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DATE

Tuesday, May 5, 2026, at 5 p.m. ET

CALL PARTICIPANTS

  • Interim Chief Executive Officer — Robert Feurle
  • Chief Financial Officer — Gregor Von Isom
  • Operator

TAKEAWAYS

  • Total Revenue -- $150 million, aligning with the midpoint of company guidance.
  • Power Device Revenue -- Approximately $100 million, with 90% originating from Mohawk Valley 200 millimeter device fabrication and 10% from last-time 150 millimeter device inventory sales.
  • Materials Revenue -- About $50 million, described as flat sequentially from Q2.
  • Gross Margin -- Negative 20.6%, a double-digit percentage point improvement over the previous quarter attributed to product mix and the impacts of fresh-start accounting inventory digestion.
  • Underutilization Charge -- Approximately €46 million, identified explicitly as the main factor driving negative gross margin.
  • Non-GAAP Operating Expenses -- €61 million, with the company expecting this run rate to continue into the next quarter due to completed headcount reductions.
  • Adjusted EBITDA -- Negative €62 million reported for the period.
  • Operating Cash Flow -- Negative €84 million, attributed to progress in precious metal reclamation, interest income, and improvements in working capital.
  • Net Capital Expenditures -- €5 million, with €38 million in gross CapEx nearly offset by €33 million of New York State incentives tied to Mohawk Valley investments.
  • Liquidity -- Quarter-end cash and short-term investments of approximately $1.2 billion.
  • Capital Structure Actions -- Raised roughly $476 million via private placements of convertible 1.5-lien senior secured notes, common stock, and pre-funded warrants, reducing total debt principal by $97 million, and senior secured note balance by 43%.
  • Annual Interest Expense Reduction -- Expected decrease of approximately €62 million resulting from the debt refinancing actions.
  • CFIUS Clearance -- Led to the release of equity to Renesas and contributed to a more than $400 million increase in company equity during the quarter.
  • Q4 2026 Revenue Guidance -- Projected between $140 million and $160 million with expectations for continued negative non-GAAP gross margin and flat quarter-over-quarter OpEx.
  • AI Data Center Revenue -- Segment grew approximately 30% sequentially from Q2 to Q3, with management expressing confidence in long-term demand.
  • Technology Announcements -- Introduced the first commercially available 10-kilovolt silicon carbide power MOSFET and launched the next-generation TOL D portfolio.
  • Manufacturing Platform Transition -- All device production shifted to Mohawk Valley at 200 millimeters, with Durham site now dedicated to materials capabilities and supporting near-term growth, including commercial-scale 200 millimeter development.
  • AI in Operations -- Expanded partnership with Snowflake has enabled deployment of AI-driven tools across the enterprise for real-time data insights and accelerated decision-making.
  • Go-to-Market Realignment -- Completed leadership strengthening in all four business verticals (Auto, I&E, Aerospace and Defense, Materials), targeting design wins in high SiC adoption sectors.

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RISKS

  • Automotive demand described as "uncertain" by management, with near-term softness anticipated to persist and requiring new end markets to offset this weakness over time.
  • Gross margin remains negative primarily due to underutilization, with improvement contingent on factory utilization ramping, as stated by "Underutilization continues to be the primary driver of our gross margin."

SUMMARY

Management indicated the capital structure was materially strengthened through the refinancing actions and CFIUS approval, improving liquidity and the debt-to-equity mix. The transition to Mohawk Valley for full device production and the parallel realignment of go-to-market strategy across distinct verticals represent substantial operational and strategic milestones. Executive commentary signaled optimism for meaningful future AI data center growth, evidenced by 30% sequential revenue expansion in that segment, while acknowledging ongoing negative gross margins tied to capacity underutilization. Leadership described new technology introductions as positioning Wolfspeed (WOLF +1.92%) for high-voltage market leadership and expanded customer engagement, especially within Auto and I&E.

  • CFO Von Isom emphasized flexibility in addressing remaining first-lien debt, opting to "take the best possible approach when market conditions are optimal."
  • CEO Feurle highlighted a manufacturing asset transition enabling Mohawk Valley scale-up while maintaining all commercial materials activity at the Durham campus.
  • The company reported that leadership hires in Greater China, EMA, and Asia Pacific are already providing early traction in global go-to-market execution.
  • Management described ongoing R&D discipline, selectively allocating capital to "higher-return programs in the fastest-growing markets" to capture anticipated demand over upcoming cycles.

INDUSTRY GLOSSARY

  • SiC: Silicon carbide, a wide bandgap semiconductor material used for high-efficiency power devices in EV, industrial, and AI data center applications.
  • LTA: Long-term agreement framework, a contractual structure used with materials customers for consistent supply arrangements.
  • PCN: Product change notification; a formal process required to inform customers of manufacturing location or design changes in the semiconductor industry.
  • CFIUS: Committee on Foreign Investment in the United States, which reviews certain transactions for national security implications.

Full Conference Call Transcript

Robert Feurle: Thank you, and good afternoon, everyone. We appreciate you joining us today. We are pleased to see that our strategy is building meaningful momentum. The 2026 third quarter delivered revenue of $150 million, in line with the midpoint of our guidance. We continue to make strong progress on the areas of our business within our control: addressing our capital structure, improving our operational efficiency, and deepening engagement with customers across a broad set of end markets. As we move forward, we remain focused on three key strategic priorities: advancing technology leadership, demonstrating strict financial discipline, and driving operational excellence. We have made strong progress in each of these areas this quarter.

Starting with technology leadership, we continue to accelerate innovation across our silicon carbide platform to create a fundamental technology advantage. We are maintaining a disciplined approach to R&D, focusing our investments on higher-return programs in the fastest-growing markets, and our efforts are delivering tangible results. This quarter, we introduced the first commercially available 10-kilovolt silicon carbide power MOSFET and launched our next-generation TOL D portfolio. These innovations, particularly 10 kilovolt, will help to cement our position as a leader in high-voltage applications. At the same time, we are making progress on our materials capabilities. After shifting all device production to two nanometer at Mohawk Valley, our Durham facilities anchor our materials capabilities.

The infrastructure, talent, and floor space there today support at least our near-term growth ambitions, including commercial-scale 200 millimeter development as the market evolves. Now turning to financial discipline. We took an important step this quarter to further optimize our capital structure through the refinancing of a portion of our first-lien senior secured notes. This refinancing was supported by both new and existing institutional investors, demonstrating confidence in the long-term growth prospects of Wolfspeed, Inc. and silicon carbide technology more broadly. Gregor will provide more on the specific financial implications shortly. This brings us to our third priority, driving operational excellence. We remain focused on differentiating through quality, customer responsiveness, time to market, and supply chain resilience.

We continue to refine our manufacturing processes to improve quality, cost, and speed across everything we do. As mentioned last quarter, we completed a shutdown of 150 millimeter device production at Durham ahead of schedule. This creates optionality to redeploy that space. This approach allows us to increase output and improve our earnings potential by leveraging our current tooling base, without heavy incremental capital investment that would otherwise be required. The Durham campus can currently support all commercial materials activities as well as our emerging trend and user platform. We are also leveraging AI within our own operations.

Through our expanded partnership with Snowflake, we have unified factory, supply chain, and enterprise data on a single platform and deployed AI-driven tools that enable real-time insights and faster decision-making across the organization. Last quarter, we outlined the realignment of our go-to-market strategy around four verticals: Auto, I&E, Aerospace and Defense, and Materials. During the quarter, we have sharpened our approach with the completion of recent leadership additions, including Daiwei Yu as regional president for Greater China, Stefan Stael, vice president of sales for EMA, and most recently, Yasu Harita as regional president for Asia Pacific.

These leaders strengthen our ability to scale our go-to-market efforts globally, and we are encouraged by the early traction we are seeing across each of these end markets. In Auto, global EV adoption continues to grow, though more modestly in certain regions. Silicon carbide revenue does not necessarily scale in lockstep with vehicle sales due to design-in and qualification cycles. As the industry evolves, we believed that we needed to retool the approach as the market entered its next phase. Therefore, we strengthened our team with experienced automotive executives and launched a focused strategy targeting key global accounts with high SiC adoption, positioning Wolfspeed, Inc. to capture the next wave of design wins.

Given the qualification cycles of EV programs, our success from these engagements is expected to translate into revenue over time. In I&E, momentum in AI data center applications continues to build. Our TOL D portfolio is purpose-built for AI direct power, and we are actively collaborating with AI ecosystem partners on the transition from 400-volt to 800-volt architectures. While it represents a moderate portion of our business today, we have continued to see strong sequential growth in AI applications, with approximately 30% sequential growth from Q2 to Q3 and increasing customer engagement, which gives us confidence in the long-term trajectory of this opportunity.

In Aerospace and Defense, growth is supported by electrification trends and increasing demand for secure domestic supply chains. In addition, we continue to expand our presence in emerging applications such as electric aviation. Our partnership with a leading manufacturer of electrical vertical takeoff and landing aircraft is a strong example of how our solutions enable higher efficiency and power density in next-generation platforms. Finally, in our Materials business, we continue to serve our under-150 millimeter materials customers, including under the LTA framework. In addition, we are making progress with qualification on 200 millimeter material.

At the same time, we are engaging with AI ecosystem companies to explore how 300 millimeter substrates can address thermal, mechanical, and electrical challenges in next-generation AI high-performance computing packaging architectures. We continue to engage on 300 millimeter as a longer-term opportunity. I want to thank the team for their continued execution against our strategic priorities, and for the excellent progress against our technological, operational, and go-to-market objectives. With that, I will turn it over to Gregor.

Gregor Von Isom: Thank you, Robert, and good afternoon, everyone. Before walking through our financials, I want to highlight the benefits of our recent refinancing. We took a significant step to strengthen our capital structure through the private placements of new convertible 1.5-lien senior secured notes, common stock, and pre-funded warrants, generating approximately $476 million of aggregate gross proceeds. We used cash on hand to cover fees associated with the private placements, directing the full aggregate gross proceeds toward reducing our existing senior secured note balance by approximately 43%. These actions reduce total debt principal by $97 million and are expected to lower annual interest expense by approximately €62 million.

Our first debt maturity remains in 2030, providing runway to execute our strategic plans as we continue to optimize our capital structure. Additionally, during the quarter, we received CFIUS clearance that resulted in the release of equity to Renesas. CFIUS approval, coupled with our strategic refinancing, primarily drove the more than $400 million increase in the company's equity position during the quarter, significantly improving our debt-to-equity ratio. Now I will turn to our third quarter results. We generated €150 million in total revenue for the quarter, in line with the midpoint of our guidance. Power revenue was approximately $100 million, of which 90% was from our Mohawk Valley 200 millimeter device fab.

The remaining 10% of power device revenue was last-time buys of our 150 millimeter device inventory. Materials revenue was approximately $50 million, flat sequentially. Our gross margin for the third quarter was negative 20.6%, representing a double-digit percentage point improvement compared to last quarter, partially driven by a more favorable product mix as well as beneficial impacts from digesting the fresh-start accounting inventory in the last quarter. The impact of underutilization of our manufacturing footprint was approximately €46 million in Q3. Underutilization continues to be the primary driver of our gross margin, and improving factory utilization remains one of the most important levers to drive margin expansion going forward.

One point worth highlighting is that as our operational performance continues to improve, we are producing the same revenue with less capacity consumed. These continuous efforts position us to keep expanding our earnings potential per dollar of invested capital, even if it makes the reported underutilization look larger. Non-GAAP operating expenses totaled €61 million in the quarter. With headcount reduction actions largely complete, we expect to maintain approximately this level of OpEx moving into the next quarter. Adjusted EBITDA for the quarter was negative €62 million. Now turning to cash flow, which remains one of our top priorities.

Operating cash flow for Q3 was negative €84 million, driven by improvement in precious metal reclamation, interest income, and continued working capital improvements. Capital expenditures were approximately €5 million on a net basis in the third quarter, reflecting €38 million of gross CapEx, mostly coming from previous commitments we have made. These investments were nearly entirely offset by €33 million of incentive receipts from New York State related to Mohawk Valley. We ended the quarter with approximately $1.2 billion in cash and short-term investments, allowing us to continue to pursue our strategic priorities with confidence. Whilst we have taken meaningful steps to strengthen our balance sheet, we recognize there is more work ahead.

Looking ahead, while near-term demand in automotive remains uncertain, we continue to see encouraging momentum in high-growth areas such as AI data centers and other I&E applications. These markets represent meaningful long-term opportunities, though it will take time for them to scale and offset current softness in automotive. During 2026 Q4, we are targeting revenues between $140 million and $160 million. We expect non-GAAP gross margin to remain negative in the fourth quarter and OpEx to be roughly flat quarter over quarter. In the long term, our objective remains clear: to return to above-market revenue growth driven by a more diversified customer base and to achieve EBITDA and cash flow profitability.

Robert Feurle: Thank you, Gregor. This quarter reflects continued progress against our three strategic priorities: advancing technology leadership, demonstrating strict financial discipline, and driving operational excellence. The actions we have taken this quarter—strengthening our balance sheet, launching industry-leading products, deepening our leadership team in the region with a focus on customer centricity, and enhancing our operational capabilities—are all directed towards one objective: positioning Wolfspeed, Inc. to capture growth and expand earnings power as the market environment improves. With that, operator, we are now ready to take questions.

Operator: We will now open the call for questions. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q&A roster. Your first question comes from the line of Christopher Rolland with Susquehanna. Your line is open. Please go ahead.

Christopher Rolland: Thank you, guys, for the question. I guess my first one is going to be around AI and your opportunities to address AI very specifically. If you could talk about perhaps the AI power tree, what is available in your view for silicon carbide, what applications you might address earliest—whether it might be PSUs or power delivery boards or solid-state transformers—or the 300 millimeter future applications that you spoke about in your prepared remarks. If you could just talk about what you think actually comes to revenue first and what might be meaningful for Wolfspeed, Inc., that would be great.

Robert Feurle: Thank you. That is a great question. Let me quickly start answering this. It has two parts. One is on the device side; here it is everything which is, I call it, 650 volt up. From an application perspective, these are the power supplies in the data center—the traditional new customers around that space—and this is, of course, battery backup storage, powering also the air conditioning in the data center. It is consuming silicon carbide. Then outside of the data center is more of the transmission piece, where pretty much you will see the future adoption of solid-state transformers.

This is really a significant driver of future silicon carbide demand, and we are engaged, I would say, across the whole chain from energy generation up to the 650-volt level. Below that, that is a different wide bandgap technology taking that space. Up to that space, we are engaged with everybody in the ecosystem. The lower voltages are primarily component and discrete approaches, and the higher voltage are modules. So the qualification times are also a little bit different between modules—improving reliability of a solid-state transformer—versus selling components to the power supply. The one which is probably ramping faster is more the power supply side, then solid-state transformers, I think, will kick in over time.

The second part of your question around 300 millimeter: again, we started these beyond power activities, and we see quite some really good momentum here with a lot of ecosystem partners on using silicon carbide's unique properties around thermals and mechanicals in various aspects, but all of them come around packaging, co-packaging, interposers, heat sinking, and that kind of application area. People are looking like, wow, there are really unique properties—being superconductive while also being insulating—and the discussions have started. This is early, as we have indicated; there is nothing where we see revenue short term, but we believe the technology certainly has a right to play.

Christopher Rolland: Excellent. Thank you for that. Maybe as a follow-up, I think the legacy for silicon carbide has primarily been automotive. I was wondering if you could speak to how the end market might change under your management, particularly between automotive, industrial, and AI. And for AI in particular, might you be able to offer maybe an aspirational AI target for revenue at some point in the future?

Robert Feurle: Very good question. When I came in, the company was organized around product—one gentleman running modules, one gentleman running discretes—and I said we must change this to be application-oriented. The focus was all around EVs, and then we made an organizational change to move to an application-focused go-to-market approach. The business lines are now an Automotive business line—the gentleman from onsemi is running that business line—and there is an I&E business line with substructure around renewables, AI data center, and then an internal drives business, which is pretty much all of what we call industrial. Then we have a segment around Aerospace and Defense, and then there is the Materials business.

This is how we view the go to market, to really support a more differentiated view of how we approach customers and how we service the customers, because the design-in cycles are different, the requirements are different, and the dynamics are also different. We really see that the organizational change we put in place last year is starting to pay off to get that focus. As you have probably seen, previous quarter Q1 to Q2 we grew 50% on the data center side; this quarter, Q2 to Q3, we grew 30%. So it is really growing. Again, it is not a huge slice of revenue yet, but the growth shows that putting the focus there works.

We have the product portfolio, and we are making really, really good progress.

Operator: Your next question comes from the line of Jed Dorsheimer with William Blair. Your line is open. Please go ahead.

Jed Dorsheimer: Hi. Yes. Thanks, guys. Robert, question for you, just maybe a little bit on the go-to-market strategy. Some of your competitors—everybody is talking up the use in AI in terms of 800 volts—but utilization at some of the competitors has actually come down, which tells me that auto is still the main driver. So I guess my question for you is, as you think about your go-to-market strategy on the product level for AI applications and maybe also for solid-state transformers, how much absorption do you think you can get to in Mohawk Valley? And then I have a follow-up question.

Robert Feurle: At the end of the day, first of all, we are not disengaging from automotive. Let us make this very clear. Automotive is a very important part of our business. Cars are becoming electric, and cars are becoming connected. We will really focus on technology leadership around penetrating these high-end sockets, and quite frankly the customers are appreciating what we are doing on the technology side. You will see some announcements at PCIM—the upcoming trade show on the power side in June—and you will see some announcements around the technology side coming out at that trade show. On your question on AI data center, again, this is being driven out of our I&E business line.

It represents significant growth for us in the sense that it really diversifies Wolfspeed, Inc. away from being a pure-play auto company and diversifies the revenue. Within I&E, like I already mentioned, it goes pretty much everything from 650 volts up: 650-volt discretes, 1,200-volt discretes, and then in the 2.3 kilovolt, 3.3 kilovolt range you look into modules, and these are modules which are used for solid-state transformers. As these transitions in this transformer space happen, I think we are very well positioned with customers in this ecosystem. As we see demand picking up, that will also increase the loading in our Mohawk Valley. The good news is that the restructuring on our device side is done.

We phased out 6-inch; we exited our Durham facility for devices. This means we have completely made the move over to Mohawk Valley, which means the ability to scale. A lot of the competition is still on 6-inch and trailing in that conversion, and this puts us in a unique position that we can tell the customer there is no PCN—we do not have to move the product anywhere—as demand picks up on these applications.

Jed Dorsheimer: And then maybe as a follow-up for Gregor, it looks like you have been able to restructure a little bit more than half of the L1. I am just curious what your intentions are in terms of that. Is the goal to get that completely restructured before the June or July time frame?

Gregor Von Isom: You saw that we took a first big step by taking out 43% of the first-lien debt. That is the most expensive debt we have. It is around a 14% interest rate, and there would be a further step up to 16%, so clearly this is the prime focus to address. We felt it was very important to take this first step. We are very pleased with the signal of strength with new long-haulers coming in and even having a part of equity at a premium be part of this mix of taking a part of the L1 out.

The size of the L1 was, however, such that doing this in one go would have been too costly, particularly because we expected that the stock would re-rate after taking a first step and showing the signal of strength that we have this ability. We think we have seen some of that over the last couple of weeks. What we are doing right now is evaluating which exact steps we are going to take and when. We are not in a rush because of the maturities in 2030, but obviously I am keen to do something. We are not going to put a specific timeline against that. It is not necessary to put that pressure on ourselves.

We will take the best possible approach when market conditions are optimal to get the best cost of capital for the company.

Jed Dorsheimer: That is helpful. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Robert for closing remarks.

Robert Feurle: Thank you for joining us on the call, and thank you for the very constructive questions.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.