Wolfspeed Inc. (WOLF) Cash Flow Statement

The OCF/NI ratio fluctuates wildly, from 1.37 in 2024Q4 to -0.01 in 2026Q1, indicating that net income is not a reliable proxy for cash generation. The gap between net losses and operating cash flow is driven by substantial D&A and working capital swings, but the underlying cash burn remains severe. Investors should focus on the persistent negative operating cash flow rather than the volatile net income figures, as the latter are distorted by one-time impairment charges.

The FCF trajectory shows no sign of inflection, with quarterly FCF ranging from -$73M to -$884M, reflecting both weak operating cash flow and elevated capital expenditures. The FCF margin has deteriorated from -3.6% in 2024Q3 to -81.0% in 2026Q3, indicating that revenue growth is not translating into cash generation. This suggests the company is in a prolonged investment phase with no near-term path to positive free cash flow.

The capex-to-revenue ratio has been extraordinarily high, reaching 107.6% in 2025Q4, indicating that the company is investing heavily in capacity ahead of demand. While recent capex has declined, the cumulative investment in Mohawk Valley and Siler City suggests a multi-year commitment that will require sustained external financing. The character of capex appears growth-oriented, but the lack of corresponding revenue growth raises questions about the efficiency of these investments.

The volatile working capital adjustments, particularly in receivables and payables, have occasionally offset operating losses, but these are timing effects rather than sustainable improvements. The positive working capital changes in 2026Q1 and Q2 may indicate customer prepayments or extended payables, but the underlying operating cash flow remains deeply negative. Investors should monitor whether these swings reverse, as they could exacerbate the cash burn in future quarters.

The absence of shareholder returns is consistent with a company in a heavy investment phase, but the scale of cash consumption is notable, with cumulative FCF of -$3.4B. The $92.7M acquisition in 2026Q1 and Q2 suggests management is still deploying capital for strategic purposes, but the return on these investments is unproven. Given the strained balance sheet, the lack of capital return is expected, but the ongoing dilution risk from financing activities warrants attention.

The gap between cumulative net income and operating cash flow is substantial, with net losses exceeding cash burn by nearly $2B, driven by large impairment charges and depreciation. This suggests that the reported losses overstate the actual cash outflow, but the underlying operating cash flow is still deeply negative. The divergence highlights the importance of focusing on cash metrics rather than GAAP earnings, as the company's true cash consumption is lower than net losses but still unsustainable.