Q2 2024 SkyWater Technology Inc Earnings Call

August 7, 2024

Yeah.

Audra: Good afternoon, my name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Skywater Technology Q2 2024 Financial Results Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise.

Audra: My name is Audra, and I will be your conference operator today.

Operator: Good afternoon.

Audra: My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the Skywater Technology Q2 2024 Financial Results Conference call. Today's conference is being recorded. All lines have been placed on mute to forget any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Audra: Good afternoon, my name is Audra and I will be your conference operator today. At this time I would like to welcome everyone to the Skywater Technology Q2 2024 financial results conference call. Today's conference is being recorded.

Audra: At this time, I would like to welcome everyone to the SkyWater Technology Q2 2024 financial results conference call. Today's conference is being recorded. All lines have been placed on mute to forget any background noise.

Audra: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Claire McAdams, Investor Relations. Please go ahead.

Audra: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Speaker Change: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.

Claire McAdams: At this time, I would like to turn the conference over to Claire McAdams, investor relations. Please go ahead.

Claire McAdams: At this time, I would like to turn the conference over to Claire McAdams, Investor Relations. Please go ahead. Good afternoon and welcome to Skywater's second quarter 2024 conference call. With me on the call today from Skywater, our Thomas Sonderman Chief Executive Officer and Steve Manko Chief Financial Officer. I'd like to remind you that our Call of Steam webcast live on Skywater's Investor Relations website at ir.skywatertechnology.com. The webcast will be available for replay shortly after the call concludes.

Speaker Change: At this time, I would like to turn the conference over to Claire McAdams, Investor Relations. Please go ahead.

Claire McAdams: Good afternoon, and welcome to Skywater's second quarter 2024 conference call. With me on the call today from Skywater are Thomas Sonderman, Chief Executive Officer, and Steve Manko, Chief Financial Officer. I'd like to remind you that our call is being webcast live on Skywater's Investor Relations website at ir.skywatertechnology.com. The webcast will be available for replay shortly after the call concludes.

Claire McAdams: Good afternoon and welcome to SkyWater's second quarter 2024 conference call. With me on the call today from SkyWater, our Thomas Sonderman, Chief Executive Officer, and Steve Manko, Chief Financial Officer. I'd like to remind you that our Call of Steam webcast live on Skywater's Investor Relations website at ir.skywatertechnology.com. The webcast will be available for replay shortly after the call concludes.

Speaker Change: Good afternoon and welcome to Skywater's second quarter 2024 conference call.

Claire McAdams: With me on the call today from Skywater are Thomas Sonderman, Chief Executive Officer, and Steve Manko, Chief Financial Officer. I'd like to remind you that our call is being webcast live on Skywater's Investor Relations website at ir.skywatertechnology.com.

Claire McAdams: The webcast will be available for replay shortly after the call concludes.

Claire McAdams: On our investor relations website, we have posted a slide presentation to accompany today's call, as well as the financial supplement summarizing our quarterly and annual financial results for the last three years, including all non-GAAP adjustments and comparisons to our GAAP results, as well as the impact of tool sales on our gross margin. During the call, any statements made about future financial results and business are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially.

Claire McAdams: On our IR website, we have posted a slide presentation to accompany today's call, as well as the financial supplements summarizing our quarterly and annual financial results for the last three years, including all non-GAAP adjustments and comparisons to our GAAP results, as well as the impact of pool sales on our gross margins. During the call, any statements made about future financial results and business are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially. For a discussion of these risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our earnings release filed on Form 8-K today and our Fiscal 2023 Form 10-K.

Claire McAdams: On our IR website, we have posted a slide presentation to accompany today's call, as well as the financial supplements summarizing our quarterly and annual financial results for the last three years, including all non-gap adjustments and comparisons to our gap results, as well as the impact of pool sales on our gross margins. During the call, any statements made about future financial results and business are forward looking statement. These forward looking statements are subject to risk and uncertainties that could cause our actual results to differ materially.

Claire McAdams: On our IR website, we have posted a slide presentation to accompany today's call, as well as a financial supplement summarizing our quarterly and annual financial results for the last three years, including all non-GAAP adjustments and comparisons to our GAAP results

Claire McAdams: as well as the impact of tool sales on our gross margins.

Claire McAdams: During the call, any statements made about future financial results and business are a forward-looking statement.

Claire McAdams: These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially.

Claire McAdams: For a discussion of these risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our earnings release filed on Form 8K today and our fiscal 2023 Form 10K. All forward-looking statements are made as of today, and we assume no obligation to update any such statements. During this call, we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release, our financial supplement, and in our Q2 earnings presentation, all three of which are posted on our investor relations website. With that, I'll turn the call over to Tom.

Claire McAdams: For a discussion of these risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our earnings release filed on form 8k today and our fiscal 2023 form 10k. All forward looking statements are made as of today, and we assume no obligation to update any such statements. During this call, we will discuss non-gap financial measures. You can find a reconciliation of these non-gap financial measures to gap financial measures in our earnings release, our financial supplement, and in our Q2 earnings presentation, all three of which are posted on our investor relations website.

Claire McAdams: All forward-looking statements are made as of today, and we assume no obligation to update any such statements. During this call, we will discuss non-GAAP financial measures.

Claire McAdams: All forward-looking statements are made as of today, and we assume no obligation to update any such statement.

Claire McAdams: You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release, our financial supplement, and in our Q2 earnings presentation, all three of which are posted on our investor relations website.

Claire McAdams: During this call, we will discuss non-GAAP financial measures.

Claire McAdams: You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release.

Claire McAdams: Our financial supplement and in our Q2 earnings presentation, all three of which are posted on our investor relations website.

Thomas Sonderman: With that, I'll turn the call over to Tom. Thank you, Claire, and good afternoon to everyone on the call. I'm pleased to report strong financial results for SkyWater's second quarter, with a record $93 million in revenue and our achievement of non-GAAP positive EPS for the first time. ATS Development revenue of nearly $62 million exceeded our expectations to reach a new record of 1% from Q1 and up 18% compared to Q2 of last year. This growth was driven primarily by continued strength in our aerospace and defense business, which extended forecasts due to pull-ins of demand on multiple programs, which we delivered through improved cycle times and agile engineering execution.

Thomas Sonderman: Thank you, Claire, and good afternoon to everyone on the call. I'm pleased to report strong financial results for Skywater's second quarter, with a record $93 million in revenue and our achievement of non-GAAP positive EPS for the first time. ATS development revenue of nearly $62 million exceeded our expectations to reach a new record of 1% from Q1 and up 18% compared to Q2 of last year. This growth was driven primarily by continued strength in our aerospace and defense business, which extended its forecast due to pull-ins of demand on multiple programs, which we delivered through improved fab cycle times and agile engineering execution. Wafer Services revenue was just under $6 million, slightly better than expected, but still well below prior run rates due to continued weakness in the broader industrial segment.

Claire McAdams: With that, I'll turn the call over to Tom.

Thomas Sonderman: Tool revenues exceeded our forecast at $26 million, with enhanced equipment lead times enabling faster deliveries within the quarter. Customer-funded tool installations demonstrate our customers' commitment to bring additional capabilities and capacity into our fabs to support their most critical programs. We believe we are in the early stages of an anticipated multi-year period of elevated customer co-investment. These investments are adding critical new capabilities in our fabs and will enable substantial additional scale to our business while maintaining our streamlined cost structure given minimal Skywater-funded CapEx needs. With the record results and the revenue upside in ATS, we achieved positive non-GAAP EPS results for the first time this quarter.

Tom: Thank You Claire and good afternoon to everyone on the call. I'm pleased to report strong financial results for Skywater's second quarter with a record 93 million dollars in revenue and our achievement of non-gap positive EPS for the first time.

Speaker Change: ATS development revenue of nearly $62 million exceeded our expectations to reach a new record of 1% from Q1 and up 18% compared to Q2 of last year.

Thomas Sonderman: This growth was driven primarily by continued strength in our aerospace and defense business, which extended forecasts due to pull-ins of demand on multiple programs, which we delivered through improved cycle times and agile engineering execution. Way for services revenue was just under $6 million, slightly better than expected, but still well below prior run rates due to continued weakness in the broader industrial segments.

Speaker Change: This growth was driven primarily by continued strength in our aerospace and defense business, which extended forecasts due to pull-ins of demand on multiple programs, which we delivered through improved fab cycle times and agile engineering execution.

Thomas Sonderman: Way for services revenue was just under $6 million, slightly better than expected, but still well below prior run rates due to continued weakness in the broader industrial segments.

Speaker Change: Wafer Services revenue was just under $6 million, slightly better than expected, but still well below prior run rates due to continued weakness in the broader industrial segment.

Thomas Sonderman: Development. Tool revenues exceeded our forecast at $26 million, with enhanced equipment lead times enabling faster deliveries within the quarter. Customer-funded tool installations demonstrate our customer's commitment to bring additional capabilities and capacity into our FAFs to support their most critical programs. We believe we are in the early stages of an anticipated multi-year period of elevated customer co-investment. These investments are adding critical new capabilities in our FAFs and will enable substantial additional scale to our business while maintaining our streamlined cost structure, given minimal Skywater-funded capex needs. With the record results and the revenue offset in ATS, we achieved non-GAAP ETS positive results for the first time this quarter.

Thomas Sonderman: Development. Tool revenues exceeded our forecast at $26 million with enhanced equipment lead times enabling faster deliveries within the quarter. Customer-funded tool installations demonstrate our customer's commitment to bring additional capabilities and capacity into our FAFs to support their most critical programs. We believe we are in the early stages of an anticipated multi-year period of elevated customer co-investment. These investments are adding critical new capabilities in our FAFs and will enable substantial additional scale to our business while maintaining our streamlined cost structure given minimal Skywater-funded capex needs.

Speaker Change: Tool revenues exceeded our forecast at $26 million with enhanced equipment lead times enabling faster deliveries within the quarter.

Speaker Change: Customer-funded tool installations demonstrate our customers' commitment to bring additional capabilities and capacity into our fabs to support their most critical programs. We believe we are in the early stages of an anticipated multi-year period of elevated customer co-investment.

Speaker Change: These investments are adding critical new capabilities in our fabs and will enable substantial additional scale to our business while maintaining our streamlined cost structure given minimal Skywater-funded CapEx needs.

Thomas Sonderman: With the record results and the revenue offset in ATS, we achieved non-GAP ETS positive results for the first time this quarter. With strong growth margin flow through and ongoing efficiency gains, we have now demonstrated the expected business level necessary to support profitable results in the future. We believe our capex light and high operating leverage business model will lead to significant expansion of our growth margin profile allowing strong profitable results in the years to come.

Speaker Change: With the record results and the revenue upside in ATS, we achieved non-GAAP EPS positive results for the first time this quarter.

Thomas Sonderman: With strong growth margin flow through and ongoing efficiency gains, we have now demonstrated the expected business level necessary to support profitable results in the future. We believe our capex light and high operating leverage business model will lead to significant expansion of our growth margin profile, allowing strong profitable results in the years to come.

Thomas Sonderman: With strong gross margin flow-through and ongoing efficiency gains, we have now demonstrated the expected business level necessary to support profitable results in the future. We believe our CapEx Lite and High Operating Leverage business model will lead to a significant expansion of our gross margin profile, allowing strong profitable results in the years to come. Today, I will highlight several positive developments in our business and provide our current outlook within the overall customer demand environment.

Speaker Change: With strong gross margin flow-through and ongoing efficiency gains, we have now demonstrated the expected business level necessary to support profitable results in the future.

Speaker Change: We believe our CapEx Lite and high operating leverage business model will lead to significant expansion of our gross margin profile, allowing strong profitable results in the years to come.

Thomas Sonderman: Today, I will highlight several positive developments in our business and provide our current outlook within the overall customer demand environment. First, our strong exhaust for Q2 and continued confidence in the growth expected in our ATS business for fiscal 2024 underscored the strategic importance of multiple aerospace and defense programs underway at Skywater. Altogether, our expectation is that the majority of our growth this year will be driven by several strategic A&D programs witnessing consistently strong demand, coupled with steady improvements in our capabilities and operational execution. For Q2 specifically, we witnessed some pull-ins of demand from the second half, which we expect will result in a slightly front-half loaded year for our ATS business in 2024.

Thomas Sonderman: Today, I will highlight several positive developments in our business and provide our current outlook within the overall customer demand environment. First, our strong exhaust for Q2 and continued confidence in the growth expected in our ATS business for fiscal 2024 underscored the strategic importance of multiple aerospace and defense programs underway at Skywater. Altogether, our expectation is that the majority of our growth this year will be driven by several strategic A&D programs witnessing consistently strong demand coupled with steady improvements in our capabilities and operational execution.

Speaker Change: Today, I will highlight several positive developments in our business and provide our current outlook within the overall customer demand environment.

Thomas Sonderman: First, our strong results for Q2 and continued confidence in the growth expected in our ATS business for Fiscal 2024 underscore the strategic importance of multiple aerospace and defense programs underway at Skywater. Altogether, our expectation is that the majority of our growth this year will be driven by several strategic A&E programs witnessing consistently strong demand coupled with steady improvements in our capabilities and operational execution. For Q2 specifically, we witnessed some pull-ins of demand from the second half, which we expect will result in a slightly front-half loaded year for our ATS business in 2024. Overall, we believe these programs are secure and well-funded.

Thomas Sonderman: For Q2 specifically, we witnessed some pull-ins of demand from the second half which we expect will result in a slightly front-half loaded year for our ATS business in 2024. Overall, we believe these programs are secure and well-funded. The added revenue tailwind of record level tool sales is yet another proof point of our customers' confidence in Skywater as a trusted domestic source of critical semiconductor technology.

Speaker Change: First, our strong results for Q2 and continued confidence in the growth expected in our ATS business for fiscal 2024 underscore the strategic importance of multiple aerospace and defense programs underway at Skywater.

Speaker Change: All together, our expectation is that the majority of our growth this year will be driven by several strategic A&E programs witnessing consistently strong demand coupled with steady improvements in our capabilities and operational execution.

Speaker Change: For Q2 specifically, we witnessed some pull-ins of demand from the second half, which we expect will result in a slightly front-half loaded year for our ATS business in 2024. Overall, we believe these programs are secure and well-funded.

Thomas Sonderman: Overall, we believe these programs are secure and well-funded. The added revenue tailwind of record level tool sales is yet another proof point of our customers' confidence in Skywater as a trusted domestic source of critical semiconductor technology.

Thomas Sonderman: The added revenue tailwind of record-level tool sales is yet another proof point of our customers' confidence in Skywater as a trusted domestic source of critical semiconductor technology. Next, we are pleased to announce another successful customer transition from ATS to wafer services, this time for biomedical pioneer QuantumSci. We have remained committed to our focus on next-generation medical technologies, in particular novel categories of instruments and devices that leverage our unique service model that enables highly differentiated and customized technology. For example, our recent collaboration with QuantumSci will support a key facet of their state-of-the-art proteome sequencing technology to enable enhanced analysis of proteins anticipated to propel a variety of life sciences applications, including drug discovery.

Speaker Change: The added revenue tailwind of record-level tool sales is yet another proof point of our customers' confidence in Skywater as a trusted domestic source of critical semiconductor technology.

Thomas Sonderman: Next, we are pleased to announce another successful customer transition from ATS to wafer services, this time for biomedical pioneer Quantum Size. We have remained committed to our focus on next-generation medical technologies, in particular for the novel categories of instruments and devices that leverage our unique service model that enables highly differentiated and customized technologies. Our recent collaboration with QuantumSci will support a key facet of their state-of-the-art proteome sequencing technology to enable enhanced analysis of proteins anticipated to propel a variety of life sciences applications, including drug discovery. We continue to believe that these types of customer partnerships build a strong foundation for the future growth of our commercial businesses.

Thomas Sonderman: Next, we are pleased to announce another successful customer transition from ATS to wafer services this time for biomedical pioneer quantum size. We have remained committed to our focus on next-generation medical technologies in particular for the novel categories of instruments and devices that leverage our unique service model that enables highly differentiated and customized technologies. Our recent collaboration with QuantumSci will support a key facet of their state-of-the-art proteome sequencing technology to enable enhanced analysis of proteins anticipated to propel a variety of life sciences applications including drug discovery.

Speaker Change: Next, we are pleased to announce another successful customer transition from ATS to Wafer Services, this time for Biomedical Pioneer QuantumSci.

Speaker Change: We have remained committed to our focus on next-generation medical technologies, in particular for the novel categories of instruments and devices that leverage our unique service model that enables highly differentiated and customized technologies.

Speaker Change: Our recent collaboration with QuantumSci will support a key facet of their state-of-the-art proteome sequencing technology to enable enhanced analysis of proteins anticipated to propel a variety of life sciences applications, including drug discovery.

Thomas Sonderman: We continue to believe that these types of customer partnerships build a strong foundation for the future growth of our commercial businesses, where, in addition to advanced biomedical, we see strong potential for our advanced compute and thermal imaging platform. Another exciting development is the recent installation of MultiBeam's high productivity direct-write patterning system into our Minnesota fab. The first-of-its-kind multi-column e-beam lithography system, our MEBL system, enables the most advanced 200mm patterning solution capable of sub-50nm geometries currently available from early concept prototyping through production ramp.

Thomas Sonderman: We continue to believe that these types of customer partnerships build a strong foundation for the future growth of our commercial businesses. We are in addition to advanced biomedical. We see strong potential for our advanced compute and thermal imaging platform. Another exciting development is the recent installation of multi-beans high productivity direct-right patterning system into our Minnesota FAF. The first of its kind, multi-column e-beam lithography, our M-E-B-L system, enables the most advanced 200-millimeter patterning solution capable of sub-15-anometer geometries currently available from early concept prototyping through production ramps.

Speaker Change: We continue to believe that these types of customer partnerships build a strong foundation for the future growth of our commercial businesses, where in addition to advanced biomedical, we see strong potential for our advanced compute and thermal imaging platforms.

Thomas Sonderman: We are in addition to advanced biomedical. We see strong potential for our advanced compute and thermal imaging platform.

Thomas Sonderman: Another exciting development is the recent installation of multi-beans high productivity direct-right patterning system into our Minnesota FAF. The first of its kind, multi-column e-beam lithography, our M-E-B-L system, enables the most advanced 200-millimeter patterning solution capable of sub-15-anometer geometries currently available from early concept prototyping through production ramps. We consider this new direct-right lithography capability, which is orders of magnitude faster and more productive than conventional e-beam solutions, as a key development toward supporting strong customer demand for our technology as a service, our task, business model. M-E-B-L accommodate high topography and curvilinear designs to enable 3D devices, such as MEMS and photonics, and also can enable secure chip identification for anti-conofit applications as one example.

Speaker Change: Another exciting development is the recent installation of MultiBeam's high productivity direct-write patterning system into our Minnesota fab.

Speaker Change: The first-of-its-kind multi-column e-beam lithography, our MEBL system, enables the most advanced 200-mm patterning solution capable of sub-50-nm geometries currently available from early concept prototyping through production ramp.

Thomas Sonderman: We consider this new direct-write lithography capability, which is orders of magnitude faster and more productive than conventional e-beam solutions, as a key development toward supporting strong customer demand for our technology-as-a-service (TAS) business model. MEBL accommodates high topography and curved linear designs to enable 3D devices such as MEMS and photonics, and it also can enable secure chip identification for anti-conflict applications, as one example.

Thomas Sonderman: We consider this new direct-right lithography capability, which is orders of magnitude faster and more productive than conventional e-beam solutions, as a key development toward supporting strong customer demand for our technology as a service, our task, business model. M-E-B-L accommodate high topography and curvilinear designs to enable 3D devices, such as MEMS and photonics, and also can enable secure chip identification for anti-conofit applications as one example. M-E-B-L can also enable advanced packaging for very large and custom interposers. We are very excited to add this capability and artist speed the concept of production journey and secure defense, biomedical, thermal imaging, and the high reliability and advanced compute markets.

Speaker Change: We consider this new direct-write lithography capability, which is orders of magnitude faster and more productive than conventional e-beam solutions, as a key development toward supporting strong customer demand for our technology-as-a-service, our TAS, business model.

Speaker Change: MEBL accommodates high topography and curved linear designs to enable 3D devices such as MEMS and photonics, and also can enable secure chip identification for anti-conflict applications, as one example.

Thomas Sonderman: MEBL can also enable advanced packaging for very large and custom interposers. We are very excited to add this capability in order to speed the concept of production journey and secure the defense, biomedical, thermal imaging, and high reliability and advanced compute market. Another highlight since last quarter is the first tool delivery of our new fan-out wafer-level packaging platform in Florida. With the arrival of tools accelerating as we move through the next several quarters, we anticipate ATS development on this exciting new technology to ramp up throughout 2025.

Thomas Sonderman: M-E-B-L can also enable advanced packaging for very large and custom interposers. We are very excited to add this capability and artist speed the concept of production journey and secure defense, biomedical, thermal imaging, and the high reliability and advanced compute markets.

Speaker Change: MEBL can also enable advanced packaging for very large and custom interposers.

Speaker Change: We are very excited to add this capability in order to speed the concept of production journey in secure defense, biomedical, thermal imaging, and the high reliability and advanced compute markets.

Thomas Sonderman: Another highlight since last quarter is the first tool delivery of our new fan outweigh for level packaging platform in Florida. With the arrival of tools accelerating as we move through the next several quarters, we anticipate ATS development on this exciting new technology to ramp up throughout 2025. We have already begun engaging a broad set of customers across both defense and commercial applications, including Tier 1 semiconductor companies. We believe there is a clear market demand for domestic advanced packaging services that can support waivers from any boundary. We have secured $120 million in outside funding to complete the tooling and facilitation of our Florida operation.

Speaker Change: Another highlight since last quarter is the first tool delivery of our new fan-out wafer-level packaging platform in Florida. With the arrival of tools accelerating as we move through the next several quarters, we anticipate ATS development on this exciting new technology to ramp up throughout 2025.

Thomas Sonderman: We have already begun engaging a broad set of customers across both defense and commercial applications, including tier one semiconductor companies. We believe there is a clear market demand for domestic advanced packaging services that can support wafers from any foundry. We have secured $120 million in outside funding to complete the tooling and facilitation of our Florida operation. This first new tool delivery for our 300mm capable fan-out packaging line is an exciting milestone for our emerging advanced packaging business.

Speaker Change: We have already begun engaging a broad set of customers across both defense and commercial applications, including Tier 1 semiconductor companies.

Thomas Sonderman: We believe there is a clear market demand for domestic advanced packaging services that can support waivers from any boundary. We have secured $120 million in outside funding to complete the tooling and facilitation of our Florida operation. There's first new tool delivery for our 300 millimeter capable fan out packaging line as an exciting milestone for emerging the fans packaging business.

Speaker Change: We believe there is a clear market demand for domestic advanced packaging services that can support wafers from any foundry. We have secured $120 million in outside funding to complete the tooling and facilitation of our Florida operation.

Thomas Sonderman: There's first new tool delivery for our 300 millimeter capable fan-out packaging line as an exciting milestone for emerging the fans packaging business.

Speaker Change: This first new tool delivery for our 300mm capable fan-out packaging line is an exciting milestone for our emerging advanced packaging business.

Thomas Sonderman: Now turning to our outlook. Our full year revenue expectations for ATS and waiver services in 2024 are largely unchanged since our last earnings call. We continue to expect ATS development growth in the range of 10 to 20% over 2023 and a meaningful decline in our legacy waiver services revenue. Today, we are once again increasing our forecast for customer-funded CAPEX investments, which for SkyWater are recorded as tools revenue. We now expect approximately $80 million of customer-funded CAPEX investments in 2024. With strong operational performance as we install and ramp up these new systems, we are executing well in our expected path to install over $200 million of new customer-funded tooling spanning 2024 through 2026.

Thomas Sonderman: Now turning to our outlook, our full-year revenue expectations for ATS and wafer services in 2024 are largely unchanged since our last earnings call. We continue to expect ATS development growth in the range of 10 to 20 percent over 2023 and a meaningful decline in our legacy wafer services revenue. Today, we are once again increasing our forecast for customer-funded CapEx investments, which for Skywater are recorded as tools revenue. We now expect approximately $80 million of customer-funded CapEx investments in 2024.

Speaker Change: Now turning to our Outlook.

Speaker Change: Our full-year revenue expectations for ATS and wafer services in 2024 are largely unchanged since our last earnings call.

Speaker Change: We continue to expect ATS development growth in the range of 10-20% over 2023 and a meaningful decline in our legacy wafer services revenue.

Thomas Sonderman: Today, we are once again increasing our forecast for customer-funded CAPEX investments which for SkyWater are recorded as tools revenue. We now expect approximately $80 million of customer-funded CAPEX investments in 2024. With strong operational performance as we install and ramp up these new systems, we are executing well in our expected path to install over $200 million of new customer-funded tooling spanning 2024 through 2026.

Speaker Change: Today, we are once again increasing our forecast for customer-funded CapEx investments, which for Skywater are recorded as tools revenue.

Speaker Change: We now expect approximately $80 million of customer-funded CapEx investments in 2024.

Thomas Sonderman: With strong operational performance as we install and wrap up these new systems, we are executing well on our expected path to install over $200 million of new customer-funded tooling spanning 2024 through 2026. For Q3, specifically, we are forecasting total revenues to be slightly higher than Q2. Within this forecast, ATS development revenue is expected to be $60 million, plus or minus 3%, and wafer services revenue in the $4 to $5 million range.

Speaker Change: With strong operational performance as we install and wrap up these new systems, we are executing well in our expected path to install over $200 million of new customer-funded tooling spanning 2024 through 2026.

Thomas Sonderman: For Q3 specifically, we are forecasting total revenues to be slightly higher than Q2. Within this forecast, ATS development revenue is expected to be $60 million plus or minus 3%, and waiver services revenue in the $4 to $5 million range. With our current visibility, we believe waiver services is likely to remain quite soft for at least another quarter or two, reflecting the continued weakness in the broader industrial market. That being said, we are optimistic for a return to growth for waiver services in 2025, driven by the thermal imaging and medical diagnostics. With customer-funded capex, continuing to ramp to record levels, tool revenue in Q3 is expected to be approximately $30 million.

Speaker Change: For Q3 specifically, we are forecasting total revenues to be slightly higher than Q2.

Speaker Change: Within this forecast, ATS development revenue is expected to be $60 million, plus or minus 3 percent, and wafer services revenue in the $4 to $5 million range.

Thomas Sonderman: With our current visibility, we believe wafer services revenue is likely to remain quite soft for at least another quarter or two, reflecting the continued weakness in the broader industrial market. That being said, we are optimistic about a return to growth for wafer services in 2025, driven by the thermal imaging and medical diagnostic segment. With customer-funded CapEx continuing to ramp to record levels, tool revenue in Q3 is expected to be approximately $30 million.

Speaker Change: With our current visibility, we believe wafer services is likely to remain quite soft for at least another quarter or two, reflecting the continued weakness in the broader industrial market.

Thomas Sonderman: That being said, we are optimistic for a return to growth for waiver services in 2025, driven by the thermal imaging and medical diagnostics. With customer-funded capex, continuing to ramp to record levels, tool revenue in Q3 is expected to be approximately $30 million.

Speaker Change: That being said, we are optimistic for a return to growth for wafer services in 2025 driven by the thermal imaging and medical diagnostic segments.

Speaker Change: With customer-funded CapEx continuing to ramp to record levels, tool revenue in Q3 is expected to be approximately $30 million.

Thomas Sonderman: Finally, we are driving for incremental growth in each of our businesses as we move into 2025, and we look forward to continuing to build your confidence in our ability to execute on our growth and profitability objectives.

Speaker Change: Finally, we are driving for incremental growth in each of our businesses as we move into 2025, and we look forward to continuing to build your confidence in our ability to execute on our growth and profitability objectives. I will now turn the call over to Steve.

Steve Manko: I will now turn the call over to Steve. Thank you, Tom. Second quarter revenue reached another record for us at $93.3 million, with upside reported and all three revenue components. Total revenue was up 17% from Q1 and up 34% from the second quarter of 2023. Record APS development revenue of $61.7 million exceeded our forecast for the quarter as a result of strong demand and acceleration on our strategic aerospace and defense programs. While we had expected a modestly lower ATS run rate entering Q2, actual ATS revenues increased slightly from the first quarter. As expected, wafer services revenue declined immediately from our prior run rates, but still came in a bit higher than forecast at $5.8 million.

Steve Manko: I will now turn the call over to Steve. Thank you, Tom. Second quarter revenue reached another record for us at $93.3 million with upside reported and all three revenue components. Total revenue was up 17% from Q1 and up 34% from the second quarter of 2023. Record APS development revenue of $61.7 million exceeded our forecast for the quarter as a result of strong demand and acceleration on our strategic aerospace and defense programs.

Steve Manko: Thank you, Tom. Second quarter revenue reached another record for us at $93.3 million, with upside reported in all three revenue components. Total revenue was up 17% from Q1 and up 34% from the second quarter of 2023. Record ATS development revenue of $61.7 million exceeded our forecast for the quarter as a result of strong demand and accelerations on our strategic aerospace and defense program. While we had expected a modestly lower ATS run rate entering Q2, actual ATS revenues increased slightly from the first quarter. As expected, Waiver Services revenue declined meaningfully from our prior run rates, but it still came in a bit higher than forecast at $5.8 million.

Steve: Thank you, Tom. Second quarter revenue reached another record for us at $93.3 million, with upside reported in all three revenue components.

Steve: Total revenue was up 17% from Q1 and up 34% from the second quarter of 2023. Record ATS development revenue of $61.7 million exceeded our forecast for the quarter as a result of strong demand and accelerations on our strategic aerospace and defense programs.

Steve Manko: While we had expected a modestly lower ATS run rate entering Q2, actual ATS revenues increased slightly from the first quarter. As expected, wafer services revenue declined immediately from our prior run rates, but still came in a bit higher than forecast at $5.8 million. Tools revenue was $25.9 million compared to our Outlook for at least $20 million with the accelerated delivery of tools near quarter rent. Our non-gap gross margin for the quarter was 18.9% at the upper end of our guidance range due primarily to stronger ETS and wafer services revenue compared to our forecast.

Steve: While we had expected a modestly lower ATS run rate entering Q2, actual ATS revenues increased slightly from the first quarter.

Speaker Change: As expected, wafer services revenue declined meaningfully from our prior run rates, but still came in a bit higher than forecast at $5.8 million.

Steve Manko: Tools revenue was $25.9 million compared to our Outlook for at least $20 million with the accelerated delivery of tools near quarter rent. Our non-GAAP gross margin for the quarter was 18.9% at the upper end of our guidance range due primarily to stronger ETS and wafer services revenue compared to our forecast. Tools revenue in the quarter impacted non-GAAP gross margin by 570 basis points. As a reminder, you can find the impact of tools revenue on our gross margin each quarter in the financial supplement posted to our IR website. Non-GAAP operating expenses were $13.5 million, which was well below the forecast, primarily due to lower variable compensation and a shift in timing of certain other costs to subsequent quarters.

Steve Manko: Tools revenue was $25.9 million, compared to our outlook for at least $20 million, due to the accelerated delivery of tools near quarter end. Our non-GAAP gross margin for the quarter was 18.9%, at the upper end of our guidance range, due primarily to stronger ETS and wafer services revenue compared to our forecast. Tools revenue in the quarter impacted non-GAAP gross margin by 570 basis points.

Speaker Change: Tools revenue was $25.9 million compared to our outlook for at least $20 million with the accelerated delivery of tools near quarter end.

Speaker Change: Our non-GAAP gross margin for the quarter was 18.9% at the upper end of our guidance range, due primarily to stronger ETS and wafer services revenue compared to our forecast.

Steve Manko: Tools revenue in the quarter impacted non-gap gross margin by 570 basis points. As a reminder, you can find the impact of tools revenue on our gross margin each quarter into financial supplement posted to our IR website. Non-gap operating expenses were $13.5 million, which was well below the forecast, primarily due to lower variable compensation and a shift in timing of certain other costs to subsequent quarters. With the up-siding gross margin and lower AAPX, non-gap operating income was well ahead of forecast at $4.1 million.

Speaker Change: Tools revenue in the quarter impacted non-GAAP gross margin by 570 basis points. As a reminder, you can find the impact of tools revenue on our gross margin each quarter in the financial supplement posted to our IR website.

Steve Manko: As a reminder, you can find the impact of tools revenue on our gross margin each quarter in the financial supplement posted to our IR website. Non-GAAP operating expenses were $13.5 million, which was well below the forecast, primarily due to lower variable compensation and a shift in the timing of certain other costs in subsequent quarters. With the upside in gross margin and lower OPEX, non-GAAP operating income was well ahead of forecast at $4.1 million, adjusted EBITDA was $8.1 million, and we achieved a non-GAAP net income of $0.02 per share. Turning to the balance.

Speaker Change: non-GAAP operating expenses were $13.5 million, which was well below the forecast, primarily due to lower variable compensation and a shift in timing of certain other costs to subsequent quarters.

Steve Manko: With the up-siding gross margin and lower AAPX, non-GAAP operating income was well ahead of forecast at $4.1 million. Adjusted EBITDA was $8.1 million, and we achieved a non-GAAP net income of two cents per share.

Speaker Change: With the upside in gross margin and lower OPEX, non-GAAP operating income was well ahead of forecast at $4.1 million, adjusted EBITDA was $8.1 million, and we achieved a non-GAAP net income of $0.02 per share.

Steve Manko: Adjusted EBITDA was $8.1 million, and we achieved a non-gap net income of two cents per share.

Steve Manko: Turning to the balance sheet. The balance of total cash at quarter end at 18.4 million dollars has remained relatively consistent since year end 2023. We generally manage our cash needs through inter-quarter draws on a revolver, which also helps minimize our overall borrowing costs. Q2 was a strong quarter of free cash flow generation with $9.3 million in cash flow from operations and $1.1 million of CAPX. Positive cash flow from operations consisted of approximately $5.8 million generated from the P&L and $3.5 million benefit from working capital changes. During the quarter, we reduced our overall indebtedness by $5.6 million, with $66.3 million in total debt outstanding at quarter end.

Steve Manko: The balance of total cash at quarter end, at $18.4 million, has remained relatively consistent since year-end 2023. We generally manage our cash needs through inter-quarter draws on a revolver, which also helps minimize our overall borrowing costs. Q2 was a strong quarter of free cash flow generation, with $9.3 million in cash flow from operations and $1.1 million of CapEx. Positive cash flow from operations consisted of approximately $5.8 million generated from the P&L and $3.5 million benefit from working capital changes. During the quarter, we reduced our overall indebtedness by $5.6 million, with $66.3 million in total debt outstanding at quarter end. We currently have $74 million available on our revolver.

Speaker Change: Turning to the balance sheet.

Speaker Change: The balance of total cash at quarter end, at $18.4 million, has remained relatively consistent since year-end 2023. We generally manage our cash needs through inter-quarter draws on a revolver, which also helps minimize our overall borrowing costs.

Steve Manko: Q2 was a strong quarter of free cash flow generation with $9.3 million in cash flow from operations in $1.1 million of CAPX. Positive cash flow from operations consisted of approximately $5.8 million generated from the P&L and $3.5 million benefit from working capital changes.

Speaker Change: Q2 was a strong quarter of free cash flow generation, with $9.3 million in cash flow from operations and $1.1 million of CapEx.

Speaker Change: Positive cash flow from operations consisted of approximately 5.8 million dollars generated from the P&L and 3.5 million dollars benefit from working capital changes.

Steve Manko: During the quarter, we reduced our overall indebtedness by $5.6 million with $66.3 million in total debt outstanding at quarter end. We currently have $74 million available on our revolver.

Speaker Change: During the quarter, we reduced our overall indebtedness by $5.6 million, with $66.3 million in total debt outstanding at quarter end. We currently have $74 million available on our revolver.

Steve Manko: We currently have $74 million available on our revolver.

Steve Manko: Turning to our outlook for Q3 and our expectations for various financial metrics as we move through 2024 and 2025. As Tom mentioned, with our current visibility, we expect Q3 total revenues in the mid-90 million dollar range. This reflects our forecast for ETF development revenue of $60 million plus or minus 3%, $4 to $5 million for wait for services revenue, and approximately $30 million of tool sales.

Steve Manko: Turning to our outlook for Q3 and our expectations for various financial metrics as we move through 2024 and into 2025. As Tom mentioned, with our current visibility, we expect Q3 total revenues in the mid $90 million range. This reflects our forecast for ATS development revenue of $60 million, plus or minus 3%, $4 to $5 million for wait-for-service revenue, and approximately $30 million in tool sales. Given this expected revenue profile, we expect Q3 non-GAAP gross margin in the mid to high teens. Our gross margin expectations reflect the increased mix of tool sales expected in the quarter, which we expect will impact gross margin by approximately 7 percentage points or 700 basis points.

Speaker Change: Turning to our outlook for Q3 and our expectations for various financial metrics as we move through 2024 into 2025.

Tom: As Tom mentioned, with our current visibility, we expect Q3 total revenues in the mid-$90 million range.

Tom: This reflects our forecast for ATS development revenue of $60 million, plus or minus 3%, $4 to $5 million for wafer services revenue, and approximately $30 million of tool sales.

Steve Manko: Service. Given this expected revenue profile, we expect Q3 non-GAAP gross margin in the mid to high teens. Our gross margin expectations reflect the increased mix of tool sales expected in the quarter, which we expect will impact gross margin by approximately 7 percentage points or 700 basis points. We expect non-GAAP operating expenses of approximately $14 million for the third quarter and to remain in this range through the end of fiscal 2024. For the full year, our revenue outlook is largely unchanged in the last quarter. We continue to forecast APS development revenue growth in 2024 in the range of 10 to 20 percent, while the prolonged industry softness affecting our wafer services business is expected to result in a revenue decline of 60 to 65 percent for the full year.

Steve Manko: Service. Given this expected revenue profile, we expect Q3 non-gap gross margin in the mid to high teams. Our gross margin expectations reflect the increased mix of tool sales expected in the quarter, which we expect will impact gross margin by approximately 7 percentage points or 700 basis points. We expect non-gap operating expenses of approximately $14 million for the third quarter and to remain in this range through the end of fiscal 2024.

Speaker Change: Given this expected revenue profile, we expect Q3 non-GAAP gross margin in the mid- to high-teens.

Speaker Change: Our gross margin expectations reflect the increased mix of tool sales expected in the quarter, which we expect will impact gross margin by approximately 7 percentage points or 700 basis points.

Steve Manko: We expect non-GAAP operating expenses of approximately $14 million for the third quarter and to remain in this range through the end of fiscal 2024. For the full year, our revenue outlook is largely unchanged since last quarter. We continue to forecast APS development revenue growth in 2024 in the range of 10 to 20 percent, while the prolonged industry softness affecting our wafer services business is expected to result in a revenue decline of 60 to 65 percent for the full year.

Speaker Change: We expect non-GAAP operating expenses of approximately $14 million for the third quarter and to remain in this range through the end of fiscal 2024.

Steve Manko: For the full year, our revenue outlook is largely unchanged in the last quarter. We continue to forecast APS development revenue growth in 2024 in the range of 10 to 20 percent, while the prolonged industry softness affecting our wafer services business is expected to result in a revenue decline of 60 to 65 percent for the full year.

Speaker Change: For the full year, our revenue outlook is largely unchanged since last quarter.

Speaker Change: We continue to forecast APS development revenue growth in 2024 in the range of 10-20%, while the prolonged industry softness affecting our wafer services business is expected to result in a revenue decline of 60-65% for the full year.

Steve Manko: Today, we have increased the expected level of tools revenue for the year to approximately $80 million.

Steve Manko: Today, we have increased the expected level of tools revenue for the year to approximately $80 million. Finally, here are a few more of our assumptions for our quarterly results. Our OPEX run rates are lower than previously forecasted for 2024 as a result of good execution on our cost control initiatives, as well as deferment of certain spending to future quarters. As a result, the run rate is likely to be somewhat higher as we move into next year.

Steve Manko: Today, we have increased the expected level of tools revenue for the year to approximately $80 million.

Speaker Change: Today, we have increased the expected level of tools revenue for the year to approximately $80 million.

Steve Manko: Finally, here are a few more of our assumptions for our quarterly results. Our OptX run rates is lower than previously forecasted for 2024 as a result of good execution on our cost control initiatives as well as the firmament of certain spending to future quarters. As a result, the run rate is likely to be somewhat higher as we move into next year. While overall debt levels will fluctuate through the year depending on draws from our revolver, we believe $2.5 to $2.9 million in quarterly interest expenses is a good assumption for the foreseeable future as we continue to benefit from over $20 million of advanced customer deposits for tool purchases.

Speaker Change: Finally, here are a few more of our assumptions for our quarterly results. Our OPEX run rates is lower than previously forecasted for 2024 as a result of good execution on our cost control initiatives as well as deferment of certain spending to future quarters.

Speaker Change: As a result, the run rate is likely to be somewhat higher as we move into next year.

Steve Manko: While overall debt levels will fluctuate through the year depending on draws from a revolver, we believe $2.5 to $2.9 million in quarterly interest expense is a good assumption for the foreseeable future as we continue to benefit from over $20 million of advanced customer deposits for tool purchases. For the remainder of 2024, for modeling purposes, you should assume nominal to no tax expense or benefit. Our income from variable interest entities below the line is not something we can predict with accuracy, but $1 million is a historical average that we expect will be appropriate to use for your models looking forward. Operator, please open the line for questions.

Speaker Change: While overall debt levels will fluctuate through the year depending on draws from our revolver, we believe $2.5 to $2.9 million in quarterly interest expense is a good assumption for the foreseeable future as we continue to benefit from over $20 million of advanced customer deposits for tool purchases.

Steve Manko: For the remainder of 2024 for modeling purposes, you should assume nominal to no tax expense for benefits. Our income from variable interest entities below the line is not something we can predict with accuracy, but $1 million is a historical average that we expect will be appropriate to use for your models looking forward.

Speaker Change: For the remainder of 2024, for modeling purposes, you should assume nominal to no tax expense or benefit.

Speaker Change: our income from variable interest eneries below the line is not something we can predict with accuracy but one million dollars is a historical average that we expect will be appropriate to use for your models looking forward with that i'll turn the call over to q and a operator please open the line for questions

Audra: With that, I'll turn the call over to Q&A. Operator, please open the line for questions. Thank you. We will now begin the question and answer session.

Operator: With that, I'll turn the call over to Q&A.

Operator: Operator, please open the line for questions. Thank you. We will now begin the question and answer session. If you have dialed in, I would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.

Audra: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. And our first question goes to Harsh Kumar at Piper Sandler.

Audra: If you have dialed in, I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.

Speaker Change: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.

Harsh Kumar: And our first question goes to Harsh Kumar at Piper Sandler. Hi, guys. Congratulations on a very, very strong execution.

Speaker Change: And our first question goes to Harsh Kumar at Piper Sandler.

Harsh Kumar: Yeah, hey guys. Congratulations on a very, very strong execution. Tom, I have one for you.

Speaker Change: Yeah, hey guys, congratulations on a very, very strong execution.

Thomas Sonderman: Tom, I had one for you. I guess the question was, what kind of programs are you seeing in ATS? You talked about aerospace and defense being the dominant sort of force in the results this quarter, and you talked about this continuing on for the rest of the years. I was curious if there's a specific area of aerospace and defense where people are coming to you more than other areas, or is it pretty broad based? Well, clearly, you know, we talked before about thermal imaging. I think that's a strong growth area for us. There's a variety of special programs will be referred to as specialized ASICs that drive a lot of our engagement with the aerospace and defense business.

Thomas Sonderman: I guess the question was, what kind of programs are you seeing in ATS? You talked about aerospace and defense being the dominant sort of force in the results this quarter, and you talked about this continuing for the rest of the year. So I was curious if there's a specific area of aerospace and defense where people are coming to you more than other areas, or it's just pretty broad.

Speaker Change: Tom, I had one for you. I guess the question was, what kind of programs are you seeing in ATS?

Speaker Change: You talked about aerospace and defense being the dominant sort of force in the results this quarter, and you talked about this continuing on for the rest of the year. So I was curious if there's a specific area of aerospace and defense where people are coming to you more than other areas, or is it pretty broad-based?

Thomas Sonderman: Well, clearly, you know, we've talked before about thermal imaging. I think that's a strong growth area for us. There are a variety of special programs that we'll refer to as specialized ASICs that drive a lot of our engagement with the aerospace and defense business. And then, of course, we've talked before about the RAD-HART program, which, while it gets a lot of attention, today is a relatively small component of our overall A&D business. So I'd bucket it into those three broad categories.

Thomas Sonderman: Well, clearly, you know, we talked before about thermal imaging. I think that's a strong growth area for us. There's a variety of special programs will be referred to as specialized ASICs that drive a lot of our engagement with the aerospace and defense business. And then, of course, we talked before about the Rad Hard program, which, while it gets a lot of attention, today is a relatively small component of our overall indie business. So I bucketed in those three broad categories. I got you, okay.

Speaker Change: Well, clearly, you know, we've talked before about thermal imaging. I think that's a strong growth area as far as...

Speaker Change: There's a variety of special programs will be referred to as specialized ASICs.

Speaker Change: that drive a lot of our engagement with the aerospace and defense business.

Thomas Sonderman: And then, of course, we talked before about the Rad Hard program, which, while it gets a lot of attention, today is a relatively small component of our overall indie business. So I bucketed in those three broad categories. I got you, okay.

Speaker Change: And then, of course, we talked before about the RAD-HART program, which, while it gets a lot of attention, today is a relatively small component of our overall A&E business. So I'd bucket it in those three broad categories.

Thomas Sonderman: I got you. Okay. And then for my follow-up, Tom, you're putting the Florida FAB together. Sounds like you're, I think you're getting closer to commercialization at some point in time in the near term, but could you maybe help us think about what this Florida facility for advanced packaging can do for you and what the contribution could be when it's all put together and sort of humming and running?

Thomas Sonderman: And then from my follow-up time, you're equipping the Florida FAP. Sounds like you're, I think you're getting closer to commercialization at some point in time in the near term, but could you maybe help us think about what this, what this Florida facility for advanced packaging can do for you and what the contribution could be when it's all put together and sort of humming and running? Yeah, so over the last several years we've been, of course, facilitating the clean room, getting the FAP, you know, essentially ready to run the development programs that we currently, you know, have up here in Minnesota.

Thomas Sonderman: And then from my follow-up time, you're equipping the Florida FAP sounds like you're, I think you're getting closer to commercialization at some point in time in the near term, but could you maybe help us think about what this, what this Florida facility for advanced packaging can do for you and what the contribution could be when it's all put together and sort of humming and running? Yeah, so over the last several years we've been, of course, facilitating the clean room, getting the FAP, you know, essentially ready to run the development programs that we currently, you know, have up here in Minnesota.

Speaker Change: I got you. Okay. And then for my follow-up, Tom, you're equipping the Florida FAB. Sounds like you're...

Speaker Change: I think you're getting closer to commercialization at some point in time in the near term, but could you maybe help us think about what this Florida Facility for Advanced Packaging can do for you and what the contribution could be when it's all put together and sort of humming and running?

Thomas Sonderman: Yeah, so over the last several years, we've been, of course, facilitating the clean room, getting the fab, you know, essentially ready to run the development programs that we currently, you know, have up here in Minnesota, with the difference, of course, being the focus on advanced packaging in Florida.

Speaker Change: Yeah, so over the last several years we've been, of course, facilitating the clean room, getting the fab, you know, essentially ready to run the development programs.

Thomas Sonderman: The difference, of course, being the focus on advanced packaging in Florida. We put in an inter-poser program that was the first program that came via IMAC. We put in a hybrid bonding capability that has been slowly ramping up, but the one that's the most exciting and the one that is really just beginning to move forward is the fan outweigh for level packaging capability that we announced back in January. That's the $120 million investment that will allow us, again, via the DOD's investment, to stand up. A gin-to-version of deck of technologies, technology are adaptive patterning based technology and we expect the Florida operation to be sufficient for prototyping early stage production, but anything beyond that would obviously require an investment in a larger type facility.

Speaker Change: that we currently have up here in Minnesota. The difference, of course, being the focus on advanced packaging in Florida.

Thomas Sonderman: The difference of course being the focus on advanced packaging in Florida. We put in an inter-poser program that was the first program that came via IMAC. We put in a hybrid bonding capability that has been slowly ramping up, but the one that's the most exciting and the one that is really just beginning to move forward is the fan outweigh for level packaging capability that we announced back in January. That's the $120 million investment that will allow us, again, via the DOD's investment to stand up.

Thomas Sonderman: We put in an Interposer program that was the first program that came via IMEC. We also put in a hybrid bonding capability that has been slowly ramping up. But the one that's the most exciting and the one that is really just beginning to move forward is the fan-out wafer-level packaging capability that we announced back in January. That's the $120 million investment that will allow us, again, via the DOD's investment, to stand up a Gen 2 version of DECA technologies. Our adaptive patterning-based technology.

Speaker Change: We've put in an Interposer program that was the first program that came via IMEC. We put in a hybrid bonding.

Speaker Change: capability that has been

Speaker Change: slowly ramping up, but the one that's the most exciting and the one that is really just beginning to move forward is the fan-out wafer level packaging capability that we announced back in January . That's the 120 million dollar investment that will allow us again via the DoD's investment to stand up

Thomas Sonderman: A gin-to-version of deck of technologies, technology are adaptive patterning based technology and we expect the Florida operation to be sufficient for prototyping early stage production, but anything beyond that would obviously require an investment in a larger type facility. So think of it as an ATS-like capability that will begin to really add, you know, to the top line as we get into next year as we're standing up the technology. Then as you get into, you know, the out years you would begin to see that transition away for services, but it will be primarily ATS development related revenue in Florida as that program is yours.

Speaker Change: a Gen 2 version of Deca Technologies.

Speaker Change: technology, our adaptive patterning.

Thomas Sonderman: And we expect the Florida operation to be sufficient for prototyping and early-stage production, but anything beyond that would obviously require an investment in a larger type facility. So think of it as an ATS-like capability that will begin to really add, you know, to the top line as we get into next year as we're standing up the technology. Then as you get into, you know, the later years, you would again begin to see that transition to wafer services. But it will be primarily ATS development-related revenue in Florida as that program matures.

Speaker Change: based technology.

Speaker Change: And we expect the forward operation to be sufficient for prototyping, early stage production.

Speaker Change: But anything beyond that would obviously require an investment in a larger type facility.

Thomas Sonderman: So think of it as an ATS-like capability that will begin to really add, you know, to the top line as we get into next year as we're standing up the technology. Then, as you get into, you know, the out years, you would begin to see that transition away for services, but it will be primarily ATS development related revenue in Florida as that program is yours.

Harsh Kumar: Thank you so much.

Speaker Change: So, think of it as an ATS-like capability that will begin to really add, you know, to the top line as we get into next year as we're standing up the technology. Then as you get into, you know, the out years, you would, again, begin to see that transition away for services. But it'll be primarily ATS development-related revenue in Florida as that program matures.

Thomas Sonderman: I understand. Thank you so much.

Harsh Kumar: Thank you so much.

Speaker Change: Understood. Thank you so much.

Krish Nankar: We'll move next to Krish Nankar at TD Callin. Hi, next we're taking my questions.

Krish Sankar: We'll move next to Krish Sankar at TD Cowen.

Krish Nankar: We'll move next to Krish Nankar at TD Callin. Hi, next we're taking my questions. This is Steven calling on behalf of Krish.

Speaker Change: We'll move next to Krish Sankar at TD Cowan.

Stephen Karni: Hi, thanks for taking my questions. This is Stephen Karni on behalf of Krish.

Krish Nankar: This is Steven calling on behalf of Krish. Tom, maybe a first question for you in terms of your demand from laser services customers. I know what you just mentioned; it's very remarks that demand should be relatively soft for the near term, but you're kind of wondering, you know, in terms of conversations with customers, especially through a large European one. What kind of, I guess, demand signals are they giving you in terms of two or three quarters out if there's any of those countries happening? Is, you know, the relative look down at the inventory that some of your customers are talking about.

Speaker Change: don'

Thomas Sonderman: Tom, maybe a first question for you in terms of your demand from wafer services customers. I know you just mentioned in your remarks that demand should still be relatively soft for the near term. I'm just kind of wondering, in terms of conversations with customers, especially if you're a large European one, what kind of, I guess, demand signals are they giving you in terms of two or three quarters out, if there are any of those conversations happening? Is the relative work down of inventory that some of your customers have been talking about more favorable for you, or is that other areas of the business that WSG doesn't touch upon?

Speaker Change: Hi, thanks for taking my questions. This is Steven calling on behalf of Krish.

Thomas Sonderman: Tom, maybe a first question for you in terms of your demand from laser services customers. I know what you just mentioned, it's very remarks that demand should be relatively soft for the near term, but you're kind of wondering, you know, in terms of conversations with customers, especially through a large European one. What kind of, I guess, demand signals are they giving you in terms of two or three quarters out if there's any of those countries happening is, you know, the relative look down at the inventory that some of your customers are talking about.

Speaker Change: Tom, maybe a first question for you in terms of your...

Speaker Change: we have demand from ler services customers i know he has mentioned for remarks that de mand should will be you can be software the near term but just kind of ring in terms conversations customers pe through large looking one

Speaker Change: What kind of...

Speaker Change: I guess demand signals are they giving you in terms of you know two or three quarters out if there's any of those conversations happening is

Speaker Change: Is the relative work down at the inventory that some of your customers have been talking about, is that more favorable for you or is that other areas of the business that doesn't touch upon for WS business?

Thomas Sonderman: So that's more favorable for you or that other reagents that doesn't touch upon the rest of us. Yeah, so clearly, you know, when it comes to infinity and who is, you know, our largest legacy way for services customer, they continue to have weakness. I think they announced their earnings there so ago. So the industrial segment that we primarily service continues to be weak. We think it'll be weak for the rest of this year. That's what we're modeling. And then as we get into 2025, you know, we do see, you know, and they're expecting like many to see a modest recovery in the legacy business, but it's really going to be, you know, our focus to continue to accelerate the thermal imaging capabilities.

Thomas Sonderman: Yeah, so clearly, you know, when it comes to Infineon, who is, you know, our largest legacy Wafer Services customer, they continue to have weakness. I think they announced their earnings a day or so ago.

Speaker Change: Yeah, so clearly, you know, when it comes to Infineon, who is, you know, our largest legacy Wafer Services customer, they continue to have weakness. I think they announced their earnings a day or so ago.

Thomas Sonderman: So the industrial segment that we primarily service continues to be weak, and we think it'll be weak for the rest of this year. That's what we're modeling. And then as we get into 2025, you know, we do see, and they're expecting, like many, to see a modest recovery in the legacy business. But it's really going to be, you know, our focus to continue to accelerate the thermal imaging capabilities and continue to transition our ATS to Wafer Services customers, which, as we've been discussing, is really focused around the biomedical space.

Speaker Change: So, the industrial segment that we primarily service continues to be weak. We think it'll be weak for the rest of this year. That's what we're modeling.

Thomas Sonderman: That's what we're modeling. And then as we get into 2025, you know, we do see, you know, and they're expecting like many to see a modest recovery in the legacy business, but it's really going to be, you know, our focus to continue to accelerate the thermal imaging capabilities. Continue to transition our ATS to wait for services customers, which as we've been discussing is really focused around the biomedical space. And then of course, you know, continue to make progress on things like thermal imaging, like I mentioned, which we believe will move start moving into production as we move into next year.

Speaker Change: And then as we get into 2025...

Speaker Change: You know, we do see, you know, and they're expecting, like many, to see a modest recovery in the legacy business.

Speaker Change: But it's really going to be, you know, our focus to continue to accelerate the thermal imaging capabilities, continue to transition our ATS to wafer services customers, which, as we've been discussing, is really focused around the biomedical space.

Thomas Sonderman: Continue to transition our ATS to wait for services customers, which, as we've been discussing, is really focused around the biomedical space. And then, of course, you know, continue to make progress on things like thermal imaging, like I mentioned, which we believe will start moving into production as we move into next year. So, we're hopeful, like many, that eventually the legacy businesses will start coming back, but we are definitely pivoting towards the future, which is really taking the technologies. We've been developing with our customers over the last several years and helping get those ramped into production because that's really what's going to drive the profitability side of the way for services business, just like we have today in ATS.

Thomas Sonderman: And then, of course, you know, continue to make progress on things like thermal imaging, which we believe will start moving into production as we move into next year. So we're hopeful, like many, that eventually the legacy businesses will start coming back. But we are definitely pivoting towards the future, which is really taking the technologies we've been developing with our customers over the last several years and helping get those ramped into production, because that's really what's going to drive the profitability side of the wafer services business, just like we have today in ATS.

Speaker Change: And then, of course, continuing to make progress on things like thermal imaging, like I mentioned, which we believe will start moving into production as we move into next year.

Thomas Sonderman: So, we're hopeful like many that eventually the legacy businesses will start coming back, but we are definitely pivoting towards the future which is really taking the technologies. We've been developing with our customers over the last several years and helping get those ramped into production because that's really what's going to drive the profitability side of the way for services business just like we have today in ATS. Great. Thanks for that.

Speaker Change: So, we're, you know, hopeful like many that...

Speaker Change: Eventually, the legacy businesses will start coming back, but we are definitely pivoting towards...

Speaker Change: the future, which is really taking the technologies we've been developing with our customers over the last several years and Helping get those ramped into production because that's really what's going to drive The profitability side of the wafer services business just like we have today in ATS

Krish Nankar: Great. Thanks for that.

Steve Manko: Great, thanks for that. For my second question, I had one for Steve regarding the, I guess, the longer-term CapEx needs for the Florida packaging facility relative to that $120 million to be spent between now and 2026. Just to clarify, is that $120 million part of the original $190 million of funding that was announced with that fan-out, is it a level packaging win, or is this on top of that $190 million? And secondly, for the $80 million of pool revenue you guys are expecting this year, does that include any of that CapEx related to Florida? Thank you.

Steve Manko: For my second question, I had one for Steve regarding the, I guess, the longer term cat-backed needs for the Florida Packaging Facility. So, we'll do that $120 million to be spent between now and 2026. Just to clarify, is that 120 million, is that part of the original 190 million funding that was announced? With that fan out, it's a level packaging, when or on top of that, 190 million.

Steve Manko: For my second question, I had one for Steve regarding the, I guess, the longer term cat-backed needs for the Florida Packaging Facility. So, we'll do that $120 million to be spent between now and 2026 just to clarify, is that 120 million, is that part of the original 190 million funding that was announced? With that fan out, it's a level packaging, when or on top of that, 190 million. And secondly, for the $80 million of full revenue you guys are expecting this year, does that include any of that cat-backed related to Florida?

Speaker Change: Great, thanks for that. For my second question, I had one for Steve regarding the...

Speaker Change: I guess the longer-term CapEx needs for the Florida packaging facility, relative to that $120 million.

Speaker Change: to be spent between now and 2026. Just to clarify, is that 120 million, is that part of the original 190 million of funding that was announced?

Speaker Change: With that fan out it's a level packaging win or is this on top of that 190 million and secondly for the 80 million dollars of pool revenues you guys are expecting this year Does that include any of that? CapEx related to Florida. Thank you

Steve Manko: And secondly, for the $80 million of full revenue you guys are expecting this year, does that include any of that cat-backed related to Florida? Thank you.

Steve Manko: Yeah, good question. So, I'll start with the last question first. So, part of that $80 million has a very small amount of the tool revenue going into Florida for 2024. So, that would be item number one.

Steve Manko: Yeah, good question. So, part of that $80 million is a very small amount of the tool revenue going into Florida for 2024. So that would be item number one.

Steve Manko: Thank you. Yeah, good question. So, I'll start with the last question first. So, part of that $80 million has a very small amount of the tool revenue going into Florida for 2024. So, that would be item number one. Item number two, going specifically to Florida then, what we talked about with 120 million going into to Florida for the fan out wait for packaging. As Tom mentioned, that would take place over a couple years, really starting in 2025, and a little bit into 2026.

Speaker Change: Yeah, good question. So, I'll start with the last question first. So, part of that $80 million has a very small amount.

Steve Manko: Item number two, going specifically to Florida, then, what we talked about with the $120 million going into Florida for the fan-out wafer packaging, as Tom mentioned, that would take place over a couple years, really starting in 2025 and a little bit into 2026. That amount, as you said, though, has been awarded is $120 million. There is potential upside for that program to go to something like $190 million and maybe something above that.

Speaker Change: of the tool revenue going into Florida for 2024. So that would be item number one.

Steve Manko: Item number two, going specifically to Florida then, what we talked about with 120 million going into Florida for the fan out wait for packaging. As Tom mentioned, that would take place over a couple of years, really starting in 2025, and a little bit into 2026. That amount, like you said, what has been awarded is 120. There's potential upside to that program to go to something like 190 million. And maybe something above that; we've seen that happen with other programs before, where they start getting more and more money as we are successful with various stages of the program.

Steve Manko: That amount, like you said, what has been awarded is 120. There's potential upside to that program to go to something like 190 million. And maybe something above that, we've seen that happen with other programs before where they start getting more and more money as we are successful with various stages of the program. But just to keep everything straight, what we're talking about by putting out the fan out wait for packaging in Florida, that is part of the $120 million program we had now last year.

Speaker Change: Item number two, going specifically to Florida, then, what we talked about with the $120 million going into Florida for the fan-out wafer packaging, as Tom mentioned, that would take place over a couple years, really starting in 2025 and a little bit into 2026.

Speaker Change: That amount, like you said, though...

Speaker Change: What has been awarded is $120 million. There's potential upside to that program to go to something like $190 million and maybe something above that. We've seen that happen with other programs before where we start getting more and more money as we are successful with various stages of the program.

Steve Manko: We've seen that happen with other programs before, where we start getting more and more money as we are successful with various stages of the program. But just to keep everything straight, what we're talking about by putting out the fan-out wafer packaging in Florida is part of the $120 million program we announced last year.

Steve Manko: But just to keep everything straight, what we're talking about by putting out the fan out wait for packaging in Florida, that is part of the $120 million program we had now last year.

Speaker Change: But just to keep everything straight, what we're talking about by putting out the fan out weight for packaging in Florida, that is part of the $120 million program we announced last year.

Steve Manko: Great. Thank you so much, Steve.

Speaker Change: Great. Thank you so much, Steve.

Shadi Mitwalli: We'll move next to Shady Mitt Wally at Needham & Company.

Ashadi Mitwally: We'll move next to Ashadi Mitwally at Needham & Company.

Shadi Mitwalli: We'll move next to Shady Mitt Wally at Needham & Company. Hey, this is Shady Mitt Wally on for Quinn Bolton. I have a question on the MEDL system, Skywater Received. Can you expand on what this means for Skywater in the near and long term? And can you talk about the customer interest you have received with that capability? Yeah, great question. So, this is obviously a new system that Skywater is very excited to now have in our fab.

Speaker Change: so

Speaker Change: We'll move next to Shadi Mittwally at Needham and Company.

Shadi Mitwalli: Hey, this is Shady Mitt Wally on for Quinn Bolton. I have a question on the MEDL system, Skywater received. Can you expand on what this means for Skywater in the near and long term? And can you talk about the customer interest you have received with that capability? Yeah, great question. So, this is obviously a new system that Skywater is very excited to now have in our fab. E-Beam traditionally has been a technology that is used for, we'll call it, more exotic type processing. It's slow; it doesn't have high productivity and, again, is geared towards a certain type of application.

Shadi Mittwally: Hey, this is Shadi Mittwally on behalf of Quinn Bolton. I have a question on the MEDL system Skywater received. Can you expand on what this means for Skywater in the near and long term? And can you talk about the customer interest you have received with that capability?

Shadi Mittwally: Hey, this is Shadi Mittwally on for Quinn Bolton. I have a question on the MEDL system Skywater receives. Can you expand on what this means for Skywater in the near and long term and can you talk about the customer interest you have received with that capability?

Thomas Sonderman: Yeah, great question. So this is obviously a new system that, you know, Skywater is very excited to now have in our fab. eBeam traditionally has been a technology that is used for, we'll call it, more exotic type processing. It's slow, it doesn't have, you know, high productivity, and again is geared towards a certain type of application.

Speaker Change: Yeah, great question. So this is obviously a new system that

Shadi Mitwalli: E-Beam traditionally has been a technology that is used for, we'll call it more exotic type processing. It's slow, it doesn't have high productivity and, again, is geared towards a certain type of application. Those type of applications actually align very well with what Skywater does, which leverages a lot of customization and focus on optimizing co-optimization of the process. So, the multi-beam capability, because it's 10x to even 100x faster than traditional E-Beam, allows more customers that want to take advantage of a direct right capability, which essentially doesn't require mass and some of the other collateral that you get with a optical solution.

Speaker Change: You know, Skywater is very excited to now have an RFAB.

Speaker Change: EBEAM traditionally has been a

Speaker Change: technology that

Speaker Change: is used for, we'll call it more exotic type processing, it's slow, it doesn't have, you know, high productivity, and again is geared towards a certain type of application. Those type of applications actually align very well with what Skywater does, which...

Thomas Sonderman: Those types of applications actually align very well with what Skywater does, which leverages a lot of customization and focus on optimizing, co-optimization of the process and the product. So the multi-beam capability, because it's 10x to even 100x faster than traditional eBeam, allows more customers that want to take advantage of a direct write capability, which essentially doesn't require masks and some of the other collateral that you get It just opens up many more opportunities for us.

Thomas Sonderman: Those type of applications actually align very well with what SkyWater does, which leverages a lot of customization and focus on optimizing co-optimization of the process. So, the multi-beam capability, because it's 10x to even 100x faster than traditional E-Beam, allows more customers that want to take advantage of a direct right capability, which essentially doesn't require mass and some of the other collateral that you get with an optical solution. And it just opens up many more opportunities for us. Again, as I mentioned in my remarks for MIMS, Curbellinear Designs, things that are really aligned with the type of work that we do at Skywater.

Speaker Change: leverages a lot of customization and focus on optimizing, co-optimization of the process and the product.

Speaker Change: So the multi-beam capability, because it's 10x to even 100x faster than traditional e-beam, allows more customers that want to take advantage of a direct write capability, which essentially doesn't require masks and some of the other...

Shadi Mitwalli: And it just opens up many more opportunities for us. Again, as I mentioned in my remarks for MIMS, Curbellinear Designs, things that are really aligned with the type of work that we do at Skywater. So, the fact that it provides a new kind of conduit of customers, but also allows us to go below 50 nanometers at 200 millimeter, makes it very unique and puts Skywater into position. And, you know, as the most advanced 200 millimeter fab from a geometric perspective in the world, and we believe that will derive a lot of innovation not only within our existing customer base, but as investments start flowing. You know, through chips related funding, we just think it's going to be a great opportunity for us to really exploit our leading edge 200 millimeter capability. Thanks for all that.

Speaker Change: collateral that you get with a optical solution just opens up many more opportunities for us. Again, as I mentioned in my remarks, for MEMS, curved linear designs, things that are really aligned with the type of work that we do at Skywater.

Thomas Sonderman: Again, as I mentioned in my remarks, for MIMS, and Curved Linear Designs, things that are really aligned with the type of work that we do at Skywater. So the fact that it provides a new kind of conduit for customers but also allows us to go below 50 nanometers at 200 millimeters makes it very unique and puts Skywater into position as the most advanced 200 millimeter fab from a geometric perspective in the world.

Thomas Sonderman: So, the fact that it provides a new kind of conduit of customers, but also allows us to go below 50 nanometers at 200 millimeter, makes it very unique and puts Skywater into position. And, you know, as the most advanced 200 millimeter fab from a geometric perspective in the world, we believe that will derive a lot of innovation not only within our existing customer base, but as investments start flowing. You know, through chips related funding, we just think it's going to be a great opportunity for us to really exploit our leading edge 200 millimeter capability.

Speaker Change: So, the fact that it provides a new kind of conduit of customers, but also allows us to go below 50 nanometers at 200 millimeter, makes it very unique and puts Skywater into position as the most advanced 200 millimeter fab from a geometric perspective.

Thomas Sonderman: And we believe that will drive a lot of innovation, not only within our existing customer base, but as investments start flowing through chip-related funding, we just think it's going to be a great opportunity for us to really exploit our leading-edge 200 millimeter capability.

Speaker Change: perspective in the world, and we believe that will drive a lot of innovation, not only within our existing customer base, but as investments start flowing, you know, through chips related funding, we just think it's going to be a great opportunity for us to really exploit our leading-edge 200 millimeter capability.

Thomas Sonderman: Thanks for all that. And then my follow-up is on quantum side transitioning into wafer services. How long have you guys been working with them before the transition? And can you give any color on the timing and capacity ramp? Yeah, so typically these biomedical solutions are about two years of ATS engagement, and that's true in the case of quantum side. As we get to the point of freezing the process, we then go through a qualification period. We provide the initial samples, and then they complete the rest of their qualifications. That can take upwards a year depending upon the level of approvals that are needed.

Thomas Sonderman: Thanks for all that. And then my follow-up question is on Quantum Psi transitioning into wafer services. How long have you guys been working with them before the transition? And can you give any color on the timing and capacity ramp?

Thomas Sonderman: And then my follow-up is on quantum side transitioning into wafer services. How long have you guys been working with them before the transition? And can you give any color on the timing and capacity ramp? Yeah, so typically these biomedical solutions are about two years of ATS engagement and that's true in the case of quantum side. As we get to the point of freezing the process we then go through a qualification period. We provide the initial samples and then they complete the rest of their qualifications. That can take upwards a year depending upon the level of approvals that are needed.

Speaker Change: Thanks for all that. And then my follow-up is on Quantum's side, transitioning into wafer services. How long have you guys been working with them before the transition and can you give any color on the timing and capacity ramp?

Thomas Sonderman: Yeah, typically, these biomedical solutions take about two years of ATS engagement, and that's true in the case of QuantumSci. As we get to the point of freezing the process, we then go through a qualification period. We provide the initial samples, and then they complete the rest of their qualifications. That can take upwards of a year, depending upon the level of approvals that are needed. So we would start seeing ramps of many of these biomedical programs as we get into the later part of next year, going into 2026, I would anticipate.

Speaker Change: Yeah, so typically these biomedical solutions are about two years of ATS engagement, and that's true in the case of quantum psi.

Speaker Change: as we

Speaker Change: We get to the point of freezing the process. We then go through a qualification period. We provide the initial samples, and then they complete the rest of their qualifications.

Speaker Change: You know, that can take, you know, upwards of a year, depending upon the level of approvals that are needed.

Thomas Sonderman: So we would start seeing ramps of many of these biomedical programs as we get into a later part of next year going into 2026, I would anticipate. Of course, along the way, there will be more samples that will be needed. But this is what we talk about the J-curve effect as you come out of an ATS development. There is definitely going to be a law before the wafer services revenue kind of picks up from where we left off from the ATS revenue. And think of that as about a 9 to 18-month time frame. Again, we're kind of just moving through the process.

Thomas Sonderman: So we would start seeing ramps of many of these biomedical programs as we get into a later part of next year going into 2026, I would anticipate. Of course, along the way, there will be more samples that will be needed. But this is what we talk about the J-curve effect as you come out of a ATS development. There is definitely going to be a law before the wafer services revenue kind of picks up from where we left off from the ATS revenue.

Speaker Change: So, we would start, you know, seeing ramps of many of these biomedical programs as we get into, you know, the later part of next year, going into 2026, I would anticipate. Of course, along the way, there will be more samples that will be needed, but this is what we talked about, the J-curve effect, as you come out of an ATS development, there is definitely going to be a lull before the Waiver Services revenue kind of picks up from where we left off in the ATS revenue. So, I think of that as about a, you know, nine to...

Thomas Sonderman: Of course, along the way, there will be more samples that will be needed, but this is what we talk about, the J-curve effect: as you come out of an ATS development, there is definitely going to be a lull before the wafer services revenue kind of picks up from where we left off in the ATS revenue. And think of that as about a 9- to 18-month time frame. Again, we're kind of just moving through the process, so we're getting data on this as you guys are getting data on it, but that's the way I would generally think of it.

Thomas Sonderman: And think of that as about a 9 to 18 month time frame. Again, we're kind of just moving through the process. So we're getting data on this as you guys are getting data on it, but that's the way I would generally think of it.

Speaker Change: Again, we're kind of just moving through the process, so we're getting data on this as you guys are getting data on it, but that's the way I would generally think of it.

Thomas Sonderman: So we're getting data on this as you guys are getting data on it, but that's the way I would generally think of it.

Shadi Mitwalli: Thanks for all the color and congrats on the salt quarter. Thank you.

Thomas Sonderman: Thanks for all the color, and congrats on a solid quarter. Thank you.

Shadi Mitwalli: Thanks for all the color and congrats on the salt quarter.

Richard Shannon: Thank you. We'll move next to Richard Shannon at Craig Allen. Well, thanks, guys, for taking my questions.

Speaker Change: Thanks for all the color and congrats on the solid quarter.

Richard Shannon: We'll move next to Richard Shannon at Craig Allen. Well, thanks, guys, for taking my questions. I may fill up on the last one here and maybe ask the question that's more broadly about all of your ATS customers that have or at least you talk about transitioning or transition to ATS here.

Richard Shannon: We'll move next to Richard Shannon and Craig Hallam.

Speaker Change: Thank you.

Speaker Change: that

Speaker Change: We'll move next to Richard Shannon at Craig Hallam.

Richard Shannon: Well, thanks guys for taking my questions. I may follow up on the last one here and maybe ask the question a bit more broadly about all of your ATS customers that have, or at least you've talked about transitioning, to ATS here. Tom, what if you kind of paint us a picture about when we see revenue profiles from these new customers that become relevant, become noticeable, maybe even become bigger than the kind of legacy wafer services revenue streams you have right now? Yeah.

Thomas Sonderman: I may fill up on the last one here and maybe ask the question that's more broadly about all of your ATS customers that have or at least you talk about transitioning or transition to ATS here. Tom, why don't you kind of paint us a picture about when do we see revenue profile from these new customers that becomes relevant and becomes noticeable, maybe even becomes bigger than the legacy way for services revenue students have right now?

Richard Shannon: Well thanks guys for taking my questions. I may fill up on the last one here and maybe ask the question a bit more broadly about all of your...

Richard Shannon: ATS customers that have or at least you've talked about transitioning or transition to ATS here.

Thomas Sonderman: Tom, why don't you kind of paint us a picture about when do we see revenue profile from these new customers that becomes relevant and becomes noticeable, maybe even becomes bigger than the legacy way for services revenue students have right now? Yeah, great question, Richard. I think, you know, it's kind of, again, like we talked in our remarks. We believe we're going to start seeing growth again in Wafer services next year. Some of that growth will come from these ATS wafer services transitions. We clearly are being conservative in terms of hiring. We think these programs are ramped because they're very much out of our control.

Richard Shannon: Tom, what if you could kind of paint us a picture about when do we see, you know, revenue profile from these new customers that becomes relevant, becomes noticeable, maybe even becomes bigger than the kind of the legacy wafer services revenue streams you have right now?

Thomas Sonderman: Yeah, great question, Richard. I think, you know, it's kind of, again, like we talked in our remarks. We believe we're going to start seeing growth again in wafer services next year. Some of that growth will come from these APS wafer services transitions. We clearly are being conservative in terms of how we think these programs are ramped because they're very much out of our control.

Thomas Sonderman: Yeah, great question, Richard. I think, you know, it's kind of, again, like we talked in our remarks, we believe we're going to start seeing growth again in Wafer services next year. Some of that growth will come from these ATS wafer services transitions. We clearly are being conservative in terms of hiring. We think these programs are ramped because they're very much out of our control. Once we get the solutions, you know, provided to our customers, they have to build the rest of the systems and get the calls done.

Speaker Change: Yeah, great question, Richard. I think, you know, it's kind of, again, like we talked in our remarks. We believe we're going to start seeing growth again in wafer services next year. Some of that growth will come from these APS wafer services transitions.

Speaker Change: We clearly are being conservative in terms of how we think these programs are wrapped because they're very much out of our control.

Thomas Sonderman: Once we get the solutions, you know, provided to our customers, they have to build the rest of the systems and get the quals done. So whether it's in the biomedical space or in the case of the motive and the ADAS space, we believe, you know, it's going to be a series of quarters. But as you, you know, get into the later part of 25, moving into 26, I think you'll start seeing an acceleration and, you know, the pace of their ramp.

Thomas Sonderman: Once we get the solutions, you know, provided to our customers, they have to build the rest of the systems and get the calls done. So whether it's in the biomedical space or in the case of the motive and the ATS space, we believe, you know, it's going to be a series of quarters. But as you, you know, get into the, again, the later part of 25 moon into 26, I think you'll start seeing an acceleration and, you know, the pace of their ramp. And then the other thing you can expect is that we'll continue to have customers transitioning. So much like in the early days of ATS, where we didn't have a broad portfolio of customers, you know, when one would slow down, it tended to be more noticeable.

Richard Shannon: Once we get the solutions provided to our customers, they have to build the rest of the systems and get the quals done. So whether it's in the biomedical space, or in the case of Lumotive in the ADAS space,

Thomas Sonderman: So whether it's in the biomedical space or in the case of the motive and the ATS space, we believe, you know, it's going to be a series of quarters. But as you, you know, get into the, again, the later part of 25 moon into 26, I think you'll start seeing an acceleration and, you know, the pace of their ramp. And then the other thing you can expect is that we'll continue to have customers transitioning so much like in the early days of ATS where we didn't have a broad portfolio of customers, you know, when one would slow down, tended to be more noticeable.

Richard Shannon: We believe, you know, it's going to be a series of quarters.

Richard Shannon: But as you get into the later part of 25, moving into 26, I think you'll start seeing an acceleration in the pace of their ramp.

Thomas Sonderman: And then the other thing you can expect is that we'll continue to have customers transitioning. So much like in the early days of ATS where we didn't have a broad portfolio of customers, you know, when one would slow down, it tended to be more noticeable. We expect as we get into the out years and we get multiple programs in wafer services, they'll all be ramping at different paces. But overall, you're going to see growth in wafer services that is no longer dependent on our legacy business.

Richard Shannon: And then the other thing you can expect is that we'll continue to have customers transitioning. So much like in the early days of ATS where we didn't have a broad portfolio of customers, you know, when one would slow down, it tended to be more noticeable. We expect as you get in the out years and we get multiple programs and wait for services.

Thomas Sonderman: We expect as you get in the out years and we get multiple programs in Wafer services, they'll all be ramping at different cases. But overall, you're going to see growth in wafer services that is no longer dependent on our legacy business. And that's really the exciting opportunity that we think we have before us because the slowdown has allowed us to accelerate the focus on the ATS, which is driving these programs faster and faster through the conversion. And that just gets them out in the market quicker so that we can capture the upside when it materializes.

Thomas Sonderman: We expect as you get in the out years and we get multiple programs in Wafer services, they'll all be ramping at different cases. But overall, you're going to see growth in Wafer services that is no longer dependent on our legacy business. And that's really the exciting opportunity that we think we have before us because the slowdown has allowed us to accelerate the focus on the ATS, which is driving these programs faster and faster through the conversion. And that just gets them out in the market quicker so that we can capture the upside when immaterialize.

Richard Shannon: They'll all be ramping at different paces, but overall, you're going to see...

Richard Shannon: growth, and wafer services that is no longer dependent on our legacy business. And that's really the exciting opportunity that we think we have before us because

Thomas Sonderman: And that's really the exciting opportunity that we think we have before us because the slowdown has allowed us to accelerate the focus on ATS, which is driving these programs faster and faster through the conversion. And that just gets them out in the market quicker so that we can capture the upside when it materializes.

Richard Shannon: The slowdown has allowed us to accelerate the focus on ATS, which is driving these programs faster and faster through the conversion, and that just gets them out in the market quicker so that we can capture the upside when it materializes.

Steve Manko: Okay, thanks for those thoughts, Tom, and my follow-up is this is probably mostly for Steve. Steve, obviously, you hit a nice level of profitability this quarter, which is obviously great to see, and you didn't have enough time to really run your forward numbers through my model in great detail here. But it sounds like we could see close to profitable, if not profitable, quarters from the next couple, few or so. Maybe you just want to comment generally on what you see, profitability versus light losses in the near future here, kind of the big picture. Thanks.

Steve Manko: Thank you for the thoughts, Tom, and my follow-up is this is probably mostly for Steve. Steve obviously hit a nice level of profitability here at the quarter, which is obviously great to see, and didn't have enough time to really run your forward numbers through my model on a great detail here. But it sounds like we could see close to profitable, if not profitable quarter from the next couple, a few, or so.

Richard Shannon: Thank you for the thoughts, Tom, and my follow-up is this is probably mostly for Steve. Steve obviously hit a nice level of profitability here at the quarter, which is obviously great to see, and didn't have enough time to really run your forward numbers through my model on a great detail here. But it sounds like we could see close to profitable, if not profitable quarter from the next couple, a few, or so.

Richard Shannon: Steve, obviously, you hit a nice level of profitability here in the quarter, which is obviously great to see, and you didn't have enough time to really run your forward numbers through my model in great detail here.

Steve: It sounds like we could see, you know, close to profitable, if not profitable, quarter from the next year.

Steve Manko: Maybe you just want to comment generally on what you see, you know, profitability versus playbosses in the near future here, kind of a big picture. Thanks. Yeah, good question. I mean, that's something that we've been waiting for quite some time. We were clearly excited to announce that we had non-GAPEPS positive for the quarter for the first time. I think what this shows is the second level of, you know, financial modeling. We talked about the leverage of our model from a profitability perspective. In the second quarter of 2022, I believe we talked about generating 50% or greater flow-through on gross profit once we exceeded 45 million at a fixed cost.

Speaker Change: a couple, few or so. Maybe you just want to comment generally on what you see, you know, profitability versus site losses in the near future, kind of big picture. Thanks.

Steve Manko: Yeah, good question. I mean, that's something that we've been waiting for for quite some time. We were clearly excited to announce that we had non-GAAP EPS positive for the quarter for the first time. I think what this shows is the second level of, you know, financial modeling. We talked about the leverage of our model from a profitability perspective. In the second quarter of 2022, I believe, we talked about generating 50% or greater flow through on gross profit once we exceeded $45 million at a fixed cost. That was very demonstrated in the past couple of quarters.

Steve Manko: Yeah, a good question.

Speaker Change: Yeah, good question. I mean, that's something that we've been waiting for for quite some time, and we were clearly excited to announce that we hit non-GAP EPS positive for the quarter for the first time.

Richard Shannon: i think what this shows is a second level of financial modeling we talked about the leverage of our model from a profitability perspective

Steve Manko: In the second quarter of 2022, I believe we talked about generating 50% or greater flow-through on gross profit once we exceeded 45 million at a fixed cost. That was very demonstrated for the past couple of quarters just seeing a new revenue profile. And remember, the real margin right now is coming from ETS and wait for services. We see something in the upper 60s to 70 for ETS and wait for services revenue coming through.

Richard Shannon: In the second quarter of 2022, I believe, we talked about generating 50% or greater

Richard Shannon: flow through on gross profit once we exuded.

Steve Manko: That was very demonstrated for the past couple of quarters, just seeing a new revenue profile. And remember, the real margin right now is coming from ETS and wait for services. We see something in the upper 60s to 70 for ETS and wait for services revenue coming through. That's really looking like our next break even on the profitability standpoint. So there could be some puts and takes each quarter depending on exactly what that revenue profile looks like. And maybe even more importantly, what the cost side of the house looks like. But I think we're demonstrating pretty consistently that in the upper 60s, we can really get very close to non-GAPEPS and non-GAPE profitability.

Richard Shannon: 45 million at a fixed cost. Now, as we've demonstrated for the past couple of quarters, we're seeing a new revenue profile. And remember, the real margin right now is coming from ATS and wafer services. When you see something in the upper 60s to 70 for ATS and wafer services revenue coming through, that's really looking like our next break, even on the profitability standpoint. So there could be some puts and takes each quarter, depending on exactly what that revenue looks like, and maybe even more importantly, what the cost side of the house looks like. But I think we're demonstrating pretty consistently that in the upper 60s...

Steve Manko: We're seeing a new revenue profile, and remember, the real margin right now is coming from ETS and wafer services. When you see something in the upper 60s to 70 for ETS and wafer services revenue coming in, that's really looking like our next break even on the profitability standpoint. So there could be some puts and takes each quarter, depending on exactly what that revenue profile looks like and, maybe even more importantly, what the cost side of the house looks like.

Steve Manko: That's really looking like our next break even on the profitability standpoint. So there could be some puts and takes each quarter depending on exactly what that revenue profile looks like. And maybe even more importantly, what the cost side of the house looks like. But I think we're demonstrating pretty consistently that in the upper 60s, we can really get very close to non-GAPEPS and non-GAPE profitability. I think that's something that we can look forward to going forward at those revenue levels. Thanks for that detail, Steve. That's all for me guys. Thanks, Richard. As a reminder, if you would like to ask a question, press star one.

Steve Manko: But I think we're demonstrating pretty consistently that in the upper 60s, we can really get very close to non-GAAP EPS and non-GAAP profitability. I think that's something that we can look forward to going forward at those revenue levels.

Steve Manko: I think that's something that we can look forward to going forward at those revenue levels. Thanks for that detail, Steve.

Richard Shannon: We can really get very close to non-gap EPS and non-gap profitability. I think that's something that we can look forward to going forward at those revenue levels.

Richard Shannon: Thanks for that detail, Steve. That's all for me, guys. Thanks. As a reminder, if you would like to ask a question, press star 1, then go next to Ezra Wiener at Jeff.

Richard Shannon: That's all for me, guys.

Audra: Thanks, Richard. As a reminder, if you would like to ask a question, press star one.

Speaker Change: Okay, thanks for that detail Steve. That's all from you guys. Thanks.

Audra: As a reminder, if you would like to ask a question, press star 1. We'll go next to Ezra Wiener at Jeffries.

Richard Shannon: Thanks, Richard.

Ezra Weiner: We'll go next to Ezra Weiner at Jefferies. Thanks for taking my question. Quick question: you guys talked about quantum psi and moving that from ETS and to wait for services. Obviously, that's a great step trying to, as you try to do that with more of the ETS business. Can you just talk about that pipeline going forward in opportunities you see there? Yeah, so we have, I think, announced now four different customers that have done a conversion this year. There's more slated as we get into the later part of this year, another one or two. And then, as we get into next year, again, we're not going to get into this many per year kind of cadence, but we have others that we expect to begin the transition.

Speaker Change: As a reminder, if you would like to ask a question, press star 1. We'll go next to Ezra Wiener at Jeffries.

Ezra Weiner: We'll go next to Ezra Weiner at Jeffries. Thanks for taking my question. Quick question you guys talked about quantum psi and moving that from ETS and to wait for services.

Ezra Wiener: Thanks for taking my question. A quick question, you guys talked about QuantumSci and moving that from ATS into wafer services. Obviously, that's a great step trying to, as you try to do that with more,

Thomas Sonderman: Obviously, that's a great step trying to, as you try to do that with more of the ETS business, can you just talk about that pipeline going forward in opportunities you see there? Yeah, so we have, I think, announced now four different customers that have done a conversion this year. There's more slated as we get into the later part of this year, another one or two. And then as we get into next year, again, we're not going to get into this many per year kind of cadence, but we have others that we expect to begin the transition.

Speaker Change: of the ATS business. Can you just talk about that pipeline going forward and opportunities you see there?

Ezra Wiener: Yeah, so, you know, we have, I think, announced now four different customers that have done a conversion this year. There are, you know, more slated as we get into the later part of this year, another one or two.

Speaker Change: Yeah, so, you know, we have, I think, announced...

Speaker Change: Now four different customers that have done a conversion this year

Speaker Change: There's more slated as we get into the later part of this year, another one or two, and then as we get into next year.

Thomas Sonderman: And then as we get into next year, you know, again, we're not going to get into this many per year kind of cadence, but we have others that we expect to begin the transition. And as I was just alluding to, over time, what you'll see is just more and more of those customers converting. They'll each be ramping at their own rates, but the ability to replace the legacy volume with new, highly profitable technologies that we help create with our customers that are just beginning to enter the market, we think is a huge opportunity for us.

Ezra Wiener: Again, we're not going to get into this many per year

Thomas Sonderman: And as I was just alluding to, over time, what you'll see is just more and more of those customers converting, though each be ramping at their own rates. But the ability to replace the legacy buying with new, highly profitable technologies that we help create with our customers that are just beginning to enter the market, we think is a huge opportunity for us. And what you're seeing is profitability at the very lowest levels of wait for services revenue. As those wait for services revenue begin to move back up into the right, we're absorbing the fixed cost of the business.

Thomas Sonderman: And as I was just alluding to, over time, what you'll see is just more and more of those customers converting, though each be ramping at their own rates, but the ability to replace the legacy buying with new, highly profitable technologies that we help create with our customers that are just beginning to enter the market, we think is a huge opportunity for us. And what you're seeing is profitability at the very lowest levels of wait for services revenue.

Ezra Wiener: to begin the transition.

Ezra Wiener: And as I was just alluding to, over time, what you'll see is just more and more of those customers converting. They'll each be ramping at their own pace.

Ezra Wiener: their own rates, but the ability to replace the legacy volume with new.

Ezra Wiener: Highly profitable technologies that we help create with our customers that are just beginning to enter the market We think is a huge opportunity for us

Thomas Sonderman: And what you're seeing is profitability at the very lowest levels of wafer services revenue. As those wafer services revenues begin to move back up and to the right, you know, we're absorbing the fixed cost of the business that Steve was just alluding to. We are now seeing where the true breakout point is, and we believe we're very well positioned to capture that upside with the very efficient business model we put in place.

Ezra Wiener: And what you're seeing is profitability at the very lowest levels of wafer services revenue. As those wafer services revenue begin to move back up and to the right, you know, we're absorbing the fixed cost of the business that Steve was just alluding to. We're seeing now where the true breakout point is, and we believe we're very well positioned to capture that upside.

Thomas Sonderman: As those wait for services revenue begin to move back up into the right, we're absorbing the fixed cost of the business. So Steve was just alluding to where we're seeing now where the true break out point is. And we believe we're very well positioned to capture that upside with the very efficient business model we put in place.

Thomas Sonderman: So Steve was just alluding to where we're seeing now where the true break out point is. And we believe we're very well positioned to capture that upside with the very efficient business model we put in place. And again, I think you're seeing a new phase of our business that we've been talking about for quite some time, materializing with more swear. You know, it's maybe only one or two per quarter, but we're talking about we're not guaranteed with timing to have one every quarter. But there's been a consistency that you've seen this year with more and more customers routinely moving from ETS to wait for services.

Thomas Sonderman: And again, I think you're seeing a new phase of our business that we've been talking about for quite some time materializing before us, where, you know, it's maybe only one or two per quarter that we're talking about. We're not guaranteed timing to have one every quarter, but there's been a consistency that you've seen this year with more and more customers routinely moving from ATS to Waiver Services. And that's an exciting time for our business that we've been waiting for.

Thomas Sonderman: And again, I think you're seeing a new phase of our business that we've been talking about for quite some time, materializing with more swear. You know, it's maybe only one or two per quarter, but we're talking about we're not guaranteed with timing to have one every quarter, but there's been a consistency that you've seen this year with more and more customers routinely moving from ETS to wait for services. And that's an exciting time for our business that we've been waiting for.

Steve: with the very efficient business model we put in place.

Steve: And again, I think you're seeing a new phase of our business that we've been talking about for quite some time, materializing before us, where, you know, it's maybe only one or two per quarter that we're talking about. We're not guaranteed with timing to have one every quarter, but there's been a consistency that you've seen this year with more and more customers routinely moving from ATS to wafer services. And that's an exciting time for our business that we've been waiting for. With that, we expect more and more customers to do so, and we'll have better information on really what the pipeline looks like and when we can expect revenue from those new wafer services customers.

Thomas Sonderman: And that's an exciting time for our business that we've been waiting for.

Thomas Sonderman: With that, we expect more and more customers to do so. Then we'll have better information on really what the pipeline looks like and when we can expect a revenue from those new wait for services customers.

Thomas Sonderman: With that, we expect more and more customers to do so, and we'll have better information on really what the pipeline looks like and when we can expect revenue from those new Waiver Services customers. And I'll just add, we're always, you know...

Thomas Sonderman: With that, we expect more and more customers to do so, then we'll have better information on really what the pipeline looks like and when we can expect a revenue from those new wait for services customers. And I'll just add, we're always, you know, adding to our ATS pipeline as well, you know, whether it's advanced compute, more biomedical things than the, you know, AI IOT space. We have lots of exciting customers that are just coming on board and others that continue to move through the pipeline.

Thomas Sonderman: And I'll just add, we're always, you know, adding to our ATS pipeline as well, whether it's advanced compute, more biomedical things in the, you know, AI, and IoT space. We have lots of exciting customers that are just coming on board, and others that continue to move through the pipeline. And that is the real story of Skywater, is that we took a legacy fab through our ATS model and brought in a lot of new, exciting customers and opportunities. And as those move into volume production, we'll essentially have replaced legacy volume with new Skywater-created technology that is literally just beginning to enter the market. Awesome. Thank you very much. That was a very CapEx-like model.

Thomas Sonderman: And I'll just add, we're always, you know, adding to our ATS pipeline as well, you know, whether it's advanced compute, more biomedical things than the, you know, AI IoT space. We have lots of exciting customers that are just coming on board, and others that continue to move through the pipeline. And that is the real story of Skywater: we took a legacy fab through ATS model. We brought in a lot of new exciting customers and opportunities. And as those moving to buying production will essentially have replaced legacy buying with new Skywater created technology that literally is just beginning to enter the market.

Speaker Change: And I'll just add, we're always, you know, adding to our ATS pipeline as well, you know, whether it's advanced compute, more biomedical.

Steve: things, and the, you know...

Steve: AI, IoT space. We have lots of exciting...

Speaker Change: customers that are just coming on board and others that continue to move through the pipeline.

Ezra Weiner: And that is the real story of Skywater is we took a legacy fab through ATS model. We brought in a lot of new exciting customers and opportunities. And as those moving to buying production will essentially have replaced legacy buying with new Skywater created technology that literally is just beginning to enter the market. Awesome. Thank you very much. Very CapEx-like model. Sorry. Yep. No, I appreciate it. Okay. Thanks.

Speaker Change: and that is the real story of skywater is we took agh a legacy fab

Steve: Through our ATS model, we brought in a lot of new, exciting customers and opportunities. And as those move into volume production, we'll essentially have replaced legacy volume with new Skywater-created technology that literally is just beginning to enter the market.

Thomas Sonderman: Awesome. Thank you very much. Very CapEx-like model. Sorry. Yep. No, I appreciate it. Okay.

Speaker Change: Awesome. Thank you very much. Very CapEx-like model. Sorry. Yep. No, I appreciate it. OK, thanks.

Thomas Sonderman: Thanks. And that concludes our Q&A session.

Thomas Sonderman: And that concludes our Q&A session. I will now turn the conference back over to Thomas Sonderman for closing remarks.

Thomas Sonderman: And that concludes our Q&A session.

Thomas Sonderman: I will now turn the conference back over to Thomas Bonderman for closing remarks. Thank you, operator. I'm going to close today's call by conveying the strong confidence all of us that Skywater have and our ability to execute successfully towards our long term growth opportunities and profitability objectives. It is our intent to continue to build your confidence and our capability to execute. We anticipate that additional opportunities to meet with investors during the third quarter will include the virtual Needham Semiconductor Conference and the Jeffrey Semiconductor Summit in Chicago later this month, as well as the Piper Sandler Growth Frontiers Conference in early September. And please feel free to reach out to Claire directly to follow up with us. We look forward to talking with you again on our Q3 call in November.

Steve: And that concludes our Q&A session. I will now turn the conference back over to Thomas Sonderman for closing remarks.

Thomas Sonderman: Thank you, Operator. I want to close today's call by conveying the strong confidence all of us at Skywater have in our ability to execute successfully towards our long-term growth opportunities and profitability objectives. It is our intent to continue to build your confidence and our capability to execute. We anticipate that additional opportunities to meet with investors during the third quarter will include the Needham Semiconductor Conference and the Jeffrey Semiconductor Summit in Chicago later this month, as well as the Piper Sandler Growth Frontiers Conference in early September.

Steve: it is our intent to continue to build your confidence in our capability to execute

Thomas Sonderman: We anticipate that additional opportunities to meet with investors during the third quarter will include the virtual Needham Semiconductor Conference and the Jeffrey Semiconductor Summit in Chicago later this month, as well as the Piper Sandler Growth Frontiers Conference in early September. And please feel free to reach out to Claire directly to follow up with us. We look forward to talking with you again on our Q3 call in November. And with that, I'll conclude today's earnings call. Thank you.

Speaker Change: We anticipate that additional opportunities to meet with investors during the third quarter will include the virtual Needham Semiconductor Conference and the Jeffrey Semiconductor Summit in Chicago later this month, as well as the Piper Sandler Growth Frontiers Conference in early September .

Thomas Sonderman: And please feel free to reach out to Claire directly to follow up with us. We look forward to talking with you again on our Q3 call in November, and with that, I'll conclude today's earnings call. Thank you.

Speaker Change: iandm please feel free to reach out todeclare directly to fall up with us

Speaker Change: We look forward to talking with you again on our Q3 call in November . And with that, I'll conclude today's earnings call. Thank you.

Thomas Sonderman: And with that, I'll conclude today's earnings call. Thank you.

Audra: And this concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: And this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: And this concludes today's conference call. Thank you for your participation. You may now disconnect.

Q2 2024 SkyWater Technology Inc Earnings Call

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