Wolfspeed Q3 2025 Earnings Report

Wolfspeed EPS Results

• Actual EPS: -$0.72
• Consensus EPS: -$0.82
• Beat/Miss: Beat by +$0.10
• One Year Ago EPS: -$0.62

Wolfspeed Revenue Results

• Actual Revenue: $185.40 million
• Expected Revenue: $190.03 million
• Beat/Miss: Missed by -$4.63 million
• YoY Revenue Growth: -7.60%

Wolfspeed Announcement Details

• Quarter: Q3 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 5:00PM ET

Wolfspeed (NYSE:WOLF) operates as a powerhouse semiconductor company focuses on silicon carbide and gallium nitride (GaN) technologies in Europe, Hong Kong, China, rest of Asia-Pacific, the United States, and internationally. It offers silicon carbide and GaN materials, including silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers to manufacture products for RF, power, and other applications. The company also provides power devices, such as silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), and power modules for customers and distributors to use in applications, including electric vehicles comprising charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, it offers RF devices comprising GaN-based die, high-electron mobility transistors, monolithic microwave integrated circuits, and laterally diffused MOSFET power transistors for telecommunications infrastructure, military, and other commercial applications. The company was formerly known as Cree, Inc. and changed its name to Wolfspeed, Inc. in October 2021. Wolfspeed, Inc. was incorporated in 1987 and is headquartered in Durham, North Carolina.

Wolfspeed Q3 2025 Earnings Call Transcript

Key Takeaways

• New CEO Robert Foyler has begun a broad reorganization—including an external search for a COO, a 30% reduction in senior leadership and a 25% cut in total headcount—to streamline decision-making and accelerate accountability.
• In Q3, Wolfspeed reported revenue of $185 million (up 2.2% sequentially), with Mohawk Valley contributing $78 million (50% sequential growth), a non-GAAP gross margin of 2.2% and adjusted EPS of –$0.72 per share.
• Wolfspeed ended the quarter with $1.3 billion in cash and liquidity—boosted by a $200 million equity raise and $192 million in Section 48D tax refunds—and anticipates an additional ~$600 million in refunds plus $150 million from non-core asset sales.
• The company is exiting the 150 mm market and transitioning fully to its automated 200 mm silicon carbide platform, targeting $200 million in annual cost savings, reducing its EBITDA breakeven to ~$800 million in annual revenue, and aiming for $200 million of positive unlevered operating cash flow in fiscal 2026.
• Wolfspeed is focusing on high-value end markets—such as AI data centers, EVs, energy storage and aerospace/defense—leveraging its industry-leading 200 mm manufacturing quality to win blue-chip contracts and drive revenue reacceleration.

Presentation

[Operator]

Hello, everyone, and thank you for joining the Wolfspeed Incorporated Third Quarter Fiscal twenty twenty five Earnings Call. My name is Megan, and I will be your coordinating your call today. I will now hand you over to your host, Tyler Groenbach, VP of External Affairs to begin.

[Operator]

Please go ahead.

[Tyler Gronbach, Vice President of External Affairs at Wolfspeed]

Thank you, operator, and good afternoon, everyone. Welcome to Wolfspeed's third quarter fiscal twenty twenty five conference call. Today, Wolfspeed's Chairman of the Board, Tom Werner Wolfspeed's CEO, Robert Foyerle and Wolfspeed's CFO, Neil Reynolds, will report on the results for the third quarter of fiscal year twenty twenty five. Please note that we will be presenting non GAAP financial results during today's call, which we believe provide useful information to our investors. Non GAAP results are not in accordance with GAAP and may not be comparable to non GAAP information provided by other companies.

[Tyler Gronbach, Vice President of External Affairs at Wolfspeed]

Non GAAP information should be considered as a supplement to and not a substitute for financial statements prepared in accordance with GAAP. A reconciliation to the most directly comparable GAAP measures is in our press release and posted in the Investor Relations section of our website along with a historical summary of other key metrics. Today's discussion includes forward looking statements about our business outlook and we may make other forward looking statements during the call. Such forward looking statements are subject to numerous risks and uncertainties. Our press release today and the SEC filings noted in the release mention important factors that could cause actual results to differ materially.

[Tyler Gronbach, Vice President of External Affairs at Wolfspeed]

Also, please note that we will not be taking questions during today's conference call. Lastly, all numbers presented today will be on a continuing operations basis. And now I'd like to turn the call over to Robert.

[Robert Feurle, CEO at Wolfspeed]

Good afternoon, everyone, and thank you for joining us today. I'm very excited to have the opportunity to connect with you. Although I've been only in the role for a few days, I spent my time listening closer to our customers, employees and leadership team and reviewing our results, roadmap and strategic initiatives. One thing is abundantly clear, Full Speed is a company with enormous potential underpinned by strong foundational elements already in place. As Tom and Neil will elaborate shortly, the Board has taken decisive steps to improve our financial foundation, including rightsizing of our operations and accelerating our path to cash flow breakeven.

[Robert Feurle, CEO at Wolfspeed]

My immediate focus will be maintaining stability and continuity for all stakeholders and building upon our strength. First and foremost, silicon carbide technology is second to none as long term admire the talent and the can do spirit of the organization. I firmly believe Wolfspeed possesses the technology leadership required to drive the industry forward and develop solutions for new emerging applications. Additionally, Wolfspeed has already established and rightsized a best in class greenfield fully automated 200 millimeter manufacturing footprint poised to deliver customers with cutting edge silicon carbide solutions. Drawing on my experience as an operator and leading through complex transitions, feel very well prepared to support Wolfspeed as we enter a new era with new energy.

[Robert Feurle, CEO at Wolfspeed]

I'm grateful for all the work that Tom and Neil and the rest of the leadership has done in improving the foundation of the company prior to my start. In coming weeks, I'll collaborate closely with our leadership team and forward to refine our operating plan with a clear emphasis on reaccelerating revenue growth and enhancing profitability. We've already taken initial steps that will aid these plans by reorganizing the company to improve teamwork, accountability and streamlining decision making process. From a product and customer facing perspective, we are conducting an external search for a new EVP and Chief Operating Officer, a new position responsible for facilitating operational excellence, quality assurance, cost reduction and execution. Cenkus Polkas will now lead Materials and Power Business Operations as our Chief Business Officer.

[Robert Feurle, CEO at Wolfspeed]

And finally, Angelo Kensian, who previously led Wolfspeed's EMEA sales team to be our new global SVP of Sales and Marketing. I look forward to working with Angelo to aggressively pursue opportunities in a rapidly scaling market such as AI data centers, energy storage, EVs and aerospace and defense among others. These are highly specialized markets where quality, reliability, efficiency matters most. In these environments, BlueSpeed's fully automated 200 millimeter manufacturing platform sets us apart. That's where our focus needs to be, serving our blue chip customers in strategic verticals with the best in class products, enabling Wolfspeed to both make and take market share and in turn drive revenue reacceleration of our business.

[Robert Feurle, CEO at Wolfspeed]

I look forward to sharing more details soon. For now, I want to express confidence in the work we already have underway and the path ahead us for Wolfspeed. With that, I'll hand over to Tom to discuss our recent progress

[Thomas Werner, Executive Chair at Wolfspeed]

and actions in detail. Thank you, Robert. On behalf of the entire Board, welcome. We look forward to your leadership. I'm pleased to report that our fiscal third quarter financial performance met or exceeded the midpoint of our guidance ranges and we continued our strong execution at Mohawk Valley, which posted $78,000,000 in revenue and sequential growth of 50%.

[Thomas Werner, Executive Chair at Wolfspeed]

I'd like to thank the team for continuing to improve the company's financial performance. Operationally, we made steady progress at the JP. We were granted a conditional certificate of occupancy in February and expect our full certificate of occupancy in June. Our 200 millimeter products from the JP continue to demonstrate industry leading quality, a competitive advantage driving ongoing customer engagement and new contract opportunities. As a matter of fact, we are actively engaged with customers on sampling our 200 millimeter materials and pursuing new contracts for 200 millimeter wafer supply.

[Thomas Werner, Executive Chair at Wolfspeed]

We will begin significantly ramping production at the JP as market conditions improve. Moving on, since the beginning of the year, we've consistently communicated that our primary objective is improving our capital structure to capitalize on Wolfspeed's competitive advantages and multi decade growth opportunity in silicon carbide. To achieve this objective, we remain focused on these key priorities: first, continuing to take aggressive steps to strengthen our balance sheet second, continuing our efforts to raise cost effective capital required to support our long term growth plan and third, dramatically improving the financial performance of the company and accelerating our path to generate positive free cash flow. I'm pleased to report that we made notable progress on these priorities this past quarter. Related to improving our balance sheet, we received approximately $192,000,000 in cash tax refunds from the Section 48D advanced manufacturing tax credit, further boosting our liquidity.

[Thomas Werner, Executive Chair at Wolfspeed]

Additionally, we remained actively engaged with our lenders addressing our capital structure. Next, we continue to maintain a constructive dialogue with the Trump administration in the CHIPS program office regarding federal funding. Wolfspeed is positioned to help achieve some of this administration's important initiatives, leading the American semiconductor revolution, reassuring the manufacturing of critical mineral derivatives, boosting domestic production of technologies critical to national security and securing domestic supply chains. We believe Wolfspeed is the right company to support these initiatives, and we look forward to working with the administration in these efforts. Finally, related to improving financial performance, we've engaged external experts to continue to identify additional cost saving measures beyond those already underway.

[Thomas Werner, Executive Chair at Wolfspeed]

This work will continue to optimize how the business is organized to better align with current customer demands and position the organization to pivot quickly as demand continues to improve. One of the first actions from this work is to reduce the senior leadership team by 30%. Additionally, we are in the final stages of fully transitioning the business to 200 millimeter and simplifying our footprint. The move to 200 millimeter began back in 2019, well before the rest of the industry, when we announced our plans to build what is now our Mohawk Valley fab. This marked the company's strategic decision to begin building 200 millimeter capabilities, which is expected to result in lower cost and higher quality wafers.

[Thomas Werner, Executive Chair at Wolfspeed]

We recognized back then that the most compelling and high growth areas of the silicon carbide market necessitated better quality in the highest value verticals where quality wins over price. Now that we have completed our fully automated 200 millimeter facility footprint, we can exit the more competitive and non differentiated 150 millimeter device market through the closures of our Farmers Branch 1 Hundred And 50 millimeter epitaxy facility, which is completed and our Durham One Hundred And Fifty millimeter device facility, which remains on track for completion this calendar year. Not only do we believe that these moves will help accelerate our path to profitability, but more importantly, they align the company to pursue growth in the end markets Robert mentioned earlier. The markets that have the most compelling tailwinds and those that will drive silicon carbide technology forward for years to come. We believe these combined efforts will reduce our non GAAP EBITDA breakeven point to approximately $800,000,000 annually and will help position us to achieve our target of approximately $200,000,000 of positive unlevered operating cash flow in fiscal twenty twenty six based on our targeted fiscal twenty twenty six revenue growth.

[Thomas Werner, Executive Chair at Wolfspeed]

Our actions, while at times difficult, are designed to best position the company for growth and set Robert up for success on a strong financial footing with the ability to aggressively pursue all the opportunities ahead of us. Now I'd like to turn the call over to Neil to discuss our quarterly financials in more detail.

[Neill Reynolds, CFO at Wolfspeed]

Thank you, Tom. Turning to our third quarter results. We generated revenue of $185,000,000 in line with our guidance midpoint and up 2.2% sequentially. Power revenue was $107,000,000 driven primarily by significant growth in our automotive revenue offset slightly by a decrease in industrial and energy revenues. Materials revenue was $78,000,000 largely due to the slowing demand that our materials customers are seeing across the device market.

[Neill Reynolds, CFO at Wolfspeed]

Mohawk Valley contributed $78,000,000 up 50% sequentially and up over 175% year over year. Non GAAP gross margin was 2.2%, also in line with the midpoint of our guidance, driven by incremental contribution from Mohawk Valley, offset by lower utilization at our Durham One Hundred And Fifty millimeter device fab and lower revenues and utilization from our materials factories. Adjusted EPS was negative $0.72 per share also above the high end of our guidance range. Our simplification and restructuring initiatives continue targeting $200,000,000 in annual cash savings and $150,000,000 in liquidity through non core asset divestitures. The Farmers Branch 150 Millimeter epitaxy facility was closed at the December and is being prepared for sale.

[Neill Reynolds, CFO at Wolfspeed]

The closure of the Durham One Hundred And Fifty Millimeter wafer fab remains on track to close at the end of calendar twenty twenty five. The non factory workforce reductions along with the factory closures now contributing to approximately 25% reduction in total company employment remains on track with most of the reductions already completed at the end of fiscal 3Q. Restructuring charges for fiscal twenty twenty five projected at $400,000,000 to $450,000,000 with $57,000,000 incurred this quarter. These charges primarily reflect severance, asset impairments, accelerated depreciation and related expenses. We anticipate restructuring to be cash neutral in fiscal twenty twenty five and generate substantial annualized cash savings starting in fiscal twenty twenty six.

[Neill Reynolds, CFO at Wolfspeed]

Moving to our balance sheet. We ended the quarter with over $1,300,000,000 of cash and liquidity on hand, inclusive of the full $200,000,000 from our equity offering and the $192,000,000 from our Section 48D cash tax refunds. As it relates to 48D, as of the end of third quarter of fiscal twenty twenty five, the company had accrued more than $900,000,000 in Section 48D tax credits, which is inclusive of the tax credits that have already been dispersed. Following the end of our fiscal year on 06/30/2025, we expect to submit for a 48D tax credit refund of approximately $600,000,000 Additionally, we continue to work on our divestiture of non core assets, which we expect to generate approximately $150,000,000 of cash proceeds in calendar twenty twenty five. Free cash flow during the quarter was negative $168,000,000 comprised of negative $142,000,000 of operating cash flow and $26,000,000 of capital expenditures net of reimbursements from 48C and other incentives.

[Neill Reynolds, CFO at Wolfspeed]

Turning now to our capital structure and liquidity. As Tom mentioned earlier, we continue to actively engage with our lenders to improve our capital structure. As we consider alternatives as it relates to these negotiations as mentioned above, we closed fiscal 3Q with approximately $1,300,000,000 of cash and liquidity. Also as previously mentioned, we expect to receive approximately $600,000,000 of 48D cash tax refunds during fiscal year twenty twenty six, further improving our cash position. Therefore, our current operating forecast allows us to continue to meet customer, supplier and employee obligations.

[Neill Reynolds, CFO at Wolfspeed]

We do not anticipate the outcome of our debt negotiations to have a material impact on these stakeholders. However, as part of our lender negotiations, we may elect to pursue either in court or out of court options. Due to our contemplation of an in court option specifically, we expect to include required going concern language in the footnotes to the financial statements of our upcoming Form 10 Q. Optimizing our capital structure has been a stated priority and we have been engaged in constructive discussions with our financial stakeholders to finalize a plan that will support our long term success. As such, we have filed certain materials today associated with those discussions.

[Neill Reynolds, CFO at Wolfspeed]

For more information, please review our Form eight ks filed this afternoon. Before I hand it back over to Tom, I'd like to take a brief moment to acknowledge the announcement last week on my upcoming departure from Wolfspeed. This transition comes at a natural inflection point, both for me and for Wolfspeed. As I prepare to transition out of the CFO role, I'm committed to doing everything in my power to ensure stability and continuity, particularly as we continue our important work to strengthen the company's capital structure. I am focused on ensuring that Robert begins his tenure with the strongest financial foundation possible.

[Neill Reynolds, CFO at Wolfspeed]

Looking ahead, I'm confident in Wolfspeed's strategic direction and its potential for long term growth. Under Robert's leadership, Wolfspeed is well positioned to capitalize on the significant opportunities in the silicon carbide market, and I look forward to following the company's continued progress. With that, I'll turn it back to Tom.

[Thomas Werner, Executive Chair at Wolfspeed]

Thanks, Neil. In my early conversations with Robert, one thing became immediately clear. We need to return to the core innovation that built Wolfspeed's leadership. That means recommitting to the technologies and markets where silicon carbide delivers the greatest impact and where Wolfspeed has the clearest right to win. I'm encouraged by the fresh perspectives Robert is bringing to the company and to the management team.

[Thomas Werner, Executive Chair at Wolfspeed]

I'm looking forward to working with him as I transition back into the role of Board Chair. Before I close, I would just like to state how proud I am of the entire Wolfspeed team and the work that we've accomplished during my tenure as Executive Chairman. We have made significant progress on all the priorities we outlined in January, including hiring a new permanent CEO who shares the Board's vision of what Wolfspeed can become completing our at the market equity offering and receiving our cash tax refunds to improve near term liquidity, working closely with the current administration to secure federal funding, accelerating our transition to a pure play 200 millimeter silicon carbide producer, reducing operating expenditures to lower our EBITDA breakeven point reducing our CapEx levels to accelerate the path to positive free cash flow and most importantly, progressing negotiations with our lenders on efforts to improve our capital structure and give Robert the strongest financial foundation possible as he looks to put his stamp on next gen Wolfspeed. With the right foundation in place, we believe we're positioned to execute and win. Thank you for your time today.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect your lines.

Participants

Executives

• Tyler Gronbach, Vice President of External Affairs
• Robert Feurle, CEO
• Thomas Werner, Executive Chair
• Neill Reynolds, CFO