Intel Corporation Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $12.7 billion, up 9% year-over-year and at the midpoint of guidance.
  • EPS: $0.18, beating guidance by $0.05 due to strong sell-through of previously reserved inventory and disciplined spending.
  • Gross Margin: 45.1%, 60 bps above guidance.
  • Adjusted Free Cash Flow: Negative $6.2 billion, with Q1 likely the low point for the year.
  • Intel expects sequential revenue growth through 2024 and into 2025, with Q1 seen as the bottom.

Performance by Segment (compared to Q1 2023)

Intel Products

  • Revenue: $11.9 billion, up 17% year-over-year.
  • Client Computing: Up over 30% year-over-year due to strong demand and improving inventory levels.
  • Data Center & AI: Up 5% year-over-year, driven by improved enterprise demand and higher Xeon ASPs.
  • NEX: Down 8% year-over-year due to 5G market weakness, partly offset by ~10% growth in networking/edge.
  • Operating Profit: Up $2.1 billion year-over-year, with operating margin at ~28%.

Intel Foundry

  • Revenue: $4.4 billion, down 10% year-over-year.
  • Headwinds: Lower back-end services, lower IMS tool shipments, and a mix shift toward mature-node ASPs.
  • Operating Loss: Worsened due to rising startup costs for 5 nodes-in-4-years and ~$2B higher expected 2024 depreciation.

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Operator: Thank you for standing by, and welcome to the Intel Corporation's First Quarter 2024 Earnings Call. [Operator Instructions] 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, Corporate Vice President of Investor Relations. John Pitzer: Thank you, Jonathan. By now, you should have received a copy of the Q1 earnings release and earnings presentation, both of which are available on our Investor Relations website, intc.com. For those joining us online today, the earnings presentation is also available in our webcast window. I'm joined today by our CEO, Pat Gelsinger; and our CFO, David Zinsner. In a moment, we will hear brief comments from both followed by a Q&A session. Before we begin, please note that today's discussion does contain forward-looking statements based on the environment as we currently see it and as such, are subject to various risks and uncertainties. It also contains reference to non-GAAP financial measures that we believe provide useful information to our investors. Our earnings release, most recent quarterly report on Form 10-Q and other filings with the SEC provide more information on specific risk factors that could cause actual results to differ materially from our expectations. They also provide additional information on our non-GAAP financial measures, including reconciliations where appropriate to corresponding GAAP financial measures. With that, let me turn

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