Key Takeaways

  • Shares of WOLF declined 11% in extended trading following fourth-quarter earnings release

  • The company posted an EPS loss of $2.26, beating one projection but significantly missing another consensus estimate of $0.52 loss

  • Fourth-quarter revenue reached $149.6 million, falling short of certain Wall Street expectations of $223.55 million

  • Revenue from AI data center applications more than doubled compared to last year and increased 20% sequentially

  • First-quarter revenue outlook ranges from $140 million to $160 million, with continued margin challenges expected

Shares of Wolfspeed tumbled 11% during after-hours trading Tuesday following the release of the silicon carbide manufacturer’s fiscal fourth-quarter financial results. The decline extended losses from the regular session, where the stock had already retreated 7.5% to close at $26.00.

WOLFSPEED $WOLF Q4’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $149.6M (Est. $224M) 🔴
🔹 Adj. EPS: -$2.26 (Est. -$2.45) 🟢
🔹 Gross Margin: -25%
🔹 Free Cash Flow: -$60.9M (Est. -$108M) 🟢

Q1 Guide:
🔹 Revenue: $140M-$160M (Est. $150M) 🟡
🔹 Non-GAAP Gross Margin: Negative
🔹 Non-GAAP… pic.twitter.com/rVhlGkPI3j

— Wall St Engine (@wallstengine) August 19, 2026

The company’s gross margin registered at 25% for the period. Management pointed to insufficient factory utilization as the primary driver behind the margin performance. This underutilization issue is anticipated to persist and continue impacting profitability through the current quarter.

Artificial Intelligence Delivers Strong Growth

Among the quarterly highlights, Wolfspeed’s artificial intelligence segment stood out prominently. Revenue generated from AI data center customers more than doubled on a year-over-year basis during Q4, while posting 20% sequential growth from the third quarter. Company leadership characterized this performance as representing a notable evolution in the firm’s customer demand profile.

This AI-driven expansion has helped counterbalance significant weakness in electric vehicle demand. Sales linked to the EV sector have contracted across both of the company’s core business units: the materials segment, which manufactures silicon carbide wafers, and the power products division.

The materials business unit experienced particularly challenging conditions. Year-over-year sales plummeted 44%, while also declining nearly 14% from the prior quarter. Market analysts identified this materials segment weakness as a primary catalyst for the after-hours selloff, overshadowing the partial earnings beat.

Financial Position and Liabilities

Wolfspeed concluded the quarter holding $1.1 billion in cash reserves. The company’s total debt obligation currently sits at $1.7 billion. Leadership indicated meaningful progress was achieved in decreasing the debt burden throughout the quarter.

The organization entered Chapter 11 bankruptcy protection on June 30, 2025, successfully emerging from the restructuring process last September. Following the bankruptcy exit, WOLF shares had surged as much as 80% on a year-to-date basis prior to Tuesday’s decline.

Looking ahead to the first quarter, Wolfspeed issued revenue guidance ranging from $140 million to $160 million. The $150 million midpoint closely matches Wall Street’s consensus projection of $150.4 million. Operating expenditures are projected to fall between $62 million and $66 million.

Management cautioned that gross margin pressure will likely continue as a result of persistent factory underutilization challenges.

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