Wolfspeed — First Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Consolidated revenue was $155.0 million, compared to $196.8 million in the prior year period.
• GAAP gross margin was (22)%, improving from (39)% in the prior year; Non-GAAP gross margin was (13)%, an improvement of 710 basis points sequentially.
• GAAP net loss was $143.8 million ($2.61 per diluted share), compared to a net loss of $643.6 million ($4.12 per diluted share) in the prior year.
• Adjusted EBITDA (Non-GAAP) was ($55) million.
• Operating cash flow was ($84.2) million, compared to $5.7 million in the prior year.
• Free cash flow was ($96.5) million.
• Cash, cash equivalents, and short-term investments totaled $995.1 million as of September 27, 2026, down from $1,088.6 million at the end of the previous quarter.
• Total liabilities were $2,071.5 million, with long-term debt at $930.3 million and convertible notes, net at $750.3 million.
• Total equity was $804.0 million.

Guidance and Future Outlook:

• The Company targets revenue between $155 million and $175 million for the second quarter of fiscal 2027.
• Management targets sequential non-GAAP gross margin improvement approaching breakeven in the second quarter.
• Non-GAAP operating expenses for the second quarter are targeted between $65 million and $69 million.
• Management views fiscal 2027 as a turning point, citing the conditional loan commitment and long-term supply agreements as support for a path to long-term, sustainable growth.

Business Segments and Product Lines:

• Power Products revenue was $116.8 million, down from $131.8 million in the prior year.
• Materials Products revenue was $38.2 million, down from $65.0 million in the prior year.
• Announced a conditional 30-year, $1.5 billion loan commitment from the U.S. Department of War to advance the domestic wide bandgap supply chain.
• Expanded and extended a 150mm long-term silicon carbide wafer supply agreement with Infineon Technologies AG to include 200mm.
• Announced a multiyear supply agreement for silicon carbide devices to support BorgWarner's next-generation 800V silicon carbide-based inverter platform.
• Awarded the Strategic Partner Award from Megmeet, an emerging customer in the AI data center market.
• Commercially introduced proprietary silicon carbide (TSiCTM) technology for next-generation augmented reality, quantum computing, and advanced optical applications.

Market and Competitive Landscape:

• The Company leads the market in the worldwide adoption of silicon carbide technologies.
• Growth is being driven by applications in AI data centers, 800V inverter platforms, and advanced optical applications.
• The conditional loan commitment from the U.S. Department of War supports the domestic supply chain.

Risks and Challenges:

• Risks include ongoing impacts from the 2025 Chapter 11 reorganization, including effects on commercial relationships.
• Uncertainty in global economic and geopolitical conditions may impact demand.
• Production risks include poor yields, quality control issues, manufacturing inefficiencies, and longer lead times.
• Risks associated with receiving and retaining government funding, loans, and incentives, including the OSC Loan Commitment.
• Risks related to customer demand forecasting, converting design-ins to volume sales, and managing product mix and inventory.
• Concentration of business among few customers poses a risk of order reductions or cancellations.
• Potential for significant charges if amortizable assets become impaired.
• Risks related to international sales, tariffs, trade restrictions, and retaliatory measures.
• Risks associated with ongoing litigation, including intellectual property litigation.

Management Commentary and Tone:

• CEO Robert Feurle stated the company is building momentum and advancing every pillar of its strategy, expressing commitment to returning to a path of long-term, sustainable growth.
• CFO Gregor van Issum noted revenue results were above the midpoint of guidance and highlighted that the conditional loan commitment is expected to deliver significant annual interest savings upon completion.
• Management expressed conviction that fiscal 2027 marks a turning point.

Other Key Points:

• The Company adopted fresh-start accounting on September 29, 2025, following its Chapter 11 reorganization; financial statements after this date are not comparable to those prior to the Effective Date.
• The Company is unable to provide a quantitative reconciliation of forward-looking Non-GAAP Operating Expenses to GAAP Operating Expenses without unreasonable effort due to the difficulty in forecasting items such as share-based compensation, project costs, and restructuring charges.
• A conference call was held on November 4, 2026, to review the results.
• The Company recorded a gain on disposal of property and equipment of $3.2 million in the current quarter.
• Stock-based compensation expense was $10.3 million for the quarter.
• Restructuring and facility closure costs were $1.3 million for the quarter.