Wolfspeed (Minutes): Weak SiC demand will persist throughout the fiscal year 2026
The following are the$Wolfspeed(WOLF.US) Fiscal Year 2026 Q1 Earnings Call Minutes. For earnings interpretation, please refer to "Wolfspeed After Debt Relief: Layoffs and Cost Reductions Can Mitigate Losses, Profitability Depends on Growth"
I. Review of Wolfspeed's Core Financial Information
1. Overall Performance
A. Revenue: This quarter's consolidated revenue was $197 million, remaining essentially flat compared to $195 million in the same period last year.
B. Gross Margin: GAAP gross margin was -39%, non-GAAP gross margin was -26%, including $29 million inventory reserves and $47 million underutilization costs (Mohawk Valley + JP factories).
C. Loss Per Share: GAAP loss per share was $4.12, expanding from $2.23 last year, mainly due to $504 million restructuring costs. Non-GAAP loss per share was $0.55, better than $0.91 in the same period last year.
D. Underutilization Costs: $47 million, significantly increased from $26 million in the same period last year, primarily due to low utilization rates at Mohawk Valley and Siler City factories.
2. Cash Flow and Investment
A. Operating Cash Flow: Inflow of $5.7 million, significantly improved from negative $132 million in the same period last year.
Investment Activities: Cash inflow of $136.9 million, including $91 million cash from the sale of RF business to MACOM.
Capital Expenditure: $104 million, lower than $437 million in the same period last year.
II. Detailed Content of Wolfspeed's Earnings Call
2.1 Key Information from Executive Statements
1) The company is focusing on core growth areas and strengthening financial discipline, transitioning from the "expansion phase" to the "execution phase," with an emphasis on improving the efficiency of silicon carbide (SiC) power device capacity and cash flow performance. Leveraging the manufacturing advantage of 200mm silicon carbide wafers, the company is accelerating its layout in high-growth markets such as electric vehicles, industrial power supplies, AI data centers, and energy storage.
2) The company plans to close the Durham 150mm factory by the end of 2025 (calendar year) and consolidate device production at the Mohawk Valley factory;
3) The company strictly controls expenses and capital investments, with capital expenditure of $104 million, lower than $437 million in the same period last year, promoting positive quarterly free cash flow.
4) Outlook
The company expects second fiscal quarter revenue to be in the range of $150 million to $190 million, declining from this quarter, mainly due to customers placing orders in advance this quarter (Durham factory closure) and some customers seeking "second supply" during the restructuring period. No earnings guidance for the next quarter is provided (affected by restructuring and new accounting adjustments).
It is expected that market demand weakness will continue for the remainder of Fiscal Year 2026, with management focusing on cost control and cash flow stability. The company plans to release more detailed long-term strategy and financial updates in the first half of 2026.
2.2 Q&A Session
No analyst Q&A session was set for this earnings call.
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