Quarterly Highlights
(All figures refer to continuing operations, comparing with Q1 of fiscal 2024)
- Revenue: $195 million, slightly down from $197 million.
- Mohawk Valley Fab Contribution: Generated $49 million in revenue.
- Power Device Design: $1.5 billion in design-ins; $1.3 billion in design-wins.
- GAAP Gross Margin: (19)% compared to 13%, influenced by start-up and underutilization costs at the Mohawk Valley Fab.
- Non-GAAP Gross Margin: 3%, down from 16%.
- Liquidity: Ended Q1 with around $1.7 billion in cash and investments, excluding an additional $250 million drawn from a lender group.
CEO Commentary
Wolfspeed CEO Gregg Lowe highlighted strategic actions to strengthen the company’s capital structure and boost profitability by optimizing its silicon carbide production facilities. The company is targeting a 200mm silicon carbide manufacturing capability across its Mohawk Valley and North Carolina facilities, with potential to generate $3 billion in annual revenue. Wolfspeed secured a preliminary agreement under the CHIPS Act for up to $750 million in direct funding, plus an additional $750 million from its lending group, bringing the total available incremental funding for U.S. expansion to $2.5 billion.
Lowe also discussed Wolfspeed’s transition to a pure-play 200mm silicon carbide platform, which includes consolidating manufacturing and workforce reductions. These actions are expected to yield $200 million in annual savings. To align with evolving EV market demands, Wolfspeed has also reduced its fiscal 2025 capital expenditure guidance by $100 million.
Growth in Automotive Business
The automotive segment saw a 2.5x growth year-over-year in Q1, with Wolfspeed expecting continued EV revenue growth throughout 2025 as car models using Wolfspeed silicon carbide powertrains increased fourfold from 2023 to 2024, with another 75% increase projected for 2025. The long-term growth prospects for Wolfspeed’s industrial and energy segments remain positive.
Outlook for Q2 Fiscal 2025
Wolfspeed projects Q2 revenue between $160 million and $200 million. GAAP net loss is anticipated to be between $401 million and $362 million, or $3.14 to $2.84 per share. Non-GAAP net loss is targeted between $145 million and $114 million, or $1.14 to $0.89 per share, excluding expenses mainly related to stock-based compensation, debt costs, and restructuring.
Restructuring and Facility Consolidation
In Q1, Wolfspeed launched a restructuring plan to optimize costs and transition fully to 200mm silicon carbide devices. This plan involves severance.
