Intel Q2 Earnings Fall Short of Estimates, Revenues Remain Flat Y/Y

Core Insights - Intel Corporation (INTC) reported mixed second-quarter 2025 results, with revenues exceeding the Zacks Consensus Estimate but adjusted earnings falling short [1][9] - The company is experiencing solid growth in artificial intelligence (AI) PCs, although margins are impacted by operational efficiency initiatives and cost-cutting measures [1][9] Financial Performance - Intel incurred a GAAP loss of $2.9 billion, or 67 cents per share, compared to a net loss of $1.6 billion, or 38 cents per share, in the same quarter last year [2] - Excluding non-recurring items, the non-GAAP loss was $400 million, or 10 cents per share, down from a net income of $100 million, or 2 cents per share, a year ago [3] - GAAP revenues were flat year over year at $12.85 billion, surpassing company guidance and consensus estimates of $12.05 billion [4][9] Segment Performance - Client Computing Group revenues decreased by 3% year over year to $7.9 billion, affected by customers reducing inventory levels due to macroeconomic challenges [5] - Datacenter and AI Group revenues improved by 4% year over year to $3.9 billion, driven by strong demand for AI server CPUs and Xeon 6 processors [6] - Total product revenues were $11.8 billion, down 1% year over year, while Intel Foundry revenues increased to $4.4 billion from $4.3 billion [7] Operating Margins - Non-GAAP gross margin declined to 29.7% from 38.7% a year ago, with a non-GAAP operating margin loss of 3.9% compared to a gain of 0.2% in the previous year [8] - Margins were negatively impacted by impairment charges and restructuring costs associated with operational realignment [8] Cash Flow and Liquidity - As of June 30, 2025, Intel had cash and cash equivalents of $9.64 billion and long-term debt of $44.02 billion [10] - The company generated $2.05 billion in cash from operating activities in the second quarter, down from $2.29 billion a year ago [10] Outlook - For the third quarter of 2025, Intel expects GAAP revenues to be between $12.6 billion and $13.6 billion, with a non-GAAP gross margin projected at 36% [11]