Wolfspeed, Inc. Q2 FY2026 earnings call

Key Points - Continued momentum across the business since first quarter, including 50% quarter-over-quarter growth in AI data center revenue and producing a 300-millimeter silicon carbide wafer. - Strengthened operational discipline and strategic focus under refreshed leadership team, bringing in top-tier talent. - Concentrated on strict financial discipline, advancing technology leadership across the silicon carbide value chain, and driving operational excellence. - Diversified revenue base into verticals: automotive (core market with partnerships like Toyota), industrial energy (AI data center power, grid storage, etc., with 50% quarter-over-quarter growth in data center revenue), aerospace and defense (growing opportunity due to defense modernization), and materials (scaling 200-millimeter leadership and advancing 300-millimeter capabilities). - Completed shutdown of all 150-millimeter device production over Durham campus a month ahead of schedule, improving gross margins. - Upsized and collected $700 million cash tax refund in Q2 and improved $89 million in working capital management.

Total revenue for the second quarter was $168 million. Power revenue accounted for $118 million, with Mohawk Valley contributing approximately $75 million. Materials revenue was $50 million. The revenue mix included a weaker automotive market and fast-growing mid to high voltage revenue, particularly in the AI and data center space.

Fiscal 2026 - Expected revenues between $140 million and $160 million, driven by factors like accelerated customer purchases in first fiscal quarter, second sourcing, and weaker EV demand. - OpEx expected to be flat to slightly down sequentially. - Gross margin expected to improve quarter-over-quarter but remain negative in fiscal Q3. - Update on long-range plan in 2026 to provide long-term financial targets and capital allocation plans.

Risks - Market volatility affecting EV demand, including macroeconomic factors like higher interest rates, elimination of government incentives, excess supply, and global competition. - Underutilization in manufacturing sites impacting margins. - Potential interest rate step-ups on first lien debt, particularly around mid-2026, and high cost of capital related to convertible debt.

Q: Brian Lee asked about strategy diversification away from EVs and go-to-market changes.

A: Robert Feurle mentioned pivoting to application-oriented go-to-market, building sales organization and channel strategy, and bringing in new talent from semiconductor companies.

Q: Brian Lee followed up on financials and balance sheet, asking about interest rate step-ups and financing maneuvers.

A: Gregor Von Isom responded about interest rate step-up in mid-2026, high cost of convertible debt, and focus on strict financial discipline with plans to refinance.

Q: Christopher Rolland asked about AI data center revenue composition and competitive position.

A: Robert Feurle discussed AI data center revenue from energy generation, storage, solid-state transformers, UPS, and cooling devices, and ongoing discussions on 300-millimeter silicon carbide wafers for thermal and optical applications.

Q: Jed Dorsheimer asked about L1 savings and 300-millimeter utilization.

A: Gregor Von Isom talked about L1 refinancing potential and interest reduction, and Robert Feurle mentioned scaling production based on demand and customer adoption for 300-millimeter.

Q: Samik Chatterjee's representative asked about Wolfspeed's positioning in EV market and customer conversations.

A: Robert Feurle discussed partnership with Toyota, global diversification, vertical integration, and ongoing sampling with key customers for EV programs.