Wolfspeed's first revenue gain in a year burns $96 million a quarter; its $1.5 billion loan has not closed
The post-Chapter 11 silicon carbide maker beat its revenue guide and says breakeven gross margin is one quarter away. But it burned $96 million of cash in three months, and the $1.5 billion federal loan behind the turnaround has not closed.
Vincent Jiang · 2 min read
The beat, and the bleed
Wolfspeed+0.96% — Wolfspeed, up 0.96 percent today, the silicon carbide chip maker that emerged from Chapter 11 in September 2025, opened fiscal 2027 with revenue of $155.0 million, above the midpoint of its own guidance and above the $149.9 million Wall Street consensus 12. That is its first quarter-over-quarter revenue increase in a year 3.
The win is relative: revenue still runs 21% below the $196.8 million of a year earlier, the adjusted loss of $2.03 a share came in slightly wider than the $1.98 analysts expected, and gross margin stayed negative at minus 22% on a GAAP basis 12.
Margins heal from very deep
Adjusted gross margin reached minus 13%, a 710-basis-point gain on the June quarter's minus 20%, and the fiscal second-quarter guide of $155 million to $175 million promises margin "approaching breakeven" 14. The arithmetic is tight. Chief financial officer Gregor van Issum has pegged breakeven at an $800 million annual run rate, about $200 million a quarter, and the top of the new guide annualizes to $700 million 4. Cost cuts can close part of that gap; volume has not.
Gross margin has improved for four straight quarters, still 22 points under water
- GAAP gross margin
- Adjusted gross margin
Data
| GAAP gross margin | Adjusted gross margin | |
|---|---|---|
| Sep '25 | -39.2% | — |
| Dec '25 | -46.5% | — |
| Mar '26 | -26.6% | — |
| Jun '26 | -24.5% | -20% |
| Sep '26 | -22% | -13% |
Revenue turned up in September, still below the CFO's breakeven pace
First sequential gain in a year, and still $45M short of breakeven pace
Data
| Revenue | |
|---|---|
| Sep '25 | $196.8M |
| Dec '25 | $169M |
| Mar '26 | $150M |
| Jun '26 | $149.6M |
| Sep '26 | $155M |
The burn, and who carries it
Operating cash flow was minus $84.2 million and free cash flow minus $96.5 million, against $995.1 million of cash and short-term investments: roughly ten quarters of runway at this pace, before any debt maturities 1. The 30-year, $1.5 billion Department of War loan stays conditional on due diligence, definitive agreements and approvals, requires $750 million of new money alongside it, and prices the support in warrants for up to 7.5% of the equity 156.
Refinancing matters as much as the cash, because the first-lien debt carries roughly 16% interest 4. Until the loan funds, shareholders carry the burn and the dilution.
Half the register is betting the other way
Short interest ended October at 51.72% of shares, the highest of any technology stock under $2 billion in market value 7. Management's answer is signed paper: an Infineon wafer agreement extended to 200mm wafers, a multiyear BorgWarner deal for 800V inverter devices, and AI data center revenue that roughly doubled through fiscal 2026, in a device market Yole expects to more than triple to $11.1 billion by 2031 689. The reported base still leans on electric vehicles, and materials revenue fell 41% year over year, to $38.2 million 1.
Two readings settle the argument: the definitive loan agreements, which unlock the federal $1.5 billion, and the next quarterly print, where management has promised gross margin at breakeven's edge.
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