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It has been about a month since the last earnings report for Wolfspeed (WOLF). Shares have added about 11.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wolfspeed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Wolfspeed Reports Loss in Q1 Earnings, Revenues Down Y/Y
Wolfspeed reported a first-quarter fiscal 2025 non-GAAP loss of 91 cents per share, which increased from the year-ago quarter’s loss of 53 cents per share. The figure missed the Zacks Consensus Estimate by 9.90%
Revenues of $194.7 million decreased 1.4% year over year and lagged the consensus mark by 2.71%. Mohawk Valley Fab contributed $49 million in revenues in the reported quarter.
Power Products accounted for 49.9%, while Materials Products contributed 50.1%. Power Products revenues decreased 4.1% year over year to $97.1 million. Materials Products revenues increased 1.5% year over year to $97.6 million.
Power device design-ins were $1.5 billion in the reported quarter. Quarterly design wins were $1.3 billion.
WOLF's Operating Details
In the fiscal first quarter, Wolfspeed reported a non-GAAP gross margin of 3.4%, down from 15.6% reported in the year-ago quarter. Underutilization costs of $26.4 million negatively impacted gross margin in the reported quarter.
In the reported quarter, sales, general and administrative expenses were $62.2 million (31.9% of total revenues), down 3% year over year.
Research & development expenses (26.1% of total revenues) increased 15.4% year over year to $50.9 million.
Wolfspeed incurred $19.7 million in factory start-up costs in the first quarter of fiscal 2025.
The company incurred a non-GAAP operating loss of $113 million, wider than the operating loss of $72.3 million in the year-ago quarter.
WOLF’s Balance Sheet & Cash Flow
As of Sept. 29, 2024, WOLF had cash, cash equivalents and short-term investments of $1.68 billion compared with $2.17 billion as of June 30, 2024.
Long-term debt was $3.14 billion as of Sept. 29, 2024.
Free cash outflow was $528.2 million, comprising $132 million of operating cash outflow and $395 million of capital expenditures.
WOLF Initiates Weak 2Q25 Guidance
For second-quarter fiscal 2025, Wolfspeed expects revenues in the range of $160-$200 million. Non-GAAP loss is expected to be between $1.14 per share and $0.89 per share.
The company expects Mohawk Valley Fab to contribute nearly $50-$70 million in revenues in the second quarter of fiscal 2025.
The company targets a non-GAAP gross margin of -6% to +6%.
Wolfspeed expects fiscal second-quarter 2025 non-GAAP operating expenses of $110 million, marking a $10 million decrease from the prior quarter and reflecting a 15% reduction from fiscal fourth-quarter 2024 due to restructuring actions and cost-saving measures.