Wolfspeed (WOLF) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue was $194.7M–$195M, nearly flat year-over-year, with Mohawk Valley Fab contributing $49M and automotive/EV revenue growing 2.5x YoY.

• Strategic shift to 200mm silicon carbide production, closure of legacy fabs, and ~20% workforce reduction, targeting $200M annual cash savings.

• $2.5B in new funding secured via CHIPS Act, debt, and tax credits to support U.S. capacity expansion.

• Gross margin declined to (18.6)%–(19)% GAAP and 3% non-GAAP, impacted by underutilization and restructuring costs.

• Positioned for long-term silicon carbide demand in EV, industrial, and energy markets, despite near-term market and operational challenges.

Financial highlights

• Power revenue: $97M–$97.1M (down QoQ/YoY); Materials revenue: $97.6M–$98M (up slightly QoQ/YoY).

• Q1 net loss from continuing operations: $282.2M; non-GAAP net loss: $115.8M; adjusted EBITDA: ($61.2M).

• Non-GAAP gross margin: 3.0%–3.4%, with $26M underutilization costs.

• Cash and equivalents: $1.7B at quarter end; free cash flow: ($528M).

• Operating expenses: $120M, down $10M QoQ.

Outlook and guidance

• Q2 FY25 revenue guidance: $160M–$200M, with Mohawk Valley targeted at $50M–$70M.

• Q2 non-GAAP gross margin: -6% to +6%, including $35M underutilization costs; non-GAAP OpEx: $105M–$115M.

• Q2 GAAP net loss expected: $401M–$362M; non-GAAP net loss: $145M–$114M.

• Non-GAAP EBITDA profitability expected in 2H FY25; operating cash flow break-even in FY26.

• FY25 CapEx guidance reduced by $100M to $1.1B–$1.3B.