Lip-Bu Tan, Intel’s new CEO, commented: “We are going back to basics by listening to our customers and making the changes needed to build the new Intel.” He acknowledged progress but emphasized that significant improvements will take time. Intel’s Data Centre and AI segment grew by 8%, and its foundry business saw a 7% revenue increase to $4.7 billion. However, the PC business declined by 8%, and the foundry segment remains unprofitable.
The company’s gross margin fell to 36.9% from 41% a year ago, reflecting higher costs and market pressures. Intel also reported a cash flow from operations of $813 million, an improvement from last year’s outflow. Following workforce reductions of 20% this year, after a 15% cut in 2024, Intel is streamlining management to enhance decision-making and focus on engineering innovation.
David Zinsner, Intel’s CFO, stated: “The current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook. We are taking a disciplined and prudent approach to support continued investment in our core products and foundry businesses while maximising operational cost savings and capital efficiency.” For the second quarter, Intel projects revenue as low as $11.2 billion and anticipates breaking even on a non-GAAP basis.
Intel has adjusted its 2025 operating expense target to $17 billion and reduced capital expenditure plans. The partial sale of Altera to Silver Lake has bolstered cash reserves, supporting the company’s restructuring efforts. Despite growth in the foundry business, which is central to Intel’s long-term strategy, it faces stiff competition from industry leaders.
Wall Street responded with cautious optimism, as Intel’s shares rose from $19.90 to $21.49 after the earnings report. However, the company’s guidance signals continued challenges, with persistent pressure on its core markets and margins. Intel’s focus remains on operational efficiency and strategic investments to strengthen its position in the semiconductor industry.
