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Wolfspeed (WOLF) Q1 Loss Narrows, Revenues Increase Y/Y
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Wolfspeed (WOLF - Free Report) reported a first-quarter fiscal 2023 non-GAAP loss of 4 cents per share, narrower the Zacks Consensus Estimate of a loss of 5 cents. The year-ago loss was 21 cents per share.
Revenues of $241.3 million were up 54% year over year, surpassing the consensus mark by 0.64%.
Growth in revenues was driven across all of its product lines and design-in portfolio, which grew by $3.5 billion in the fiscal first quarter, and now totals $14.5 billion cumulatively. Approximately 43% of Wolfspeed’s design-ins have converted into design wins, representing more than 1,600 projects.
Quarter in Detail
In the fiscal first quarter, Wolfspeed’s revenues benefited from the growing trend of high-voltage applications’ continuous migration from traditional silicon to silicon carbide. This is owing to various initiatives to move toward greener energy sources.
WOLF is also experiencing rising demand for its silicon carbide on high demand for electronic vehicles.
In the fiscal first quarter, WOLF reported a non-GAAP gross margin of 35.6%, which expanded 210 basis points from the year-ago fiscal quarter, primarily driven by higher revenues. However, the gross margin was adversely impacted by the wafer manufacturing process, which faced supply chain constraints.
In the quarter, non-GAAP total operating expenses were $155.6 million (64.5% of total revenues), which increased substantially by 35.2% year over year.
However, Wolfspeed incurred start-up costs, primarily related to Mohawk Valley, totaling approximately $38 million, contributing to the operating loss in the fiscal first quarter.
WOLF incurred a non-GAAP operating loss of $75.7 million compared with the operating loss of $65.7 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 25, 2022, WOLF reported cash, cash equivalents and short-term investments of $1.2 billion, flat quarter over quarter.
In the fiscal first quarter, WOLF reported cash outflow from operations of $66 million compared with $154.2 million in the fiscal fourth quarter.
Guidance
For the second quarter of fiscal 2023, WOLF expects revenues in the range of $232.5-$247.5 million.
Non-GAAP loss per share is expected to be 8-16 cents.
Zacks Rank & Other Stocks to Consider
Wolfspeed currently has a Zacks Rank #2 (Buy).
WOLF’s shares have fallen 4.8% compared with the Zacks Computer and Technology sector’s decline of 32.5% in the year-to-date period.
Here are some other top-ranked stocks worth considering in the broader sector.
ZI’s shares have lost 28.8% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 7.4%.
Tencent Music Entertainment Group (TME - Free Report) is also a Zacks Rank #2 stock. The company is set to report third-quarter 2022 earnings on Nov 15.
TME shares have lost 44.3% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.7%.
Absolute Software has a Zacks Rank #2. The company is set to report its third-quarter 2022 earnings on Nov 8.
ABST shares have lost 28.3% in the year-to-date period compared with the Zacks Security industry’s decline of 15.1%.
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Wolfspeed (WOLF) Q1 Loss Narrows, Revenues Increase Y/Y
Wolfspeed (WOLF - Free Report) reported a first-quarter fiscal 2023 non-GAAP loss of 4 cents per share, narrower the Zacks Consensus Estimate of a loss of 5 cents. The year-ago loss was 21 cents per share.
Revenues of $241.3 million were up 54% year over year, surpassing the consensus mark by 0.64%.
Growth in revenues was driven across all of its product lines and design-in portfolio, which grew by $3.5 billion in the fiscal first quarter, and now totals $14.5 billion cumulatively. Approximately 43% of Wolfspeed’s design-ins have converted into design wins, representing more than 1,600 projects.
Quarter in Detail
In the fiscal first quarter, Wolfspeed’s revenues benefited from the growing trend of high-voltage applications’ continuous migration from traditional silicon to silicon carbide. This is owing to various initiatives to move toward greener energy sources.
WOLF is also experiencing rising demand for its silicon carbide on high demand for electronic vehicles.
In the fiscal first quarter, WOLF reported a non-GAAP gross margin of 35.6%, which expanded 210 basis points from the year-ago fiscal quarter, primarily driven by higher revenues. However, the gross margin was adversely impacted by the wafer manufacturing process, which faced supply chain constraints.
In the quarter, non-GAAP total operating expenses were $155.6 million (64.5% of total revenues), which increased substantially by 35.2% year over year.
Wolfspeed Price, Consensus and EPS Surprise
Wolfspeed price-consensus-eps-surprise-chart | Wolfspeed Quote
However, Wolfspeed incurred start-up costs, primarily related to Mohawk Valley, totaling approximately $38 million, contributing to the operating loss in the fiscal first quarter.
WOLF incurred a non-GAAP operating loss of $75.7 million compared with the operating loss of $65.7 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 25, 2022, WOLF reported cash, cash equivalents and short-term investments of $1.2 billion, flat quarter over quarter.
In the fiscal first quarter, WOLF reported cash outflow from operations of $66 million compared with $154.2 million in the fiscal fourth quarter.
Guidance
For the second quarter of fiscal 2023, WOLF expects revenues in the range of $232.5-$247.5 million.
Non-GAAP loss per share is expected to be 8-16 cents.
Zacks Rank & Other Stocks to Consider
Wolfspeed currently has a Zacks Rank #2 (Buy).
WOLF’s shares have fallen 4.8% compared with the Zacks Computer and Technology sector’s decline of 32.5% in the year-to-date period.
Here are some other top-ranked stocks worth considering in the broader sector.
ZoomInfo Technologies (ZI - Free Report) currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company is set to report its third-quarter 2022 earnings on Nov 1.
ZI’s shares have lost 28.8% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 7.4%.
Tencent Music Entertainment Group (TME - Free Report) is also a Zacks Rank #2 stock. The company is set to report third-quarter 2022 earnings on Nov 15.
TME shares have lost 44.3% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.7%.
Absolute Software has a Zacks Rank #2. The company is set to report its third-quarter 2022 earnings on Nov 8.
ABST shares have lost 28.3% in the year-to-date period compared with the Zacks Security industry’s decline of 15.1%.