Wolfspeed(WOLF) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company generated revenue of $185 million in Q3 2025, which is in line with guidance and represents a 2.2% sequential increase [18] - Non-GAAP gross margin was 2.2%, driven by contributions from Mohawk Valley, offset by lower utilization at the Durham 150mm device fab [19] - Adjusted EPS was negative $0.72 per share, exceeding the high end of the guidance range [19] - The company ended the quarter with over $1.3 billion in cash and liquidity, boosted by a $192 million cash tax refund [21][22] Business Line Data and Key Metrics Changes - Power revenue reached $107 million, primarily driven by significant growth in automotive revenue, slightly offset by decreases in industrial and energy revenues [18] - Materials revenue was $78 million, largely due to slowing demand from materials customers across the device market [18] - Mohawk Valley contributed $78 million, showing a 50% sequential growth and over 175% year-over-year growth [19] Market Data and Key Metrics Changes - The company is actively engaged with customers on sampling 200mm materials and pursuing new contracts for 200mm wafer supply, indicating strong market engagement [11] - The transition to 200mm manufacturing is expected to result in lower costs and higher quality wafers, aligning with high-growth areas of the silicon carbide market [15] Company Strategy and Development Direction - The company is focused on improving its capital structure and financial performance, with a target of achieving approximately $200 million of positive unlevered operating cash flow in fiscal 2026 [16] - The strategic decision to transition to a pure play 200mm silicon carbide producer is aimed at reducing operating expenditures and accelerating the path to profitability [15][27] - The company is pursuing opportunities in specialized markets such as AI data centers, energy storage, EVs, and aerospace and defense [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic direction and potential for long-term growth under new leadership [25] - The company is committed to returning to core innovation and focusing on technologies where silicon carbide delivers the greatest impact [26] - Management acknowledged the challenges faced but emphasized that actions taken are designed to position the company for growth and success [17] Other Important Information - The company is undergoing significant restructuring, including a 30% reduction in the senior leadership team and a 25% reduction in total company employment [20] - Restructuring charges for fiscal 2025 are projected at $400 million to $450 million, with $57 million incurred in the latest quarter [20] - The company is in the final stages of transitioning to 200mm manufacturing and simplifying its operational footprint [14] Q&A Session Summary - No questions were taken during the conference call, as noted in the initial remarks [4]