Wolfspeed Shares Plummet Following Disappointing Quarterly Results

Wolfspeed shares are facing intense pressure after the semiconductor manufacturer reported deeply concerning financial results for its fourth fiscal quarter of 2025. The company posted a GAAP loss of $669.3 million, equating to $4.30 per share. This represents a severe deterioration compared to the prior year’s loss of $174.9 million, marking a staggering 283 percent year-over-year increase in losses that highlights the company’s significant operational challenges.

Revenue Decline and Segment Performance

Total quarterly revenue declined by 1.8 percent to $197 million, down from $200.7 million in the same quarter last year. Despite this contraction, the company’s top-line performance managed to exceed analyst expectations of $189.3 million by approximately 4.1 percent.

A notable shift occurred in the company’s revenue composition:
– Power Products accounted for 60.2 percent of total revenue ($118.6 million), representing a 13.4 percent increase
– Materials Products contributed 39.8 percent of revenue ($78.4 million), reflecting an 18.4 percent decrease
– The Mohawk Valley Fab generated $94.1 million in revenue, significantly higher than the $41 million reported in the previous year

Earnings Miss and Annual Performance

The company’s earnings performance proved particularly disappointing to market observers. Wolfspeed reported an adjusted loss per share of $0.77, substantially worse than the $0.65 loss anticipated by analysts. This represents an 18 percent wider loss than market expectations.

For the full 2025 fiscal year, consolidated revenue decreased to $758 million compared to $807 million in the previous year.

Profitability and Margin Pressures

Profitability metrics deteriorated dramatically during the quarter. The adjusted gross margin plummeted to negative 1 percent, a sharp decline from the 5.4 percent recorded in the year-ago quarter. This margin compression was significantly impacted by $23.6 million in underutilization costs, primarily associated with production ramp-up at the Mohawk Valley facility.

Should investors sell immediately? Or is it worth buying Wolfspeed?

The company’s adjusted operating loss expanded to $119.8 million, compared to $112 million in the same quarter last year.

Liquidity Position Deteriorates

Wolfspeed’s liquidity position continues to weaken concerningly. As of June 2025, the company reported cash and liquid assets of $955.4 million—a substantial decrease from the $1.32 billion reported at the end of March 2025.

Operational cash consumption accelerated dramatically to $242.5 million, up from $142.1 million in the previous quarter. Free cash outflow reached $454 million, indicating significant cash burn.

Bankruptcy Proceedings Continue

The company remains under Chapter 11 bankruptcy protection. CEO Robert Feurle expressed confidence that the court will approve the reorganization plan in the coming month, which would enable Wolfspeed to emerge from bankruptcy proceedings with a strengthened financial structure.

Despite its positioning in growth markets including electric vehicles and renewable energy, the company continues to grapple with substantial production ramp-up costs and fluctuating market demand.