SkyWater Technology, IncSKYT
SkyWater Technology, Inc Revenue Disclosure
Revenue
Contract Liabilities
Disaggregated Revenue
The Company recognizes ATS development, Tools, and Wafer Services revenues pursuant to its revenue recognition policies as described in Note 3 – Summary of Significant Accounting Policies. The following tables disclose revenue by product type and the timing of recognition of revenue for transfer of goods and services to customers:
Fiscal Year Ended December 28, 2025 | |||||||||||||||||||||||
| Topic 606 Revenue | Lease Revenue Per Topic 842 | ||||||||||||||||||||||
| Point-in-Time | Over Time | Total Revenue | |||||||||||||||||||||
| ATS development | |||||||||||||||||||||||
| Time-and-materials and cost-plus-fixed-fee contracts | $ | 1,204 | $ | 139,659 | $ | — | $ | 140,863 | |||||||||||||||
| Fixed price contracts | 16,240 | 53,450 | — | 69,690 | |||||||||||||||||||
| Other | — | — | 1,944 | 1,944 | |||||||||||||||||||
| Total ATS development | 17,444 | 193,109 | 1,944 | 212,497 | |||||||||||||||||||
Wafer Services | 481 | 199,503 | 798 | 200,782 | |||||||||||||||||||
| Combined ATS development and Wafer Services | 17,926 | 392,610 | 2,743 | 413,279 | |||||||||||||||||||
Tools | 28,860 | — | — | 28,860 | |||||||||||||||||||
| Total | $ | 46,786 | $ | 392,610 | $ | 2,743 | $ | 442,139 | |||||||||||||||
Fiscal Year Ended December 29, 2024 | |||||||||||||||||||||||
| Topic 606 Revenue | Lease Revenue Per Topic 842 | ||||||||||||||||||||||
| Point-in-Time | Over Time | Total Revenue | |||||||||||||||||||||
| ATS development | |||||||||||||||||||||||
| Time-and-materials and cost-plus-fixed-fee contracts | $ | — | $ | 140,482 | $ | — | $ | 140,482 | |||||||||||||||
| Fixed price contracts | 12,665 | 80,830 | — | 93,495 | |||||||||||||||||||
| Other | — | — | 4,668 | 4,668 | |||||||||||||||||||
| Total ATS development | 12,665 | 221,312 | 4,668 | 238,645 | |||||||||||||||||||
Wafer Services | 1,803 | 25,058 | — | 26,861 | |||||||||||||||||||
| Combined ATS development and Wafer Services | 14,468 | 246,370 | 4,668 | 265,506 | |||||||||||||||||||
| Tools | 76,763 | — | — | 76,763 | |||||||||||||||||||
| Total | $ | 91,231 | $ | 246,370 | $ | 4,668 | $ | 342,269 | |||||||||||||||
Deferred Contract Costs
The Company recognizes an asset, deferred contract costs, for the incremental costs of obtaining a contract with a customer when costs are considered recoverable and the duration of the contract is in excess of one year. Deferred contract costs are amortized as the related revenue is recognized. The Company recognized amortization of deferred contract costs totaling $0, and $172, for the fiscal years ended December 28, 2025, and December 29, 2024, respectively. There were no deferred contract costs capitalized as of December 28, 2025.
Contract Assets
Contract assets represent SkyWater’s rights to payments for services it has transferred to its customers, but has not yet billed to its customers. Contract assets were $18,020 and $20,890 at December 28, 2025 and December 29, 2024, respectively, and are presented net of allowances for credit losses of $26 and $42, respectively. The table below shows contract asset detail information on a gross basis:
| Balance at December 29, 2024 | $ | 20,932 | |||
| Transfers to accounts receivable, net | (20,861) | ||||
| Increase due to revenue recognized in advance of customer billings | 17,975 | ||||
| Balance at December 28, 2025 | $ | 18,046 | |||
The Company’s contract liabilities principally consist of deferred revenue on customer contracts and deferred lease revenue representing customer prepayments on a leasing arrangement in which the Company serves as lessor. Deferred revenue on customer contracts represents payments from customers for which performance obligations have not yet been satisfied. In some instances, cash may be received, or payment may be contractually due by a customer before the related revenue is recognized. The contract liabilities and other significant components of contract liabilities at December 28, 2025 and December 29, 2024 are as follows:
| December 28, 2025 | December 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Contract Deferred Revenue (1) | Lease Deferred Revenue | Supply Agreement (2) | Total Contract Liabilities | Contract Deferred Revenue (1) | Lease Deferred Revenue | Supply Agreement (2) | Total Contract Liabilities | ||||||||||||||||||||||||||||||||||||||||
| Current contract liabilities | $ | 40,301 | $ | 100 | $ | 1,794 | $ | 42,195 | $ | 53,222 | $ | 1,944 | $ | — | $ | 55,166 | |||||||||||||||||||||||||||||||
| Long-term contract liabilities | 81,665 | — | 67,805 | 149,470 | 51,901 | — | — | 51,901 | |||||||||||||||||||||||||||||||||||||||
| Total contract liabilities | $ | 121,966 | $ | 100 | $ | 69,599 | $ | 191,665 | $ | 105,123 | $ | 1,944 | $ | — | $ | 107,067 | |||||||||||||||||||||||||||||||
(1)Contract deferred revenue includes $37,077 and $48,200 at December 28, 2025 and December 29, 2024, respectively, related to material rights provided to a significant customer in exchange for funding additional manufacturing capacity. Of these amounts, $11,123 and $11,123 were classified as current in the consolidated balance sheets at December 28, 2025 and December 29, 2024, respectively.
(2)In connection with the Fab 25 Transaction, the Company entered into a multi-year supply agreement with certain of Infineon’s subsidiaries under a take-or-pay arrangement for the first four-year period following the closing of the Transaction (the “Supply Agreement”). The Supply Agreement included an off-market component estimated at a fair value of $120,000 which was included in the purchase price for the Transaction. This amount is presented net of Supply Agreement specific contract assets which total $32,492 as of December 28, 2025.
The change in contract liabilities is as follows:
| Balance at December 29, 2024 | $ | 107,067 | |||
Increase due to payments received, excluding amounts recognized as revenue | 82,087 | ||||
Recognition of off-market component of Supply Agreement in Fab 25 purchase accounting (1) | 87,508 | ||||
Revenue recognized included in the balance at the beginning of the period | (67,088) | ||||
Revenue recognized from Fab 25 Supply Agreement (1) | (17,909) | ||||
| Balance at December 28, 2025 | $ | 191,665 | |||
(1) The Company recorded a $120,000 contract liability in purchase accounting for the acquisition of Fab 25 to recognize the fair value of the off-market component of the Supply Agreement. Related revenue for this contract liability is recognized as the Company fulfills its wafer production obligations over the four-year term of the Supply Agreement. Between June 30, 2025, the date the Company acquired Fab 25, and December 28, 2025, the Company recognized $17,909 of revenue associated with this contract liability reducing its total balance to $102,091 at December 28, 2025.
Remaining Performance Obligations
Excluding the contract liability related to the off-market component of the supply agreement recognized in purchase accounting (see Note 4 - Acquisitions), the Company had $175,321 of remaining performance obligations at December 28, 2025 that had not been fully satisfied on contracts with original expected durations of one year or more, which were primarily related to ATS development and tools contracts. The Company expects to recognize the revenue associated with these performance obligations as it satisfies the performance obligations within the next 10 years.
The Company does not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. Furthermore, the Company does not adjust the promised amount of consideration for
the effects of a significant financing component if it expects, at contract inception, that the period between when it transfers a promised good or service to a customer and when the customer pays for that good or service is expected to be one year or less.
Contract Estimates
Transaction prices are established at, or prior to, entering into customer arrangements. The Company recognizes transaction prices as revenue by allocating the transaction price associated with a contract to the performance obligations included in that contract based on estimates of the selling price for those performance obligations on a standalone basis.
The terms of a contract and historical business practices can, but generally do not, give rise to the inclusion of variable consideration in the Company’s customer contracts. To the extent a customer contract includes variable consideration, the allocated transaction price reflects the Company’s estimates of variable consideration. Estimates of variable consideration reflect the amount the Company expects to receive from its customers and considers the uncertainty of meeting the conditions to earn the variable consideration so as to avoid significant reversals of revenue as those uncertainties are resolved. Estimates of variable consideration are based largely on an assessment of the Company’s anticipated performance and all historical, current, and forecasted information that is reasonably available at contract inception. There are no significant instances where variable consideration is constrained and not considered as part of the allocated contract consideration.
Contract Modifications
When contracts are modified to account for changes in contract specifications and requirements, the Company evaluates whether the modification either creates new, or changes existing, enforceable rights and obligations in the original contract. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original product or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is adjusted prospectively with either an upward or downward revision to revenue recognized using the cumulative catch-up method.
When a contract modification adds new performance obligations to the original contract, the old contract is terminated and the modified contract is treated as a new contract for accounting purposes with revenue recognition commencing with a new accounting basis. During the year ended December 28, 2025, the Company had no significant contract modifications. During the year ended December 29, 2024, the Company had two significant contract modifications with customers which include (1) a modification of a customer contract that decreased project scope and resulted in a $5,616 decrease in the estimate of future costs to complete their program; and (2) a contract termination and related establishment of a new contract for a customer, which resulted in recognition of $1,902 of revenue previously recorded as a contract liability.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 10, 2022 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.