Wolfspeed (WOLF) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue was $181 million, slightly above guidance midpoint but down 13% year-over-year and 7% sequentially, with Mohawk Valley Fab contributing $52 million and EV revenue up 92% year-over-year.

• Aggressive restructuring is underway, including closure of Durham and Farmers Branch facilities, a 20% workforce reduction, and a transition to 200mm silicon carbide devices.

• Liquidity at quarter end was $1.4 billion, increasing to $1.5 billion after a $200 million ATM equity offering, with over $2.5 billion in total liquidity including proposed funding.

• The company is focused on improving financial performance, strengthening the balance sheet, and raising cost-effective capital, supported by a $2.5 billion funding package including CHIPS Act support.

• The divestiture of the RF Business was completed, with proceeds in cash and MACOM shares, and a CEO transition was announced.

Financial highlights

• Non-GAAP gross margin for Q2 was 2%, down from 16% a year ago; GAAP gross margin was -21%.

• Non-GAAP net loss for Q2 was $122.6 million ($0.95/share); GAAP net loss was $372 million ($2.88/share); adjusted EBITDA was -$58 million.

• Free cash flow was -$598 million for the quarter; cash and short-term investments at quarter end were $1.4 billion, down from $2.2 billion at June 2024.

• Operating expenses were $108 million, down $11 million quarter-over-quarter; operating loss for Q2 was $323 million, up from $98.1 million a year ago.

• Long-term debt, net, increased to $6.4 billion.

Outlook and guidance

• Q3 FY25 revenue guidance is $170–$200 million, with Mohawk Valley expected to contribute $55–$75 million.

• Q3 non-GAAP gross margin expected between -3% and 7%; non-GAAP OpEx of $99–$104 million; non-GAAP net loss expected between $119–$138 million.

• CapEx for FY25 is forecasted at $1.1–$1.3 billion, with a sharp decline expected in FY26.

• Restructuring charges for FY25 expected at $400–$450 million, with $188 million recorded in Q2.

• The company anticipates $200 million in annualized cost savings from restructuring.