Intel (INTC) Q4 2025 Earnings Call — January 22, 2026

Date: January 22, 2026 | Source: Motley Fool (fool.com) Intel Q4 2025 Earnings Call Transcript + CNBC

Participants:Lip-Bu Tan (CEO), David Zinsner (CFO/Interim Co-CEO), John Pitzer (Executive VP, Corporate Strategy/IR).

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Lip-Bu Tan, CEO: Thank you, John, and thank you all for joining us today. 2025 was a year of solid progress. Over the last 10 months, we established the foundation for new Intel, a more focused and execution-driven company. We simplified our organization and greatly reduced bureaucracy, recruited new leaders from the outside and empowered key leaders from within, strengthened our balance sheet, and forged strong new partnerships.

Our Q4 was another positive step forward. Revenue, gross margin and EPS were all above our guidance. We delivered these results despite supply constraints, which meaningfully limited our ability to capture all of the strength in our underlying markets.

In our Client Computing Group, we strengthened our position with our Core Ultra Series 3 lineup, formerly known as Panther Lake, built on our most advanced Intel 18A manufacturing process. We committed to deliver our first Series 3 SKU by the end of 2025, and we exceeded that commitment by delivering our first three SKUs. At CES earlier this month, we formally launched Series 3 with our OEM partners, powering over 200 notebook designs.

On DCAI, I believe that our traditional server and accelerated roadmaps must advance together. Demand for traditional servers continues to be very strong, and we are focused on ramping available capacity to support the meaningful uptick we are seeing, including partnering with key customers to support their needs beyond 2026. We have made decisive changes to simplify our server roadmap, focusing resources on the 16-channel Diamond Rapids and accelerating the introduction of Coral Rapids. We continue to work closely with NVIDIA to build a custom Xeon fully integrated with their NVLink technology.

In foundry, we are now shipping our first products built on Intel 18A, the most advanced semiconductor process developed and manufactured on U.S. soil. Intel 14A development remains on track, and we believe customers will begin to make firm supplier decisions starting in the second half of this year and extending into the first half of 2027.

David Zinsner, CFO: We remain encouraged by the fundamental drivers of demand across our core markets. Fourth quarter revenue was $13.7 billion, at the high end of the range we provided in October. Q4 marks the fifth consecutive quarter of revenue above our guidance, even as we navigate industry-wide supply constraints for our key products.

Non-GAAP gross margin came in at 37.9%, approximately 140 basis points ahead of guidance, on higher revenue and lower inventory reserves, partially offset by increased mix of outsourced client products and the early ramp of Intel 18A. We delivered non-GAAP EPS of $0.15 versus our guidance of $0.08. Q4 operating cash flow was $4.3 billion, with gross CapEx of $4 billion, and positive adjusted free cash flow of $2.2 billion. NVIDIA's $5 billion investment closed in Q4 as expected.

For the full year, revenue was $52.9 billion, down slightly year-over-year due to constraints. Full-year non-GAAP gross margin was 36.7%, up 70 basis points. Full-year non-GAAP EPS was $0.42, up $0.55 year-over-year. Non-GAAP OpEx of $16.5 billion was down 15% versus 2024. We generated $9.7 billion in cash from operations and made $17.7 billion of gross capital investments. Adjusted free cash flow was minus $1.6 billion in 2025, but we produced $3.1 billion in the second half. We exit 2025 with $37.4 billion of cash and short-term investments.

Intel Products' Q4 revenue was $12.9 billion, up 2% sequentially. CCG revenue was $8.2 billion, down 4% quarter-over-quarter even as AI PC units grew 16%. DCAI revenue was $4.7 billion, up 15% sequentially, the fastest sequential growth this decade — revenue would have been meaningfully higher if we had more supply. Our custom ASIC business grew more than 50% in 2025, 26% sequentially, reaching an annualized revenue run rate greater than $1 billion in Q4.

Intel Foundry delivered revenue of $4.5 billion, up 6.4% sequentially on increased EUV wafer mix. External foundry revenue was $222 million. Intel Foundry operating loss in Q4 was $2.5 billion, $188 million worse quarter-over-quarter, driven by the early ramp of Intel 18A.

Now turning to guidance. Our internal supply constraints are most acute in Q1. We are forecasting a Q1 revenue range of $11.7 billion to $12.7 billion. The midpoint of $12.2 billion reflects the lower end of seasonal Q1. At the midpoint, we forecast a gross margin of approximately 34.5%, with a tax rate of 11% and breakeven EPS, all on a non-GAAP basis.

For full-year 2026, we expect our factory network to improve available supply beginning in Q2 and for each of the remaining quarters. We target 2026 operating expenses of $16 billion. For CapEx in 2026, we are now planning for a range of flat to down slightly, more weighted to the first half. We expect to generate positive adjusted free cash flow for the full year.

Questions & Answers

Ross Seymore (Deutsche Bank): Are the yield improvements and other actions sufficient to address typical seasonality? And when would you decide to loosen up the reins on CapEx?

David Zinsner: Improving yields and throughput are a great driver of supply increases with great ROI because they don't require incremental capital. We are ramping up tool spending quite a bit in '26 relative to '25 to address this supply shortfall. Things will certainly improve in Q2, but we won't be completely out of the woods. On 14A, Lip-Bu does not want to spend on capacity until we have customers secured — the window for that is the back half of this year and the first half of next year.

Tim Arcuri (UBS): What would the unconstrained guidance be for March?

David Zinsner: If you look at the $12.2 billion relative to the $13.7 billion we posted in Q4 and normal seasonality, it's at the low end of that range. We'd be well above seasonal if we had all the supply to hit the revenue.

Stacy Rasgon (Bernstein): Why are you in the inventory situation you're in given you have your own factories?

David Zinsner: If you go back six months, core count was expected to increase but units were not. Every hyperscaler customer was signaling that. It has rapidly increased over the third and fourth quarter. Our advantage is we do have our own fab so we can squeeze out supply as much as possible, but we directionally weren't managing to an expectation of this significant a unit increase in data center.

Vivek Arya (BofA): When should Intel start getting credit for external foundry? And what level of external foundry revenue calls this a success?

Lip-Bu Tan: Engagements with potential external customers on 14A are very active right now. On 14A, realistically risk production in the later part of 2027 and volume production in 2028 — similar to a leading foundry timeframe.

Harlan Sur (JPMorgan): Have customers commenced test chip designs on 14A?

Lip-Bu Tan: A couple of customers are already engaging about the PDK 0.5 and looking at test chips and the specific products they will run in our fab. Capacity and pricing are all in discussion. In the second half of this year, they will start to make their volume commitments.