Wolfspeed Reports Strong Financial Results for Q2 FY 2025
Wolfspeed, has released its financial results for the second quarter of fiscal year 2025, highlighting key financial performance metrics, strategic initiatives, and future outlooks.
Quarterly Financial Highlights
(All figures pertain to continuing operations. Comparisons are made to Q2 FY 2024.)
- Consolidated Revenue: $181 million, compared to $208 million in Q2 FY 2024.
- Mohawk Valley Fab Revenue Contribution: $52 million, a substantial increase from $12 million in the prior year.
- GAAP Gross Margin: (21)%, compared to 13% in Q2 FY 2024.
- Non-GAAP Gross Margin: 2%, compared to 16% in the prior year.
- Underutilization Costs: $28.9 million, a reduction from $35.6 million in Q2 FY 2024.
These financial figures reflect Wolfspeed’s ongoing strategic realignment efforts and the continued ramp-up of its manufacturing operations, particularly at the Mohawk Valley Fab facility.
Executive Leadership’s Perspective
Thomas Werner, Executive Chair of Wolfspeed, emphasized the company’s commitment to achieving financial and operational targets. He stated:
Since stepping into the Executive Chairman role in November, I have been acutely focused on aggressively pursuing our plans to achieve our financial and operational targets. Myself, the Board, and the management team have aligned on an operating plan driven by three key immediate priorities designed to put us on a path toward long-term growth and profitability: improving the financial performance of the company to accelerate the path to operating free cash flow generation.
taking aggressive steps to strengthen our balance sheet, and raising cost-effective capital to support our growth plan. We have already made significant progress on these initiatives, evidenced by our completion of our $200 million at-the-market equity offering, which puts us one step closer to finalizing our CHIPS funding.”
Werner further highlighted Wolfspeed’s strategic positioning within the high-voltage silicon carbide market, stating that the company’s cutting-edge technology and manufacturing capabilities will play a pivotal role in industry advancements.
Business Outlook for Q3 FY 2025
Wolfspeed has set ambitious yet strategic financial targets for the third quarter of fiscal 2025:
- Revenue Projection: Between $170 million and $200 million.
- GAAP Net Loss: Estimated between $(295) million and $(270) million, or $(1.89) to $(1.73) per diluted share.
- Non-GAAP Net Loss: Expected to range between $(138) million and $(119) million, or $(0.88) to $(0.76) per diluted share.
These projections take into account the issuance of approximately 27.8 million shares of common stock under Wolfspeed’s ATM program. The forecasted non-GAAP net loss excludes estimated expenses ranging between $157 million and $151 million, related primarily to stock-based compensation, amortization of debt issuance costs, project transformation, transaction costs, restructuring expenses, and facility closure costs.
Restructuring and Facility Closure Plans
Wolfspeed has undertaken a facility closure and consolidation initiative to optimize its cost structure and transition from 150mm to 200mm silicon carbide devices.
- Q2 FY 2025 Restructuring Costs: $188.1 million, including $31.4 million recognized in cost of revenue and $156.7 million recorded as operating expenses.
- Q3 FY 2025 Expected Restructuring Costs: $72 million, with $35 million allocated to cost of revenue and $37 million recognized as operating expenses.
This restructuring plan is expected to enhance Wolfspeed’s operational efficiency and drive long-term profitability.
Factory Start-up and Underutilization Costs
As Wolfspeed expands its manufacturing footprint, factory start-up and underutilization costs remain significant considerations:
- Q2 FY 2025 Factory Start-up Costs: $22.8 million.
- Q2 FY 2025 Underutilization Costs: $28.9 million.
- Q2 FY 2024 Comparison: $10.5 million in factory start-up costs and $35.6 million in underutilization costs.
Wolfspeed expects factory start-up costs for Q3 FY 2025 to be around $26 million, with underutilization costs amounting to approximately $31 million, primarily related to the continued ramp-up of the Mohawk Valley Fab facility.
Strategic Growth and Industry Leadership
Wolfspeed remains committed to driving innovation and capitalizing on the increasing demand for silicon carbide solutions across various industries, including electric vehicles (EVs), renewable energy, and industrial power applications. The company’s investments in next-generation manufacturing capabilities and strategic partnerships position it as a leader in the transition to high-efficiency, high-voltage semiconductor solutions.
Investor Relations and Quarterly Conference Call
Wolfspeed will host a conference call at 5:00 p.m. Eastern Time today to discuss its Q2 FY 2025 results and provide further insights into its Q3 FY 2025 business outlook. Interested parties can access the live audio webcast through Wolfspeed’s investor relations website.
Additionally, supplemental financial information, including a reconciliation of non-GAAP measures, is available on Wolfspeed’s website at investor.wolfspeed.com/results.cfm.
Conclusion
Wolfspeed’s Q2 FY 2025 results reflect a mix of challenges and progress as the company navigates through its strategic transformation. While revenue saw a year-over-year decline, the Mohawk Valley Fab’s increased contribution and continued efforts to optimize operations signal positive momentum. Looking ahead, Wolfspeed remains focused on financial discipline, operational efficiency, and long-term market leadership in silicon carbide technology. As the company continues its trajectory toward profitability and sustainable growth, stakeholders can anticipate further updates on Wolfspeed’s strategic milestones in the coming quarters.
