AI Datacenter Revenue up 50% QoQ
$200 Million Annualized Operating Expense Reduction Compared to Q2 FY 2025
Capital Expenditures Down by 90% Year over Year
Strong Balance Sheet Ending with $1.3 Billion in Cash, Cash Equivalents and Short-term Investments
DURHAM, N.C.--(BUSINESS WIRE)--February 04, 2026--
Wolfspeed, Inc. $(WOLF)$ today announced its results for the second quarter of fiscal 2026.
Business Highlights
-- Received approximately $700 million in Section 48D cash tax refunds and
applied $175 million of the proceeds, net of make-whole premiums, toward
the retirement of long-term debt.
-- $1.3 billion of cash, cash equivalents and short term investments as of
December 28, 2025.
-- Working capital improvements (excluding liability management
costs) contributing approximately $90 million.
-- Further reduction of operating costs and capital expenditures ahead of
plan resulted in a cumulative reduction of operating expenses of
approximately $200 million on an annualized basis, with capital
expenditures down 90%, compared to second quarter of fiscal 2025. All
capital expenditures were limited to previously committed investments.
-- Completed the shutdown of 150mm device production at Durham fab, one
month ahead of schedule.
-- Demonstrated a single-crystal 300-millimeter silicon carbide wafer, a
meaningful step towards longer-term optionality beyond power devices and
commitment to technology leadership.
-- AI datacenter revenue grew approximately 50% sequentially, reflecting a
modest but expanding part of the Company's business with meaningful
long-term potential.
-- Announced key customer wins with Toyota to enable the onboard charging
systems for its BEVs and Hopewind to support its high-performance
industrial and renewable energy inverters.
Quarterly Financial Highlights(1)
-- Consolidated revenue of approximately $168 million (Mohawk Valley Fab:
$76 million).
-- GAAP gross margin of (46)% and Non-GAAP gross margin of (34)%.
-- GAAP and non-GAAP gross margin includes the impacts of $48
million of underutilization costs and the impact of $23 million of
inventory fair value step-ups related to the adoption of fresh
start accounting, which was fully recognized within Cost of
revenue, net during the second quarter of fiscal 2026.
-- Remeasured all assets and liabilities to fair value in connection with
the adoption of fresh start accounting.
-- Recorded a $1.1 billion gain in "Reorganization items, net" in
the Predecessor period(1).
-- Reduction in PP&E partially offset by additional intangibles
will result in a net reduction to ongoing Depreciation &
Amortization expense of approximately $30 million per quarter,
which will be fully realized as inventory turns.
-- GAAP net loss of $151 million and adjusted EBITDA of ($82) million.
[1]: As further described under "Fresh Start Accounting", the Company's second quarter ended December 28, 2025 includes a Predecessor period for the day of September 29, 2025, reflecting the application of fresh start accounting upon emergence from Chapter 11 bankruptcy, and a Successor period from September 30, 2025 to December 28, 2025, reflecting the Company's operating results for the quarter, including the effects fresh start accounting. Unless otherwise noted, the references above refer to the Successor period ended December 28, 2025.
"With a stronger capital structure following our financial restructuring, we are operating with discipline to maintain balance sheet strength while upholding our commitment to disruptive innovation," said Wolfspeed CEO Robert Feurle. "We completed the shutdown of our Durham 150mm device fab roughly one month ahead of schedule and have shifted production to our 200mm device fab in Mohawk Valley, while also continuing to diversify our end-markets, particularly in mid and high-voltage verticals like AI data centers, where we generated 50% sequential quarterly revenue growth. In materials, we demonstrated our capabilities in 300mm silicon carbide wafer production, a critical step towards entering emerging markets beyond power devices. I am very excited that we now have the team and structure in place to navigate near-term demand dynamics and execute with discipline as we scale for long-term growth."
Wolfspeed CFO Gregor van Issum added, "During the quarter, we took decisive actions to strengthen our balance sheet. First, we maximized the value of our 48D Advanced Manufacturing Tax Credit, receiving approximately $700 million ahead of schedule. We used some of the proceeds to retire approximately $175 million of outstanding debt, an important step to reduce our leverage and interest expense. Next, we drove strong working capital improvements by proactively aligning production with the current demand environment leading to a reduction in inventory and improving our receivables position. Lastly, we significantly improved operating cash flow performance by reducing operating expenses by $200 million on an annualized basis and capital expenditures by more than 90% compared to the same quarter last year. Going forward, we will continue to execute operational improvements centered on quality, cost and speed."
Business Outlook:
The Company expects to generate revenue between $140 million and $160 million for its fiscal third quarter. The decline is driven by accelerated fiscal first half customer purchases, as certain customers built up inventory by placing orders from the Durham fab prior to its planned closure at year-end, certain customers pursuing second sourcing of products during Wolfspeed's bankruptcy process and weaker EV demand. The Company expects operating expenses to be flat to slightly down sequentially, as management remains focused on controlling operating costs through actions already implemented. Due to ongoing fresh start accounting impacts, Wolfspeed will not provide numeric gross margin guidance, but does expect further quarter over quarter improvement driven by ongoing operational actions. Gross margin is expected to remain negative in fiscal third quarter.
Chapter 11 Emergence & Recapitalization:
On September 29, 2025 (the "Effective Date"), Wolfspeed emerged from a voluntary proceeding under Chapter 11 of the U.S. Bankruptcy Code (the "Prepackaged Chapter 11 Case"). The Company was able to maintain payments to its vendors, continue serving customers, and operate business as usual throughout the entirety of the restructuring process. As of the end of the second quarter of fiscal 2026, Wolfspeed had $1.3 billion of cash, cash equivalents and short-term investments on its balance sheet, providing runway and financial flexibility to execute on its self-funded business plan post-emergence.
Fresh Start Accounting:
As a result of emerging from the Prepackaged Chapter 11 Case on the Effective Date and qualifying for the adoption of fresh-start accounting, at the Effective Date, Wolfspeed's assets and liabilities were recorded at their estimated fair values which, in some cases, are significantly different than amounts included in our financial statements prior to the Effective Date. Accordingly, our condensed consolidated financial statements after the Effective Date are not comparable with our condensed consolidated financial statements on or before that date.
References to "Successor" relate to our financial position and results of operations after the Effective Date. References to "Predecessor" refer to our financial position and results of operations on or before the Effective Date.
Quarterly Conference Call:
Wolfspeed will provide additional commentary on a conference call at 5:00 p.m. Eastern time today reviewing the highlights of its second quarter results.
The conference call will be available to the public through a live audio web broadcast via the Internet. For webcast details, visit Wolfspeed's website at investor.wolfspeed.com/events.cfm.
About Wolfspeed, Inc.
Wolfspeed (NYSE: WOLF) leads the market in the worldwide adoption of silicon carbide technologies that power the world's most disruptive innovations. As the pioneers of silicon carbide, and creators of the most advanced semiconductor technology on earth, we are committed to powering a better world for everyone. Through silicon carbide material, Power Modules, Discrete Power Devices and Power Die Products targeted for various applications, we will bring you The Power to Make It Real.$(TM)$ Learn more at www.wolfspeed.com.
Non-GAAP Financial Measures:
This press release highlights the Company's financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain costs, charges and expenses that are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the Company's performance, core results and underlying trends. Wolfspeed's management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP results are not prepared in accordance with GAAP, and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release.
Forward Looking Statements:
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