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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

FORM 10-Q

______________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 29, 2026


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 001-40345

______________________

SkyWater Technology, Inc.

(Exact name of registrant as specified in its charter)

______________________


Delaware	2401 East 86th Street, Bloomington, Minnesota, 55425	37-1839853
(State or other jurisdiction of incorporation or organization)	(Address of registrant’s principal executive offices and zip code)	(I.R.S. Employer Identification No.)

Registrant’s telephone number, including area code: (952) 851-5200

______________________

Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class

Trading
Symbol

Name of Each Exchange
on Which Registered

Common stock, par value $0.01 per share

SKYT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 17(a)(2)(B) of the Securities Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

On May 5, 2026, the number of shares of common stock, $0.01 par value, outstanding was 49,204,602.

Table of Contents

SkyWater Technology, Inc.

TABLE OF CONTENTS


		Page No.

Forward-Looking Statements		3

PART I. FINANCIAL INFORMATION		5

Item 1.	Financial Statements	5

	Condensed Consolidated Balance Sheets	5

	Condensed Consolidated Statements of Operations	6

	Condensed Consolidated Statements of Shareholders’ Equity	7

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	41

PART II. OTHER INFORMATION		43

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that SkyWater Technology, Inc. (“SkyWater,” the “Company,” “we,” “us,” or “our”) believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, our expectations regarding our business, results of operations, financial condition and prospects, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “seek,” “potential,” “believe,” “will,” “could,” “should,” “would,” and “project” or the negative thereof or variations thereon or similar words or expressions that convey the uncertainty of future events or outcomes are generally intended to identify forward-looking statements.

Our forward-looking statements are subject to a number of risks, uncertainties, and assumptions. Key factors that may affect our results include, among others, the following:

•our goals and strategies;

•our future business development, financial condition, and results of operations;

•our ability to operate our fabrication facilities at full capacity;

•our ability to appropriately respond to changing technologies on a timely and cost-effective basis;

•our customer relationships and our ability to retain and expand our customer relationships;

•the timing and amount of funding our customers are able to secure for their purchase commitments;

•our ability to accurately predict our future revenues for the purpose of appropriately budgeting and adjusting our expenses;

•our expectations regarding dependence on our largest customers;

•our ability to diversify and expand our customer base and develop relationships in new markets;

•our ability to integrate the operations of the Fab 25 facility with our operations and risks associated with operating the Fab 25 facility;

•our increased indebtedness as a result of the Fab 25 facility acquisition;

•the performance and reliability of our third-party suppliers and manufacturers;

•our ability to procure tools, materials, and chemicals;

•our ability to control costs, including our operating and capital expenses;

•the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets;

•the level of demand in our customers’ end markets;

•our ability to attract, train, and retain key qualified personnel;

•adverse litigation judgments, settlements, or other litigation-related costs;

•changes in trade policies, including the imposition of or increase in tariffs;

•our ability to raise additional capital or financing;

•our ability to accurately forecast demand;

•changes in local, regional, national and international economic or political conditions, including those resulting from increases in inflation and interest rates, a recession, or intensified international hostilities;

•the level and timing of U.S. government program funding;

•our ability to maintain compliance with certain U.S. government contracting requirements;

•regulatory developments in the United States and foreign countries;

•our ability to protect our intellectual property rights;

Table of Contents

•risks and uncertainties associated with the proposed Mergers (as defined below) with IonQ (as defined below), including the following:

◦the risk that regulatory approvals are not obtained or are obtained subject to conditions that are not anticipated by IonQ and SkyWater;

◦IonQ’s ability to integrate SkyWater’s operations in a successful manner and in the expected time period following consummation of the proposed Mergers;

◦the possibility that any of the anticipated benefits and projected synergies of the potential transaction will not be realized or will not be realized within the expected time period;

◦the occurrence of any event, change or other circumstance that could give rise to the termination of the IonQ Merger Agreement (as defined below);

◦risks that the anticipated tax treatment of the potential transaction is not obtained, or other unforeseen or unknown liabilities;

◦customer or other stakeholder support, or unexpected future capital expenditures;

◦potential litigation relating to the potential transaction that could be instituted against IonQ and SkyWater or their respective directors, and the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

◦the effect of the announcement, pendency or completion of the potential transaction on the parties’ business relationships and business generally, and the risks that the potential transaction disrupts current plans and operations of IonQ or SkyWater and potential difficulties in SkyWater employee retention as a result of the transaction, as well as the risk of disruption of IonQ’s or SkyWater’s management and business disruption during the pendency of, or following, the potential transaction;

◦uncertainties as to whether the potential transaction will be consummated on the anticipated timing or at all, or if consummated, will achieve its anticipated economic benefits;

◦negative effects of the announcement of the transaction, and the pendency or completion of the proposed acquisition on the market price of IonQ’s or SkyWater’s common stock and/or operating results; and

•other factors disclosed in the section entitled “Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025 and this Quarterly Report on Form 10-Q.

Moreover, our business, results of operations, financial condition, and prospects may be affected by new risks that could emerge from time to time. In light of these risks, uncertainties and assumptions, the forward-looking events and outcomes discussed in this Quarterly Report on Form 10-Q may not occur and our actual results could differ materially and adversely from those expressed or implied in the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should not rely on forward-looking statements as predictions of future events or outcomes. Although we believe that the expectations reflected in the forward-looking statements are reasonable, the results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements may not be achieved or occur.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views only as of the date hereof. We anticipate that subsequent events and developments will cause our views to change. However, we undertake no obligation to update publicly any forward-looking statements to conform such statements to changes in expectations or to actual results, or for any other reason, except as required by law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date hereof.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Balance Sheets

(unaudited in thousands, except per share data)


	March 29, 2026		December 28, 2025

Assets
Current assets
Cash and cash equivalents	$	22,232	$	23,224
Accounts receivable, net of allowance for credit losses of $80 and $80, respectively	89,194		100,083
Contract assets, net of allowance for credit losses of $26 and $26, respectively	24,727		18,020
Inventory	25,576		24,600
Prepaid expenses and other current assets	20,347		27,269
Total current assets	182,076		193,196
Property and equipment, net	510,124		511,720
Intangible assets, net	10,006		9,168
Other assets	30,695		19,823
Total assets	$	732,901	$	733,907
Liabilities and shareholders’ equity
Current liabilities
Current portion of long-term debt	$	5,190	$	5,940
Accounts payable	59,708		34,871
Accrued expenses	64,383		56,612
Short-term financing, net of unamortized debt issuance costs	171,995		184,402
Contract liabilities	52,406		42,195
Income taxes payable	448		—
Total current liabilities	354,130		324,020
Long-term liabilities
Long-term debt, less current portion and net of unamortized debt issuance costs	32,332		32,939
Long-term contract liabilities	126,149		149,470
Deferred income tax liability, net	5,638		6,369
Other long-term liabilities	26,797		25,297
Total long-term liabilities	190,916		214,075
Total liabilities	545,046		538,095
Commitments and contingencies (Note 10)
Shareholders’ equity
Preferred stock, $0.01 par value per share (80,000 shares authorized; zero shares issued and outstanding as of March 29, 2026 and December 28, 2025)	—		—
Common stock, $0.01 par value per share (200,000 shares authorized; 49,157 and 48,608 shares issued and outstanding as of March 29, 2026 and December 28, 2025, respectively)	495		489
Additional paid-in capital	207,091		202,386
Accumulated deficit	(27,364)		(15,056)
Total shareholders’ equity, SkyWater Technology, Inc.	180,222		187,819
Noncontrolling interests	7,633		7,993
Total shareholders’ equity	187,855		195,812
Total liabilities and shareholders’ equity	$	732,901	$	733,907

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Statements of Operations

(unaudited in thousands, except per share data)


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Revenue	$	160,686	$	61,296
Cost of revenue	128,534		47,039
Gross profit	32,152		14,257
Research and development expense	4,997		3,249
Selling, general, and administrative expense	32,432		15,030
Operating loss	(5,277)		(4,022)
Other income (expense):

Interest expense	(6,159)		(1,812)
Total other income (expense)	(6,159)		(1,812)
Loss before income taxes	(11,436)		(5,834)
Income tax (benefit) expense	(284)		384
Net loss	(11,152)		(6,218)
Less: net income attributable to noncontrolling interests	1,156		1,127
Net loss attributable to SkyWater Technology, Inc.	$	(12,308)	$	(7,345)
Net loss per share attributable to common shareholders, basic and diluted	$	(0.25)	$	(0.15)
Weighted average shares used in computing net loss per common share, basic and diluted	48,775		47,791

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Statements of Shareholders’ Equity

For the Three-Month Periods Ended March 29, 2026 and March 30, 2025

(unaudited in thousands)


	Preferred Stock	Common Stock		Additional Paid-in Capital			Accumulated Deficit	Total Shareholders’ Equity, SkyWater Technology, Inc.			Noncontrolling Interests		Total Shareholders’ Equity
			Shares			Amount				Shares					Amount

Balance at December 29, 2024			—	$	—		47,704	$	478		$	189,132	$	(133,966)		$	55,644	$	5,876	$	61,520
Issuance of common stock pursuant to equity compensation plans			—	—			330	6			1,253		—			1,259		—		1,259
Equity-based compensation			—	—			—	—			1,879		—			1,879		—		1,879
Contribution from noncontrolling interest			—	—			—	—			—		—			—		626		626
Distribution to noncontrolling interest			—	—			—	—			—		—			—		(1,600)		(1,600)
Net (loss) income			—	—			—	—			—		(7,345)			(7,345)		1,127		(6,218)
Balance at March 30, 2025			—	$	—		48,034	$	484		$	192,264	$	(141,311)		$	51,437	$	6,029	$	57,466

Balance at December 28, 2025			—	$	—		48,608	$	489		$	202,386	$	(15,056)		$	187,819	$	7,993	$	195,812
Issuance of common stock pursuant to equity compensation plans			—	—			549	6			2,095		—			2,101		—		2,101
Equity-based compensation			—	—			—	—			2,610		—			2,610		—		2,610

Distribution to noncontrolling interest			—	—			—	—			—		—			—		(1,516)		(1,516)
Net (loss) income			—	—			—	—			—		(12,308)			(12,308)		1,156		(11,152)
Balance at March 29, 2026			—	$	—		49,157	$	495		$	207,091	$	(27,364)		$	180,222	$	7,633	$	187,855

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited in thousands)


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Cash flows from operating activities
Net loss	$	(11,152)	$	(6,218)
Adjustments to reconcile net loss to net cash flows provided by operating activities

Revenue from off-market component of supply agreement recorded in purchase accounting	(10,221)		—
Depreciation and amortization expense	14,199		4,505
Accretion of investment tax credits	(1,568)		(147)

Amortization of debt issuance costs included in interest expense	701		242
Equity-based compensation expense	2,610		1,879
Deferred income taxes	(732)		39
Provision for credit losses	—		355
Changes in operating assets and liabilities
Accounts receivable and contract assets	19,163		15,292
Inventory	(976)		315
Prepaid expenses, other current assets, and other assets	(3,949)		858
Accounts payable and accrued expenses	22,265		(12,565)
Contract liabilities, current and long-term	(2,888)		51,412
Income taxes receivable	448		—
Net cash provided by operating activities	27,900		55,967

Cash flows from investing activities
Purchase of software and technology licenses	(1,050)		(413)

Purchases of property and equipment	(9,050)		(14,770)

Net cash used in investing activities	(10,100)		(15,183)

Cash flows from financing activities
Proceeds from draws on the revolving line of credit	147,500		125,000
Repayment of draws on the revolving line of credit	(164,752)		(132,181)



Principal payments on long-term debt	(1,443)		(1,229)

Cash paid for principal on finance leases	(682)		(269)
Proceeds from the issuance of common stock pursuant to equity compensation plans	2,101		1,259

Contributions from noncontrolling interest	—		626
Distributions to noncontrolling interest	(1,516)		(1,600)
Net cash used in financing activities	(18,792)		(8,394)

Net change in cash and cash equivalents	(992)		32,390
Cash and cash equivalents - beginning of period	23,224		18,844
Cash and cash equivalents - end of period	$	22,232	$	51,234

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SKYWATER TECHNOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited in thousands)


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Supplemental disclosure of cash flow information:
Cash paid during the fiscal year for:
Interest	$	2,809	$	1,024

Noncash investing and financing activity:
Capital expenditures incurred, not yet paid	$	27,030	$	1,738
Intangible assets acquired, not yet paid	207		185
Investment tax credit not received	14,985		337

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 1 Nature of Business

SkyWater Technology, Inc., together with its consolidated subsidiaries (collectively, “SkyWater,” the “Company,” “we”, “us”, or “our”), is a U.S.-based, independent, pure-play semiconductor foundry providing foundational-node manufacturing, advanced technology development, and advanced packaging services through an integrated, multi-site operating model. We operate exclusively within the United States, with fabrication and packaging facilities in Minnesota, Texas, and Florida.

Our operations are designed to support customers that require secure, domestic manufacturing, long product life cycles, high reliability, and close engineering collaboration. Our business model integrates production-scale manufacturing with advanced technology development, enabling customers to transition specialized semiconductor technologies efficiently from development to volume production. We support a broad array of applications where continuity of supply, manufacturability, and long-term availability are as critical as device performance. This integrated approach positions SkyWater as a leading domestic manufacturing partner for commercial and government customers.

IonQ Merger Agreement

On January 25, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with IonQ, Inc. (“Parent” or “IonQ”), Iris Merger Subsidiary 1 Inc. and a wholly owned subsidiary of IonQ (“Merger Sub 1”), and Iris Merger Subsidiary 2 LLC, a wholly owned subsidiary of Parent (“Merger Sub 2”). Pursuant to the Merger Agreement, (i) Merger Sub 1 will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “First Merger”) and (ii) immediately following the effective time of the First Merger (the “Effective Time”), the Company, as the surviving entity of the First Merger, will merge with and into Merger Sub 2, which will survive the merger as a wholly owned subsidiary of Parent (together with the First Merger, the “Mergers”).

Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time, each share of common stock, par value $0.01 per share, of the Company (each a “Company Share” and collectively, the “Company Shares”) issued and outstanding immediately prior to the Effective Time (other than Company Shares held by (x) the Company, Parent, Merger Sub 1, Merger Sub 2, or their respective direct or indirect wholly-owned subsidiaries and Company Shares for which the holder is entitled to demand and properly demands appraisal of such Company Shares pursuant to, and in compliance in all respects with, Section 262 of the Delaware General Corporation Law) will be converted into the right to receive (i) $15.00 in cash (the “Per Share Cash Consideration”) plus (ii) a number of shares of Parent common stock, par value $0.0001 per share (the “Parent Shares”), equal to the Exchange Ratio (as defined below), plus cash in lieu of any fractional shares to which such Company Share would otherwise be entitled (such cash and shares collectively, the “Merger Consideration”).

The “Exchange Ratio” means the quotient obtained by dividing (i) $20.00 by (ii) the volume weighted average price of the Parent Shares for the 20 full consecutive trading days prior to, but not including, the third business day before the closing date of the Mergers (the “Parent Trading Price”); provided, however, that (i) if the Parent Trading Price is greater than or equal to $60.13, then the Exchange Ratio shall be equal to 0.3326 shares of Parent Shares or (ii) if the Parent Trading Price is less than or equal to $37.99, then the Exchange Ratio shall be equal to 0.5265 shares of Parent Shares.

The closing of the Mergers remains subject to various closing conditions, including (i) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any applicable law or regulation enacted or deemed applicable to the Mergers by a governmental authority that makes consummation of the Mergers illegal and any judgment, injunction, order or decree prohibiting or enjoining the consummation of the Mergers, and (iii) the accuracy of the other party’s representations and warranties contained in the Merger Agreement (subject to customary materiality qualifications), and the other party’s compliance in all material respects with its covenants and agreements contained in the Merger Agreement. In addition, the parties’ obligations to consummate the Mergers are subject to the absence of any Parent Material Adverse Effect (as defined in the Merger Agreement), with respect to the Company’s obligation to consummate the Mergers, and any Company Material Adverse Effect (as defined in the Merger Agreement), with respect to Parent’s obligation to consummate the Mergers, occurring after the date of the Merger Agreement and continuing. The closing of the Mergers is not subject to a financing condition.

Emerging Growth Company Status

SkyWater will remain an emerging growth company until January 3, 2027, the last fiscal day of its 2026 fiscal year, at which point it will no longer be able to apply the transition provisions available to emerging growth companies.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Reportable Segment Information

Reportable segments are identified as components of an enterprise about which separate financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. As a result of the acquisition of Fab 25 (as defined below), the Company now operates as two distinct reportable segments, which are Legacy SkyWater and SkyWater Texas. See Note 14 - Reportable Segment and Geographic Information for segment and geography-specific disclosures.

Note 2 Basis of Presentation and Principles of Consolidation

The unaudited interim condensed consolidated financial statements as of March 29, 2026, and for the three-month periods ended March 29, 2026 and March 30, 2025, are presented in thousands of U.S. dollars (except per share information), are unaudited, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all financial information and disclosures required by U.S. GAAP for annual consolidated financial statements. These interim condensed consolidated financial statements should be read in conjunction with SkyWater’s annual consolidated financial statements and the related notes thereto as of December 28, 2025 and for the fiscal year then ended. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, including normal and recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of March 29, 2026 and its consolidated results of operations, shareholders’ equity, and cash flows for the three-month periods ended March 29, 2026 and March 30, 2025.

The consolidated results of operations for the three-month period ended March 29, 2026 are not necessarily indicative of the results of operations to be expected for the fiscal year ending January 3, 2027, or for any other interim period, or for any other future fiscal year.

Principles of Consolidation

The interim condensed consolidated financial statements include the Company’s assets, liabilities, revenues, and expenses, as well as the assets, liabilities, revenues, and expenses of subsidiaries in which it has a controlling financial interest, SkyWater Technology Foundry, Inc. (“SkyWater Technology Foundry”), SkyWater Federal, LLC (“SkyWater Federal”), SkyWater Florida, Inc. (“SkyWater Florida”), Spansion Fab 25, LLC (“Fab 25”) and Oxbow Realty Partners, LLC (“Oxbow Realty”), a variable interest entity (“VIE”) for which SkyWater is the primary beneficiary and an affiliate of the Company’s principal stockholder. The Company reports noncontrolling interests for amounts that are attributable to ownership interests other than the Company’s common shareholders. All intercompany accounts and transactions have been eliminated in consolidation.

Liquidity and Cash Requirements

The accompanying interim condensed consolidated financial statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of uncertainties.

For the three-month periods ended March 29, 2026 and March 30, 2025, the Company incurred net losses attributable to SkyWater Technology, Inc. of $12,308 and $7,345, respectively. As of March 29, 2026 and December 28, 2025, the Company had cash and cash equivalents of $22,232 and $23,224, respectively.

SkyWater’s ability to execute its operating strategy is dependent on its ability to maintain liquidity and continue to access capital through the Revolver (as defined in Note 7 – Debt), and other sources of financing. The current business plans indicate that the Company maintains sufficient liquidity to continue its operations and maintain compliance with financial covenants for the next twelve months from the date the condensed consolidated financial statements are issued. As a result of amendments made on June 30, 2025, the Revolver matures on June 30, 2030 and provides for a maximum revolving facility amount of $350,000. Based upon SkyWater’s operational forecasts, cash and cash equivalents on hand, and available borrowings on the Revolver, management believes SkyWater will have sufficient liquidity to fund its operations for the next twelve months from the date these condensed consolidated financial statements are issued.

Use of Estimates

The preparation of the interim condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods then ended. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations, and various other assumptions that management believes are reasonable under the circumstances. Actual results could differ from those estimates.

Net Loss Per Share

Basic net loss per common share is calculated by dividing the net loss attributable to SkyWater Technology, Inc. by the weighted-average number of shares outstanding during the reporting periods, without consideration for potentially dilutive securities. Diluted net loss per common share is computed by dividing the net loss attributable to SkyWater Technology, Inc. by the weighted-average number of shares and potentially dilutive securities outstanding during the reporting periods determined using the treasury-stock method. Because the Company reported a net loss attributable to SkyWater Technology, Inc. for the three-month periods ended March 29, 2026 and March 30, 2025, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share because the potentially dilutive shares would have been anti-dilutive if included in the calculation. At March 29, 2026 and March 30, 2025, there were restricted stock units and stock options totaling 2,097,694 and 1,144,534, respectively, excluded from the computation of diluted weighted-average shares outstanding because their inclusion would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per common share for the three-month periods ended March 29, 2026 and March 30, 2025:


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Numerator: net loss attributable to SkyWater Technology, Inc.	$	(12,308)	$	(7,345)


Denominator: weighted-average common shares outstanding, basic and diluted	48,775		47,791
Net loss per common share, basic and diluted	$	(0.25)	$	(0.15)

Immaterial Revisions of Prior Period Financial Information

In 2025, the Company identified errors related to the overbilling of ATS development revenues that cumulatively totaled $1,970 for fiscal years preceding January 1, 2024. As a result, the Company corrected the statement of shareholders’ equity as of January 1, 2024 to increase the accumulated deficit by $1,970. The correction also increased the accumulated deficit by the same amount as of March 30, 2025. The Company has evaluated the materiality of these errors and concluded it was not material to the consolidated financial statements in any of the previous fiscal periods.

Note 3 Summary of Significant Accounting Policies

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (“ASU 2023-09”). The amendments in this update improve existing income tax disclosures, notably with respect to the income tax rate reconciliation and income taxes paid disclosures, and are effective for annual periods beginning after December 15, 2025. As an emerging growth company, SkyWater will adopt the amendments in ASU 2023-09 for its fiscal year ending January 3, 2027. The Company is evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”). The amendments in this update require disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in ASU 2024-03 are effective for annual periods beginning after December 15, 2026. SkyWater will adopt the amendments in this update for its fiscal year ending January 2, 2028. The Company is evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements.

In July 2025, the FASB issued ASU No. 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in this update provide registrants with a practical expedient in its application of FASB Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments – Credit Losses, and allow

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

it to assume that conditions as of the balance sheet date will remain the same over the future life of the asset when estimating potential collections and losses. The amendment in ASU 2025-05 will become effective for the Company’s fiscal year ended January 3, 2027. SkyWater is currently evaluating whether it will adopt the practical expedient introduced by ASU 2025-05.

In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments in this update introduce a more principles-based framework to the capitalization of software intended for internal use focused on management’s authorization and commitment to fund a development project and the probability of whether the project will be completed and used for its intended function. The amendment in ASU 2025-06 will become effective for the Company’s fiscal year ended December 31, 2028. SkyWater is currently evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements.

In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants Received by Business Entities (“ASU 2025-10”). The amendments in this update establish guidance on the recognition, measurement and presentation of government grants received by business entities. The amendments in ASU 2025-10 will become effective for the Company’s fiscal year ended December 30, 2029. The Company is evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). The amendments in this update clarify the interim reporting requirements of ASC Topic 270, Interim Reporting, and more clearly specifies what disclosures are required for an interim reporting period. The amendments in ASU 2025-11 will become effective during the Company’s fiscal year ended December 31, 2028. The Company is evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements.

Significant Accounting Policies

The annual consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025 include discussion of the significant accounting policies and estimates used in the preparation of the interim condensed consolidated financial statements. The Company did not make any significant changes to its accounting policies and estimates during the three-month period ended March 29, 2026.

Note 4 Acquisition

On June 30, 2025, the Company executed an amendment to the Membership Interest Purchase Agreement with Spansion LLC and completed its acquisition of 100% of the voting equity interests of Fab 25, a newly formed limited liability company that received, pursuant to a pre-closing restructuring, substantially all of the property, plant and equipment, employees, and certain other assets and liabilities related to Infineon’s 200 mm fab in Austin, Texas (the “Transaction”). The purchase price for the Transaction was $206,466. The Transaction was financed through proceeds received from the execution of an Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”) with Siena Lending Group LLC (“Siena”) and the other lenders party thereto on June 30, 2025.

The acquisition of Fab 25 significantly expanded SkyWater’s footprint domestically and will enable the Company to grow its services across a broader base of industrial, automotive, and defense customers in the future.

The Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on reasonable estimates and assumptions made by the Company’s management at the time of acquisition. These estimates and assumptions are inherently uncertain and may be subject to material change as additional information becomes available during the measurement period, which will not exceed 12 months from applicable acquisition date. The Company has not finalized its purchase accounting as of March 29, 2026 and the primary areas that still remain preliminary relate to the fair value of spare parts inventory, the valuation of lease right of use assets and lease liabilities, and the accounting for income tax-related matters. No measurement period adjustments were made during the three-month period ended March 29, 2026.

The Company incurred $269 and $1,810 of non-recurring transaction costs for the three-months ended March 29, 2026 and March 30, 2025, respectively. These costs are included as selling, general, and administrative costs in the interim condensed consolidated statements of operations for each period.

Pro Forma Results

The following unaudited pro forma summary presents consolidated financial information as if the Transaction occurred on January 1, 2024:

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)


	Three-Month Period Ended
	March 30, 2025

	(in thousands)
Revenue	$	152,043
Net income	$	6,498

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 5 Revenue

Disaggregated Revenue

The Company recognizes ATS development, tools, and Wafer Services revenues pursuant to its revenue recognition policies as described in Note 3 – Summary of Significant Accounting Policies to the annual consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025. The following tables disclose revenue by product type and the timing of recognition of revenue for transfer of goods and services to customers:


	Three-Month Period Ended March 29, 2026
	Topic 606 Revenue
	Point-in-Time		Over Time		Lease Revenue Per Topic 842		Total Revenue

ATS development
Time-and-materials and cost-plus-fixed-fee contracts	$	—	$	27,925	$	—	$	27,925
Fixed price contracts	4,945		22,066		—		27,011

Total ATS development	4,945		49,991		—		54,936
Wafer Services	—		95,479		369		95,848
Combined ATS development and Wafer Services	4,945		145,470		369		150,784
Tools	9,902		—		—		9,902
Total	$	14,847	$	145,470	$	369	$	160,686


	Three-Month Period Ended March 30, 2025
	Topic 606 Revenue
	Point-in-Time		Over Time		Lease Revenue Per Topic 842		Total Revenue

ATS development
Time-and-materials and cost-plus-fixed-fee contracts	$	1,204	$	35,875	$	—	$	37,079
Fixed price contracts	4,832		9,457		—		14,289
Other	—		—		1,167		1,167
Total ATS development	6,036		45,332		1,167		52,535
Wafer Services	84		7,443		—		7,527
Combined ATS development and Wafer Services	6,120		52,775		1,167		60,062
Tools	1,234		—		—		1,234
Total	$	7,354	$	52,775	$	1,167	$	61,296

Contract Assets

Contract assets represent SkyWater’s rights to payments for services it has transferred to its customers, but has not yet billed to its customers. Contract assets were $24,727 and $18,020 at March 29, 2026 and December 28, 2025, respectively, and are presented net of allowances for expected credit losses of $26 and $26, respectively.

Contract Liabilities

The Company’s contract liabilities principally consist of deferred revenue on customer contracts and deferred lease revenue representing customer prepayments on a leasing arrangement in which the Company serves as lessor. Deferred revenue on customer contracts represents payments from customers for which performance obligations have not yet been satisfied. In some instances, cash may be received, or payment may be contractually due by a customer before the related revenue is

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

recognized. The contract liabilities and other significant components of contract liabilities at March 29, 2026 and December 28, 2025 are as follows:


	March 29, 2026								December 28, 2025

	Contract Deferred Revenue (1)		Lease Deferred Revenue		Supply Agreement (2)		Total Deferred Revenue		Contract Deferred Revenue (1)		Lease Deferred Revenue		Supply Agreement (2)		Total Deferred Revenue

Current contract liabilities	$	52,406	$	—	$	—	$	52,406	$	40,301	$	100	$	1,794	$	42,195
Long-term contract liabilities	74,361		—		51,788		126,149		81,665		—		67,805		149,470
Total contract liabilities	$	126,767	$	—	$	51,788	$	178,555	$	121,966	$	100	$	69,599	$	191,665

(1)Contract deferred revenue includes $34,296 and $37,077 at March 29, 2026 and December 28, 2025, respectively, related to material rights provided to a significant customer in exchange for funding additional manufacturing capacity. Of these amounts, $11,123 and $11,123 were classified as current in the interim condensed consolidated balance sheets as of March 29, 2026 and December 28, 2025, respectively.

(2)In connection with the Transaction, the Company entered into a multi-year supply agreement with certain of Infineon’s subsidiaries under a take-or-pay arrangement for the first four-year period following the closing of the Transaction (the “Supply Agreement”). The Supply Agreement included an off-market component estimated at a fair value of $120,000 which was included in the purchase price for the Transaction. This amount is presented net of Supply Agreement specific contract assets which total $40,082 as of March 29, 2026.

The change in contract liabilities during the three-month periods ended March 29, 2026 and March 30, 2025 are as follows:


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Balance at beginning of period	$	191,665	$	107,067
Increase due to payments received, excluding amounts recognized as revenue	27,056		60,907
Revenue recognized included in the contract liabilities balance at the beginning of the period	(29,945)		(9,495)
Revenue recognized from Fab 25 Supply Agreement (1)	(10,221)		—
Balance at end of period	$	178,555	$	158,479

(1) The Company recorded a $120,000 contract liability in purchase accounting for the acquisition of Fab 25 to recognize the fair value of the off-market component of the Supply Agreement. Related revenue for this contract liability is recognized as the Company fulfills its wafer production obligations over the four-year term of the Supply Agreement. For the three-month period ended March 29, 2026, the Company recognized $10,221 of revenue associated with this contract liability reducing its total balance to $92,070 at March 29, 2026.

Remaining Performance Obligations

Excluding the contract liability related to the off-market component of the Supply Agreement recognized in purchase accounting (see Note 4 - Acquisition), the Company had $160,864 of remaining performance obligations at March 29, 2026 that had not been fully satisfied on contracts with original expected durations of one year or more, which were primarily related to ATS development and tools contracts. The Company expects to recognize the revenue associated with these performance obligations as it satisfies the performance obligations within the next 10 years.

The Company does not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. Furthermore, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between when it transfers a promised good or service to a customer and when the customer pays for that good or service is expected to be one year or less.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 6 Balance Sheet Information

Certain significant amounts included in the Company’s interim condensed consolidated balance sheets are summarized in the following tables:


Allowance for credit losses - Accounts Receivable	March 29, 2026		March 30, 2025

Balance at beginning of period	$	80	$	279
Provision for credit losses	—		355
Accounts written-off	—		—
Less recoveries of accounts charged-off	—		(37)
Balance at end of period	$	80	$	597


Inventory	March 29, 2026		December 28, 2025

Raw materials	$	1,791	$	2,064

Supplies and spare parts	23,785		22,536

Total inventory, current	25,576		24,600
Inventory, non-current (1)	10,054		9,370
Total inventory	$	35,630	$	33,970

(1)Inventory, non-current consists of spare parts that will not be used within twelve months. Inventory non-current is included in Other assets on the consolidated balance sheet.


Prepaid expenses and other current assets	March 29, 2026		December 28, 2025

Prepaid expenses	$	8,329	$	6,766
Tools purchased for customers (1)	10,394		20,503

Investment tax credit receivable	1,624		—
Total prepaid assets and other current assets	$	20,347	$	27,269

(1)The Company acquires tools for its customers that consist of manufacturing equipment its customers will own but will be installed and qualified in a SkyWater facility. Prior to the customer obtaining ownership and control of the equipment, the Company records the costs associated with the acquisition, installation, and qualification of the equipment within prepaid expenses and other current assets. These deferred costs are recognized as cost of revenue when control of the equipment transfers to the customer and the related tools revenue is recognized.


Property and equipment, net	March 29, 2026		December 28, 2025

Land	$	36,596	$	36,596
Buildings and improvements	163,789		164,752
Machinery and equipment (2)	479,418		456,090
Property and equipment placed in service, at cost (1)	679,803		657,438
Less: Accumulated depreciation (1)	(190,693)		(181,737)
Property and equipment placed in service, net (1)	489,110		475,701
Property and equipment not yet in service	21,014		36,019
Total property and equipment, net	$	510,124	$	511,720

(1)Includes $30,379 and $29,651 of cost and $3,713 and $3,974 of accumulated depreciation associated with capital assets subject to financing leases at March 29, 2026 and December 28, 2025, respectively.

(2)The cost basis of machinery and equipment reflects the amount of investment tax credits the Company has received, or expects to receive, on new investments in related equipment.

Depreciation expense was $12,284 and $4,029 for the three-month periods ended March 29, 2026 and March 30, 2025, respectively, which is net of accretion of investment tax credits.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)


Intangible assets, net	March 29, 2026		December 28, 2025

Software and licensed technology	$	15,731	$	18,758
Less: accumulated amortization	(9,662)		(13,460)
Intangible assets placed in service, net	6,069		5,298
Intangible assets not yet in service	3,937		3,870
Total intangible assets, net	$	10,006	$	9,168

Intangible assets consist primarily of payments made under software and technology licensing arrangements with third parties. For the three-month periods ended March 29, 2026 and March 30, 2025, amortization of software and licenses was $347 and $329, respectively.

Remaining estimated aggregate annual amortization expense for intangible assets placed in service is as follows for future fiscal years:


Fiscal year	Amortization Expense

Remainder of 2026	$	1,101
2027	1,099
2028	1,103
2029	876
2030	840
Thereafter	1,050
Total	$	6,069


Other assets	March 29, 2026		December 28, 2025

Inventory, non-current (1)	$	10,054	$	9,370
Operating lease right-of-use assets	272		—
Investment tax credit receivable	19,347		10,230
Other assets	1,022		223
Total other assets	$	30,695	$	19,823

(1)Inventory, non-current consists of spare parts that will not be used within twelve months.


Accrued expenses	March 29, 2026		December 28, 2025

Accrued compensation	$	19,344	$	11,248
Accrued commissions	503		390
Accrued royalties	20		1,815
Current portion of operating lease liabilities	34		—
Current portion of finance lease liabilities	2,261		2,203
Accrued inventory (2)	4,566		2,233
Accrued warranty	998		1,131
Accrued vendor purchase commitments (1)	13,111		14,094
Accrued accounts payable	18,189		15,041
Accrued utilities	1,536		1,208
Other accrued expenses	3,821		7,249
Total accrued expenses	$	64,383	$	56,612

(1)The Company accrues outstanding obligations on vendor purchase orders for goods or services provided to the Company for which invoices have not yet been received.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

(2)The Company accrues outstanding obligations on uninvoiced receipts of inventory and inventory in transit.


Accrued provisions for warranties	March 29, 2026		December 28, 2025

Beginning accrued warranty balance	$	1,131	$	3,752
Warranty expense	132		419
Warranty credits	(265)		(3,040)
Ending accrued warranty balance	$	998	$	1,131


Other long-term liabilities	March 29, 2026		December 28, 2025

Finance lease obligations	$	26,509	$	24,859
Other	219		369
Liability for uncertain tax positions	69		69
Total other long-term liabilities	$	26,797	$	25,297

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 7 Debt

The components of debt outstanding at March 29, 2026 and December 28, 2025 are as follows:


Short-term financing	March 29, 2026		December 28, 2025

Revolver	$	182,439	$	195,460
Unamortized debt issuance costs	(10,444)		(11,058)
Total short-term financing, net of unamortized debt issuance costs	$	171,995	$	184,402
Long-term debt
VIE financing	$	33,240	$	33,534
Tool financing loans	5,991		7,142
Unamortized debt issuance costs	(1,709)		(1,797)
Total long-term debt, including current maturities	37,522		38,879
Less: current portion of long-term debt	(5,190)		(5,940)
Total long-term debt, excluding current portion	$	32,332	$	32,939

Revolver

On December 28, 2022, the Company entered into a Loan and Security Agreement with Siena, which was initially modified on November 19, 2024 upon execution of an Amended and Restated Loan and Security Agreement. On June 30, 2025, this lending arrangement was further modified in advance of the acquisition of Fab 25 when the Company entered into an Amended Loan Agreement with Siena as agent and the other lenders party thereto, which replaced the prior Loan and Security Agreement. The Amended Loan Agreement provides for a revolving line of credit with a borrowing limit of up to $350,000 with a scheduled maturity date of June 30, 2030 (the “Revolver”). Due to a lockbox clause in the Amended Loan Agreement, the outstanding loan balance is required to be serviced with working capital, and the debt is classified as current on the condensed consolidated balance sheets.

The outstanding balance of the Revolver was $182,439 as of March 29, 2026 at an interest rate of 8.0%. The remaining availability under the Revolver was $61,837 as of March 29, 2026. As of March 29, 2026, the Company was in compliance with applicable financial covenants of the Revolver.

VIE Financing

On September 30, 2020, Oxbow Realty, the Company’s consolidated VIE entered into a loan agreement for $39,000 (the “VIE Financing”) to finance the acquisition of the building and land of the SkyWater Minnesota facility (see Note 11 – Related Party Transactions and Note 12 – Variable Interest Entity). The VIE Financing is repayable in equal monthly installments of $194 over 10 years, with the remaining balance payable at the maturity date of October 6, 2030. The interest rate under the VIE Financing is fixed at 3.44%. The VIE Financing is guaranteed by Oxbow Industries, who is also the sole equity holder of Oxbow Realty. The VIE financing is not subject to financial debt default covenants.

The terms of the VIE Financing include provisions that grant the lender several protective rights when certain triggering events defined in the loan agreement occur, including events tied to SkyWater’s occupancy of the SkyWater Minnesota facility and SkyWater’s financial performance. The occurrence of a triggering event does not represent a default event as per the loan agreement, nor does it result in the VIE Financing becoming callable, rather the protective rights become enforceable by the lender. As defined in the loan agreement, a triggering event occurred beginning in the three-month period ended January 1, 2023 based on the level of earnings before interest, taxes, depreciation, amortization and rent, as defined in the loan agreement, reported by SkyWater historically. Pursuant to its protective rights, the lender retained in a restricted account amounts paid by SkyWater to Oxbow Realty that were in excess of the scheduled debt payments paid by Oxbow Realty to the lender. The triggering event was cured during the three-month period ended June 30, 2024 and the funds held in the restricted account were remitted back to Oxbow Realty. No triggering events as defined in the loan agreement existed as of March 29, 2026.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

The VIE Financing is secured by a security interest in the land and building which was the subject of the sale-leaseback transaction (see Note 11 – Related Party Transactions). The Company and Oxbow Realty, the Company’s VIE, incurred third-party transaction costs of $3,487 and $65, respectively, which have been capitalized as debt issuance costs, presented as a reduction of the outstanding loan balance, and are being amortized as additional interest expense over the remaining maturity of the VIE Financing.

Maturities

Future principal payments of the Company’s long-term debt, excluding unamortized debt issuance costs, are as follows:


Fiscal year	Future Principal Payments

Remainder of 2026	$	4,499
2027	2,853
2028	1,999
2029	1,307
2030	28,573
Thereafter	—
Total	$	39,231

Note 8 Income Taxes

The Company’s effective tax rates for the three-month periods ended March 29, 2026 and March 30, 2025 differ from its 21% U.S. statutory corporate tax rate due to the impact of state income taxes, permanent tax differences, the tax impact of the vesting of restricted stock units, and changes in the Company’s deferred tax asset valuation allowance. The effective tax rate in any quarter can be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution. The effective income tax rates for the three-month periods ended March 29, 2026 and March 30, 2025 were (3.7)% and (5.5)%, respectively.

Note 9 Equity-Based Compensation

Equity-based compensation expense was allocated in the interim condensed consolidated statements of operations as follows:


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Cost of revenue	$	943	$	567
Research and development expense	153		83
Selling, general and administrative expense	1,514		1,229
Total equity-based compensation expense	$	2,610	$	1,879

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 10 Commitments and Contingencies

Litigation and Other Asserted Claims

From time to time, the Company is involved in legal proceedings and subject to other asserted claims arising in the ordinary course of its business. Although the results of litigation and asserted claims cannot be predicted with certainty, the Company currently believes that the resolution of these ordinary-course matters will not have a material adverse effect on its business, operating results, financial condition or cash flows. Even if any particular litigation is resolved in a manner that is favorable to the Company’s interests, such litigation can have a negative impact on the Company because of defense and settlement costs, diversion of management resources from its business, and other factors. There were no material litigation-related or other asserted claim contingencies recognized at either March 29, 2026 or December 28, 2025.

Capital Expenditures

The Company has various contracts outstanding with third parties which primarily relate to semiconductor tool purchases and installation. The Company has $3,457 and $2,880 of contractual commitments outstanding as of March 29, 2026 and December 28, 2025, respectively, that it expects to be paid in the next twelve months using cash on hand and operating cash flows.

Center for NeoVation

On January 25, 2021 the Company entered into a technology and economic development agreement (the “TED Agreement”), and a lease agreement (the “CfN Lease”) with the government of Osceola County, Florida (“Osceola”) and ICAMR, Inc., a Florida non-profit corporation doing business as BRIDG (“BRIDG”), to lease and operate the Center for NeoVation (the “CfN”), a semiconductor research and development and manufacturing facility in Kissimmee, Florida. Under the CfN Lease, the Company agrees to bring the plant to full production capacity within five years, and then to operate the plant at full capacity for an additional fifteen years At the end of the lease, SkyWater will take ownership of the facility. The Company is responsible for taxes, utilities, insurance, maintenance, operation of the assets, and making capital investments in the facility to bring the facility to its full production capacity. Investments and costs required to bring the facility to its full capacity will be substantial. The Company may terminate the TED Agreement and CfN Lease with eighteen months’ notice. In the event the Company terminates the agreements, it is required to continue to operate the CfN until the earlier of either a replacement operator is found, or the 18-month notice period expires, and it may be required to make a payment of up to $15,000 to Osceola upon termination.

As part of entering into the TED Agreement, the Company agreed to operate the advanced wastewater treatment facility (“AWT Facility”), a separate building located on the same leased premise as the CfN and subject to the CfN Lease. The AWT Facility was financed in substantial part by funds provided by the Tohopekaliga Water Authority (“TWA”) to house the acid waste neutralization, pH adjustment, and reverse osmosis water treatment systems. In connection with entering into the CfN Lease, the Company agreed that development of the CfN requires the payment of water, wastewater, and reuse water capacity charges imposed by TWA monthly over the remaining period of six years. The Company also agreed that TWA shall be entitled to recover the capital contribution of TWA for construction of the AWT Facility through a capital reimbursement surcharge monthly over the remaining period of six years. As of March 29, 2026, the Company expects future payments on these commitments of approximately $3,500 which the Company expects will be paid in full by the first quarter of 2028.

Build Back Better Grant

In the third quarter of 2023, the U.S. Department of Commerce Economic Development Administration granted funds to Osceola and BRIDG for continued development of Central Florida’s Semiconductor Cluster for Broad-Based Prosperity through the Build Back Better Regional Challenge, a portion of which is committed to the expansion of the CfN and purchase, installation, and qualification of equipment in the CfN. In February 2023, SkyWater committed to a 20% matching share contribution of the project costs to Osceola totaling approximately $9,100. SkyWater’s commitment to fund this matching contribution is limited to $1,000 in any single calendar quarter. Of this total commitment, and as of March 29, 2026, the Company has paid a total of $2,000 and has an unpaid obligation accrued of $4,900 based upon development activity that has occurred through quarter-end, which is expected to be paid in the second quarter of 2026.

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 11 Related Party Transactions

In August 2023, SkyWater entered into a consulting agreement with Oxbow Industries pursuant to which an employee of Oxbow Industries provided certain consulting services to the Company, including services where the Oxbow Industries employee negotiated and brokered the acquisition of Fab 25. In October 2025, this related party consulting agreement was terminated. Expense associated with this agreement totaled $141 for the three-month period ended March 30, 2025.

Sale-Leaseback Transaction

On September 29, 2020, SkyWater entered into an agreement to sell the land and building of its Bloomington, Minnesota facility to Oxbow Realty. In the fourth quarter of 2020, SkyWater entered into an agreement to lease the land and building from Oxbow Realty for initial payments of $394 per month over twenty years. The monthly payments are subject to a 2% increase each year during the term of the lease and is currently $435 per month. The Company is also required to make certain customary payments constituting “additional rent,” which relate to monthly leasing and replacement reserves, insurance, and tax payments in accordance with the terms of the lease agreement. Future minimum lease commitments to Oxbow Realty as of March 29, 2026 were as follows (such amounts are eliminated from the condensed consolidated financial statements due to the consolidation of Oxbow Realty, see Note 12 – Variable Interest Entity).


Fiscal year	Future Minimum Lease Commitments

Remainder of 2026	$	3,948
2027	5,357
2028	5,464
2029	5,573
2030	5,685
Thereafter	61,150
Total lease payments	87,177
Less: imputed interest	(59,113)
Total	$	28,064

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Note 12 Variable Interest Entity

Oxbow Realty was established for the purpose of holding real estate and facilitating real estate transactions on behalf of Oxbow Industries. This included facilitating the purchase of the land and building of SkyWater’s Minnesota facility with proceeds from a bank loan (see Note 7 – Debt) and managing the leaseback of the land and building to SkyWater (see Note 11 – Related Party Transactions). Management determined that Oxbow Realty meets the definition of a VIE under Accounting Standards Codification Topic 810, “Consolidations” (“Topic 810”), because it lacks sufficient equity to finance its activities. Furthermore, the Company is the primary beneficiary of Oxbow Realty as it has the power over those activities that most significantly affect Oxbow Realty’s economic performance, mainly activities focused on the operation and maintenance of the Minnesota facility. As the primary beneficiary, the Company consolidates the assets, liabilities, and results of operations of Oxbow Realty pursuant to Topic 810, eliminating any transactions between the Company and Oxbow Realty, and recording a noncontrolling interest for the economic interest in Oxbow Realty attributable to parties other than the Company’s common stock shareholders. In addition, the assets of Oxbow Realty can only be used to settle its liabilities, and the creditors of Oxbow Realty do not have recourse to the general credit of SkyWater.

The following table shows the carrying amounts of assets and liabilities of Oxbow Realty that are consolidated by the Company as of March 29, 2026 and December 28, 2025. The assets and liabilities are presented prior to the elimination of intercompany balances.


	March 29, 2026		December 28, 2025

Cash and cash equivalents	$	22	$	742
Accounts receivable	1,556		1,503

Finance receivable	41,723		41,556
Other assets	74		77
Total assets	$	43,375	$	43,878

Accounts payable	$	1,636	$	1,503
Accrued expenses	—		7
Contract liabilities	821		872
Debt	33,211		33,504
Total liabilities	$	35,668	$	35,886

The following table shows the revenue and expenses of Oxbow Realty for the three-month periods ended March 29, 2026 and March 30, 2025. These results of Oxbow Realty are presented prior to the elimination of intercompany transactions.


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

Revenue	$	1,447	$	1,434
General and administrative expenses	4		3
Interest expense	287		304
Total expenses	291		307
Net income	$	1,156	$	1,127

Note 13 Leases

SkyWater as the Lessor

In March 2020, SkyWater executed a contract with a customer that includes an operating lease for the right to use a specified portion of the Company’s Minnesota facility to produce wafers using the customer’s equipment. The contractual amount that relates to revenue from an operating lease was $21,000, and is being recognized over the estimated lease term of 4.5 years. The total amount was prepaid by the customer and recorded as deferred revenue. See Note 5 – Revenue for additional information on revenue recognition and deferred revenue of the operating lease.

As part of the Fab 25 Transaction, the Company entered into a multi-year lease agreement to lease a portion of the acquired office space at the Austin, Texas facility back to Infineon for the first four-year period following the closing of the

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

Transaction. The lease agreement provides for lease payments of $1,200 annually through June 2029, after which time the agreement can be extended with lease payments adjusted based on fair market value escalators.

Note 14 Reportable Segment and Geographic Information

Prior to the completion of the Fab 25 acquisition, the Company operated as a single reportable segment which reflected how the Company managed its business and the nature of its services. Following the Fab 25 acquisition, the Company re-evaluated its reportable segments and now operates as two distinct reportable segments, Legacy SkyWater and SkyWater Texas. This determination aligns with how our Chief Executive Officer, who is our chief operating decision maker (“CODM”) currently assesses segment operating performance and allocates resources. Prior to the acquisition, the CODM utilized net earnings as the primary measure of segment profit or loss. Subsequent to the completion of the Fab 25 acquisition, net earnings continues to be the primary measure of segment profit or loss utilized by the CODM in regard to evaluating segment performance and allocation of resources. Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not regularly reviewed by the CODM.

•Legacy SkyWater: A pure-play technology foundry that offers advanced semiconductor development and manufacturing services from its fabrication facility in Bloomington, Minnesota and advanced packaging services from its Kissimmee Florida facility. Legacy SkyWater provides ATS and Wafer Services product offerings.

•SkyWater Texas: A high-volume manufacturer that offers manufacturing services from its fabrication facility in Austin, Texas. SkyWater Texas provides Wafer Services product offerings focused on 200 mm semiconductor fabrication, copper processing, high-voltage technology services and 65 nm node infrastructure support.

The following table represents the results of the Company’s reportable segments:


	Three-Month Period Ended
	March 29, 2026						March 30, 2025

	Legacy SkyWater		SkyWater Texas		Total		Legacy SkyWater		SkyWater Texas		Total

Revenue	$	74,368	$	86,318	$	160,686	$	61,296	$	—	$	61,296
Cost of revenue
Labor	23,349		27,091		50,440		21,268		—		21,268
Direct expenses	24,511		30,847		55,358		20,647		—		20,647
Cost of tool revenue	10,618		—		10,618		1,030		—		1,030
Depreciation and amortization	2,869		9,249		12,118		4,094		—		4,094
Total cost of revenue	61,347		67,187		128,534		47,039		—		47,039
Gross profit	13,021		19,131		32,152		14,257		—		14,257
Research and development expense	4,375		622		4,997		3,249		—		3,249
Selling, general, administrative expense
Labor	8,928		2,448		11,376		7,114		—		7,114
Direct expenses	16,762		3,878		20,640		7,777		—		7,777
Depreciation and amortization	277		139		416		139		—		139
Total selling, general, and administrative expense	$	25,967	$	6,465	$	32,432	$	15,030	$	—	$	15,030
Operating (loss) income	(17,321)		12,044		(5,277)		(4,022)		—		(4,022)
Other expense:

Interest expense	(6,029)		(130)		(6,159)		(1,812)		—		(1,812)
Total other expense	$	(6,029)	$	(130)	$	(6,159)	$	(1,812)	$	—	$	(1,812)
(Loss) income before income taxes	(23,350)		11,914		(11,436)		(5,834)		—		(5,834)
Income tax (benefit) expense	(294)		10		(284)		384		—		384
Net (loss) income	$	(23,056)	$	11,904	$	(11,152)	$	(6,218)	$	—	$	(6,218)

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SKYWATER TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited in thousands, except share and per share data)

The following table discloses revenue for the three-month periods ended March 29, 2026 and March 30, 2025 by country as determined based on customer address:


	Three-Month Period Ended
	March 29, 2026		March 30, 2025

United States	$	151,398	$	57,247
Canada	4,434		2,312
Hong Kong	872		474
Israel	1,270		—
All others	2,712		1,263
Total	$	160,686	$	61,296

Three customers each accounted for 10% or more of revenue, and in aggregate accounted for 78% of revenue for the three-month period ended March 29, 2026. Two customers each accounted for 10% or more of revenue, and in aggregate accounted for 53% of revenue for the three-month period ended March 30, 2025. In addition, two customers had accounts receivable balances in excess of 10% or more of revenue, and in aggregate accounted for 64% of accounts receivable as of March 29, 2026. The loss of a major customer could adversely affect the Company’s operating results and financial condition.

Note 15 Subsequent Events

The Company evaluated the impact of events that occurred subsequent to March 29, 2026, through the date the condensed consolidated financial statements were filed with the United States Securities and Exchange Commission. Based on this evaluation, the Company has determined no events are required to be recognized or disclosed in the condensed consolidated financial statements and related notes other than the event described below:

Tool Financing Loan

In April 2026, we entered into an agreement to sell a semiconductor manufacturing tool to an equipment financing lender for proceeds of approximately $36,600. We subsequently entered into an agreement to lease the tool from the lender for monthly payments of $800 over 60 months at an interest rate of 11.9%. The agreement provides for a bargain purchase option at the end of the lease term which we intend to exercise.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the interim condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the Company’s audited annual consolidated financial statements and related notes, included in its Annual Report on Form 10-K for the fiscal year ended December 28, 2025. In addition to historical financial information, the following discussion contains forward-looking statements that reflect the Company’s current expectations, estimates and assumptions concerning events and financial trends that may affect the Company’s future operating results or financial position. Actual results and the timing of events may differ materially from those discussed or implied in the Company’s forward-looking statements due to a number of factors, including those described in the sections entitled “Risk Factors” and “Forward-Looking Statements” herein and elsewhere in its Annual Report on Form 10-K.

SkyWater refers to the three-month periods ended March 29, 2026 and March 30, 2025 as the first quarter of 2026 and first quarter of 2025, respectively. Each of these three-month periods includes 13 weeks. All percentage amounts and ratios presented in this management’s discussion and analysis were calculated using the underlying data in thousands. Unless otherwise indicated, all changes identified for the current period results represent comparisons to results for the prior corresponding period.

For purposes of this section, the terms “we,” “us,” “our,” and “SkyWater” refer to SkyWater Technology, Inc. and its subsidiaries collectively.

Overview

SkyWater Technology, Inc., together with its consolidated subsidiaries, is a U.S.-based, independent, pure-play semiconductor foundry providing foundational-node manufacturing, advanced technology development, and advanced packaging services through an integrated, multi-site operating model. We operate exclusively within the United States, with fabrication and packaging facilities in Minnesota, Texas, and Florida.

Our operations are comprised of two reportable segments:

Legacy SkyWater: A pure-play technology foundry that offers advanced semiconductor development and manufacturing services from its fabrication facility in Bloomington, Minnesota and advanced packaging services from its Kissimmee, Florida facility. Legacy SkyWater provides ATS and Wafer Services product offerings.

SkyWater Texas: A high-volume manufacturer that offers manufacturing services from its fabrication facility in Austin, Texas. SkyWater Texas provides Wafer Services product offerings focused on 200 mm semiconductor fabrication, copper processing, high-voltage technology services and 65 nm node infrastructure support.

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Factors and Trends Affecting our Business and Results of Operations

The following trends and uncertainties either affected our financial performance during the first quarters of 2026 and 2025 or are reasonably likely to impact our results in the future.

•Macroeconomic and competitive conditions, including cyclicality and consolidation, as well as government funding in semiconductor technology and manufacturing, create unique challenges and opportunities for the semiconductor industry and SkyWater.

•Changes in trade policies, including the imposition of, or increase in tariffs and changes to existing trade agreements, could negatively impact our business, financial condition and results of operations.

•In August 2022, the U.S. enacted the CHIPS and Science Act pursuant to which the United States has committed to a renewed focus on providing incentives and funding for onshore companies to develop and advance the latest semiconductor technologies, supporting onshore manufacturing capabilities, and on strengthening key onshore supply chains. The CHIPS Act authorizes the U.S. Department of Commerce to enable execution of awards under the CHIPS Act and provides $52.7 billion for American semiconductor research, development, manufacturing, and workforce development, including $39 billion in financial assistance to build, expand, or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging, or research and development. In December 2023, we submitted an application to the CHIPS Program Office of the U.S. Department of Commerce for funding through the CHIPS and Science Act for modernization and equipment upgrades to enhance production at our Minnesota facility. In December 2024, we signed a preliminary memorandum of terms that provides for up to $16 million pursuant to the CHIPS and Science Act, which is in addition to $19 million in incentives from the State of Minnesota. We can not predict when and/or if such funding will be received based upon Company conversations with U.S. and Minnesota government officials.

•We project customer-funded capital investment to be a significant driver of the success of our business model, as we expect customers to invest in our capabilities and enable us to develop technology platforms that will drive our future growth.

•Our overall level of indebtedness from our revolving credit agreement, which we refer to as the Revolver (as defined in Note 7 – Debt to the condensed consolidated financial statements), financing arising from the sale and leaseback of the land and building of our Minnesota facility, which we refer to as the VIE Financing, financing arrangements with lenders to finance the purchase of manufacturing tools and other equipment, which we refer to as the Tool Financing Loans, and the corresponding interest rates charged to us by our lenders, are key components of maintaining capital funding that allow us to continue to grow our business.

Pending Acquisition of the Company

On January 25, 2026, the Company entered into a definitive agreement to be acquired by IonQ. The transaction is subject to customary closing conditions, including regulatory approval, and, if approved, is expected to close in the second or third quarter of 2026. The pending acquisition did not impact the Company’s results of operations for the period presented. Additional information regarding the transaction is included in Note 1 – Nature of Business to the condensed consolidated financial statements.

Financial Performance Metrics

Our senior management team regularly reviews certain key financial performance metrics within our business, including:

•Revenue;

•Gross profit and gross margin;

•Net income (loss); and

•Earnings before interest, taxes, depreciation and amortization, as adjusted (“adjusted EBITDA”), which is a financial measure not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), that excludes certain items that may not be indicative of our core operating results, as well as items that can vary widely across different industries or among companies within the semiconductor industry. For information regarding our non-GAAP financial measure, see the section entitled “Non-GAAP Financial Measure” below.

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Results of Operations

First Quarter of 2026 Compared to the First Quarter of 2025

The following table summarizes certain financial information relating to our operating results for the first quarter of 2026 and 2025.


	First Quarter Ended
	March 29, 2026		March 30, 2025		Percentage Change

	(in thousands)
Consolidated statements of operations data:
Revenue	$	160,686	$	61,296	162%
Cost of revenue	128,534		47,039		173%
Gross profit	32,152		14,257		126%
Research and development expense	4,997		3,249		54%
Selling, general, and administrative expense	32,432		15,030		116%
Operating loss	(5,277)		(4,022)		31%
Other expense:

Interest expense	(6,159)		(1,812)		240%
Total other expense	(6,159)		(1,812)		240%
Loss before income taxes	(11,436)		(5,834)		96%
Income tax (benefit) expense	(284)		384		(174)%
Net loss	(11,152)		(6,218)		79%
Less: net income attributable to noncontrolling interests	1,156		1,127		3%
Net loss attributable to SkyWater Technology, Inc.	$	(12,308)	$	(7,345)	68%

Revenue

Revenue was $160.7 million for the first quarter of 2026 compared to $61.3 million for the first quarter of 2025, a increase of $99.4 million, or 162%. The following table shows revenue by service type for the first quarter of 2026 and 2025:


	First Quarter Ended
	March 29, 2026		March 30, 2025		Percentage Change

	(in thousands)
ATS development	$	54,936	$	52,535	5%
Tools	9,902		1,234		702%
Wafer Services - Legacy SkyWater	9,530		7,527		27%
Wafer Services - SkyWater Texas	86,318		—		NM
Total	$	160,686	$	61,296	162%

ATS development revenue increased $2.4 million, or 5%, from the first quarter of 2025 to the first quarter of 2026. The increase was primarily driven by a $19.9 million increase in the advanced compute industry. Additional increases included $5.8 million at the Florida facility, primarily related to increased tool installation and qualification activity, as well as growth in other end markets, including $3.0 million consumer, $0.8 million medical, and $0.4 million industrial. These increases were partially offset by a $27.2 million decline in aerospace and defense revenue attributable to recent U.S. government policy shifts and changes in defense spending priorities, as two programs went on stop work and are proceeding to termination for convenience in 2026.

Tools revenue increased $8.7 million from the first quarter of 2025 to the first quarter of 2026 driven by the ramp up of our Florida facility.

The increase in Wafer Services revenue of $88.3 million, or 1173%, from the first quarter of 2025 to the first quarter of 2026 was primarily driven by an $86.3 million contribution from the Fab 25 acquisition, which expanded the Company’s manufacturing capacity. Of this amount, $10.2 million represents non-cash revenue associated with the off-market component of the Supply Agreement. Legacy SkyWater Wafer Services revenue increased by $2.0 million, primarily driven by a $3.2

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million increase in wafer starts from a key automotive customer, partially offset by a $1.6 million decrease in revenue from several aerospace and defense customers.

Cost of revenue

Cost of revenue increased $81.5 million to $128.5 million for the first quarter of 2026 from $47.0 million for the first quarter of 2025. The increase was primarily driven by $67.2 million higher costs resulting from the inclusion of Fab 25 operations following the acquisition, as well as an $8.7 million increase in cost of tool revenue, reflecting an increase in tool sales at the Florida facility.

Legacy SkyWater direct expenses increased by $5.0 million, primarily driven by $4.7 million of non-recurring startup costs at the Florida facility related to installing, qualifying, and operationalizing production tools, which are expected to decline as the site exits the startup phase. Freight expense rose $0.4 million year-over-year due to higher shipment volumes, fab ramp activity, and increased use of expedited shipping amid elevated global logistics costs. Additionally, target costs increased by $0.3 million due to a bulk purchase of platinum wire not tied to a specific customer program.

Legacy SkyWater labor costs increased by $1.9 million, primarily driven by a $1.6 million rise in payroll expense reflecting annual compensation increases and staffing and operational ramp activity at the Florida facility. Retention-related bonus expense increased by $0.2 million due to incremental accruals associated with strategic initiatives, while bonus expense also increased by $0.2 million, reflecting higher expected payouts driven by improved performance relative to plan.

Cost of revenue depreciation decreased by $1.3 million year-over-year, primarily driven by a $1.4 million increase in benefits from CHIPS Act Section 48D advanced manufacturing tax credits. The increase reflects both a higher volume of qualifying assets placed in service, with approximately $43.0 million of 48D-eligible assets placed in service during the first quarter of 2026, compared to $18.0 million in all of 2025, as well as an increase in the credit rate to 35% in 2026 from 25% in prior periods. These benefits were partially offset by other changes in depreciation during the period.

Research and development expense

Research and development expense increased $1.7 million to $5.0 million for the first quarter of 2026. The increase was partially driven by $0.6 million of incremental costs associated with the inclusion of Fab 25 operations following the acquisition. In addition, lower customer activity resulted in approximately $0.7 million of engineering labor and related direct costs being allocated to internal research and development efforts rather than customer programs compared to the prior year.

Selling, general and administrative expense

Selling, general and administrative expense increased to $32.4 million for the first quarter of 2026, from $15.0 million for the first quarter of 2025. The increase of $17.4 million was primarily attributable to a $6.5 million contribution from the Fab 25 acquisition, which includes $1.4 million of services provided by Infineon under the transitional services agreement. Additionally, selling, general and administrative expense was impacted by $6.9 million of consulting-related fees within Legacy SkyWater resulting from a modification of a contract with a consulting firm. Additional Legacy SkyWater selling, general and administrative expense increased by $2.5 million, primarily due to higher legal and consulting costs incurred to support the IonQ transaction, as well as $1.0 million of integration-related expenses associated with the Fab 25 acquisition.

Interest expense

Interest expense increased to $6.2 million for the first quarter of 2026 from $1.8 million for the first quarter of 2025. The increase was the result of higher average borrowings under our revolving credit facility following an increase in the facility’s capacity in connection with the acquisition completed in the prior year.

Net Loss

Net loss increased $5.0 million, or 68% from $7.3 million for the first quarter of 2025 to $12.3 million for the first quarter of 2026. The increase was the result of the net impacts of the changes described above related to the components of our results of operations.

Adjusted EBITDA

Adjusted EBITDA increased $8.9 million, or 222%, to $13.0 million for the first quarter of 2026 from $4.0 million in the first quarter of 2025. The increase was primarily driven by the acquisition of Fab 25, including the impact of revenue recognized under the off-market component of the Supply Agreement, as well as continued expansion within the advanced compute end market. These increases were partially offset by headwinds in the ATS business resulting from U.S. government policy impacts on defense spending and related funding, as well as incremental costs associated with the Fab 25 acquisition. For a discussion of adjusted EBITDA as well as reconciliation to the most directly comparable U.S. GAAP measure, see the section below entitled “Non-GAAP Financial Measure.”

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Segment Performance

Legacy SkyWater Segment


	First Quarter Ended
	March 29, 2026		March 30, 2025		Percentage Change

	(in thousands)
Revenue	$	74,368	$	61,296	21	%
Gross profit	13,021		14,257		(9)	%
Net loss	(23,056)		(6,218)		(273)	%

Revenue

Legacy SkyWater revenue increased $13.1 million, or 21%, from $61.3 million to $74.4 million when comparing the quarter ended March 30, 2025 with the quarter ended March 29, 2026.

Legacy SkyWater Tools revenue increased $8.7 million, reflecting a higher volume of tool installations year-over-year primarily driven by a Florida facility program as the program nears initiating test vehicles for fan out technologies.

Legacy SkyWater ATS development revenue increased by $2.4 million. The increase was largely attributable to a $19.9 million increase in the advanced compute industry. Additional increases included $5.8 million at the Florida facility, primarily related to increased tool installation and qualification activity, as well as growth in other end markets, including $3.0 million consumer, $0.8 million medical, and $0.4 million industrial. These increases were partially offset by a $27.2 million decline in aerospace and defense revenue, attributable to recent U.S. government policy shifts, changes in defense spending priorities, as two programs went on stop work and are proceeding to termination for convenience in 2026.

Legacy SkyWater Wafer Services revenue increased by $2.0 million, primarily driven by a $3.2 million increase in wafer starts from a key automotive customer, partially offset by a $1.6 million decrease in revenue from several aerospace and defense customers.

Gross profit

Gross profit decreased from $14.3 million for the quarter ended March 30, 2025, as compared to $13.0 million for the quarter ended March 29, 2026, representing a decrease in gross margins from 23% to 18% in the same periods. The decrease was primarily driven by losses from increased tool revenue and incremental tool installation costs absorbed in the first quarter of 2026, compared to tool-related gains recognized in the first quarter of 2025. In the first quarter of 2025, the Company generated $0.2 million of gross profit on tools, representing a 16% gross margin, whereas in the first quarter of 2026 the Company absorbed a core tool loss of $0.7 million, as well as incurred $4.7 million of incremental tool installation costs. Excluding the impact of tool-related losses and incremental installation costs, gross margins for the segment would have been relatively consistent year over year.

Net Loss

Net loss increased by $17.0 million to $23.1 million for the quarter ended March 29, 2026, from $6.2 million for the quarter ended March 30, 2025. The increase was primarily driven by tool margin degradation, $6.9 million of consulting-related fees within Legacy SkyWater resulting from a modification of a contract with a consulting firm, and $3.7 million of transaction and integration costs, (primarily legal, consulting, and other professional services fees).

SkyWater Texas Segment


	First Quarter Ended
	March 29, 2026		March 30, 2025		Percentage Change

	(in thousands)
Revenue	$	86,318	$	—	NM
Gross profit	19,131		—		NM
Net income	11,904		—		NM

Revenue

Revenue for the quarter ended March 29, 2026 included $86.3 million in Wafer Services revenue. Of this amount, $10.2 million represents non-cash revenue associated with the off-market component of the Supply Agreement.

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Gross profit

Gross profit was $19.1 million and gross margin was 22% for the quarter ended March 29, 2026.

Net Income

Net income was $11.9 million for the quarter ended March 29, 2026.

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Liquidity and Capital Resources

General

For the three-months ended March 29, 2026, and fiscal year ended December 28, 2025 the Company incurred net (loss) income attributable to SkyWater Technology, Inc. of $(12.3) million and $118.9 million, respectively. As of March 29, 2026 and December 28, 2025, the Company held cash and cash equivalents of $22.2 million and $23.2 million, respectively.

We had $22.2 million in cash and cash equivalents, not including cash held by a VIE that we consolidate, and availability under our Revolver of $61.8 million at March 29, 2026. We are subject to certain liquidity and EBITDA covenants under our Loan Agreement, as outlined in the section below entitled “Indebtedness.”

Open Market Sale Agreement

On September 2, 2022, SkyWater entered into an Open Market Sale Agreement with Jefferies LLC with respect to an at the market offering program (the “ATM Program”). Pursuant to the agreement, the Company may, from time to time, offer and sell up to $100.0 million in shares of the Company’s common stock. During the three-month period ended March 29, 2026 and March 30, 2025, the Company did not sell shares under the ATM Program. From the date of the ATM Program through March 29, 2026, the Company has cumulatively sold 2,516,586 shares at an average sale price of $9.96 per share, resulting in gross proceeds of approximately $25.1 million before deducting sales commissions and fees of approximately $1,212. The Company used the net proceeds to pay down the Revolver and fund its operations.

As of March 29, 2026, the Company was authorized to sell an additional $74.9 million in shares under the ATM Program. The Merger Agreement with IonQ prohibits the Company from issuing new shares of the Company’s common stock without IonQ’s prior written consent, which precludes the Company from utilizing the ATM Program.

Capital Expenditures

For the first quarter of 2026 and 2025, cash outflows related to capital expenditures totaled $10.1 million and $15.2 million, respectively. The majority of these capital expenditures relate to our foundry expansion in Minnesota, as discussed below, and the development of our advanced packaging capabilities at the Center for NeoVation in Florida. We anticipate our cash on hand and the availability under the Revolver will provide the funds needed to meet our customer demand and anticipated capital expenditures in fiscal year 2026.

We have approximately $3.5 million of contractual commitments relating to various anticipated capital expenditures outstanding at March 29, 2026 that we expect to pay during the remainder of 2026 through cash on hand and operating cash flows. In addition, we had $59.7 million of accounts payable at March 29, 2026 which we expect to pay during the remainder of 2026 through operating cash flows and draws on the Revolver.

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Working Capital

Historically, we have depended on cash on hand, funds available under our Revolver and, in the future, we may need to depend on additional debt and equity financings to fund our growth strategy, working capital needs, and capital expenditures. We believe that these sources of funds will be adequate to provide cash, as required, to support our strategy, ongoing operations, capital expenditures, lease obligations, and working capital for at least the next twelve months. However, we cannot be certain that we will be able to obtain future debt or equity financings on commercially reasonable terms sufficient to meet our cash requirements.

At March 29, 2026, the outstanding balance of our Revolver was $182.4 million, and our remaining availability under the Revolver was $61.8 million.

The following table sets forth general information derived from our interim condensed consolidated statement of cash flows for the first quarter of 2026 and 2025:


	First Quarter Ended
	March 29, 2026		March 30, 2025

	(in thousands)
Net cash provided by operating activities	$	27,900	$	55,967
Net cash used in investing activities	$	(10,100)	$	(15,183)
Net cash used in financing activities	$	(18,792)	$	(8,394)

Cash and Cash Equivalents

At March 29, 2026 and December 28, 2025, we had $22.2 million and $23.2 million of cash and cash equivalents, respectively. A discussion of the change in cash and cash equivalents can be found below.

Operating Activities

Cash flow from operations is driven by changes in the working capital needs associated with the various goods and services we provide, and expenses related to the infrastructure in place to support revenue generation. Working capital is primarily affected by changes in accounts receivable, contract assets, accounts payable, accrued expenses, and contract liabilities, all of which are partially correlated to and impacted by changes in the timing and volume of activities performed in our facilities.

Net cash provided by operating activities was $27.9 million during the first quarter of 2026, a decrease of $28.2 million from $56.0 million of cash provided by operating activities during the first quarter of 2025. The decrease was primarily driven by changes in contract liabilities. During the first quarter of 2025, short-term and long-term contract liabilities increased by $51.3 million, primarily due to a significant customer prepayment received during the period. In contrast, during the first quarter of 2026, short-term and long-term contract liabilities decreased by $13.1 million despite approximately $26 million of customer prepayments received from a significant contract. The decrease in contract liabilities during the first quarter of 2026 was primarily driven by a $15.8 million reduction related to the delivery of 11 tools under the SkyWater Florida program and a $16.0 million reduction at SkyWater Texas resulting from the passage of time and recognition of revenue from the off-market component of the Supply Agreement.

Other decreases to operating cash flow were driven by a $6.8 million decrease in earnings adjusted for non-cash items, as well as a $6.1 million increase in inventory, primarily related to the acquisition of Fab 25 and higher spare parts inventory, partially offset by reductions in legacy inventory. These negative impacts were primarily offset by a $34.6 million increase in accounts payable, primarily related to the acquisition of Fab 25, as well as a $4.0 million increase in accounts receivable due primarily to the addition of Fab 25 accounts receivable and higher balances associated with the Section 48D Advanced Manufacturing Investment Credit.

Investing Activities

Our investments in capital expenditures are intended to enable revenue growth in new and expanding markets, help us meet product demand, and increase our manufacturing efficiencies and capacity. Net cash used in investing activities was $10.1 million during the first quarter of 2026, a decrease of $5.1 million from $15.2 million during the first quarter of 2025. The decrease in cash used in investing activities during the first quarter of 2026 reflects decreased capital spending on property and equipment compared to the same period in 2025.

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Financing Activities

Net cash used in financing activities was $18.8 million in the first quarter of 2026, compared with $8.4 million in the first quarter of 2025. The higher use of cash in financing activities during the first quarter of 2026 was primarily due to a $10.1 million increase in net draws on our Revolver.

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Indebtedness

Sale Leaseback Transaction

In 2020, we entered into an agreement to sell the land and building of our Minnesota facility to Oxbow Realty, an affiliate of our principal stockholder, for $39.0 million, less applicable transaction costs of $1.5 million and transaction services fees paid to Oxbow Realty of $2.0 million, and paid a guarantee fee to our principal stockholder of $2.0 million. We subsequently entered into an agreement to leaseback the land and building from Oxbow Realty for initial payments of $0.4 million per month over 20 years. The monthly payments are subject to a 2% increase each year during the term of the lease. We are also required to make certain customary payments constituting “additional rent,” including certain monthly reserve, insurance, and tax payments, in accordance with the terms of the lease. Due to our continuing involvement in the property, we are accounting for the transactions as a failed sale leaseback. Under failed sale leaseback accounting, we are deemed the owner of the land and building with the proceeds received recorded as a financial obligation.

In June 2025, the Company entered into an agreement to sell and leaseback a furnace over a 36 month period. Monthly lease payments total $0.1 million under the agreement. The Company received $4.6 million of cash as part of the sale agreement and accounted for the transaction as a failed sale leaseback. As a result, the Company is deemed the owner of the asset and a financial obligation has been recorded. Monthly lease payments will reduce the financial obligation balance, with a portion of the payments being applied to interest expense over the course of the lease.

In April 2026, we entered into an agreement to sell a semiconductor manufacturing tool to an equipment financing lender for proceeds of approximately $36.0 million. We subsequently entered into an agreement to lease the tool from the lender for monthly payments of $0.8 million over 60 months. The agreement provides for a bargain purchase option at the end of the lease term and will be accounted for as a failed sale leaseback.

Revolving Credit Agreement

On December 28, 2022, we entered into a Loan and Security Agreement with Siena, which was amended on November 19, 2024 to extend the maturity date to December 31, 2028 and increase the total borrowing capacity to $130.0 million (the “Revolver”). On June 30, 2025, we entered into an Amended Loan Agreement with Siena and the other lenders party thereto, which replaced the prior Loan and Security Agreement, as amended, to further amend the credit facility and increase the borrowing base in connection with the Transaction. The Amended Loan Agreement significantly increased our borrowing capacity from $130 million to $350 million, increased the borrowing base under the Revolver, and extended the maturity date to June 30, 2030. The Amended Loan Agreement enhanced the availability under the borrowing base, increased the allowable unfunded capital expenditures from $15 million to $44 million for 2025, and increased our minimum liquidity requirement from $15 million to $30 million. We expect these changes to improve our liquidity profile and support continued investment in strategic capital growth initiatives.

The Company has incurred $10.1 million of debt issuance costs in connection with the Amended Loan Agreement, which is being amortized as additional interest expense over the term of the Revolver. At March 29, 2026, we had borrowings of $182.4 million and availability of $61.8 million under the Revolver.

Under the Amended Loan Agreement, the Company may be required to prepay the unpaid principal balance of the loans following specified prepayment events in the amount of 100% of the net proceeds received by the Company or any borrower with respect to such prepayment event. Borrowing under the Amended Loan Agreement is limited by a borrowing base of specified advance rates applicable to billed accounts receivable, unbilled accounts receivable, inventory and equipment, subject to various conditions and limits as provided in the Amended Loan Agreement. The Amended Loan Agreement also provides for borrowing base sublimits applicable to each of unbilled accounts receivable and equipment. Under certain circumstances, Siena may from time to time establish and revise reserves against the borrowing base and/or the maximum revolving facility amount.

Borrowings under the Amended Loan Agreement bear interest at a rate that depends upon the type of borrowing, whether a term secured overnight financing rate (“SOFR”) loan or base rate loan, plus the applicable margin. The term SOFR loan rate is a forward-looking term rate based on SOFR for a tenor of one month on the applicable day, subject to a minimum of 2.5% per annum. The base rate is the greatest of the prime rate, the Federal funds rate plus 0.5% and 7.0% per annum. The applicable margin is an applicable percentage based on the fixed charge coverage ratio that ranges from 4.0% to 5.0% per annum for term SOFR loans and ranges from 3.0% to 4.0% per annum for base rate loans.

The Amended Loan Agreement contains customary representations and warranties and financial and other covenants and conditions. Subject to certain cure rights and financial conditions, the Amended Loan Agreement requires $10 million in minimum EBITDA (as defined in the Amended Loan Agreement) calculated as of the last day of each calendar month for the preceding twelve calendar months, prohibits unfunded capital expenditures in excess of the amounts set forth in the Amended Loan Agreement calculated as of the last day of each calendar year commencing December 31, 2025, requires a minimum fixed

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charge coverage ratio, measured on a trailing twelve month basis, of not less than 1.00 to 1.00 if our liquidity is less than (i) $30 million prior to the consummation of a sale and leaseback transaction on certain owned real property in Austin, Texas or (ii) $80 million following the consummation of such sale and leaseback transaction, and requires the Borrowers maintain liquidity of at least $70 million at all times following such sale and leaseback transaction. In addition, the Amended Loan Agreement places certain restrictions on our ability to incur additional indebtedness (other than permitted indebtedness), to create liens or other encumbrances (other than liens relating to permitted indebtedness), to sell or otherwise dispose of assets, to merge or consolidate with other entities, and to make certain restricted payments, including payments of dividends to our stockholders. As of March 29, 2026, we were in compliance with applicable covenants of the Amended Loan Agreement and expect to continue to be in compliance with applicable financial covenants over the next twelve months.

Due to a lockbox clause in the Loan Agreement, the outstanding loan balance is required to be serviced with working capital, and the debt is classified as short-term on the interim condensed consolidated balance sheets in accordance with U.S. GAAP.

VIE Financing

On September 30, 2020, Oxbow Realty, the Company’s consolidated VIE, entered into a loan agreement for $39 million (the “VIE Financing”) to finance the acquisition of the building and land of the SkyWater Minnesota facility. The VIE Financing is repayable in equal monthly installments of $0.2 million over 10 years, with the balance payable at the maturity date of October 6, 2030. The interest rate under the VIE Financing is fixed at 3.44%. The VIE Financing is guaranteed by Oxbow Industries, who is also the sole equity holder of Oxbow Realty. The VIE Financing is not subject to financial covenants.

The terms of the VIE Financing include provisions that grant the lender several protective rights when certain triggering events defined in the loan agreement occur, including events tied to SkyWater’s occupancy of the SkyWater Minnesota facility and SkyWater’s financial performance. The triggering events are not financial covenants and the occurrence of these triggering events do not represent events of default, nor do they result in the VIE Financing becoming callable, rather the protective rights become enforceable by the lender. Based on the level of SkyWater’s earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs relative to gross rents paid from SkyWater to Oxbow Realty, as defined in the loan agreement, a triggering event existed and the lender’s protective rights were enforceable during the first half of fiscal year 2025. Pursuant to its protective rights, the lender had retained in a restricted account amounts paid by SkyWater to Oxbow Realty pursuant to the Company’s related party lease agreement that were in excess of the scheduled debt payments paid by Oxbow Realty to the lender. The triggering event was cured during the three-month period ended June 30, 2024 and the funds held in the restricted account were remitted back to Oxbow Realty. No triggering events as defined in the loan agreement existed as of March 29, 2026.

The VIE Financing is secured by a security interest in the land and building which was the subject of the sale-leaseback transaction described above. The Company’s VIE incurred third-party transaction costs of $0.1 million, which are recognized as debt issuance costs and are amortizing as additional interest expense over the life of the VIE Financing. The Company incurred additional third-party transaction costs of $3.5 million, which are recognized as debt issuance costs and are being amortized as additional interest expense over the life of the VIE Financing.

Tool Financing Loans

We, from time to time, enter into financing arrangements with lenders to finance the purchase of manufacturing tools and other equipment. In the first quarter of fiscal year 2026, we did not enter into any new arrangements to sell manufacturing tools and other equipment to financing lenders. In fiscal year 2025, these arrangements totaled $6.0 million. These agreements include bargain purchase options at the end of the lease terms, which we intend to exercise. These transactions represent failed sale leasebacks with the associated equipment recorded in property and equipment, net and the proceeds received, net of scheduled repayments of the financings, recorded as debt on the consolidated balance sheets.

Material Cash Requirements

Our material cash requirements from known contractual and other obligations primarily relate to the following, for which information on both a short-term and long-term basis is provided in the indicated notes to the condensed consolidated financial statements:

•Debt—Refer to Note 7.

•Capital expenditure commitments—Refer to Note 10.

•Capital lease commitments—Refer to Note 13.

•Sale leaseback obligation—Refer to Note 11.

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•Income taxes—Refer to Note 8.

•Other commitments and contingencies—Refer to Note 10.

Recent Accounting Developments

For information on new accounting pronouncements, see Note 3 to the condensed consolidated financial statements.

Emerging Growth Company and Smaller Reporting Company Status

We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act, with this qualification ending at the end of our fiscal 2026. For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation, and shareholder advisory votes on golden parachute compensation.

The JOBS Act also permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use the extended transition period for complying with new or revised accounting standards and therefore, we will not be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis.

However, as of December 28, 2025, we no longer qualify as a “smaller reporting company” as defined under Rule 12b-2 of the Exchange Act due to the market value of our common stock held by our non-affiliates as of the last business day of the fiscal quarter ended June 29, 2025 exceeding the applicable threshold for smaller reporting company status. Accordingly, while we remain eligible to take advantage of certain reduced disclosure and reporting requirements applicable to emerging growth companies, we are no longer eligible to rely on the reduced disclosure and reporting requirements available to smaller reporting companies beginning with this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

In connection with preparing our interim condensed consolidated financial statements in accordance with U.S. GAAP, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expense, and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends, and other factors that management believes are relevant at the time we prepared our interim condensed consolidated financial statements. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our interim condensed consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, valuation of long-lived assets, valuation of inventory, equity-based compensation, and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may materially differ from these estimates under different assumptions or conditions.

There have been no changes to our critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 28, 2025.

Non-GAAP Financial Measure

Our interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP. To supplement our interim condensed consolidated financial statements presented in accordance with U.S. GAAP, an additional non-GAAP financial measure is provided and reconciled in the table below.

We provide supplemental non-GAAP financial information that our management regularly evaluates to provide additional insight to investors as supplemental information to our U.S. GAAP results. Our management uses adjusted EBITDA to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate the Company’s and our management’s performance. We believe that adjusted EBITDA is a useful performance measure to our investors because it provides a baseline for analyzing trends in our business and excludes certain items that may not be indicative of our core operating results. The use of non-GAAP financial information should not be considered as an alternative to, or more meaningful than, the comparable U.S. GAAP measure. In addition, because this non-GAAP financial measure is not determined in accordance with U.S. GAAP, other companies, including our peers, may calculate their non-GAAP financial measures

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differently than we do. As a result, the non-GAAP financial measure presented in this Quarterly Report on Form 10-Q may not be directly comparable to similarly titled measures presented by other companies.

Adjusted EBITDA

Adjusted EBITDA is not a financial measure determined in accordance with U.S. GAAP. We define adjusted EBITDA as net (loss) income before interest expense, income tax (benefit) expense, depreciation and amortization, equity-based compensation, and certain other items that we do not view as indicative of our ongoing performance, including net income attributable to noncontrolling interests, equity-based compensation expense and transaction costs.

We believe adjusted EBITDA is a useful performance measure to our investors because it allows for an effective evaluation of our operating performance when compared to other companies, including our peers, without regard to financing methods or capital structures. We exclude the items listed above from net income or loss in arriving at adjusted EBITDA because these amounts can vary substantially within our industry depending on the accounting methods and policies used, book values of assets, capital structures, and the methods by which assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net (loss) income determined in accordance with U.S. GAAP. Certain items excluded from adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from adjusted EBITDA. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items and other similar items in our non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual, unless otherwise expressly indicated.

The following table presents a reconciliation of net loss attributable to SkyWater Technology, Inc. to adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.


	First Quarter Ended
	March 29, 2026		March 30, 2025

	(in thousands)
Net loss attributable to SkyWater Technology, Inc.	$	(12,308)	$	(7,345)
Interest expense	6,159		1,812
Income tax (benefit) expense	(284)		384
Depreciation and amortization, net	12,631		4,358
EBITDA	6,198		(791)
Equity-based compensation (1)	2,610		1,879

Sale process costs (2)	2,724		—

Transaction and integration costs (3)	269		1,810

Net income attributable to non-controlling interests (4)	1,156		1,127
Adjusted EBITDA	$	12,957	$	4,025

(1)Represents non-cash equity-based compensation expense.

(2)Represents incremental expenses incurred in connection with the Company’s evaluation of IonQ’s offer to acquire the Company, including legal, accounting, and other advisory fees.

(3)Represents transaction and integration costs associated with our June 30, 2025 acquisition of Fab 25, including legal fees, professional services fees, consultant fees, and other costs to effectuate the closing of the transaction and integration of the acquired business.

(4)Represents net income attributable to noncontrolling interests arising from our variable interest entity (VIE), which was formed for the purpose of purchasing the land and building of our primary operating facility in Bloomington, Minnesota. Since interest expense is added back to net loss to shareholders in our adjusted EBITDA financial measure, we also add back the net income attributable to noncontrolling interests as its net income is derived from interest the VIE charges SkyWater.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices. Currently, our market risks relate to potential changes in the fair value of our debt due to fluctuations in applicable market interest rates. In the future, our market risk exposure generally will be limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.

Credit Risk

Financial instruments that potentially subject us to credit risk are cash and cash equivalents, accounts receivable, and contract assets. Cash balances are maintained in financial institutions, which at times exceed federally insured limits. We monitor the financial condition of the financial institutions in which our accounts are maintained and have not experienced any losses in such accounts. We perform ongoing credit evaluations as to the financial condition of our customers with respect to trade receivables and contract assets. Generally, no collateral is required as a condition of sale. Our consideration of the need for an allowance for credit losses is based upon current market conditions and other factors.

Interest Rate Risk

At March 29, 2026, the outstanding balance of our Revolver was $182.4 million, which bears interest at a variable rate. At March 29, 2026, the rate in effect was 8.00%. Based on the outstanding balance of our Revolver at March 29, 2026, a 100 basis point increase in the interest rate would increase interest expense by $1.8 million annually.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial and accounting officer) as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of March 29, 2026. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 29, 2026 due to the material weaknesses in our internal control over financial reporting described below.

Notwithstanding the material weaknesses in internal control over financial reporting, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that the Company’s condensed consolidated balance sheets as of March 29, 2026 and December 28, 2025, the related condensed consolidated statements of operations, shareholders’ equity, and cash flows for the three-month periods ended March 29, 2026 and March 30, 2025, present fairly, in all material respects, the Company’s financial position, results of its operations and its cash flows for the periods presented in this Quarterly Report on Form 10-Q, in conformity with GAAP.

Previously Reported Material Weaknesses

As disclosed in Item 9A. “Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 28, 2025, we identified material weaknesses in our internal control over financial reporting. As of March 29, 2026, we have a material weaknesses in our revenue accounting process and a material weakness in our Fab 25 account reconciliation processes. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Remediation Plans

Remediation of the revenue accounting process material weakness will require further validation and testing to demonstrate the sustained operating effectiveness of the new IT general controls implemented in the second half of 2025 to address the privileged access issues inherent in the manufacturing application and related databases. To remediate the revenue accounting process material weakness, the Company plans to sustain the execution of the new IT-general controls implemented in fiscal year 2025 throughout fiscal year 2026 and perform testing throughout fiscal year 2026 to validate the effectiveness of the new controls implemented and to address the other revenue control deficiencies aggregated in this material weakness.

Remediation of the Fab 25 account reconciliation material weakness will require design, implementation, and sustained execution of business process and IT general controls for all accounting processes and related applications at Fab 25. In preparation for this effort, the Company completed the migration of Fab 25 to the Company’s existing ERP system in February 2026 and the Company will be concluding the transition services agreement (“TSA”) in mid-2026, thereby bringing all accounting processes fully under the control of the Company.

The Company will not be able to conclude whether the actions it is taking will remediate these material weaknesses until it has completed its remediation plans and performs testing to validate the effectiveness of these controls throughout fiscal year 2026.

As the Company continues to evaluate and work to remediate the control deficiencies that gave rise to the revenue accounting process material weakness and the Fab 25 account reconciliation material weakness, it may determine that additional measures or time are required to address the issues fully, or that it needs to modify or otherwise adjust the remediation actions described above. The Company will also continue to assess the effectiveness of its remediation efforts in connection with its evaluation of its internal control over financial reporting. The revenue accounting process material weakness and the Fab 25 account reconciliation material weakness cannot be considered remediated until the Company’s remediation plans are completed and the effectiveness of the remedial actions validated.

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Changes in Internal Control Over Financial Reporting

Other than the remediation activity discussed above, there were no changes in our internal control over financial reporting that occurred during the three-month period ended March 29, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition.

Item 1A. Risk Factors

This Quarterly Report on Form 10-Q should be read in conjunction with the risk factors included in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 28, 2025. There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 28, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(c) During the three-month period ended March 29, 2026, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

The following is a list of all exhibits filed or furnished as part of this report:


Exhibit Number						Description

2.1						Agreement and Plan of Merger , dated as of January 25, 2026 , among IonQ, Inc., Iris Merger Subsidiary 1 Inc., Iris Merger Subsidiary 2 LLC and SkyWater Technology, Inc. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2026)

3.1						Certificate of Incorporation of SkyWater Technology, Inc. (incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on April 12, 2021)

3.2						Bylaws of SkyWater Technology, Inc. (incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on April 12, 2021)









10.1						Voting Agreement, dated as of January 25, 2026, by and among IonQ, Inc., Iris Merger Subsidiary 1 Inc., Iris Merger Subsidiary 2 LLC, SkyWater Technology, Inc. and certain stockholders of SkyWater Technology, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2026)

10.2+						Restricted Stock Unit Agreement pursuant to 2021 Equity Incentive Plan

10.3+						SkyWater Technology, Inc. Employee Retention Plan

31.1						Certification of the Chief Executive Officer pursuant to Exchange Act Rules Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of the Chief Financial Officer pursuant to Exchange Act Rules Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2*						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+ Indicates a management contract or any compensatory plan, contract or arrangement.

* The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SkyWater Technology, Inc.

Date: May 8, 2026	By:	/s/ Thomas Sonderman
	Thomas Sonderman Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Steve Manko
	Steve Manko Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

SkyWater Technology, Inc 10-Q