Skip to content
    INTC
    Earnings call· Dec 2025(Q4 FY25)

    INTEL CORP INTC

    Jan 22, 2026 Source

    Executive summary

    Intel Q4 FY25 — Strong AI Demand Drives Revenue Beat Amidst Supply Constraints

    Intel delivered a strong Q4 FY25, exceeding revenue and margin guidance, driven by robust AI-related demand across data center and custom ASIC segments. The company is navigating significant supply constraints, particularly impacting Q1 FY26, and is focused on improving manufacturing yields and accelerating advanced process node ramps (18A, 14A) to meet future demand. Strategic investments and partnerships are bolstering its foundry ambitions and balance sheet.

    Highlights

    5

    • Q4 revenue of $13.7 billion was at the high end of guidance.

    • Non-GAAP gross margin came in at 37.9%, approximately 140 basis points ahead of guidance.

    • Non-GAAP earnings per share of $0.15 exceeded guidance of $0.08.

    • Q4 operating cash flow was $4.3 billion, with positive adjusted free cash flow of $2.2 billion.

    • Custom ASIC business grew more than 50% in 2025, 26% sequentially, and reached an annualized revenue run rate greater than $1 billion in Q4.

    Concerns

    5

    • Supply constraints meaningfully limited the ability to capture all market strengths, particularly acute in Q1 2026.

    • Yields on advanced process nodes are improving but still below desired levels.

    • Q1 2026 revenue guidance of $11.7 billion to $12.7 billion (midpoint $12.2 billion) reflects the lower end of seasonal Q1.

    • Q1 2026 non-GAAP gross margin is guided at approximately 34.5%, down sequentially.

    • Rising component pricing for DRAM, NAND, and substrates could limit revenue opportunity in 2026.

    Guidance & targets

    15
    CategoryTargetConfidence
    Q1 Revenue
    $11.7 billion to $12.7 billion
    high materiality
    High
    Q1 Non-GAAP Gross Margin
    approximately 34.5%
    high materiality
    High
    Q1 Non-GAAP Tax Rate
    11%
    medium materiality
    High
    Q1 Non-GAAP EPS
    breakeven
    high materiality
    High
    Q1 Share Count
    5.1 billion shares
    low materiality
    High
    Full-year 2026 Operating Expenses
    $16 billion
    medium materiality
    High
    Full-year 2026 CapEx
    flat to down slightly
    high materiality
    High
    Full-year 2026 Adjusted Free Cash Flow
    positive
    high materiality
    High
    Full-year 2026 Debt Maturities Retirement
    $2.5 billion
    medium materiality
    High
    Full-year 2026 GAAP Noncontrolling Interest (NCI)
    approximately $1.2 billion
    low materiality
    High
    Q1 2026 GAAP Noncontrolling Interest (NCI)
    approximately $325 million
    low materiality
    High
    Client Market Share
    45%
    high materiality
    Medium
    Foundry 14A Customer Firm Decisions
    starting in the second half of this year and extending into the first half of 2027
    high materiality
    Medium
    Foundry 14A Risk Production
    later part of 2027
    high materiality
    Medium
    Foundry 14A Volume Production
    2028
    high materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Intel Products
    Operating profit was down approximately $200 million quarter-over-quarter due to an increased mix of outsourced products and seasonally higher operating expenses.
    Operating profit as % of revenue: 27%
    		$12.9 billion—up 2% sequentially$3.5 billion
    CCG (Client Computing Group)
    Revenue was in line with expectations. Intel is prioritizing internal wafer supply to data center and leveraging an increased mix of externally sourced wafers in clients.
    AIPC units growth: 16%
    		$8.2 billion—down 4% quarter-over-quarter—
    DCAI (Data Center & AI)
    Revenue was above expectations and represented the fastest sequential growth this decade. Revenue would have been meaningfully higher with more supply. Reflects strong demand for traditional server compute.
    		$4.7 billion—up 15% sequentially—
    Intel Foundry
    Operating loss was $188 million worse quarter-over-quarter, driven by increased EUV wafer mix and the early ramp of Intel 18A. External foundry revenue was driven by projects with the U.S. government and the deconsolidation of Altera.
    External foundry revenue: $222 millionEUV wafer revenue share: >10% (in 2025, from <1% in 2023)
    		$4.5 billion—up 6.4% sequentiallyoperating loss of $2.5 billion
    All Other
    The sequential decline was due to the Q3 2025 deconsolidation of Altera. The primary components in Q4 were Mobileye and IMS.
    		$574 million—down 42% sequentiallyoperating loss of $8 million

    Operational metrics

    16
    Non-GAAP gross margin
    37.9%140 bps ahead of guidance
    Q4 FY25

    Ahead of guidance on higher revenue and lower inventory reserves, partially offset by increased mix of outsourced client products and early ramp of Intel 18A.

    Non-GAAP EPS
    $0.15vs guidance of $0.08
    Q4 FY25

    Driven by higher revenue, stronger gross margins, and continued spending discipline.

    Gross CapEx
    $4 billion
    Q4 FY25

    In the quarter.

    Revenue
    $52.9 billiondown slightly year-over-year
    FY25

    Limited by constraints across own manufacturing network and external suppliers, especially in H2.

    Non-GAAP gross margin
    36.7%up 70 bps
    FY25

    Up 70 bps year-over-year on reduced period charges.

    Non-GAAP EPS
    $0.42up $0.55 year-over-year
    FY25

    Up year-over-year on lower period charges and improved operating leverage.

    Non-GAAP OpEx
    $16.5 billiondown 15% versus 2024
    FY25

    As actions were executed to reduce complexity and bureaucracy.

    Gross capital investments
    $17.7 billion
    FY25

    For the full year.

    Capital offsets
    $6.5 billion
    FY25

    Approximately for the full year.

    Cash and short-term investments balance
    $37.4 billion
    end of FY25

    Bolstered by further monetization of Mobileye, Altera stake sale, U.S. government funding, and investments.

    Debt repaid
    $3.7 billion
    FY25

    Repaid during the year.

    Client consumption TAM
    >290 million units
    2025

    Marking 2 straight years of growth and the fastest TAM growth since 2021.

    Custom ASIC business growth
    >50%
    2025

    Driven by networking demand for AI infrastructure build-out.

    Custom ASIC business sequential growth
    26%
    Q4 FY25

    Sequential growth.

    Custom ASIC annualized revenue run rate
    >$1 billion
    Q4 FY25

    Reached in Q4.

    Finished goods inventory
    40%of peak levels
    Q4 FY25

    Down to 40% of peak levels, indicating depletion of buffer inventory.

    Industry KPIs

    6
    MetricValueDetails
    Ai data center revenue>$1 billionUSD
    Fab capacity utilization>10%%
    Design wins socket pipelineover 200designs
    Inventory channel inventory40%%
    Node platform ramp scheduleIntel 18A, Intel 18AP, Intel 14A, Core Ultra Series 3, Nova Lake, Diamond Rapids, Coral Rapids
    End market segment revenue mixDCAI up 15% sequentially; CCG down 4% sequentially; Custom ASIC grew >50% in 2025, 26% sequentially%

    Product announcements

    4
    ProductTypeDetails
    Core Ultra Series 3 (Panther Lake)launch
    Nova Lakeroadmap
    Diamond Rapidsupdate
    Coral Rapidsroadmap

    Deals & partnerships

    5
    NVIDIAInvestment in Intel$5 billion

    NVIDIA's $5 billion investment closed in Q4 as expected.

    Silver LakeSale of Altera stake

    Completion of Intel's stake sale of Altera to Silver Lake.

    SoftBank GroupInvestment in Intel

    Investment by the SoftBank Group.

    U.S. governmentAccelerated funding

    Accelerated funding from the U.S. government.

    NVIDIACustom Xeon integration

    Working closely with NVIDIA to build a custom Xeon fully integrated with their NVLink technology.

    Risks & headwinds

    4
    Supply constraintsQ4 FY25, most acute in Q1 FY26

    meaningfully limited our ability to capture all of the strengths in our underwriting markets

    Mitigation: working aggressively to address this and better support our customers' needs going forward; driving efficiency and more output from our fabs; increasing wafer starts across Intel 7, Intel 3 and 18A

    Yields below desired levels2026

    yields are in line with our internal plans, they are still below what I want them to be

    Mitigation: Accelerating yield improvement will be important lever in 2026 as we look to better support our customers.

    Rising component pricing2026

    increasing pressure due to intense demand to support the rapid expansion of AI infrastructure

    Mitigation: continue to watch closely, especially relative to the client market; careful allocation of CPUs to customers to match with memory availability

    Depleted finished goods inventoryQ1 FY26

    now down to kind of 40% of what it was at peak levels

    Mitigation: increasing wafer start increases pretty much across the board across Intel 7, Intel 3 and 18A

    What to watch in Q1 FY26

    5

    Supply constraints easing

    Q2 FY26
    Currentmost acute in Q1
    Targetimprove available supply beginning in Q2

    Why it matters

    Easing supply constraints are critical for revenue growth and meeting strong demand in DCAI and client markets.

    First, from a revenue perspective, we expect our factory network to improve available supply beginning in Q2 and for each of the remaining quarters in 2026.

    Q&A highlights

    8

    Are short-term yield improvements sufficient for seasonality, and when will Intel loosen CapEx for 14A given increased confidence?

    Yield improvements and throughput are key short-term drivers with good ROI, and wafer starts are increasing across Intel 7, 3, and 18A. For 14A, CapEx for capacity will only be unlocked after firm customer commitments, expected in H2 2026 to H1 2027, focusing on R&D spend until then.

    “On 14A, Lip-Bu has been very direct with us on all of this. He does not want to spend on capacity on 14A only spend on the kind of TD spend or R&D spend associated with 14A even in the fab until we have customers secured.”

    asked by Ross Seymore · answered by David Zinsner

    3 min read6 chapters

    Detailed Narrative

    01

    AI-Driven Opportunity and Strategic Positioning

    Intel views the era of artificial intelligence as driving unprecedented🌐 demand for semiconductors across the entire compute landscape, from data centers to edge devices. This requires heterogeneous silicon solutions leveraging CPUs, NPUs, GPUs, ASICs, and XPUs, alongside innovations in software and new technologies like photonics. The company believes its broad IP, silicon design, system-level integration, wafer manufacturing, and advanced packaging capabilities uniquely position it to capitalize on these AI-driven trends and achieve sustainable profitable growth.

    02

    Client Computing Group (CCG) Momentum and AIPC

    In the Client Computing Group, Intel strengthened its position with the formal launch of its Core Ultra Series 3 (formerly Panther Lake) at CES, powering over 200 notebook designs. This product, built on the Intel 18A manufacturing process, is expected to be the most broadly adopted and globally available AIPC platform. The company also highlighted its next-generation Nova Lake, coming at the end of 2026, aiming for 45% market share and profitability in notebooks and desktops over the next several years. The push towards hybrid AI, splitting workloads between cloud and client, is seen as a significant opportunity to grow the installed base and accelerate refresh rates.

    03

    Data Center & AI (DCAI) Reorganization and Roadmap

    To support its AI objectives, Intel centralized its data center and AI businesses under new leadership to ensure tight coordination across CPUs, GPUs, and platform strategy. The company is seeing strong demand for traditional servers and is focused on ramping available capacity for Granite Rapids, Sapphire, and Emerald Rapids. Intel has simplified its server roadmap, focusing resources on the 16-channel Diamond Rapids and accelerating the introduction of Coral Rapids, which will reintroduce multi-threading into its data center roadmap. Intel is also collaborating with NVIDIA on a custom Xeon integrated with NVLink technology.

    04

    Foundry Progress and Advanced Process Nodes

    Intel is focused on building a world-class wafer and advanced packaging foundry. It is now shipping its first products built on Intel 18A, the most advanced semiconductor process developed and manufactured in the U.S., with yields steadily improving. Intel 18AP is progressing well, with the 1.0 PDK delivered. Development of Intel 14A remains on track, with simplified process flow and a comprehensive IP portfolio being developed. Customer engagements for 14A are active, with firm supplier decisions expected in H2 2026 to H1 2027, leading to risk production in late 2027 and volume production in 2028. Advanced packaging, particularly EMIB and EMIB-T, is seen as a strong differentiator.

    05

    Supply Constraints and Yield Improvement Efforts

    Despite strong Q4 results, Intel faced supply constraints that limited its ability to fully capture market strengths. These constraints are most acute in Q1 2026 due to depleted buffer inventory and mix shifts. Management acknowledged that yields, while improving, are still below desired levels. The company is working tirelessly to drive efficiency and increase output from its fabs, with accelerating yield improvement identified as a critical lever for 2026 to better support customer demand.

    06

    Custom ASIC Business Growth

    Intel's custom ASIC business demonstrated robust growth, increasing by more than 50% in 2025 and 26% sequentially in Q4. It reached an annualized revenue run rate greater than $1 billion in Q4. This growth is driven by customers seeking purpose-built silicon for AI, networking, and cloud workloads. Intel leverages its design services, IP building blocks, and manufacturing capabilities to address specialized problems at scale, viewing this as a significant market opportunity.

    AI-generated summary of the company’s earnings call. Not investment advice.