Intel Q4 Earnings Call Highlights

Core Insights - Intel's fourth quarter of 2025 showed strong performance with revenue of $13.7 billion, exceeding guidance, and a non-GAAP gross margin of 37.9%, which is 140 basis points above expectations [3][7][19] - The company reported a full-year revenue of $52.9 billion, slightly down year-over-year, but with improved operating leverage and a non-GAAP EPS of $0.42 [6][8] - Intel is focusing on addressing supply constraints while capitalizing on AI-driven demand, with expectations for improved supply availability starting in Q2 2026 [4][20] Financial Performance - Operating cash flow for Q4 was $4.3 billion, with adjusted free cash flow of $2.2 billion, despite a negative adjusted free cash flow of $1.6 billion for the full year [1][9] - Non-GAAP operating expenses decreased by 15% year-over-year to $16.5 billion, contributing to improved cash generation [9] - The company ended 2025 with $37.4 billion in cash and short-term investments, bolstered by various monetization efforts and debt repayment of $3.7 billion [9] Product and Market Developments - Intel launched the Core Ultra Series 3 across over 200 notebook designs, with AI PC units growing by 16% [11][12] - Data Center & AI revenue reached $4.7 billion, up 15% quarter-over-quarter, marking the fastest sequential growth in a decade [5][12] - Custom ASIC revenue grew over 50% in 2025, achieving an annualized run rate of more than $1 billion [13] Future Outlook - For Q1 2026, Intel expects revenue between $11.7 billion and $12.7 billion, with supply constraints anticipated to be most acute [18] - The company aims for a gross margin of approximately 34.5% in Q1, with a long-term goal of reaching around 40% [19] - Intel plans to retire $2.5 billion of debt maturities and expects positive adjusted free cash flow for 2026 [20]