SkyWater Technology, Inc. (NASDAQ:SKYT) Q4 2023 Earnings Call Transcript
SkyWater Technology, Inc. (NASDAQ:SKYT) Q4 2023 Earnings Call Transcript February 27, 2024
SkyWater Technology, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon. My name is Audrey, and I will be your conference operator today. At this time, I'd like to welcome everyone to the SkyWater Technology Fourth Quarter 2023 Financial Results Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I'd like to turn the conference over to Claire McAdams, Investor Relations for SkyWater Technology. Please go ahead.
Claire McAdams: Thank you, operator. Good afternoon, and welcome to SkyWater's fourth quarter and full year 2023 conference call. With me on the call today from SkyWater are Thomas Sonderman, Chief Executive Officer; and Steve Manko, Chief Financial Officer. I'd like to remind you that our call is being webcast live on SkyWater's Investor Relations website at ir.skywatertechnology.com. The webcast will be available for replay shortly after the call concludes. On our IR website, we also have posted an investor slide presentation as well as a financial supplement to accompany today's call. During the call, any statements made about future financial results and business are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially.
For a discussion of these risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our earnings release filed on Form 8-K today and our fiscal 2022 10-K. All forward-looking statements are made as of today, and we assume no obligation to update any such statements. During this call, we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release, our financial supplements and in our Q4 earnings presentation, all three of which are posted on our IR website. With that, I'll turn the call over to Tom.
Thomas Sonderman: Thank you, Claire, and good afternoon to everyone on the call. Today, we are pleased to report strong fourth quarter financial results. Revenues grew to a record $79 million, up 11% from Q3 and exceeded our expectations due to continued sequential growth in our ATS development business, which was up 6% from Q3. As expected, tool revenues totaled nearly $10 million for the quarter. As we discussed on our last call, we are entering a new multiyear stage of increased levels of customer-funded CapEx in support of our growing ATS business. The CapEx investments being made by our customers are targeted at building our platform development capability and putting the necessary capacity in place for volume production.
Consistent with our expectations going into the quarter, Wafer Services revenues were $12 million, down 17% from Q3, driven by the continued softening in end market demand, chiefly from the broader industrial sector. In spite of this end market softness, the continued strong customer demand for ATS development business has driven six straight quarters of sequential growth and record revenue performance. For fiscal year 2023, we exceeded our long-term targets with total revenues growing 35% from fiscal 2022. The strength of ATS within a backdrop of an overall weak end market was reflected by the changing mix of revenues in 2023 with an 80-20 mix of total ATS revenues to Wafer Services compared to about two-thirds, one-third in 2022. As we have demonstrated, ATS is the major growth driver for SkyWater's business both for 2023 and we believe for the next several years as we continue to develop new advanced technologies for the aerospace, defense and commercial markets.
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