Revenue in Line with Guidance
Total revenue of $150 million in Q3 FY2026, which was in line with the midpoint of company guidance.
Wolfspeed Inc
· WOLF
May 5th, 2026
Summary
- Earnings Call Date:
- 2026-05-05
- Change Since:
- +30.47%
- Next Earnings Date:
- 2026-08-19
Earnings Call Sentiment
NeutralThe call conveyed clear strategic and operational progress — including product launches (10kV MOSFET, TOLT), notable sequential AI/data center growth (~30% Q2→Q3), successful refinancing actions (≈$476M proceeds, ~43% reduction of first-lien balance, ~$62M expected annual interest savings) and a strong cash position (~$1.2B). However, results remain constrained by a materially negative gross margin (−20.6%), significant underutilization impact (~$46M), negative adjusted EBITDA (−$62M) and negative operating cash flow (−$84M). Management emphasized that margin expansion depends on improved factory utilization and that 300mm and some AI opportunities are longer-term. Given the balance of meaningful strategic/financial progress against continued operating losses and capital structure work still required, the overall tone is mixed but steady execution is evident.
Company Guidance
Wolfspeed guided Q4 FY26 revenue of $140–$160 million, said non‑GAAP gross margin is expected to remain negative and that operating expenses should be roughly flat quarter‑over‑quarter; this follows Q3 results of $150 million revenue (in line with the midpoint), power revenue of ~$100 million (≈90% from Mohawk Valley 200‑mm, ≈10% 150‑mm last‑time buys), materials revenue of ~$50 million (flat sequentially), Q3 non‑GAAP gross margin of -20.6% (double‑digit percentage‑point improvement QoQ) with underutilization impacting results by ~ $46 million, non‑GAAP OpEx of $61 million, adjusted EBITDA of -$62 million, operating cash flow of -$84 million, net CapEx of ~$5 million (gross $38 million offset by $33 million of NY incentives), and cash & short‑term investments of ~ $1.2 billion; management reiterated the longer‑term objective to return to above‑market revenue growth and achieve EBITDA and cash‑flow profitability and highlighted balance‑sheet actions that generated ~$476 million gross proceeds, reduced first‑lien debt by ~43% (≈$97 million principal), are expected to lower annual interest expense by ≈$62 million, and drove an equity increase of more than $400 million, with the first debt maturity in 2030.
Power and Materials Revenue Mix
Power revenue ~ $100 million (≈66.7% of total) with ~90% from Mohawk Valley 200mm device fab; Materials revenue ~ $50 million (≈33.3% of total) and flat sequentially.
Product and Technology Milestones
Launched the first commercially available 10-kilovolt silicon carbide power MOSFET and introduced the next-generation TOLT portfolio; progressed 200mm device production at Mohawk Valley and advanced 300mm materials development and qualification work.
Strong Sequential Growth in AI/Data Center
AI/data center applications showed approximately 30% sequential growth from Q2 to Q3 (and prior Q1-to-Q2 growth of ~50%), indicating accelerating traction though still a moderate portion of revenue.
Capital Structure Improvement via Refinancing
Completed private placements generating approximately $476 million gross proceeds and used proceeds to reduce existing senior secured note balance by ~43%, lowering total debt principal by about $97 million and expected to reduce annual interest expense by ~$62 million.
CFIUS Clearance and Equity Improvement
Received CFIUS clearance that released equity to Renesas and primarily drove a >$400 million increase in the company’s equity position during the quarter, significantly improving the debt-to-equity ratio.
Solid Liquidity Position
Ended the quarter with approximately $1.2 billion in cash and short-term investments, providing runway to pursue strategic priorities.
Operational Actions and Cost Discipline
Completed shutdown of 150mm device production at Durham ahead of schedule, shifted device production to Mohawk Valley 200mm, and executed headcount reductions with non-GAAP OpEx ~ $61 million and expected to remain roughly flat next quarter.
Low Net CapEx for the Quarter
Net capital expenditures of approximately $5 million in Q3 (gross CapEx ~$38 million offset by ~$33 million of New York State incentive receipts).
Operator
Ladies and gentlemen, thank you for joining us, and welcome to Wolfspeed, Incorporated Third Quarter Fiscal Year 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to [ Ed Goodwin ], Investor Relations. Please go ahead.
Unknown Executive
Thank you, operator, and good afternoon, everyone. Welcome to Wolfspeed's Third Quarter Fiscal 2026 Conference Call. Today, Wolfspeed's Chief Executive Officer, Robert Feurle; and Chief Financial Officer, Gregor van Issum, will report on the results for the third quarter of fiscal year 2026. We would also encourage you to reference the slides that were published on our IR website today. 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. 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 our 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...
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