Intel(US:INTC)2025-04-24 20:05Q1 2025 Performance and Strategic Overview This section covers Intel's Q1 2025 financial results, business unit performance, strategic initiatives, and future outlook Q1 2025 Financial Highlights Intel reported flat Q1 2025 revenue of $12.7 billion, with GAAP net loss widening and non-GAAP net income declining - First-quarter revenue was $12.7 billion, flat year-over-year9 - The company generated $0.8 billion in cash from operations during the first quarter10 Q1 2025 Financial Performance (GAAP vs. Non-GAAP) | Metric | Q1 2025 GAAP | Q1 2024 GAAP | Change | Q1 2025 Non-GAAP | Q1 2024 Non-GAAP | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue ($B) | $12.7 | $12.7 | flat | - | - | - | | Gross Margin | 36.9% | 41.0% | down 4.1 ppts | 39.2% | 45.1% | down 5.9 ppts | | Operating Margin (Loss) | (2.4)% | (8.4)% | up 6.0 ppts | 5.4% | 5.7% | down 0.3 ppts | | Net Income (Loss) ($B) | $(0.8) | $(0.4) | down 115% | $0.6 | $0.8 | down 24% | | EPS Diluted | $(0.19) | $(0.09) | down 111% | $0.13 | $0.18 | down 28% | Business Unit Performance Q1 2025 Intel Products revenue decreased by 3% to $11.8 billion, with CCG declining while DCAI and Intel Foundry grew - Organizational changes integrated the Network and Edge Group (NEX) into the Client Computing Group (CCG) and Data Center and AI (DCAI) segments12 Q1 2025 Revenue by Business Unit | Business Unit | Q1 2025 Revenue | vs. Q1 2024 | | :--- | :--- | :--- | | Client Computing Group (CCG) | $7.6 billion | down 8% | | Data Center and AI (DCAI) | $4.1 billion | up 8% | | Total Intel Products | $11.8 billion | down 3% | | Intel Foundry | $4.7 billion | up 7% | | All Other | $0.9 billion | up 47% | Strategic Initiatives and Business Highlights Intel is reducing operating expenses and capital expenditures, while advancing key product launches and divestitures - The company is reducing its non-GAAP operating expense target to approximately $17 billion in 2025 and targeting $16 billion in 20267 - Gross capital expenditures target for 2025 has been reduced to $18 billion from a previous target of $20 billion8 - Key business highlights include the launch of new Intel® Core™ Ultra 200V series and Intel® Xeon® 6 processors, the expected ramp of Intel 18A process in H2 2025, the agreement to sell a 51% stake in the Altera® business to Silver Lake, and the completed final sale of its NAND business to SK hynix15 Q2 2025 Business Outlook Intel forecasts Q2 2025 revenue between $11.2 billion and $12.4 billion, reflecting elevated macroeconomic uncertainty - The company's outlook reflects elevated uncertainty across the industry due to the current macro environment5 Q2 2025 Guidance | Metric | GAAP Outlook | Non-GAAP Outlook | | :--- | :--- | :--- | | Revenue | $11.2B - $12.4B | - | | Gross Margin | 34.3% | 36.5% | | EPS - Diluted | $(0.32) | $0.00 | Consolidated Financial Statements This section presents Intel's Q1 2025 consolidated statements of operations, balance sheets, and cash flows Statement of Operations Q1 2025 net revenue slightly decreased to $12.67 billion, gross margin fell, operating loss improved, but net loss widened Q1 2025 Statement of Operations Highlights (in Millions) | Line Item | Mar 29, 2025 | Mar 30, 2024 | | :--- | :--- | :--- | | Net Revenue | $12,667 | $12,724 | | Gross Margin | $4,672 | $5,217 | | Operating Income (Loss) | $(301) | $(1,069) | | Net Income (Loss) Attributable to Intel | $(821) | $(381) | | Diluted EPS | $(0.19) | $(0.09) | Balance Sheet As of March 29, 2025, Intel's total assets were $192.2 billion, with cash increasing, liabilities at $85.8 billion, and equity rising Balance Sheet Highlights (in Millions) | Account | Mar 29, 2025 | Dec 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,947 | $8,249 | | Total current assets | $42,134 | $47,324 | | Total Assets | $192,242 | $196,485 | | Total current liabilities | $32,174 | $35,666 | | Total Liabilities | $85,829 | $91,453 | | Total Stockholders' Equity | $106,413 | $105,032 | Statement of Cash Flows In Q1 2025, Intel generated $813 million in cash from operations, a turnaround from prior year, with a net increase in cash Q1 2025 Cash Flow Summary (in Millions) | Cash Flow Activity | Three Months Ended Mar 29, 2025 | Three Months Ended Mar 30, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $813 | $(1,223) | | Net cash from investing activities | $81 | $(2,563) | | Net cash from financing activities | $(196) | $3,630 | | Net increase (decrease) in cash | $698 | $(156) | Supplemental Information and Non-GAAP Reconciliations This section provides supplemental operating segment results and reconciliations of GAAP to non-GAAP financial measures Supplemental Operating Segment Results In Q1 2025, Intel Products generated $2.9 billion in operating income, while Intel Foundry recorded an operating loss of $2.3 billion Q1 2025 Operating Income (Loss) by Segment (in Millions) | Segment | Q1 2025 Revenue | Q1 2025 Operating Income (Loss) | Q1 2024 Operating Income (Loss) | | :--- | :--- | :--- | :--- | | CCG | $7,629 | $2,361 | $2,822 | | DCAI | $4,126 | $575 | $417 | | Total Intel Products | $11,755 | $2,936 | $3,239 | | Intel Foundry | $4,667 | $(2,320) | $(2,441) | Non-GAAP Measures and Reconciliations Intel utilizes non-GAAP measures to reconcile Q1 2025 GAAP EPS loss to non-GAAP EPS profit and provides forward-looking estimates - Non-GAAP measures exclude items such as amortization of acquisition-related intangibles, share-based compensation, restructuring charges, and gains/losses on equity investments to facilitate performance comparison3536 Reconciliation of Q1 2025 GAAP to Non-GAAP EPS | Description | Per Share Amount | | :--- | :--- | | GAAP EPS - Diluted | $(0.19) | | Acquisition-related adjustments | $0.03 | | Share-based compensation | $0.16 | | Restructuring and other charges | $0.04 | | (Gains) losses on equity investments, net | $0.03 | | (Gains) losses from divestiture | $0.02 | | Other adjustments & tax effects | $0.04 | | Non-GAAP EPS - Diluted | $0.13 | Reconciliation of Forward-Looking Operating Expenses (in Billions) | (In Billions) | Full-Year 2025 (Approx.) | Full-Year 2026 (Approx.) | | :--- | :--- | :--- | | GAAP R&D and MG&A | $19.9 | $19.0 | | Adjustments (Acquisition, Share-based comp.) | $(2.9) | $(3.0) | | Non-GAAP R&D and MG&A | $17.0 | $16.0 |