Intel NASDAQ: INTC executives used the company’s fourth-quarter 2025 earnings call to highlight progress on an internal reset, improving execution on new process technologies, and accelerating efforts to meet what management described as intense AI-driven demand that remains constrained by supply.
Quarterly results came in ahead of guidance, but supply constraints persisted
CEO Lip-Bu Tan said Intel’s fourth quarter was “another positive step forward,” with revenue, gross margin, and earnings per share all above the company’s guidance despite “supply constraints” that limited Intel’s ability to fully capture demand. CFO David Zinsner reported fourth-quarter revenue of $13.7 billion, at the high end of the range provided in October, and said Intel has now delivered five consecutive quarters of revenue above guidance.
On a non-GAAP basis, Intel posted gross margin of 37.9%, about 140 basis points above guidance, and EPS of $0.15 versus guidance of $0.08. Zinsner attributed the quarter’s gross margin outperformance to higher revenue and lower inventory reserves, partially offset by a higher mix of outsourced client products and the early ramp of Intel 18A tied to the launch of Core Ultra Series 3 (Panther Lake).
Cash flow was also a focus. Zinsner said operating cash flow was $4.3 billion in Q4, with $4.0 billion of gross CapEx and positive adjusted free cash flow of $2.2 billion. He added that NVIDIA’s $5 billion investment closed in the quarter as expected.
2025 recap: lower revenue, improved operating leverage, stronger balance sheet
For full-year 2025, Intel reported revenue of $52.9 billion, “down slightly” year over year, which Zinsner said reflected constraints across Intel’s manufacturing network and external suppliers that limited growth, particularly in the second half. Full-year non-GAAP gross margin was 36.7%, and full-year non-GAAP EPS was $0.42, up $0.55 year over year on lower period charges and improved operating leverage.
Intel also emphasized cost reductions. Zinsner said non-GAAP operating expenses were $16.5 billion, down 15% versus 2024, as Intel took actions to “reduce complexity and bureaucracy.” The company generated $9.7 billion in cash from operations and made $17.7 billion in gross capital investments, with approximately $6.5 billion of capital offsets.
Adjusted free cash flow was negative $1.6 billion for 2025, though Zinsner noted Intel produced $3.1 billion of adjusted free cash flow in the second half as cash from operations more than doubled compared with the first half. Intel ended 2025 with $37.4 billion of cash and short-term investments, which Zinsner said was bolstered by further monetization of Mobileye, the Altera stake sale to Silver Lake, accelerated U.S. government funding, and investments by SoftBank Group and NVIDIA. Intel also repaid $3.7 billion of debt.
Product and segment commentary: AI PCs, server ramp, and fast-growing custom ASICs
Tan described AI as driving “unprecedented demand” across semiconductors and argued Intel’s breadth in silicon design, system integration, manufacturing, and packaging positions the company to benefit—while noting execution still needs to improve.
In the Client Computing Group (CCG), Tan said Intel launched Core Ultra Series 3, built on Intel 18A. He said Intel committed to deliver its first Series 3 SKU by the end of 2025 but delivered three SKUs. At CES, Intel launched Series 3 with OEM partners across more than 200 notebook designs, calling it Intel’s “most broadly adopted and globally available AI PC platform.” Zinsner said CCG revenue was $8.2 billion in Q4 and “in line with expectations,” though down 4% quarter over quarter even as AI PC units grew 16%.
Zinsner added that Intel estimates client “consumption TAM” exceeded 290 million units in 2025, marking two straight years of growth from the post-COVID bottom and the “fastest TAM growth since 2021.” He also cited favorable performance reviews for Series 3, including “up to 27 hours of battery life,” “a 70% gen-on-gen improvement in graphics,” and benchmark performance “50%-100% better than peers.”
In Data Center and AI (DCAI), management emphasized strong traditional server demand. DCAI revenue was $4.7 billion, up 15% sequentially and, according to Zinsner, the “fastest sequential growth this decade,” while noting revenue would have been “meaningfully higher” with more supply. Tan said Intel is centralizing the data center and AI group under a single leader to better align CPUs, GPUs, and platform strategy, and said Intel is simplifying the server roadmap with focus on 16-channel Diamond Rapids and accelerating Coral Rapids, including reintroducing multithreading with Coral Rapids.
Custom silicon was another theme. Zinsner said Intel’s custom ASIC business grew more than 50% in 2025, up 26% sequentially in Q4, and reached an annualized revenue run rate of more than $1 billion in the quarter. Management framed this as a base to pursue what Zinsner called a $100 billion TAM opportunity.
- Intel Products Q4 revenue: $12.9 billion, up 2% sequentially; operating profit $3.5 billion (27% of revenue)
- Intel Foundry Q4 revenue: $4.5 billion, up 6.4% sequentially; operating loss $2.5 billion
- All Other Q4 revenue: $574 million, down 42% sequentially due to the Q3 2025 deconsolidation of Altera; operating loss $8 million
Foundry update: 18A shipping, 14A engagement, and packaging as an early indicator
Tan said Intel is shipping its first products built on Intel 18A, describing it as “the most advanced semiconductor process developed and manufactured on U.S. soil,” and said yields are improving steadily but remain below what he wants. Zinsner said Intel Foundry is shipping gate-all-around transistors with backside power for revenue and described wafers rolling off production lines in Oregon and Arizona.
On Intel 14A, Tan said development is on track, the process flow has been simplified, and the company is building an IP portfolio and improving design enablement. He said customer engagements are active and that customers may begin making firm supplier decisions starting in the second half of the year and extending into the first half of 2027. In Q&A, Intel reiterated it is holding back capacity spending on 14A until customers are secured. Tan later said external foundry timing for 14A could involve “risk production” in the later part of 2027 and “real production” with volume in 2028.
Advanced packaging was repeatedly positioned as a differentiator, particularly EMIB and EMIB-T. Tan said Intel is focusing on improving quality and yield to support customer ramps beginning in the second half of 2026. Zinsner said packaging revenue could arrive before meaningful wafer revenue and that early customer engagements suggest opportunities “well north of $1 billion” for advanced packaging.
Guidance: Q1 expected to be the trough as inventory buffers are depleted
For the first quarter of 2026, Intel forecast revenue of $11.7 billion to $12.7 billion, with the midpoint of $12.2 billion described as the low end of typical seasonal Q1. Zinsner said internal supply constraints are “most acute” in Q1 because buffer inventory has been depleted and a wafer mix shift toward servers that began in Q3 will not come out of the fab until late Q1.
At the midpoint, Intel guided to non-GAAP gross margin of approximately 34.5%, a non-GAAP tax rate of 11%, and break-even EPS. Zinsner said gross margin is expected to decline sequentially due to lower revenue, increased 18A volumes, and product mix, but he emphasized Intel is focused on improving product cost structures and stated that 34.5% is “by no means an acceptable level,” with a near-term goal of getting to 40%.
Looking at the full year, Intel said it expects supply availability to improve beginning in Q2 and improve each quarter thereafter. The company targeted $16 billion of 2026 OpEx and said CapEx is now expected to be “flat to down slightly,” more weighted to the first half, as Intel increases tool spending while reducing spending on space. Intel also said it expects positive adjusted free cash flow for 2026 and plans to retire $2.5 billion of debt maturities as they come due.
Tan said Intel will host an Investor Day in the second half of the year at its Santa Clara headquarters.
About Intel NASDAQ: INTC
Intel Corporation, founded in 1968 by Robert Noyce and Gordon E. Moore and headquartered in Santa Clara, California, is a leading global designer and manufacturer of semiconductor products. The company is historically notable for introducing the first commercial microprocessor and for driving the x86 architecture that underpins many personal computers and servers. Intel’s core business spans the design, fabrication and marketing of processors, chipsets and related components for a wide range of computing applications.
Intel’s product portfolio includes client and mobile processors marketed under brands such as Intel Core and Pentium, as well as high-performance Xeon processors for data centers and cloud infrastructure.
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