What happened
Shares of Wolfspeed (WOLF +0.00%) are down 19% this week, according to data provided by S&P Global Market Intelligence, after the silicon-carbide electric vehicle (EV) chip specialist announced mixed fiscal fourth-quarter 2023 results and disappointing forward guidance.
To be sure, the entirety of Wolfspeed's drop this week came after it announced fiscal Q4 revenue climbed a modest 3.2% year over year, to $235.8 million, translating to an adjusted (non-GAAP) net loss of $52.8 million, or $0.42 per share. Analysts, on average, were expecting a significantly narrower adjusted net loss of $0.20 per share but on lower revenue of $222.7 million.
NYSE: WOLF
Key Data Points
So what
Wolfspeed secured quarterly design-ins of $1.6 billion in Q4, bringing full fiscal-year 2023 design-ins to $8.3 billion.
Wolfspeed CEO Gregg Lowe stated that he was "very pleased" with the company's progress over the course of the fiscal year, particularly as it secured billions in funding to support continued capacity expansion, began construction on its 200mm materials factory in North Carolina, and started generating revenue from its 200mm device-fabrication plant in Mohawk Valley.
As for its wider-than-expected net losses, the company pointed out that it incurred $39.5 million of factory start-up costs for Q4 -- related to facilities under construction or expanding that haven't begun generating revenue -- accounting for more than 22% of its total operating expenses. These expenses are necessary as part of expanding Wolfspeed's production footprint.
Now what
For the first quarter of its new fiscal-year 2024, however, Wolfspeed told investors it's targeting revenue of $220 million to $240 million, with an adjusted net loss of $75 million to $94 million (or $0.60 to $0.75 on a per-share basis). By contrast, most analysts were modeling a far narrower adjusted net loss of $0.29 per share on revenue slightly above the midpoint of Wolfspeed's guidance range at $234 million.
Wolfspeed didn't provide specific guidance for the full fiscal-year 2024. But Lowe did add that as customers continue to select the company for their future silicon-carbide devices needs, Wolfspeed "must remain keenly focused on scaliing our materials and device capacity in fiscal 2024."
That certainly shouldn't break Wolfspeed's long-term thesis for bullish investors. But in a market that hates being told to hurry up and wait for sustained, profitable growth to materialize, it's hardly surprising to see Wolfspeed stock pulling back this week.
