Financial Data and Key Metrics Changes - The company reported Q2 revenue of $12.9 billion, exceeding the high end of guidance, driven by strong demand across client and data center segments [29] - Non-GAAP gross margin was 29.7%, impacted by $800 million in non-cash impairment and accelerated depreciation charges, with adjusted EPS at -$0.10 [30] - Operating cash flow for Q2 was $2.1 billion, with gross CapEx of $4.5 billion, resulting in adjusted free cash flow of -$1.1 billion [31] Business Line Data and Key Metrics Changes - Intel products revenue was $11.8 billion, slightly up sequentially, with CCG revenue increasing by 3% quarter-over-quarter due to continued PC refresh demand [31][32] - DCAI revenue decreased by 5% sequentially but was above expectations, driven by strong demand for host CPUs for AI servers [32] - Intel Foundry revenue was $4.4 billion, down 5% sequentially, with an operating loss of $3.2 billion primarily due to impairment charges [34] Market Data and Key Metrics Changes - The company noted solid demand in the client market driven by the end of service for Windows 10 and the aging COVID-era installed base [28] - Hyperscalers and enterprises continued to refresh their CPU installed base, indicating durable demand in core markets [28] - The company expects Q3 revenue to range from $12.6 billion to $13.6 billion, reflecting a potential decline due to seasonal factors [36] Company Strategy and Development Direction - The company is focusing on four major initiatives: organization and culture, foundry strategy, core x86 franchise, and AI strategy [7] - A systematic review of the organization aims to reduce inefficiencies and redundancies, targeting a workforce of 75,000 employees by year-end [8] - The foundry strategy emphasizes building trust with customers through reliable delivery and high-quality manufacturing [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain economic landscape but noted that Q2 saw normal market functioning, allowing demand drivers to manifest [28] - The company is committed to improving its balance sheet and generating better cash flow, with a focus on reducing operating expenses [23][24] - Management expressed confidence in meeting operating expense targets for 2025 and 2026, while also planning for a below-seasonal second half of 2025 [36] Other Important Information - The company has decided to consolidate assembly and test operations in Costa Rica and slow construction in Ohio to align spending with market demand [12] - The company successfully monetized a portion of its ownership in Mobileye and is on track to close the Ultera transaction [24][38] Q&A Session Summary Question: How fast can the company fix the foundry side based on trust? - Management emphasized steady progress on the 18A technology, which is foundational for future products, and the importance of building trust with external customers through reliable performance [44][46] Question: What are the tailwinds and headwinds to gross margin looking into next year? - Management indicated that the ramp of Lunar Lake and Panther Lake would impact gross margins, with expectations for improvement as yields and volumes increase [49][51] Question: How does the company plan to engage external customers while hedging on 14A development? - Management reassured that they are focused on building the necessary technology and engaging with customers early in the process to ensure successful outcomes [56][59] Question: What is the expected trend for server products into the third quarter? - Management noted that while they are not providing specific guidance by business unit, they expect to see some improvement in share despite current competitive challenges [69] Question: What is the company's approach to AI strategy? - Management indicated a focus on inference and agentic AI, aiming to provide a full-stack solution that integrates system software with silicon [72][75]

Intel (INTC) Q2 2025 Earnings Call July 24, 2025 05:00 PM ET Speaker0Thank you for standing by and welcome to Intel Corporation's Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr.John Pitzer, Vice President, Investor Relations. Please go ahead, sir.Spe ...