---
title: "Wolfspeed's first revenue gain in a year burns $96 million a quarter; its $1.5 billion loan has not closed"
description: "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."
publisher: "The Inference"
section: "Chips"
published: 2026-11-05T00:10:14.592Z
modified: 2026-11-05T00:10:14.592Z
canonical: https://theinference.org/article/wolfspeed-s-first-revenue-gain-in-a-year-burns-96-million-a-quarter-its-1-5-billion-loan-has-not-closed
language: en
keywords: "Wolfspeed, Chips, Earnings, Silicon Carbide, Short Interest"
---

# 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.

## The beat, and the bleed

[Wolfspeed](https://theinference.org/markets/companies/wolfspeed), the silicon carbide chip maker that emerged from Chapter 11 in September 2025, [opened fiscal 2027 with revenue of $155.0 million](https://www.sec.gov/Archives/edgar/data/895419/000089541926000075/0000895419-26-000075-index.htm), above the midpoint of its own guidance and above the $149.9 million Wall Street consensus [1][2]. 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 [1][2].

## 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" [1][4]. 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.

*Chart: **Gross margin has improved for four straight quarters, still 22 points under water** Line chart of Wolfspeed gross margin by quarter from September 2025 to September 2026: GAAP gross margin falls to minus 46.5 percent in December 2025, then climbs four straight quarters to minus 22 percent GAAP and minus 13 percent adjusted in September 2026, with a note that the December quarter guide is approaching breakeven.*

*Gross margin as a percent of revenue, GAAP, by fiscal quarter. Adjusted (non-GAAP) gross margin is shown only for the June and September 2026 quarters, where Wolfspeed disclosed it; the December quarter guide is management's forecast, not a reported figure. Sources: Wolfspeed quarterly SEC filings; Q1 FY2027 press release, 8-K of November 4, 2026; 24/7 Wall St. [1][3][4]*

*Chart: **Revenue turned up in September, still below the CFO's breakeven pace** Column chart of Wolfspeed quarterly revenue from September 2025 to September 2026; the final bar turns up but all bars sit below a $200 million reference line marking the CFO's breakeven pace.*

*Quarterly revenue in millions of dollars; Sep '26 is fiscal Q1 2027, ended September 27, 2026. Reference line: CFO's $800 million annual breakeven run rate, about $200 million a quarter. Sources: Wolfspeed SEC filings; 8-K of November 4, 2026; 24/7 Wall St. [1][3][4]*

## 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](https://www.ad-hoc-news.de/boerse/news/nebenwerte/wolfspeed-secures-usd-1-5-billion-loan-and-wolfspeed-stock-sits-62-29-percent-below-its-high/70269003) 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 [1][5][6].

Refinancing matters as much as the cash, because the first-lien debt [carries roughly 16% interest](https://247wallst.com/investing/2026/10/30/wolfspeed-is-down-25-in-october-stay-the-course-or-just-stay-away/) [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](https://theinference.org/article/wolfspeed-s-borgwarner-deal-landed-with-51-81-of-its-float-short-before-the-november-4-report), 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](https://theinference.org/article/wolfspeed-now-sells-premium-wafers-to-its-competitors-and-guides-to-lose-money-doing-it), 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 [6][8][9]. 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](https://theinference.org/article/wolfspeed-s-1-5-billion-pentagon-loan-is-a-letter-not-a-check), and the next quarterly print, where management has promised gross margin at breakeven's edge.

## Takeaway

Revenue rose sequentially for the first time in a year and adjusted gross margin gained 710 basis points, but Wolfspeed still burned $96.5 million of cash in the quarter, and the $1.5 billion federal loan behind the turnaround remains unsigned.

## Sources

1. [Wolfspeed, Inc., Form 8-K with Q1 FY2027 press release (Exhibit 99.1), SEC, 4 November 2026](https://www.sec.gov/Archives/edgar/data/895419/000089541926000075/0000895419-26-000075-index.htm)
2. [ad hoc news, "Wolfspeed signs BorgWarner deal: November 4 results for Wolfspeed stock", 29 October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/wolfspeed-signs-borgwarner-deal-november-4-results-for-wolfspeed-stock/70428421)
3. [Wolfspeed, quarterly figures from its SEC filings, retrieved 4 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000895419)
4. [24/7 Wall St., "Wolfspeed Is Down 25% in October: Stay the Course, or Just Stay Away?", 30 October 2026](https://247wallst.com/investing/2026/10/30/wolfspeed-is-down-25-in-october-stay-the-course-or-just-stay-away/)
5. [ad hoc news, "Wolfspeed secures USD 1.5 billion loan and Wolfspeed stock sits 62.29 percent below its high", 8 October 2026](https://www.ad-hoc-news.de/boerse/news/nebenwerte/wolfspeed-secures-usd-1-5-billion-loan-and-wolfspeed-stock-sits-62-29-percent-below-its-high/70269003)
6. [TechTimes, "AI Data Centers Join EVs as SiC Demand Engines in Infineon-Wolfspeed 200mm Wafer Deal", 19 October 2026](https://www.techtimes.com/articles/329190/20261019/ai-data-centers-join-evs-sic-demand-engines-infineon-wolfspeed-200mm-wafer-deal.htm)
7. [Seeking Alpha, "Most and least shorted technology stocks with up to $2B market cap as of October-end", 3 November 2026](https://seekingalpha.com/news/4663888-most-and-least-shorted-technology-stocks-with-up-to-2b-market-cap-as-of-october-end)
8. [Business Wire via Yahoo Finance, "Wolfspeed Powers the Future of EVs with Multiyear Silicon Carbide Device Agreement", 28 October 2026](https://finance.yahoo.com/technology/articles/wolfspeed-powers-future-evs-multiyear-200500346.html)
9. [Business Wire via Morningstar, "Infineon and Wolfspeed Expand and Extend Long-Term Silicon Carbide Wafer Supply Agreement to Include 200 mm", 15 October 2026](https://www.morningstar.com/news/business-wire/20261014904316/infineon-and-wolfspeed-expand-and-extend-long-term-silicon-carbide-wafer-supply-agreement-to-include-200-mm)


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Wolfspeed's first revenue gain in a year burns $96 million a quarter; its $1.5 billion loan has not closed — The Inference. Canonical: https://theinference.org/article/wolfspeed-s-first-revenue-gain-in-a-year-burns-96-million-a-quarter-its-1-5-billion-loan-has-not-closed