Wolfspeed Shares Update on Capital Structure Enhancement
Wolfspeed, has announced a significant financial milestone, confirming the receipt of $192.1 million in cash tax refunds under the advanced manufacturing tax credit outlined in Section 48D. This sum includes $186.5 million attributed to the Company’s fiscal 2023 and fiscal 2024 tax obligations, along with accrued interest. This development represents a portion of the approximately $1 billion in total Section 48D cash tax refunds that Wolfspeed anticipates receiving in the coming years.
As of the conclusion of the second quarter of fiscal 2025, Wolfspeed had accrued a total of $865 million in Section 48D tax credits. The Company expects to receive over $600 million in additional cash tax refunds throughout fiscal year 2026. These tax credit proceeds are intended to fortify Wolfspeed’s capital structure and support general corporate initiatives. The Company projects its cash balance at the end of the fiscal third quarter of 2025 to reach approximately $1.3 billion, incorporating the recent influx of 48D cash tax credits.
Business Outlook and Financial Guidance
Wolfspeed has reaffirmed its financial guidance for the third quarter of fiscal 2025, maintaining its previous projections:
- Revenue from continuing operations projected between $170 million and $200 million
- Non-GAAP gross margin ranging from (3)% to 7%
- Non-GAAP operating expenses estimated between $99 million and $104 million
- GAAP net loss forecasted between $(295) million and $(270) million, or $(1.89) to $(1.73) per diluted share
- Non-GAAP net loss estimated between $(138) million and $(119) million, or $(0.88) to $(0.76) per diluted share
Additionally, Wolfspeed has reiterated its long-term capital expenditure plans and strategic goals, as outlined in its Form 8-K filing dated March 7, 2025:
- Fiscal 2026 capital expenditures expected to range between $150 million and $200 million
- Fiscal 2027 capital expenditures projected between $30 million and $50 million
- Achievement of adjusted EBITDA break-even at an annual revenue threshold of $800 million, contingent on operational streamlining, additional restructuring measures—including the closure of the North Carolina Fab—and further cost reduction initiatives
- Generation of $200 million in unlevered operating cash flow in fiscal 2026, based on targeted revenue growth
- Attainment of positive levered free cash flow in fiscal 2027 following the successful completion of refinancing transactions
Capital Structure and Strategic Partnerships
In an effort to further solidify its financial position, Wolfspeed continues to assess alternatives concerning its convertible notes. The Company is actively collaborating with its financial advisors and maintaining dialogues with lenders, including Apollo and Renesas. These efforts are aimed at optimizing Wolfspeed’s capital structure and ensuring long-term financial sustainability.
Beyond financial restructuring, Wolfspeed remains engaged in constructive discussions with the White House, U.S. legislators, and the U.S. Department of Commerce. The Company is working closely with these entities to secure federal funding and align with national initiatives aimed at reinforcing U.S. leadership in semiconductor manufacturing. Wolfspeed is particularly focused on strengthening domestic supply chains and reshoring the production of critical mineral derivatives, including semiconductor wafers, a move that aligns with the Trump Administration’s broader industrial strategy.
Wolfspeed’s Market Leadership and Technological Innovation
As a global leader in silicon carbide technology, Wolfspeed is at the forefront of transforming the semiconductor industry. The Company is pioneering advancements in silicon carbide-based solutions that drive innovation across multiple high-impact sectors. Wolfspeed’s portfolio includes silicon carbide materials, power modules, discrete power devices, and power die products designed to support a wide range of applications. Through its cutting-edge technology, Wolfspeed continues to empower industries with next-generation semiconductor solutions.
Non-GAAP Financial Measures
This press release includes financial guidance based on both GAAP and non-GAAP metrics. The non-GAAP financial measures exclude certain costs, charges, and expenses that are factored into GAAP results. Investors and stakeholders are encouraged to review the reconciliation of these non-GAAP measures with their corresponding GAAP figures, as provided in Wolfspeed’s January 29, 2025, press release. Additional details are available on the Company’s investor relations website at https://investor.wolfspeed.com/events-and-presentations/default.aspx.
With a strategic financial roadmap in place, is taking proactive steps to enhance its capital structure, optimize its financial performance, and reinforce its position as a market leader in silicon carbide semiconductor technology. The Company’s commitment to operational efficiency, cost reduction, and sustainable growth underscores its long-term vision. By leveraging key tax incentives, securing federal funding, and advancing its technological capabilities, is well-positioned to navigate the evolving semiconductor landscape and drive value for stakeholders in the years to come.
