Wolfspeed Q4 Earnings Call Highlights

Key Points

• Fourth-quarter revenue reached $150 million, at the midpoint of guidance, as data-center demand—particularly from AI applications—offset weaker automotive sales. Power revenue rose 6% sequentially to approximately $106 million, while data-center revenue more than doubled year over year.
• Wolfspeed is expanding its AI data-center opportunity through new design wins, 800-volt architecture applications and a dedicated solutions team. The company is also promoting fifth-generation silicon-carbide MOSFETs and high-voltage products for data centers, automotive, industrial, aerospace and defense markets.
• Profitability remains challenging: adjusted gross margin was negative 19.9%, EBITDA was negative $62 million and operating cash flow was negative $54 million. Wolfspeed forecast fiscal first-quarter revenue of $140 million to $160 million with continued negative gross margins, while prioritizing factory utilization and debt reduction.

Wolfspeed NYSE: WOLF reported fourth-quarter fiscal 2026 revenue of $150 million, landing at the midpoint of its guidance range, as growth in artificial intelligence data-center applications helped offset softer automotive demand.

Chief Executive Officer Robert Feurle said the company has continued its transformation through a refreshed leadership team, a revised sales strategy, capital-structure actions and an increased focus on customer relationships. He said Wolfspeed remains early in that process but has gained confidence in its path toward profitability.

Power revenue was approximately $106 million, up 6% sequentially, while materials revenue totaled about $43 million. Chief Financial Officer Gregor van Issum said AI data-center strength was a key contributor to the power business, with data-center revenue increasing about 20% from the fiscal third quarter and more than doubling from fiscal 2025 to fiscal 2026.

Data-center opportunity expands

Feurle said Wolfspeed has established a dedicated data-center solutions team and added two industry veterans in the San Francisco Bay Area with experience in high-voltage power architecture for AI and data-center applications.

The company said new design wins are ramping at power-supply companies including Lite-On and Macre, supporting multiple hyperscale customers. Wolfspeed is targeting opportunities tied to both existing and emerging high-voltage direct-current AI architectures.

Feurle said the transition to 800-volt architectures is increasing silicon-carbide content across the data-center power ecosystem. The company sees additional opportunities beyond AC-DC power supplies, including battery backup units, supercapacitors, eFuses, high-voltage DC-DC conversion and the secondary side of DC-DC systems.

During the question-and-answer session, Feurle said Wolfspeed is engaged across device voltage ranges from 750 volts and 1,200 volts to 2.3 kilovolts and 3.3 kilovolts. The company is also working with solid-state transformer manufacturers and hyperscalers on reliability qualifications and deployment.

Feurle said Wolfspeed’s completed transition from six-inch to eight-inch, or 200-millimeter, manufacturing is an asset as customers seek capacity for future data-center deployments. The company said its vertically integrated operations include substrates, devices and production capacity at its Mohawk Valley facility in upstate New York.

Technology and customer updates

Wolfspeed highlighted its fifth-generation silicon-carbide MOSFET technology, announced in June at the PCIM power technology conference in Europe. Feurle said the Gen 5 products offer what the company described as industry-leading specific on-state resistance while retaining the switching behavior of its fourth-generation MOSFETs.

The products are intended for automotive, industrial power supplies, AI data centers, solid-state transformers and renewable-energy conversion applications. Wolfspeed said Gen 5 devices were developed and are running at its 200-millimeter Mohawk Valley manufacturing facility.

In automotive, Feurle pointed to the company’s previously announced Toyota partnership for onboard charging systems and said Wolfspeed recently received its first business award from a European Tier 1 supplier supporting an onboard charger for a large German automaker.

The company also discussed its 10-kilovolt silicon-carbide MOSFET, which it said was recognized as a top innovation at PCIM. Wolfspeed recently signed a memorandum of understanding with GE Aerospace to accelerate adoption of high-voltage silicon carbide in industrial, aerospace and defense markets. The partnership includes supply of Wolfspeed’s 10-kilovolt MOSFET and co-development of standard high-voltage power-module formats.

In its materials business, Wolfspeed said it continues to support 150-millimeter long-term-agreement customers while working with them on their transition to 200-millimeter substrates. The company has begun shipping engineering samples of its 200-millimeter substrates to multiple customers for internal evaluation, though it characterized the opportunity as longer term.

Margins, cash flow and balance sheet

Wolfspeed’s adjusted non-GAAP gross margin was negative 19.9% in the fourth quarter, improving 70 basis points sequentially. Van Issum attributed the improvement primarily to product mix, including higher industrial and energy sales in power and higher radio-frequency sales in materials.

Underutilization remained the primary factor affecting gross margins, he said. Wolfspeed is focused on increasing factory utilization while producing the same revenue with less capacity consumed. Van Issum said gross-margin break-even could occur at roughly an $800 million annual revenue run rate, though the level could vary based on product mix.

• Non-GAAP operating expenses totaled $62 million, compared with $61 million in the prior quarter.
• Adjusted non-GAAP EBITDA was negative $62 million, roughly unchanged sequentially.
• Gross capital expenditures fell to $5 million from $38 million in the prior quarter.
• Operating cash flow was negative $54 million and included a $41 million benefit from inventory reductions.
• Cash and short-term investments totaled approximately $1.1 billion at quarter-end, while net debt was about $600 million.

During the quarter, holders of $46 million in second-lien convertible notes voluntarily converted debt to equity, reducing annual interest expense by about $1 million. Van Issum said reducing debt and the company’s cost of capital remains a priority. He added that the highest-priority debt to refinance carries an interest rate of roughly 16%.

Fiscal first-quarter outlook

For the first quarter of fiscal 2027, Wolfspeed expects revenue between $140 million and $160 million and anticipates that non-GAAP gross margin will remain negative. The company expects non-GAAP operating expenses of $62 million to $66 million.

Feurle said demand trends in automotive and industrial markets remain difficult to predict, including because some automotive customers are undergoing product-mix changes. However, he said Wolfspeed is seeing broader customer engagement globally and continued traction in industrial and automotive applications.

About Wolfspeed (NYSE:WOLF)

Wolfspeed, Inc NYSE: WOLF is a leading developer and manufacturer of silicon carbide (SiC) and gallium nitride (GaN) semiconductor materials and devices. The company's product portfolio addresses high-growth markets such as electric vehicles, renewable energy, fast-charging infrastructure, aerospace and defense, and telecommunications. By leveraging proprietary materials and device designs, Wolfspeed delivers solutions that offer improved energy efficiency, higher power density and greater thermal performance compared to conventional silicon-based semiconductors.

Founded as part of Cree, Inc and spun off to form an independent public company in October 2021, Wolfspeed traces its roots to the mid-1980s when it pioneered the commercial use of wide-bandgap semiconductor technology.

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