Intel Corporation Q3 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Intel delivered its strongest quarter since beginning its IDM 2.0 transformation, beating revenue, gross margin, and EPS guidance for the third consecutive quarter.
  • Q3 revenue was $14.2 billion, up 9% sequentially and above expectations. EPS was $0.41, beating guidance by $0.21.
  • Gross margin reached 45.8%, 280 basis points above guidance, driven by strong operating leverage, disciplined spending, and sell-through of previously reserved inventory.
  • Working capital improvements drove more than $2 billion in cash benefits year-to-date; adjusted free cash flow turned positive at ~$950 million.

Business Segment Performance

Client Computing (CCG)

  • Q3 revenue: $7.9 billion, up 16% sequentially; operating profit doubled to $2.1 billion.
  • Demand strengthening across commercial and gaming PCs as inventories normalize—three straight quarters of outperformance.
  • Intel reiterates full-year PC consumption forecast of ~270 million units, consistent with Q1 expectations.
  • Core Ultra (Meteor Lake) shipping; official launch set for December 14. First client chiplet design with built-in NPU for AI workloads.
  • Intel sees long-term PC TAM returning to ~300 million units driven by AIPC (AI PC) adoption and Windows 10 end-of-service tailwinds.

Data Center & AI (DCAI)

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Operator: Thank you for standing by, and welcome to Intel Corporation’s Third 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. Please go ahead. John Pitzer: Thank you, Jonathan. By now, you should have received a copy of the Q3 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 informati

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