Wolfspeed's Earnings Report Reveals Ongoing Losses Post-Bankruptcy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
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Should l Buy WOLF?
Source: Fool
- Deteriorating Financials: Wolfspeed's fiscal Q2 2026 report revealed a 7% revenue decline to $168.5 million, primarily due to a struggling electric vehicle market, leading to ongoing negative gross margins and cash flow issues.
- Persistent Negative Margins: The company reported a negative gross margin of 46%, impacted by inventory reserves and fresh start accounting, and expects to maintain negative margins in fiscal Q3 2026, highlighting severe operational challenges.
- Significant Debt Reduction: Following bankruptcy, Wolfspeed's debt was reduced from $13.6 billion to $1.7 billion, with $1.4 billion in convertible notes; however, the company still faced a negative operating cash flow of $42.6 million in the quarter, indicating ongoing financial strain.
- Market Transition Challenges: Despite achieving a 50% sequential revenue increase in the AI data center market, Wolfspeed is struggling to pivot towards aerospace and defense markets, while the continued decline in its core EV market leaves its outlook uncertain.
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Analyst Views on WOLF
Wall Street analysts forecast WOLF stock price to rise
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 16.000
Low
30.00
Averages
30.00
High
30.00
Current: 16.000
Low
30.00
Averages
30.00
High
30.00
About WOLF
Wolfspeed, Inc. is an innovator of wide bandgap semiconductors, focused on silicon carbide materials and devices for power applications. The Company’s products include power devices and silicon carbide and gallium nitride (GaN) materials. Its products are targeted for various applications such as electric vehicles, fast charging and renewable energy and storage. The Company’s materials products and power devices are used in electric vehicles, motor drives, power supplies, solar and transportation applications. Its materials products are also used in military communications, radar, satellite and telecommunication applications. The Company’s power device products consist of silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs) and power modules. Its silicon carbide materials products consist of silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Wolfspeed's Earnings Report Reveals Ongoing Losses Post-Bankruptcy
- Deteriorating Financials: Wolfspeed's fiscal Q2 2026 report revealed a 7% revenue decline to $168.5 million, primarily due to a struggling electric vehicle market, leading to ongoing negative gross margins and cash flow issues.
- Persistent Negative Margins: The company reported a negative gross margin of 46%, impacted by inventory reserves and fresh start accounting, and expects to maintain negative margins in fiscal Q3 2026, highlighting severe operational challenges.
- Significant Debt Reduction: Following bankruptcy, Wolfspeed's debt was reduced from $13.6 billion to $1.7 billion, with $1.4 billion in convertible notes; however, the company still faced a negative operating cash flow of $42.6 million in the quarter, indicating ongoing financial strain.
- Market Transition Challenges: Despite achieving a 50% sequential revenue increase in the AI data center market, Wolfspeed is struggling to pivot towards aerospace and defense markets, while the continued decline in its core EV market leaves its outlook uncertain.
See More
Wolfspeed's Earnings Report Shows Ongoing Losses
- Negative Gross Margin: Wolfspeed reported a negative gross margin of 46% in its fiscal Q2 2026 earnings, primarily due to costs from inventory reserves and fresh start accounting, indicating significant operational challenges that continue to impact its market competitiveness.
- Cash Flow Issues: Despite reducing its debt from $13.6 billion to $1.7 billion, Wolfspeed still experienced a negative operating cash flow of $42.6 million in the quarter, highlighting its fragile financial condition and limiting future investment capabilities.
- Revenue Decline: The company's revenue fell 7% year-over-year to $168.5 million, reflecting weakness in the electric vehicle market, although it achieved a 50% sequential increase in the artificial intelligence data center market, indicating mixed performance across sectors.
- Uncertain Market Outlook: Wolfspeed forecasts its fiscal Q3 revenue to be between $140 million and $160 million, down from $185 million last year, demonstrating the challenges it faces in pivoting to other markets, with future success remaining uncertain.
See More
Wolfspeed Shares Drop 18% After Q2 Results Miss Estimates Amid Weak EV Demand
- Earnings Decline: Wolfspeed's fiscal second quarter results missed estimates, leading to an approximately 18% drop in premarket shares, highlighting the severe reality of weak demand in the electric vehicle market.
- Weak Guidance: Analysts noted significant customer attrition during Wolfspeed's restructuring, with management forecasting an ~11% quarter-over-quarter revenue decline in the upcoming quarter, indicating ongoing revenue challenges.
- Cost Control Success: Throughout the restructuring, Wolfspeed effectively reduced capital expenditures by about 90% and operating expenses by around $200 million, achieving a cash balance of $1.3 billion against $600 million in debt, reflecting proactive financial management.
- New Growth Areas: Despite challenges, Wolfspeed is focusing on emerging markets such as data centers and solar wind applications, with analysts believing that Silicon Carbide's role in next-gen DC architectures will present significant growth opportunities for the company.
See More
Align Technology Reports Strong Q4 Earnings Beat
- Earnings Beat: Align Technology reported Q4 earnings of $3.29 per share, surpassing analyst expectations of $2.97, indicating a significant improvement in profitability and boosting market confidence in future growth.
- Sales Growth: The company achieved quarterly sales of $1.047 billion, exceeding the consensus estimate of $1.033 billion, demonstrating robust performance amid strong market demand.
- Stock Surge: Align's shares jumped 10.4% in pre-market trading to $178.13, reflecting a positive investor reaction to the financial results, which may attract more investor interest.
- Increased Market Confidence: This earnings beat not only enhances Align's market image but also potentially supports its future investment and expansion plans, further solidifying its leadership position in the industry.
See More
Wolfspeed Q2 2026 Earnings Call Insights
- Revenue Growth: Wolfspeed reported total revenue of $168 million for Q2, aligning with the midpoint of guidance, with power revenue at $118 million and Mohawk Valley contributing approximately $75 million, indicating the company's efforts in diversifying its revenue base.
- Manufacturing Transition: The company shut down its 150mm device fab a month ahead of schedule, fully transitioning to 200mm manufacturing, which enhances production efficiency and is expected to optimize earnings potential, reflecting management's focus on operational discipline.
- Strategic Partnership: Wolfspeed announced a new partnership with Toyota to power onboard charging systems for electric vehicles, marking a significant expansion into the EV sector and enhancing its competitive position in the market.
- Future Outlook: Management expects Q3 2026 revenue to range between $140 million and $160 million, primarily impacted by accelerated customer purchases and weaker EV demand, highlighting the challenges and uncertainties in the market environment.
See More
Wolfspeed (WOLF) Q2 2026 Earnings Call Transcript
See More
Wolfspeed's Earnings Report Reveals Ongoing Losses Post-Bankruptcy
- Deteriorating Financials: Wolfspeed's fiscal Q2 2026 report revealed a 7% revenue decline to $168.5 million, primarily due to a struggling electric vehicle market, leading to ongoing negative gross margins and cash flow issues.
- Persistent Negative Margins: The company reported a negative gross margin of 46%, impacted by inventory reserves and fresh start accounting, and expects to maintain negative margins in fiscal Q3 2026, highlighting severe operational challenges.
- Significant Debt Reduction: Following bankruptcy, Wolfspeed's debt was reduced from $13.6 billion to $1.7 billion, with $1.4 billion in convertible notes; however, the company still faced a negative operating cash flow of $42.6 million in the quarter, indicating ongoing financial strain.
- Market Transition Challenges: Despite achieving a 50% sequential revenue increase in the AI data center market, Wolfspeed is struggling to pivot towards aerospace and defense markets, while the continued decline in its core EV market leaves its outlook uncertain.
See More
Wolfspeed's Earnings Report Shows Ongoing Losses
- Negative Gross Margin: Wolfspeed reported a negative gross margin of 46% in its fiscal Q2 2026 earnings, primarily due to costs from inventory reserves and fresh start accounting, indicating significant operational challenges that continue to impact its market competitiveness.
- Cash Flow Issues: Despite reducing its debt from $13.6 billion to $1.7 billion, Wolfspeed still experienced a negative operating cash flow of $42.6 million in the quarter, highlighting its fragile financial condition and limiting future investment capabilities.
- Revenue Decline: The company's revenue fell 7% year-over-year to $168.5 million, reflecting weakness in the electric vehicle market, although it achieved a 50% sequential increase in the artificial intelligence data center market, indicating mixed performance across sectors.
- Uncertain Market Outlook: Wolfspeed forecasts its fiscal Q3 revenue to be between $140 million and $160 million, down from $185 million last year, demonstrating the challenges it faces in pivoting to other markets, with future success remaining uncertain.
See More
Wolfspeed Shares Drop 18% After Q2 Results Miss Estimates Amid Weak EV Demand
- Earnings Decline: Wolfspeed's fiscal second quarter results missed estimates, leading to an approximately 18% drop in premarket shares, highlighting the severe reality of weak demand in the electric vehicle market.
- Weak Guidance: Analysts noted significant customer attrition during Wolfspeed's restructuring, with management forecasting an ~11% quarter-over-quarter revenue decline in the upcoming quarter, indicating ongoing revenue challenges.
- Cost Control Success: Throughout the restructuring, Wolfspeed effectively reduced capital expenditures by about 90% and operating expenses by around $200 million, achieving a cash balance of $1.3 billion against $600 million in debt, reflecting proactive financial management.
- New Growth Areas: Despite challenges, Wolfspeed is focusing on emerging markets such as data centers and solar wind applications, with analysts believing that Silicon Carbide's role in next-gen DC architectures will present significant growth opportunities for the company.
See More
Align Technology Reports Strong Q4 Earnings Beat
- Earnings Beat: Align Technology reported Q4 earnings of $3.29 per share, surpassing analyst expectations of $2.97, indicating a significant improvement in profitability and boosting market confidence in future growth.
- Sales Growth: The company achieved quarterly sales of $1.047 billion, exceeding the consensus estimate of $1.033 billion, demonstrating robust performance amid strong market demand.
- Stock Surge: Align's shares jumped 10.4% in pre-market trading to $178.13, reflecting a positive investor reaction to the financial results, which may attract more investor interest.
- Increased Market Confidence: This earnings beat not only enhances Align's market image but also potentially supports its future investment and expansion plans, further solidifying its leadership position in the industry.
See More
Wolfspeed Q2 2026 Earnings Call Insights
- Revenue Growth: Wolfspeed reported total revenue of $168 million for Q2, aligning with the midpoint of guidance, with power revenue at $118 million and Mohawk Valley contributing approximately $75 million, indicating the company's efforts in diversifying its revenue base.
- Manufacturing Transition: The company shut down its 150mm device fab a month ahead of schedule, fully transitioning to 200mm manufacturing, which enhances production efficiency and is expected to optimize earnings potential, reflecting management's focus on operational discipline.
- Strategic Partnership: Wolfspeed announced a new partnership with Toyota to power onboard charging systems for electric vehicles, marking a significant expansion into the EV sector and enhancing its competitive position in the market.
- Future Outlook: Management expects Q3 2026 revenue to range between $140 million and $160 million, primarily impacted by accelerated customer purchases and weaker EV demand, highlighting the challenges and uncertainties in the market environment.
See More
Wolfspeed (WOLF) Q2 2026 Earnings Call Transcript
See More
