SkyWater Technology, Inc. (SKYT) shares are surging 20.87% in pre-market trading on Thursday, following the release of its third-quarter earnings report that significantly exceeded analyst expectations. The semiconductor company reported a surprising profit, defying market predictions of a loss and showcasing strong growth across multiple segments.

According to the earnings report, SkyWater posted an adjusted net income of $11.5 million for the quarter, drastically outperforming the consensus estimate of an $8.36 million loss. The company's adjusted earnings per share came in at $0.24, compared to the expected loss of $0.17 per share. Revenue climbed to $150.74 million, representing a 60.7% increase from the same quarter last year and surpassing the expected $135.50 million.

The company's strong performance was driven by several factors. SkyWater achieved record revenues from quantum computing customers, with four new customer engagements boosting its Advanced Technology Services (ATS) revenues. The first full quarter of Texas operations exceeded revenue and profitability expectations, driven by higher wafer production levels. Additionally, an acceleration in program timing led to stronger ATS development revenues in aerospace and defense markets.

Looking ahead, SkyWater provided an optimistic outlook for the fourth quarter, projecting consolidated revenue between $155 million and $165 million. The company also noted that advanced packaging tool installations in Florida are scheduled for completion in early 2026, potentially setting the stage for future growth. In response to the strong results and positive outlook, analysts have begun revising their price targets upward, with TD Cowen raising its target to $24 from $22 and maintaining a "Strong Buy" rating.