In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Wolfspeed Inc (NYSE:WOLF) reported fiscal third-quarter financial performance that met or exceeded the midpoint of their guidance ranges.
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The company achieved a sequential revenue growth of 50% at Mohawk Valley, contributing $78 million in revenue.
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Wolfspeed Inc (NYSE:WOLF) has established a fully automated 200-millimeter manufacturing footprint, positioning itself for cutting-edge silicon carbide solutions.
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The company received approximately $192 million in cash tax refunds from the Section 48D advanced manufacturing tax credit, boosting liquidity.
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Wolfspeed Inc (NYSE:WOLF) is actively engaged with customers on sampling 200-millimeter materials and pursuing new contracts for 200-millimeter wafer supply.
Negative Points
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Non-GAAP gross margin was only 2.2%, indicating challenges in achieving higher profitability.
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Adjusted EPS was negative $0.72 per share, reflecting ongoing financial challenges.
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The company is undergoing significant restructuring, including a 30% reduction in the senior leadership team.
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Restructuring charges for fiscal 2025 are projected at $400 million to $450 million, indicating substantial costs associated with restructuring.
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Free cash flow during the quarter was negative $168 million, highlighting cash flow challenges.
Q & A Highlights
Q: What steps is Wolfspeed taking to improve its financial foundation and accelerate its path to cash flow breakeven? A: Robert Feurle, CEO, stated that Wolfspeed is focusing on rightsizing operations and accelerating the path to cash flow breakeven. The company is reorganizing to improve teamwork, accountability, and streamline decision-making processes. Additionally, they are conducting an external search for a new EVP and Chief Operating Officer to facilitate operational excellence and cost reduction.
Q: How is Wolfspeed progressing with its 200-millimeter manufacturing capabilities? A: Thomas Werner, Chairman of the Board, reported that Wolfspeed's 200-millimeter products continue to demonstrate industry-leading quality. The company is actively engaged with customers on sampling these materials and pursuing new contracts for wafer supply. They plan to significantly ramp up production as market conditions improve.
Q: What are Wolfspeed's key priorities to capitalize on its competitive advantages in silicon carbide? A: Thomas Werner outlined three key priorities: strengthening the balance sheet, raising cost-effective capital to support long-term growth, and improving financial performance to accelerate positive free cash flow. The company received $192 million in cash tax refunds and is engaged with lenders to address its capital structure.