Wolfspeed’s stock fell sharply after the company reported fourth-quarter fiscal 2026 results that missed analyst expectations, despite progress in manufacturing and new product development.
Regular trading closed at $29.10, down 7.5%, before shares declined an additional 10.5% in after-hours trading to $26.03, a decline of roughly 17.3% from the prior close. The company’s 52-week range extends from $1.16 to $80.82.
Revenue for the quarter totaled $149.6 million, aligning with the midpoint of management’s guidance but falling short of the $223.55 million consensus estimate. Adjusted loss per share widened to $2.26, compared with expectations for a 52-cent loss. Gross margin remained negative at -19.9%, though it improved by 70 basis points from the prior quarter’s -20.6%. Adjusted EBITDA was negative $62 million, while operating cash flow stood at negative $54 million, including a $41 million benefit from inventory reduction.
Segment performance showed materials revenue at approximately $43 million, power revenue at about $106 million, and AI data center revenue more than doubling year-over-year, increasing roughly 20% sequentially and doubling overall during fiscal 2026. The company estimates it requires an annual revenue run rate of approximately $800 million to achieve break-even gross margins.
Capital expenditures declined sharply to $5 million from $38 million in the prior quarter. Cash and short-term investments totaled about $1.1 billion at quarter-end, while net debt stood near $600 million. Total debt was reduced by roughly $615 million in fiscal 2026, bringing the balance from about $2.3 billion to $1.7 billion. Second-lien convertible notes worth $46 million were voluntarily converted to equity in the quarter. The company faces no debt maturities until 2030, when $636 million comes due, followed by $1.1 billion in 2031. The highest-priority debt carries an interest rate of approximately 16%.
Management provided guidance for the first quarter of fiscal 2027, expecting revenue between $140 million and $160 million, with a midpoint of $150 million essentially flat sequentially. Non-GAAP gross margin is projected to remain negative, while operating expenses are forecast at $62 million to $66 million.
On operations, Wolfspeed completed the transition from 6-inch to 8-inch wafer production and initiated 300mm substrate engineering samples for initial customers. The company launched its fifth-generation SiC MOSFET, now in volume production at the Mohawk Valley facility. Its 10kV MOSFET was recognized as a top innovation at PCIM in June, described as the industry’s first commercially available device of its kind, built using internal 200mm substrates. A memorandum of understanding was signed with GE Aerospace following the recognition.
CFO Gregor van Issum noted that achieving gross margin neutrality represents the next major milestone, adding that product profitability is acceptable but that higher factory utilization is needed to absorb fixed costs. CEO Robert Feurle stated that the quarter’s revenue result demonstrates the company’s commitment to meeting guidance.
