Intel Corporation Q1 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Performance

  • Q1 revenue: $12.7B, above guidance; driven by stronger-than-expected Xeon and Raptor Lake demand.
  • Non-GAAP gross margin: 39.2% (guidance was ~36%). Improvement helped by product mix and cost improvements in Meteor Lake.
  • Non-GAAP EPS: $0.13, ahead of breakeven guidance.
  • Operating cash flow: $800M; adjusted free cash flow: -$3.7B.
  • Cash balance: $21B, including $1.1B CHIPS Act grants and $1.9B from NAND sale completion.
  • Intel Products revenue: $11.8B, down 10% sequentially, but above expectations.
  • Intel Foundry revenue: $4.7B, up 8% sequentially; operating loss flat at -$2.3B.

Quarterly Trends (Compared to Q4 2024)

  • Revenue declined 10% sequentially, but exceeded internal expectations.
  • Gross margin improved by approximately 3 percentage points versus guidance due to better mix and cost improvements.
  • Operating expenses fell by $400M sequentially and $700M YOY as cost reductions accelerated.

Guidance and Outlook

  • Q2 revenue forecast: $11.2B–$12.4B (down 2%–12% sequentially). Wide range due to macro uncertainty and tariff risk.
  • Expected Q2 non-GAAP gross margin: ~36.5%.
  • Q2 EPS: Approximately breakeven.
  • 2025 OpEx target reduced to $17B (was $17.5B). 2026 OpEx target: $16B.

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Operator: Thank you for standing by, and welcome to the Intel Corporation First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, John Pitzer, Corporate Vice President, Investor Relations. Please go ahead, sir. John Pitzer: Thank you, Jonathan, and good afternoon to everyone joining us today. 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, Lip Bu Tan, and our CFO, David Zinsner. Lip Bu will open with comments on our first quarter results as well as some initial observations, priorities, and actions that he is driving. Dave will then discuss our overall financial results, including second quarter guidance. We will then transition to answer your questions. Before we begin, please note that today's discussion contains forward-looking statements based on the environment as we currently see it and as such,

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