Wolfspeed, Inc. reported second-quarter fiscal 2026 results and outlined actions to strengthen its capital structure while accelerating its silicon carbide roadmap. The company received approximately $700 million in Section 48D cash tax refunds and used $175 million of the proceeds, net of make-whole premiums, to retire long-term debt. Cash, cash equivalents and short-term investments totaled $1.3 billion as of December 28, 2025, supported by about $90 million of working capital improvements (excluding liability management costs).

Operating costs and capital expenditures were further reduced ahead of plan, yielding an annualized operating-expense reduction of roughly $200 million, while capex declined about 90% versus the year-ago quarter, limited to previously committed projects. Wolfspeed completed the shutdown of 150 mm device production at its Durham fab one month early and shifted device output to the 200 mm Mohawk Valley Fab.

In parallel, the company demonstrated a single-crystal 300 mm silicon carbide wafer, underscoring long-term optionality beyond power devices and its commitment to technology leadership. AI datacenter revenue grew approximately 50% sequentially, becoming a modest but expanding contributor. Additional customer wins included onboard charger systems for Toyota BEVs and high-performance industrial and renewable inverters for Hopewind.

Quarterly financials (Q2 FY2026):

  • Consolidated revenue: approximately $168 million (including $76 million from the Mohawk Valley Fab)
  • GAAP gross margin: (46)% ; Non-GAAP gross margin: (34)%
    • Both margins include $48 million of underutilization costs and $23 million of inventory fair-value step-ups from fresh start accounting, fully recognized in cost of revenue, net
  • Fresh start accounting: all assets and liabilities remeasured to fair value; recorded a $1.1 billion gain in “Reorganization items, net” in the predecessor period; the resulting mix of lower PP&E and additional intangibles is expected to reduce ongoing depreciation and amortization by about $30 million per quarter as inventory turns
  • GAAP net loss: $151 million; adjusted EBITDA: ($82) million

Management commentary emphasized disciplined execution following the financial restructuring, continued diversification into mid- and high-voltage verticals such as AI datacenters, and progress in materials with 300 mm SiC. The company also highlighted balance-sheet actions to reduce leverage and interest expense, proactive alignment of production with demand to lower inventories and improve receivables, and significant improvements in operating cash flow driven by lower operating expenses and sharply reduced capex.

Q3 FY2026 revenue is expected between $140 million and $160 million. The sequential decline reflects accelerated first-half purchasing as certain customers built inventory ahead of the Durham closure, second-sourcing activity during the bankruptcy process, and softer EV demand. Operating expenses are expected to be flat to slightly down sequentially. Due to ongoing fresh start accounting impacts, Wolfspeed is not providing numeric gross-margin guidance.

Original – Wolfspeed