Wolfspeed, Inc. announced its results for the first quarter of fiscal 2025.
Quarterly Financial Highlights (Continuing operations only. All comparisons are to the first quarter of fiscal 2024.)
- Consolidated revenue of approximately $195 million, as compared to approximately $197 million
- Mohawk Valley Fab contributed approximately $49 million in revenue
- Power device design-ins of $1.5 billion
- Power device design-wins of $1.3 billion
- GAAP gross margin of approximately (19)%, compared to approximately 13%
- GAAP gross margin includes the impacts of underutilization costs primarily in connection with the start of production at the Mohawk Valley Fab. Underutilization was $26.4 million as compared to $34.4 million.
- Non-GAAP gross margin of 3%, compared to 16%
- Ended Q1 with ~$1.7 billion in cash and investments; does not include initial draw down of $250 million from lender group
“This quarter we took action to solidify the capital structure, simplifying our business to accelerate structural profitability and support the build out of our state-of-the-art silicon carbide facilities. We will have a 200mm silicon carbide footprint at Mohawk Valley and North Carolina materials factories that we target to generate approximately $3 billion in revenue annually,” said Wolfspeed CEO, Gregg Lowe. “Last month, we reached a significant milestone by signing a non-binding preliminary memorandum of terms (PMT) for up to $750 million in proposed direct funding under the CHIPS and Science Act and an additional $750 million from our lending group, demonstrating substantial progress towards our funding goals. With this announcement, we now have access to up to $2.5 billion of incremental funding to support our U.S. capacity expansion plans.”
Lowe continued, “To drive operational improvements, we are taking action to enhance efficiency, align our business with current market conditions and become the first silicon carbide company to transition to pure-play 200-millimeter. The transition to a fully 200-millimeter platform allows us to take further initiatives to streamline our cost structure, including closing our manual Durham 150-millimeter Fab, other manufacturing footprint rationalization, and reducing our workforce. Combined, we expect these initiatives will yield approximately $200 million in annual cash savings. In parallel, we remain focused on optimizing our capital structure, further reducing our fiscal 2025 CapEx guidance by $100 million to align the pace of our spend with the broader shift in EV market demand.”
“We delivered 2.5 times year-over-year growth in our automotive business in the first quarter, and we expect our EV revenue to continue to grow throughout calendar 2025, as the total number of car models using a Wolfspeed silicon carbide solution in the power train increased by 4x from 2023 to 2024 and is expected to grow by another approximately 75% year over year in 2025. We also remain confident in the long-term fundamentals of our industrial and energy business. Importantly, we believe the secular trends and long-term growth drivers for our core end markets remain intact, and we expect the actions we are taking today will allow us to become a more efficient and agile organization positioned to capture the long-term growth opportunities ahead,” concluded Lowe.
For its second quarter of fiscal 2025, Wolfspeed targets revenue from continuing operations in a range of $160 million to $200 million. GAAP net loss is targeted at $401 million to $362 million, or $3.14 to $2.84 per diluted share. Non-GAAP net loss is targeted to be in a range of $145 million to $114 million, or $1.14 to $0.89 per diluted share.
Targeted non-GAAP net loss excludes $256 million to $248 million of estimated expenses, net of tax, primarily related to stock-based compensation expense, amortization of discount and debt issuance costs, net of capitalized interest, project, transformation and transaction costs and restructuring and other facility closure costs. The GAAP and non-GAAP targets do not include any estimated change in the fair value of the shares of common stock of MACOM Technology Solutions Holdings, Inc. (MACOM) that we acquired in connection with the sale to MACOM of our RF product line (RF Business Divestiture).
During the first quarter of fiscal 2025, Wolfspeed initiated a facility closure and consolidation plan to optimize its cost structure and accelerate its transition from 150mm to 200mm silicon carbide devices. The costs incurred as a result of this restructuring plan include severance and employee benefit costs, voluntary termination benefits and other facility closure-related costs.
Wolfspeed incurred $87.1 million of restructuring-related costs in the first quarter of fiscal 2025, of which $34.3 million were recognized in cost of revenue, net and $52.8 million were expensed as operating expense in the statement of operations. For the second quarter of fiscal 2025, the Company expects to incur $174 million of restructuring-related costs, of which $34 million will be recognized in cost of revenue, net and the remaining $140 million will be recognized as operating expense.
Original – Wolfspeed