Intel Corporation Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Intel reported Q2 revenue of $12.9B, beating midpoint guidance by over $900M.
  • Returned to profitability with EPS of $0.13, beating guidance by $0.17.
  • Gross margin reached 39.8%, up 230 bps versus guidance.
  • Operating cash flow improved to $2.8B, up $4.6B sequentially.
  • Inventory reduced by $1B; AR declined by $850M reflecting stronger cash discipline.
  • Intel raised full-year guidance, expects sequential revenue growth throughout 2023.

Business & Strategy Highlights

  • The company continues executing on its IDM 2.0 strategy and remains on track for “5 nodes in 4 years.”
  • Intel emphasized accelerating demand for AI across client, data center, network, edge and foundry businesses.
  • Intel Foundry Services (IFS) revenue grew 4x YoY, nearly doubling sequentially.
  • Major new customer wins at IFS include Boeing, Northrop Grumman (RAMP‑C program), and Ericsson for 18A-based 5G silicon.
  • Intel announced expanded investment in semiconductor facilities in Germany and a new assembly/test site in Poland.
  • Submitted first U.S. CHIPS Act funding application for Arizona fab expansion; three more applications coming in Q3.
  • Intel expects net capital intensity in the mid‑30% range across 2023–2024, with capital offsets trending toward the high end of its 20–30% target.

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Operator: Thank you for standing by, and welcome to Intel Corporation’s Second Quarter 2023 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. [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 Q2 earnings release and earnings presentation, both of which are available on our investor website, intc.com. For those joining us online, the earnings presentation is also available in our webcast window. I am 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. Our discussion also contains references to non-GAAP financial measures that we believe provide useful information to our investors. Our earnings release, most recent annual report on Form 10-K 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-GA

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