How WOLF (Wolfspeed) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a technology company like WOLF makes money is essential for investors and anyone interested in the business of technology. In this post, we break down WOLF's quarterly income statement (Q4 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick WOLF Overview

WOLF operates as a technology company focused on innovative solutions in a competitive market. Revenue comes from core product sales and services, though specific segment breakdowns are not detailed in the latest filings. Additional context includes ongoing investments in R&D amid a challenging revenue environment.

Revenue Breakdown

• Total Revenue (Q4 2025): $168.5M (-6.6% YoY)
  • No detailed segment breakdowns available from filings.
  • Growth is powered by operational adjustments, though overall revenue declined year-over-year.

Gross Profit and Margins

• Gross Profit: -$78.3M (-46.5% gross margin)
  • Cost of Revenue: $246.8M (+13.4% YoY)
  • WOLF maintains moderate margins due to a mix of scalable elements offset by elevated cost pressures.
• Most costs come from cost of revenue, R&D, and SG&A.

Operating Income and Expenses

• Operating Income: Not specified in filings (implied negative based on flows)
• Operating Expenses: $54.3M (-81.0% YoY)
  • R&D: $24.9M (-43.9% YoY, 14.8% of revenue) — focused on technology development and innovation
  • SG&A: $29.4M (-42.5% YoY, 17.4% of revenue) — covers sales, general administration, and overhead
  • WOLF continues to control costs while maintaining efficiency amid revenue headwinds.

Net Income

• Pre-Tax Income: Not specified in filings
• Income Tax: Not specified in filings
• Net Income: $150.6M (-59.5% YoY, 89.4% net margin)
• WOLF converts a high portion of sales into profit due to one-time other items and cost controls.

What Drives WOLF's Money Machine?

• Core revenue streams: Primary driver of $168.5M in revenue, though facing YoY decline
• Cost management: Significant YoY reductions in operating expenses -81.0%, R&D -43.9%, and SG&A -42.5%
• R&D investments: $24.9M allocated to key technology areas for future competitiveness
• Other items: $150.6M other expense impacting net flows, contributing to high net margin despite gross losses

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Visualizing WOLF's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.[1][2]

• Most revenue flows into gross profit, with operating expenses (especially cost of revenue) taking the largest chunk.
• Even after significant costs, 89.4% of revenue drops to the bottom line due to other items.

Key Takeaways

• WOLF's money comes overwhelmingly from core technology products and services
• High gross and net margins illustrate the power of WOLF's cost control measures
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by expense reductions despite revenue challenges

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FAQ About WOLF's Income Statement

1. What is the main source of WOLF's revenue in 2025?

WOLF generates its revenue from core technology products and services totaling $168.5M in Q4 2025. No significant secondary sources detailed in filings.

2. How profitable is WOLF in Q4 2025?

WOLF reported net income of $150.6M in Q4 2025, with a net margin of approximately 89.4%, reflecting strong profitability driven by other items and sharp expense cuts.

3. What are the largest expense categories for WOLF?

The biggest expenses on WOLF's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $24.9M in Q4 2025, as WOLF prioritizes technology innovation.

4. Why does the gross profit operate at a loss?

Gross profit showed a -$78.3M loss despite $168.5M in revenue, posting a negative margin in Q4 2025. This is because cost of revenue surged to $246.8M (+13.4% YoY), outpacing revenue amid pricing or volume pressures.

5. How does WOLF's effective tax rate compare to previous years?

WOLF's effective tax rate in Q4 2025 was not specified in available data, making direct comparisons unavailable. Net profitability was boosted by other items rather than tax structuring.