Image source: The Motley Fool. SkyWater Technology (SKYT -7.38%) Q2 2023 Earnings Call Aug 07, 2023, 4:30 p.m. ET
– Prepared Remarks
– Questions and Answers
– Call Participants
Operator: Good afternoon, ladies and gentlemen. Welcome to the SkyWater Technology’s second quarter 2023 financial results conference call. After the speakers’ prepared remarks, there will be a question-and-answer session. I’ll hand it over to Ms. Claire McAdams, investor relations of SkyWater.
Claire McAdams — Investor Relations: Thank you, operator. Good afternoon and welcome to SkyWater’s second quarter fiscal 2023 conference call. With me on the call today from SkyWater are Thomas Sonderman, president and CEO, and Steve Manko, CFO. 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.
During the call, any statements made about our future financial results and business are forward-looking statements. These 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. 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 and Q2 earnings presentation, both of which are available on our investor relations website. With that, I’ll turn the call over to Tom.
Tom Sonderman — President and CEO: Thank you, Claire, and good afternoon, everyone. We are pleased to report strong second quarter financial results with record quarterly revenues at $69.8 million. This marks our fourth straight quarter of sequential quarterly growth. Revenues were 6% higher than the previous record set in Q1 and grew 47% from Q2 of last year. This strong performance is primarily due to the restructuring of an existing contract with one of our commercial ATS customers, which resulted in a pull-in of $3.6 million of revenue. Even without this pull-in, Q2 revenues were at the upper end of our forecast due to continued strong momentum in multiple ATS programs.
Our gross margin and adjusted EBITDA generation have also been strong over the past four quarters. We have achieved gross margin flow-through above 50% on incremental revenues, and our trailing 12-month revenue of $253 million demonstrates 50% growth over the prior 12-month period.
Despite the overall softening in worldwide semiconductor demand, we are confident in achieving our long-term annual growth objective of 25% in 2023. Our unique positioning within the semiconductor ecosystem, including a strong A&D component and commercial R&D programs, has contributed to our growth. We are also making progress on strategic government initiatives and seeing strong investment in the bio-health and advanced computing markets.
Regarding concerns about our commercial ATS customers being early stage and venture-backed, it’s important to note that our business model is about developing next-generation technologies that are high value and relatively low volume. We are not chasing the high-volume, low-mix foundry business.
In conclusion, we are pleased with our strong performance and confident in our ability to achieve our growth objectives. Thank you for joining us today. We will now open the line for questions.