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INTEL CORP (INTC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $14.3B (down 7% y/y), GAAP EPS was $(0.03) and non-GAAP EPS was $0.13; management said the quarter came in above guidance on revenue, gross margin and EPS .
  • Q1 2025 guidance: revenue $11.7–$12.7B, non-GAAP gross margin ~36.0%, non-GAAP EPS $0.00; outlook reflects seasonality, macro uncertainty, continued inventory digestion and competitive dynamics .
  • Segment mix: CCG $8.0B (down 9% y/y), DCAI $3.4B (down 3% y/y), NEX $1.6B (up 10% y/y); Intel Foundry revenue $4.5B (down 13% y/y) with EUV mix rising and CHIPS grant recognition supporting gross margin .
  • Stock-reaction catalysts: simplification of AI data center roadmap (Falcon Shores internal test chip; focus shifts to Jaguar Shores rack-scale), aggressive stance to “win every socket” in client and data center, and reduced FY25 net capex guide to $8–$11B (from prior $12–$14B) .

What Went Well and What Went Wrong

What Went Well

  • Beat internal guidance: “We delivered revenue, gross margin and EPS above our guidance” (Interim Co-CEO Michelle Holthaus) .
  • Sequential execution: Intel Products revenue rose to $13.0B (+7% q/q), with CCG up 9% q/q and NEX up 7.5% q/q as edge demand normalized .
  • Strategic funding tailwind: Signed definitive CHIPS Act agreement; received $1.1B in Q4 and $1.1B in January 2025, bolstering gross margin in Q4 .

What Went Wrong

  • Year-over-year declines across core segments: CCG down 9% y/y and DCAI down 3% y/y in Q4; Intel Foundry revenue down 13% y/y .
  • Product margin pressure: Intel Products margins are under pressure in 2025, notably Lunar Lake due to memory-in-package cost structure .
  • AI data center participation gap: Not yet participating meaningfully in cloud-based AI data centers; roadmap simplified with Falcon Shores shifted to internal test only .

Financial Results

Headline Financials vs prior periods and consensus

MetricQ2 2024Q3 2024Q4 2024Q4 2024 Consensus (S&P Global)
Revenue ($USD Billions)$12.833 $13.284 $14.260 Unavailable (see Estimates Context)
GAAP EPS ($USD)$(0.38) $(3.88) $(0.03) Unavailable (see Estimates Context)
Non-GAAP EPS ($USD)$0.02 $(0.46) $0.13 Unavailable (see Estimates Context)
Gross Margin % (GAAP)35.4% 15.0% 39.2% —
Gross Margin % (Non-GAAP)38.7% 18.0% 42.1% —

Segment Revenue by Quarter

Segment ($USD Billions)Q2 2024Q3 2024Q4 2024
Client Computing Group (CCG)$7.410 $7.330 $8.017
Data Center & AI (DCAI)$3.045 $3.349 $3.387
Network & Edge (NEX)$1.344 $1.511 $1.623
Intel Foundry$4.320 $4.352 $4.502
All Other$0.968 $1.039 $1.042
Intersegment Eliminations$(4.254) $(4.297) $(4.311)
Total Net Revenue$12.833 $13.284 $14.260

KPIs

KPIQ2 2024Q3 2024Q4 2024
Cash from Operations ($USD Billions)$2.292 $4.054 $3.165
Adjusted Free Cash Flow ($USD Billions)$8.155 $(2.702) $(1.503)
R&D + MG&A (Non-GAAP, $USD Billions)$4.942 $4.762 $4.633

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)Q4 2024$13.3–$14.3 Actual: $14.26 Beat vs guidance
Gross Margin % (Non-GAAP)Q4 202439.5% Actual: 42.1% Beat vs guidance
Non-GAAP EPS ($)Q4 2024$0.12 Actual: $0.13 Beat vs guidance
Revenue ($B)Q1 2025N/A$11.7–$12.7 New
Gross Margin % (Non-GAAP)Q1 2025N/A36.0% New
Non-GAAP EPS ($)Q1 2025N/A$0.00 New
Tax Rate (Non-GAAP)Q1 2025N/A12% New
GAAP Additions to PP&E ($B)FY 2025$20–$23 ~$20 Lowered to low end
Net Capex ($B, Non-GAAP)FY 2025$12–$14 $8–$11 Lowered
R&D + MG&A (Non-GAAP, $B)FY 2025$17.5 $17.5 Maintained
Dividend PolicyFY 2025Dividend suspended from Q4 2024 onward Continued suspension (no reinstatement signaled) Maintained suspension

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
AI PC and client roadmapQ2: Lunar Lake production release; >15M AI PCs shipped; targeting >40M by YE’24 . Q3: Core Ultra 200V (Lunar Lake) and Arrow Lake launches; leadership in AI PC .Panther Lake (18A) in 2H’25; Nova Lake after; focus on better costs/margins; aggressive share posture .Scaling AI PCs; mix-driven margin pressure near term; confidence in 18A ramp.
Data center CPU competitivenessQ3: Granite Rapids launched; closing gap; strong enterprise ecosystem .Granite Rapids ramp; Clearwater Forest moved to 1H’26 due to complex packaging; fight to “win every socket” .Incremental progress; timeline extended; share stabilization goal.
AI data center acceleratorsQ2: Gaudi 3 on track . Q3: IBM Cloud collaboration for Gaudi 3 .Falcon Shores to internal test; pivot to Jaguar Shores rack-scale solution; candid on limited cloud AI participation today .Roadmap simplified; focusing on full-system solutions.
Foundry (18A/EUV, funding)Q2: 18A PDK 1.0; Panther Lake/Clearwater Forest on 18A . Q3: 18A progress; EUV ramp; AWS custom chips discussions .18A competitive; EUV wafer mix moved from 1% (2023) to >5% (2024); CHIPS grants ($1.1B Q4; $1.1B Jan) recognized; breakeven target by end-2027 .Mix shift and funding support margins; efficiency focus to drive breakeven.
Costs/Capex/FCFQ2: Announced $10B cost reduction plan and dividend suspension; FY25 net capex $12–$14B . Q3: Large impairments and restructuring; guided Q4 non-GAAP GM 39.5% .FY25 net capex cut to $8–$11B; gross capex ~$20B; OpEx $17.5B non-GAAP; working capital focus; potential Altera monetization .Lower capex, deleveraging priority; cash discipline continues.
Macro/tariffs/inventoryQ3 commentary: restructuring and inventory impacts .Q4 benefited from some tariff-related pull-forward in Asia; Q1 guide cautious on macro and inventory digestion .Near-term headwinds into Q1; watch policy risk and channel digestion.

Management Commentary

  • “Q4 was a step in the right direction. We delivered revenue, gross margin and EPS above our guide… we are prioritizing areas where we can drive differentiated value” (Michelle Holthaus) .
  • “Intel Products… CPUs power roughly 7 out of every 10 PCs… we remain on track to ship more than 100 million cumulative [AI PC] systems by the end of 2025” (Holthaus) .
  • “We’re not yet participating in the cloud-based AI data center market in a meaningful way… leverage Falcon Shores as an internal test chip… develop a system-level solution at rack scale with Jaguar Shores” (Holthaus) .
  • “Intel Foundry… negative gross margins and >$13B operating loss in 2024. We’re going to systematically attack our costs… target breakeven operating income by end of 2027” (Zinsner) .
  • “At the midpoint [$12.2B], we expect [Q1] gross margin ~36% and breakeven EPS (non-GAAP)… seasonally weakest quarter plus macro, inventory balancing and competition” (Zinsner) .

Q&A Highlights

  • Data center roadmap: Granite Rapids is closing the gap; Clearwater Forest moved to 1H’26 given packaging complexity; expect multi-year journey to regain competitiveness .
  • Margin cadence: Q1 is likely the low point; product mix (Lunar Lake) pressures 2025 product margins; Foundry EUV mix and 18A ramp drive sequential GM improvements; fall-through ~40–60% near term .
  • Pricing/competitiveness: Intel intends to be aggressive to stem share losses in client and data center; “win every socket” posture may weigh near-term margins .
  • Tariffs/inventory: Evidence of tariff-related hedging pulled revenue into Q4 from Q1; impact concentrated in Asia; uncertainty on future policy path .
  • FCF and deleveraging: Focus on working capital and lowered capex offsets; exploring Altera stake sale; aim to improve adjusted free cash flow in 2025 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and Q1 2025 were unavailable due to data-request limits at the time of retrieval; therefore, comparisons to Wall Street consensus could not be provided. We benchmarked results against company guidance instead [GetEstimates error].

Key Takeaways for Investors

  • Near-term caution: Q1 2025 guide (revenue down 11–18% q/q; non-GAAP EPS $0.00) signals seasonality plus macro/inventory and competitive headwinds; monitor tariff developments and channel digestion into Q1 .
  • Product margin headwinds in 2025: Lunar Lake packaging costs weigh on Intel Products margins; improvement expected as Panther Lake (18A) ramps and portfolio mix shifts in 2026 .
  • Foundry margin tailwinds: EUV/18A mix and CHIPS grants support gross margin; breakeven target by end-2027 remains a central thesis variable .
  • AI roadmap reset: Pivot from Falcon Shores to Jaguar Shores rack-scale solution and focus on system-level efficiency; candid acknowledgement of current cloud AI gap is constructive for expectations .
  • Cash discipline and deleveraging: FY25 net capex trimmed to $8–$11B; working capital focus and potential Altera monetization provide balance sheet support .
  • Segment trajectory: CCG remains largest revenue driver; NEX shows recovery off Q2 lows; DCAI stable sequentially but competitive intensity remains high—watch data center share trends and pricing dynamics .
  • Trading setup: Q1 is guided as trough; catalysts to watch include EUV/18A ramp progress, AI system announcements (Jaguar Shores), Altera monetization updates, and margin progression vs fall-through targets .