Wolfspeed’s QQ3 2024 results reflect a material revenue decline on a YoY and QoQ basis, paired with a deepening quarterly loss as the company continues a high-capex, high-R&D growth phase around its silicon carbide (SiC) and GaN platforms. Revenue came in at $200.7 million, down 14.9% year over year and 3.7% quarter over quarter, with gross margin at 11.1% and an operating margin of -53.0%. Net income was -$148.9 million, or -$1.18 per share, while EBITDA was -$42.3 million, underscoring the scale of ongoing investments and the challenge of achieving near‑term profitability in a capital-intensive transition.
Cash flow remained tight on an operating basis, with operating cash flow of -$136.2 million and free cash flow of -$714.8 million, while the company drew liquidity through financing activities (+$499.1 million) to bolster liquidity. The balance sheet shows a substantial debt load (total debt of $5.79 billion; net debt of $4.65 billion) and a solid liquidity position (cash and short-term investments of $2.5509 billion) yielding a healthy near-term liquidity ratio (current ratio 4.58). The near-term challenge is the combination of negative earnings, ongoing capex/R&D outlays, and a high debt burden, versus the long-term opportunity from Wolfspeed’s leadership in SiC and GaN for power, RF, and EV charging infrastructure.
Given the data, the investment thesis hinges on Wolfspeed achieving meaningful scale to improve gross margins and deleverage while sustaining its SiC/GaN technology leadership. In the near term, expect continued pressure on profitability until volume ramps and cost efficiencies materialize. A supportive thesis would require clear visibility on capacity expansion, cost discipline, and a path to positive free cash flow as volumes scale.