Wolfspeed Inc (WOLF1) Q1 2027 Earnings Report

The call was predominantly positive, with management highlighting revenue above the guidance midpoint, sequential power revenue growth, a 710 basis point gross-margin improvement, accelerating AI data center demand, strategic customer agreements, technology expansion into GaN and transparent SiC, and a potentially transformative government financing commitment. The company still faces significant challenges, including negative gross margin, negative EBITDA, negative operating cash flow, factory underutilization, higher operating expenses, a 6% workforce reduction, and conditions that must be satisfied before the government financing is finalized.

For Q2 fiscal 2027, Wolfspeed is targeting revenue in the range of $155 million-$175 million, expects non-GAAP gross margin to improve sequentially and approach break-even for the Q2, and expects operating expenses to be in the range of $65 million-$69 million, a modest sequential increase driven primarily by the investments to support anticipated AI data center growth; the company said it should be around $200 million a quarter to be break-even, but that break-even point is “a little bit lower than the $200 million,” with Mohawk Valley utilization “wall-to-wall” around 25%-30%, and expects to finish the conditional 30-year $1.5 billion loan commitment ideally before end of the year, with the initial $600 million tranche expected to refinance the remaining balance of its high-cost first lien senior secured notes due in 2030, delivering more than $50 million in annual interest savings and approximately $100 million in annual cash interest savings.