Hello, everyone. Thank you for joining us and welcome to the Wolfspeed, Inc. first quarter. On the call today from the Wolfspeed team is Chief Executive Officer Robert Feurle, Chief Financial Officer Gregor Van Issum, and Dan Whalen, Vice President, Investor Relations. After today's prepared remarks, we will host a question and answer session. I will now hand the conference over to Dan Whalen. Dan, please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Wolf Speed's first quarter fiscal 2027 conference call. We encourage you to reference the slides that were published on our IR website today. Please note that we will be presenting non-GAAP financial results during today's call, which we believe provide useful information to our investors. Non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered as a supplement to and not a substitute for financial statements prepared in accordance with GAAP. A reconciliation to the most directly comparable GAAP measures is in our press release and posted in the Best Relations section of our website, along with a historical summary of our other key metrics. Today's discussion includes forward-looking statements about our business outlook, and we may make other forward-looking statements during the call. Such forward-looking statements are subject to the numerous risks and uncertainties. Our press release today and the SEC filings noted in the release mentioned important factors that could cause actual results in different material. With that, I'll turn the call over to Robert.

Thank you, and good afternoon, everyone. We appreciate you joining us today. We continue to build momentum. With each passing quarter, my conviction, our strategy, and team grow stronger. First quarter revenue of 155 million marks another quarter of delivering on the commitments we have made. In this case, above the midpoint of all guidance range. Our progress is anchored on our four strategic objectives. Advancing technology leadership, diversifying our revenue and customer base, driving operational excellence, and maintaining financial discipline. Together with our strength and leadership team, these are translating into financial traction. Let me start with financial discipline. In October, we announced a conditional 30-year, $1.5 billion loan commitment from the U.S. Department of War to advance the domestic wide bandgap supply chain. Upon closing, this would mark another significant milestone in optimizing our capital structure and financial foundation. Gregor will elaborate on this later. But at a high level, challenge A would refinance our outstanding Higher-cost first lien senior secured notes due in 2030, significantly reducing our cost of capital, increasing cash flow generation, and extending the maturity of the refinance debt to 2056. The tranches beyond Trench A would give us the flexibility to fund a multi-year strategic investment program on a project basis, including scaling our established silicon carbide platform, establishing and expanding domestic GAN power device capabilities, advancing GAN on SIG RF materials technology, and developing the domestic radiation hardening capabilities. To be clear, this is not a program to build additional size or square footage. It's about capitalizing on our existing capabilities, IP, tooling, and customer relationships we already have, which is fully aligned with the strategic objective we've discussed for several quarters. Importantly, our manufacturing capacity is highly fungible and synergistic between SICK and GAN. And outside of targeted tooling investments, we can pivot existing capacity as appropriate and as needed. Put simply, this would broaden our portfolio to spend both SICK and GAN through complementary power technology that address different points on the voltage spectrum. SICK anchors the high voltage, high power applications where we lead today. while GAN extends our reach into lower voltage designs. Together, they give us two engines to drive high utilization across our sites and ultimately fuel both revenue growth and gross margin expansion. To elaborate, we believe GAN is the next power technology of the future beyond silicon, with major growth drivers emerging in data center power devices and humanoids. Given our physical assets, our existing GaN IP position, and our operational synergies in manufacturing, we believe we've earned the right to compete in this market. Regarding our AI data center or superintelligence opportunity, our dedicated data center team is becoming more deeply integrated into our go-to-market efforts and is leveraging our longstanding customer relationships in Silicon Valley to drive medium and long-term sustainable growth. We are already engaging directly with hyperscaler customers on product innovation. We continue to view AI data centers as our highest growth end market, consistent with last quarter revenue more than doubled year over year on a trailing performance basis, and our order book is accelerating, reinforcing its position as our fastest growing market. Of course, our top AI data center OEMs relationships are building, and the trajectory keeps moving higher as these programs mature. We are also gaining share in HVDC high voltage direct current adoption as the architecture of the industry is moving towards a disaggregated power architecture. So high power density can be driven from a smaller footprint. The architecture is evolving from a single rack carrying both GPU and power to a dedicated two rack design, one rack for compute and a dedicated sidecar power rack alongside it. Our technology is at the core of enabling high power density with high efficiency. This opens up more space for power content in place directly to our strength as our components convert incoming power, enable backup power through conversion, protect against fault, and step voltage down to what the AI data center servers require. In mid-September, MacMeet, an emerging customer in the AI data center market, presented us with their highest honor, the Strategic Partner Award. This underscores the strength of the partnership we are building. We see significant growth potential here and actively providing technical, commercial, and supply support to ensure a smooth run. In automotive, we continue to make strides in this long-gully time high-volume market. As automators scale next-generation EV platforms, silicon carbide is increasingly essential to the efficiency, power density, and performance these architectures demand. Further separating SICK from silicon, which is directly aligned with advancing our technology leadership and doubling down on core markets. Notably, we recently signed a majority share long-term supply agreement supporting BorgWarner's next-generation 800-volt silicon-carbide inverter platform. This deepens A long-standing collaboration while providing Bob Warner reliable long-term supply of high-performance SICK for next-generation EVs, which is directly aligned with advancing our technology leadership and doubling down on core markets. In aerospace and defense, we continue to leverage our established leadership in high-voltage SICK, which is anchored by the industry's first commercially available 10-kilovolt MOSFET into a new class of ultra-high-voltage, high-current bipolar device architecture. Our industry-leading materials expertise and advanced device capabilities to develop power semiconductors operating at unprecedented voltage and current levels continues to position us well to support the increasingly demanding power conversion applications. In materials, we continue to serve a broad range of power and RF customers. As you may have seen, we recently announced the expansion and extension of our long-term thick wafer supply agreement with Infineon. The expanded agreement adds 200 mm wafers to the existing 150 mm supply, building on a relationship spanning multiple decades. It also further cements our position as a leading investment materials manufacturer and highlights the value customers place on multiple suppliers across reliable geopolitical regions. We also recently announced the commercial introduction of our proprietary transparent silicon carbide technology. further expanding growth potential of silicon carbide. This proprietary T-SIG technology coupled with our extensive IP portfolio will enable breakthroughs across augmented reality, quantum computing, and other emerging markets, a true testament to silicon carbide's versatility and transformative potential. I want to take a moment to further elaborate on where this technology can go beyond our core markets. For years, The industry vision of truly immersive, all-day augmented reality glasses has collided with the hard limits of optical materials. You simply could not deliver a wide field of view, high image quality, and lightweight variable form factor all at the same time. We believe silicon carbide changes that equation. Its exceptionally high refractive index allows a single layer waveguide to do the work that once required stacked optics, a kind of step change that can move AR from a novelty into everyday eyewear. Our work on optical-grade TSEC is exactly the type of materials innovation that underscores the versatility of silicon carbide in the long-term optionality of our platforms and is a powerful example of how the materials leadership that defines our power business can open entirely new markets over time. With that, I will turn it over to Gregor.

Thank you, Robert, and good afternoon, everyone. As you heard, we're making strong progress on multiple fronts. and we remain in the early stages of translating that into revenue growth and margin expansion. As noted, we generated $155 million in total revenue for the quarter, slightly above the midpoint of our guidance. Materials revenue was approximately $38 million. Power revenue was approximately $117 million, up 10% sequentially, driven largely by growth in the I&E and market, which includes our data center business. We believe fiscal 2027 will be a turning point and the start to more meaningful longer-term growth in both revenue and profitability. Adjusted non-GAAP gross margin was negative 12.8%, a 710 basis point sequential improvement on a slightly higher revenue base, reflecting the benefits of our operational improvement initiatives. This margin improvement was primarily driven by higher utilization as we largely completed our inventory reduction with a secondary benefit from a more favorable product mix in power. Underutilization remains the primary driver of our cross-margin profile, and improving tractor utilization is one of the most important near-term levers to drive margin expansion. Non-GAAP operating expenses were 64 million versus 62 million in the prior quarter as we positioned the company for growth. Adjusted non-GAAP EBDA was negative 55 million, an 8 million or 12% improvement sequentially. Cost capital expenditures were approximately 11 million. Turning into cash flow, which remains a top priority, Our operating cash flow was negative 84 million, including 32 million of interest paid during the quarter. Changes in working capital contributed approximately 60 million to cash in the quarter, partially from further inventory reduction. Over the past five quarters, working capital improvements have contributed approximately 235 million to cash. At this point, we believe we have largely completed the working capital optimization initiatives we launched shortly after I joined Wolfspeed. Before turning to the outlook, I'll elaborate on Robert's comments regarding the conditional 30-year, $1.5 billion loan commitment from the U.S. Department of War. This is an important milestone that would provide long-term capital to support our strategy while strengthening our capital structure and one we believe is reflective of the importance of Wall Speed's silicon carbide to the US national and economic security. The initial 600 million tranche, tranche A, is expected to refinance the remaining balance of our high-cost, first-lean, senior secured nodes due in 2030. This builds on the reduction we completed in March, which lowered our first-lean debt from 1.1 billion to approximately 630 million, and would complete our planned refinancing of these notes. The refinancing is expected to deliver more than 50 million in annual interest savings, and given the first five years of interest payments will be paid in kind, annual cash interest savings are expected to be approximately 100 million. Ultimately, we see this as a start of a meaningful financing partnership. This is a conditional milestone-based commitment that supports our existing strategy, improves our capital structure, and funds the next phase of growth as we position the company to become the partner of choice in critical end markets benefiting customers, shareholders, and national security. The additional tranches are intended to support the strategic objectives Robert previously outlined. For more details, please see the presentation posted to the event and presentation section of our website. Turning to our outlook, we continue to see growth and are targeting second quarter fiscal 2027 revenue in the range of $155 to $175 million. We expect non-GAAP gross margin to improve sequentially and approach break even for the second quarter. Operating expenses are expected to be in the range of 65 to 69 million, a modest sequential increase driven primarily by the investments to support anticipated AI data center growth. I'll also note that this quarter we completed the previously planned workforce reduction of approximately 6% further streamlining our organization. Before turning the call back to Robert, I'll echo his growing conviction in our strategy and long-term outlook. With that, I'll turn the call back over to Robert for his closing remarks.

Thank you, Gregor. Before we open the call up for questions, let me reinforce my enthusiasm and conviction for what lies ahead. Our leadership additions are becoming more integrated across every level. We continue to deepen customer partnerships across the widening scope of the market. We're taking every necessary step to return Wolfspeed to a path of long-term growth and success. and that is the source of our increased conviction in the low-speed future. With that, operator, we're ready to take questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joshua Buchalter with TD Cohen. Joshua, your line is now open. Please go ahead.

Good evening, gentlemen. This is Sam on for Josh. Congrats on the quarter of results. I was just curious if you could remind us the milestones for the $1.5 billion commitment that you're getting from the government What hurdles do you still have to clear and roughly what timing should we think about in terms of the refinancing occurring this year? And then secondarily, how does that dynamic shape your relationship with your customers, either ongoing or new ones, perhaps using your BorgWarner deal as an example of how that's given potential customers more confidence in your ability as a long-term supplier? Thank you.

Thanks, let me take the first question on the OHC loan. Obviously, a lot of work has been done by the government already before we went into the announcement that led to a very detailed LOI. However, during this period, the government is further completing its detailed diligence. That's all well on track, and we expect that this takes another couple of weeks to be able to do that, as well as in parallel finalizing the credit agreement as such. Around the actual drawing of the tranches, there are several financial commitments, limited equity rates, and other de-risking measures that we have to take on the balance sheet. That's something we're looking at and discussing together with the U.S. government. But all in all, we look here to be well on track to be able to do this ideally before end of the year.

And let me just, Robert, here, let me briefly comment on your question on the customers. Thank you for the color there. My follow-up

Your gross margin guidance is approaching breakeven, obviously, as you said. Could you give us some guideposts to think about what breakeven looks like in terms of Mohawk Valley utilization or what kind of revenue levels we're talking about here, just so we can kind of range down when we might be breakeven on the gross margin line? Thank you.

Yeah, let me comment on that. So last call, I mentioned that you should think about the competition. Thank you very much. Thank you very much. On the equipment utilization, we believe we are well on track to be able to do that. That's a bit more difficult to comment on because the question is, how do you measure that? But I would say we are well within capabilities to be able to achieve that.

Thanks so much.

Your next question comes from the line of Christopher Roland with Susquehanna. Christopher, your line is now open. Please go ahead.

Hey, guys, thank you for the question. You know, some of our data around the silicon carbide market has actually shown an increase in lead times as well as an increase in pricing. So I guess my question for you guys is, do you think the market has kind of bottomed here in terms of, you know, both pricing, it seemed like it was a race to the bottom for a while there, but also this overcapacity situation and, you know, if you could address maybe both the materials market and the device market and your perspective would be greatly appreciated.

Let me answer that question. So what we see clearly is that the build-out of the power infrastructure for AI data centers has created a very large additional consumer socket or end application for silicon carbide. And I think this really helped here to make sure that the capacity which was built over the last years is getting more and more absorbed in kind of two large end markets. One is automotive. This is a very important market, and especially with the high gas prices out there, high energy prices, a lot of EVs are getting bought. And the other one is, again, the AI data center build-out, especially Thank you for your time.

Excellent.

And for my second question, you know, your entry into the GAN market seems really interesting. When might you have products coming? What end markets, products or applications are you targeting for GAN as well?

So let's start with the market and what we clearly see is that kind of two markets driving, you know, the demand for GANs, for the low-voltage GANs. One is the robotics, specifically the humanoid robotics. The other one is, of course, the voltage step-down for the data centers, recovering the voltage rate, you know, what silicon carbide can do. And if you look at the roll speed from a capability perspective, Excellent, thank you.

As a reminder, if you would like to ask a question, please press star one to raise your hand. There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.