ฆ ๐ฅ๐ฒ๐๐ฒ๐ป๐๐ฒ: $๐ฐ๐ด - $๐ฑ๐ฎ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Decelerating. Down from $54.2M in Q3. This reflects the pull-in of ~$4M A&D revenue into Q3 and ongoing government budget delays.
๐ฎ๐ฌ๐ฎ๐ฒ ๐๐ฎ๐๐ฒ๐น๐ถ๐ป๐ฒ ๐ข๐๐๐น๐ผ๐ผ๐ธ: $๐ฒ๐ฌ๐ฌ๐ ๐ฅ๐ฒ๐ / $๐ฒ๐ฌ๐ ๐๐๐๐ง๐๐
Stable/Conservative. Management reiterated this floor, calling it 'conservative' given recent momentum. This implies ~10% EBITDA margins, lower than the 17% achieved in Q3, factoring in the roll-off of one-time benefits.
๐ฎ๐ฑ๐ค๐ฐ ๐ก๐ผ๐ป-๐๐๐๐ฃ ๐๐ฟ๐ผ๐๐ ๐ ๐ฎ๐ฟ๐ด๐ถ๐ป: ๐ญ๐ณ.๐ฌ% - ๐ฎ๐ฌ.๐ฌ%
Decelerating vs Q3 (24.6%) but Accelerating vs Q2 (19.5%). The drop from Q3 reflects the absence of one-time purchase accounting benefits and warranty reversals. - Finsee tweet
๐ด ๐ช๐ผ๐ฟ๐ธ๐ถ๐ป๐ด ๐๐ฎ๐ฝ๐ถ๐๐ฎ๐น ๐ฆ๐๐ฟ๐ฎ๐ถ๐ป
Accounts Receivable ballooned to $85.1M (from $54.3M in Q2), dragging Operating Cash Flow to a modest $7.1M YTD despite the EBITDA surge. Integrating a facility of Fab 25's size requires significant working capital injection, which may constrain near-term free cash flow generation until collections normalize.
New: โช ๐๐น๐ผ๐ฟ๐ถ๐ฑ๐ฎ ๐๐ฑ๐๐ฎ๐ป๐ฐ๐ฒ๐ฑ ๐ฃ๐ฎ๐ฐ๐ธ๐ฎ๐ด๐ถ๐ป๐ด ๐ฅ๐ฎ๐บ๐ฝ
Accelerating. Tool installation in the Florida facility is expediting, with completion expected in early 2026. This is a critical unlocking mechanism for A&D clients who need secure, domestic heterogeneous integration (combining different chips in one package). Revenue contribution is expected to ramp in 2H 2026.
โ โข โ โข โ
๐ข๐๐ต๐ฒ๐ฟ ๐๐ฃ๐๐
๐๐ฑ๐ท๐๐๐๐ฒ๐ฑ ๐๐๐๐ง๐๐ (๐ฎ๐ฑ๐ค๐ฏ): $๐ฎ๐ฑ.๐ด ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Accelerating. A step-change from the $2-4M range seen in H1 2025. This 17.1% margin provides the first concrete proof that the Fab 25 acquisition creates operating leverage, although Q4 guidance suggests a slight normalization to ~$19M.
๐๐๐๐ฃ ๐ก๐ฒ๐ ๐๐ป๐ฐ๐ผ๐บ๐ฒ (๐ฎ๐ฑ๐ค๐ฏ): $๐ญ๐ฐ๐ฐ.๐ฌ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Distorted. Includes a $110.8M 'bargain purchase gain' (buying Fab 25 for less than fair value of assets) and a $31.8M tax benefit. Real economic earnings are better reflected by Non-GAAP Net Income of $11.5M.
๐๐ฒ๐ด๐ฎ๐ฐ๐ ๐ง๐ผ๐ผ๐น๐ ๐ฅ๐ฒ๐๐ฒ๐ป๐๐ฒ (๐ฎ๐ฑ๐ค๐ฏ): $๐ฏ.๐ณ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Reversing. Down 88% YoY from $30.7M in 24Q3. While low-margin, this revenue stream funds CapEx. Guidance suggests a rebound to $17-18M in Q4, indicating the lumpiness is timing-related.
โ โข โ โข โ
๐๐๐ถ๐ฑ๐ฎ๐ป๐ฐ๐ฒ
๐ฎ๐ฑ๐ค๐ฐ ๐ง๐ผ๐๐ฎ๐น ๐ฅ๐ฒ๐๐ฒ๐ป๐๐ฒ: $๐ญ๐ฑ๐ฑ - $๐ญ๐ฒ๐ฑ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Accelerating vs YoY (due to acquisition), but stable sequentially (+6% at midpoint vs Q3). Includes continued elevated Texas revenue ($84-88M) before normalizing in 2026.
๐ฎ๐ฑ๐ค๐ฐ ๐๐ฒ๐ด๐ฎ๐ฐ๐ ๐๐ง๐ฆ ๐ฅ๐ฒ๐๐ฒ๐ป๐๐ฒ: $๐ฐ๐ด - $๐ฑ๐ฎ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป
Decelerating. Down from $54.2M in Q3. This reflects the pull-in of ~$4M A&D revenue into Q3 and ongoing government budget delays.
๐ฎ๐ฌ๐ฎ๐ฒ ๐๐ฎ๐๐ฒ๐น๐ถ๐ป๐ฒ ๐ข๐๐๐น๐ผ๐ผ๐ธ: $๐ฒ๐ฌ๐ฌ๐ ๐ฅ๐ฒ๐ / $๐ฒ๐ฌ๐ ๐๐๐๐ง๐๐
Stable/Conservative. Management reiterated this floor, calling it 'conservative' given recent momentum. This implies ~10% EBITDA margins, lower than the 17% achieved in Q3, factoring in the roll-off of one-time benefits.
๐ฎ๐ฑ๐ค๐ฐ ๐ก๐ผ๐ป-๐๐๐๐ฃ ๐๐ฟ๐ผ๐๐ ๐ ๐ฎ๐ฟ๐ด๐ถ๐ป: ๐ญ๐ณ.๐ฌ% - ๐ฎ๐ฌ.๐ฌ%
Decelerating vs Q3 (24.6%) but Accelerating vs Q2 (19.5%). The drop from Q3 reflects the absence of one-time purchase accounting benefits and warranty reversals. - Finsee tweet
Offshore
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JUST IN: Michael Saylor's 'Strategy' buys 1,286 Bitcoin worth $116 million.
saylor when everyone selling https://t.co/KZdk0qASF4
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JUST IN: Michael Saylor's 'Strategy' buys 1,286 Bitcoin worth $116 million.
saylor when everyone selling https://t.co/KZdk0qASF4
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Offshore
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memenodes
When your daughter and your wife's son both love the same guy. https://t.co/YOTBYzCwPI
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When your daughter and your wife's son both love the same guy. https://t.co/YOTBYzCwPI
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Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: 15 Quality Stocks With Estimated FCF CAGR >15% Over Next 3 Years ๐ธ
1. $UBER +15%
2. $MA +16%
3. $META +17%
4. $MSFT +17%
5. $HWM +19%
6. $TDG +20%
7. $NFLX +24%
8. $GOOG +26%
9. $FICO +27%
10. $SNPS +32%
11. $NVDA +33%
12. $TSM +33%
13. $ASML +44%
14. $AMD +52%
15. $AMZN +71%
tweet
RT @DimitryNakhla: 15 Quality Stocks With Estimated FCF CAGR >15% Over Next 3 Years ๐ธ
1. $UBER +15%
2. $MA +16%
3. $META +17%
4. $MSFT +17%
5. $HWM +19%
6. $TDG +20%
7. $NFLX +24%
8. $GOOG +26%
9. $FICO +27%
10. $SNPS +32%
11. $NVDA +33%
12. $TSM +33%
13. $ASML +44%
14. $AMD +52%
15. $AMZN +71%
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Offshore
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Dimitry Nakhla | Babylon Capitalยฎ
RT @SahilBloom: Today is my 35th birthday. This is a personal message for anyone feeling lost, stuck, or behind in life. https://t.co/TNaPXBLYQx
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RT @SahilBloom: Today is my 35th birthday. This is a personal message for anyone feeling lost, stuck, or behind in life. https://t.co/TNaPXBLYQx
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