Intel Reports Second-Quarter 2026 Financial Results

Transcript

1. #1prepared remarks

   EX-99.1 2 q226earningsrelease.htm EX-99.1

2. #2prepared remarks

   Intel Corporation 2200 Mission College Blvd. Santa Clara, CA 95054-1549

3. #3Lip-Bu Tan · Intel CEO

   AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise, ASICs, advanced packaging and vast wafer foundry network,

4. #4prepared remarks

   Full reconciliations between GAAP and non-GAAP measures are provided below. *Not meaningful In the second quarter, the company generated $7.0 billion in cash from operations.

5. #5prepared remarks

   Business Unit Summary The comparability of our Consolidated Condensed Financial Statements YoY was impacted by the deconsolidation of Altera. Altera, a business offering programmable semiconductors, primarily FPGAs, and related products for a broad range of applications that was previously a wholly owned subsidiary, was deconsolidated from our Consolidated Condensed Financial Statements effective September 12, 2025, following the closing of the sale of 51% of Altera's issued and outstanding common stock. Altera's financial results of operations were included in our Consolidated Condensed Financial Statements through September 11, 2025. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Business Unit Revenue and Trends | | Q2 2026 1 | | vs. Q2 2025 | | Intel Products: | | | | | | | Client Computing and Physical AI Group (CCPG) 2 | | $8.9 billion | | up | 13% | | Data Center and AI (DCAI) | | 6.3 billion | | up | 59% | | | | | | | | | Total Intel Products revenue | | 15.1 billion | | up | 28% | | | | | | | | | Intel Foundry | | 5.8 billion | | up | 31% | | All other | | 0.7 billion | | down | 33% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | …

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   Business Highlights Product Momentum ▪ Intel advanced its agentic AI infrastructure strategy with new rack-scale AI infrastructure and disaggregated inference solutions built on Intel® Xeon® processors. Intel, SambaNova and Foxconn demonstrated production-ready rack-scale infrastructure for inference and agentic workloads, while Vector Core Compute (VC2) unveiled a disaggregated agentic cloud combining Intel® Xeon® processors, SambaNova RDUs and NVIDIA Blackwell GPUs. ▪ Intel launched next-generation data center CPU, Xeon® 6+, Intel's first server class product on Intel 18A for sustained performance under real-world power constraints. ▪ Intel expanded its physical AI and robotics momentum, with more than 130 customers adopting or testing Intel® Core™ Ultra Series 3 and Intel® Core™ Series 3 processors for edge AI and robotics applications. Intel also introduced OpenVINO™ Physical AI, an open-source framework designed to help developers deploy robotics models across vision, language, reasoning and motion-control workloads. ▪ Intel introduced Intel® Arc™ G-Series processors, a new family of products designed for next-generation handheld gaming systems. ▪ Intel announced strate…

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   ▪ Intel announced a €5 billion investment to expand manufacturing capacity and increase production of Intel® Xeon® 6 and next-generation Intel® Xeon® processors built on Intel 3. ▪ Intel expanded Bowers campus capacity, increasing Intel Mask Operations capability to support current and future leading-edge process technology development and manufacturing. Culture & Leadership ▪ Intel strengthened its leadership team with the appointments of Alex Katouzian to lead the Client Computing and Physical AI Group, Pushkar Ranade as chief technology officer, Seok-Hee Lee to lead advanced packaging, and Aparna Bawa to lead Intel’s global legal, ethics, compliance, people, and culture organization. These appointments further align Intel’s product, technology, manufacturing, and culture organizations with the company’s innovation and execution priorities. ▪ Intel and Google Cloud expanded their multi-year strategic collaboration to scale AI capabilities across Intel’s workforce and strengthen existing workflows as part of Intel’s AI-powered transformation.

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   Business Outlook Intel's guidance for the third quarter of 2026 includes both GAAP and non-GAAP estimates as follows: | | | | | | | | | | | | | | | Q3 2026 | | GAAP | | Non-GAAP | | | | | | Revenue | | $15.8-16.8 billion | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross margin | | 41.0% | | 42.0% | Tax Rate | | 1% | | 11% | Earnings (Loss) Per Share Attributable to Intel—Diluted | | $0.31 | | $0.38 |

9. #9below

   Forward-Looking Statements

10. #10prepared remarks

    Forward-Looking Statements This release contains forward-looking statements that involve a number of risks and uncertainties. Words such as "accelerate", "achieve", "aim", "ambitions", "anticipate", "believe", "committed", "continue", "could", "designed", "estimate", "expect", "forecast", "future", "goals", "grow", "guidance", "intend", "likely", "may", "might", "milestones", "next-generation", "objective", "on track", "opportunity", "outlook", "pending", "plan", "position", "possible", "potential", "predict", "progress", "ramp", "roadmap", "seek", "should", "strive", "targets", "to be", "upcoming", "will", "would" and variations of such words and similar expressions are intended to identify such forward-looking statements, which may include statements regarding: ▪ our business plans and strategy and anticipated benefits therefrom; ▪ projections of our future financial performance, including future revenue, gross profits, capital expenditures and cash flows; ▪ projected costs and yield trends; ▪ future cash requirements, the availability, uses, sufficiency and cost of capital resources, and sources of funding, including for future capital and R&D investments and for returns t…

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    ▪ internal and external manufacturing plans, including future internal manufacturing volumes, manufacturing expansion plans and the financing therefor, and external foundry usage; ▪ future production capacity and product supply; ▪ supply expectations, including regarding constraints, limitations, pricing, and industry shortages; ▪ plans and goals related to Intel's foundry business, including with respect to anticipated customers, future manufacturing capacity and service, technology and IP offerings; ▪ expected timing and impact of acquisitions, divestitures and other significant transactions; ▪ expected completion and impacts of restructuring activities and cost-saving or efficiency initiatives; ▪ social and environmental performance goals, measures, strategies and results; ▪ our anticipated growth, future market share, customer demand and trends in our businesses and operations; ▪ projected growth and trends in markets relevant to our businesses; ▪ anticipated trends and impacts related to industry component, substrate and foundry capacity utilization, shortages and constraints; ▪ expectations regarding government funding, incentives, policies and priorities; ▪ techn…

12. #12prepared remarks

    ▪ the need to attract, retain and motivate key talent; ▪ strategic transactions and investments; ▪ sales-related risks, including customer concentration and the use of distributors and other third parties; ▪ our debt obligations and our ability to access sources of capital; ▪ complex and evolving laws and regulations across many jurisdictions; ▪ catastrophic events; ▪ fluctuations in currency exchange rates; ▪ changes in our effective tax rate and applicable tax regimes; ▪ environmental, health, safety and product regulations; and ▪ other risks and uncertainties described in this report, our 2025 Form 10-K, our Q1 2026 Form 10-Q, our Q2 2026 Form 10-Q, and our other filings with the SEC. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this release and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. Unless specifically indicated otherwise, the forward-looking statements in this release do not reflect the potential impact of any divestiture…

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    About Intel Intel (Nasdaq: INTC) designs and manufactures advanced semiconductors that connect and power the modern world. Every day, our engineers create new technologies that enhance and shape the future of computing to enable new possibilities for every customer we serve. Learn more at www.intel.com. © Intel Corporation. Intel, the Intel logo, and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.

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    Intel Corporation Consolidated Condensed Statements of Operations and Other Information | | | | | | | | | | | | | | | | | Three Months Ended | (In Millions, Except Per Share Amounts; Unaudited) | | Jun 27, 2026 | | Jun 28, 2025 | Net revenue | | $ | 16,128 | | | $ | 12,859 | | Cost of sales | | 9,619 | | | 9,317 | | Gross profit | | 6,509 | | | 3,542 | | Research and development | | 3,368 | | | 3,684 | | Marketing, general, and administrative | | 1,175 | | | 1,144 | | | | | | | Restructuring and other charges | | 170 | | | 1,890 | | Operating expenses | | 4,713 | | | 6,718 | | Operating income (loss) | | 1,796 | | | (3,176) | | Gains (losses) on equity investments, net | | (39) | | | 502 | | Interest and other, net | | (12,576) | | | (95) | | Income (loss) before taxes | | (10,819) | | | (2,769) | | Provision for (benefit from) taxes | | 29 | | | 255 | | Net income (loss) | | (10,848) | | | (3,024) | | Less: net income (loss) attributable to non-controlling interests | | 185 | | | (106) | | Net income (loss) attributable to Intel | | $ | (11,033) | | | $ | (2,918) | | Earnings (loss) per share attributable to Intel—basic | | $ | (2.16) | | | $ | (0.67) | | E…

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    | | | | | | | | | | | | | | | | | | | | | Other information: | | | | | | | (In Thousands; Unaudited) | | Jun 27, 2026 | | Mar 28, 2026 | | Jun 28, 2025 | Employees | | | | | | | Intel 1 | | 77.6 | | | 78.5 | | | 96.4 | | Mobileye and other subsidiaries | | 4.7 | | | 4.7 | | | 5.0 | | Total Intel | | 82.3 | | | 83.2 | | | 101.4 | | | | | | | | | 1 Altera, previously a wholly owned subsidiary, was deconsolidated following the sale of 51% of its common stock on September 12, 2025. As a result, approximately 3.0 thousand Altera employees were excluded from Intel’s total employee count following the closing. | | | | | | | | |

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    Intel Corporation Consolidated Condensed Balance Sheets | | | | | | | | | | | | | | | (In Millions, Except Par Value; Unaudited) | | Jun 27, 2026 | | Dec 27, 2025 | Assets | | | | | Current assets: | | | | | Cash and cash equivalents | | $ | 12,874 | | | $ | 14,265 | | Short-term investments | | 16,853 | | | 23,151 | | | | | | | | | | | | Accounts receivable, net | | 4,033 | | | 3,839 | | Inventories | | | | | Raw materials | | 1,046 | | | 993 | | Work in process | | 8,685 | | | 7,840 | | Finished goods | | 2,761 | | | 2,785 | | | | 12,492 | | | 11,618 | | | | | | | Other current assets | | 10,961 | | | 10,815 | | Total current assets | | 57,213 | | | 63,688 | | | | | | | Property, plant, and equipment, net | | 105,741 | | | 105,414 | | Equity investments | | 8,410 | | | 8,512 | | | | | | | Goodwill | | 20,465 | | | 23,912 | | Identified intangible assets, net | | 2,545 | | | 2,772 | | Other long-term assets | | 8,065 | | | 7,131 | | Total assets | | $ | 202,439 | | | $ | 211,429 | | | | | | | Liabilities and stockholders' equity | | | | | Current liabilities: | | | | | | | | | | Accounts payable | | 8,756 | | | 9,882 | | Accrued compensation and b…

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    Intel Corporation Consolidated Condensed Statements of Cash Flows | | | | | | | | | | | | | | | | | Six Months Ended | (In Millions; Unaudited) | | Jun 27, 2026 | | Jun 28, 2025 | | | | | | Cash, cash equivalents, and restricted cash, beginning of period | | $ | 14,712 | | | $ | 8,249 | | Cash flows provided by (used for) operating activities: | | | | | Net income (loss) | | (15,129) | | | (3,911) | | Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | Depreciation | | 5,891 | | | 5,213 | | Share-based compensation | | 1,307 | | | 1,348 | | | | | | | Restructuring and other charges | | 3,967 | | | 382 | | Amortization of intangibles | | 469 | | | 474 | | (Gains) losses on equity investments, net | | 111 | | | (390) | | Mark-to-market (gains) losses on Escrowed Shares 1 | | 13,619 | | | — | | | | | | | | | | | | Deferred taxes | | (27) | | | 106 | | Impairments and net (gain) loss on retirement of property, plant, and equipment | | 165 | | | 482 | | Changes in assets and liabilities: | | | | | Accounts receivable | | (221) | | | 1,004 | | Inventories | | (874) | | | 99 | | Accounts payable | | 310 | | | 114 | |…

18. #18prepared remarks

    1 Escrowed Shares refer to shares of Intel common stock held in escrow to be released to the U.S. Department of Commerce (DOC) as we perform and receive cash proceeds in connection with our CHIPS Act Secure Enclave agreement with the U.S. Government.

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    Intel Corporation Supplemental Operating Segment Results | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | (In Millions; Unaudited) | | Jun 27, 2026 | | | Intel Products | | | | | | | | | | | | | CCPG 1 | | DCAI | | Total Intel Products | | Intel Foundry | | All Other 2 | | Corporate Unallocated | | Intersegment Eliminations | | Total Consolidated | Revenue | | $ | 8,877 | | | $ | 6,262 | | | $ | 15,139 | | | $ | 5,765 | | | $ | 701 | | | $ | — | | | $ | (5,477) | | | $ | 16,128 | | Cost of sales and operating expenses | | 6,534 | | | 3,788 | | | 10,322 | | | 7,854 | | | 471 | | | 1,416 | | | (5,731) | | | 14,332 | | | | | | | | | | | | | | | | | | | Operating income (loss) | | $ | 2,343 | | | $ | 2,474 | | | $ | 4,817 | | | $ | (2,089) | | | $ | 230 | | | $ | (1,416) | | | $ | 254 | | | $ | 1,796 | |

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    | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | (In Millions; Unaudited) | | Jun 28, 2025 | | | Intel Products | | | | | | | | | | | | | CCPG 1 | | DCAI | | Total Intel Products | | Intel Foundry | | All Other 2 | | Corporate Unallocated | | Intersegment Eliminations | | Total Consolidated | Revenue | | $ | 7,871 | | | $ | 3,939 | | | $ | 11,810 | | | $ | 4,417 | | | $ | 1,053 | | | $ | — | | | $ | (4,421) | | | $ | 12,859 | | Cost of sales and operating expenses | | 5,818 | | | 3,306 | | | 9,124 | | | 7,585 | | | 984 | | | 2,755 | | | (4,413) | | | 16,035 | | | | | | | | | | | | | | | | | | | Operating income (loss) | | $ | 2,053 | | | $ | 633 | | | $ | 2,686 | | | $ | (3,168) | | | $ | 69 | | | $ | (2,755) | | | $ | (8) | | | $ | (3,176) | | |

21. #21All Other

    category includes the results of operations from other non-reportable segments, including our Mobileye business, our IMS business, startup businesses that support our initiatives, and historical results of operations from divested businesses, including Altera, which we divested on September 12, 2025. Altera's results were included within

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    Intel Corporation Explanation of Non-GAAP Measures In addition to disclosing financial results in accordance with US GAAP, this document references non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. These non-GAAP financial measures are used in our performance-based RSUs and our cash bonus plans. Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related effects to income taxes and net income (loss) attributable to non-controlling interests. Income tax effects are calculated using a fixed long-term projected tax rate. For 2026 and 2025, we determined the projected non-GAAP tax rate to be 11% and 12%, respectively. We project this long-term non-GAAP tax rate on at least an annual basis using a five-year non-GAAP financial projection that …

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    | | | | | | | | | Non-GAAP adjustment or measure | Definition | Usefulness to management and investors | Restructuring and other charges | Restructuring charges are costs associated with restructuring plans and are primarily related to employee severance and benefit arrangements. Other charges include periodic goodwill and asset impairments, and other costs associated with certain non-core activities. Q2 2026 and Q2 2025 primarily includes charges associated with the 2025 Restructuring Plan. | We exclude restructuring and other charges, including any adjustments to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our core operating performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends. | (Gains) losses on equity investments, net | (Gains) losses on equity investments, net consists of ongoing mark-to-market adjustments on marketable equity securities, observable price adjustments on non-marketable equity securities, related impairment charges, and the g…

24. #24in this document for

    Explanation of Non-GAAP Measures

25. #25prepared remarks

    | | | | | | | | | | | | | | | | | Three Months Ended | (In Millions, Except Per Share Amounts; Unaudited) | | Jun 27, 2026 | | Jun 28, 2025 | GAAP earnings (loss) per share attributable to Intel—diluted | | $ | (2.16) | | | $ | (0.67) | | Acquisition-related adjustments | | 0.02 | | | 0.03 | | | | | | | | | | | | | | | | | | | | | | | | | | | Share-based compensation | | 0.13 | | | 0.15 | | | | | | | | | | | | Restructuring and other charges | | 0.03 | | | 0.43 | | (Gains) losses on equity investments, net | | 0.01 | | | (0.11) | | (Gains) losses from divestiture | | — | | | — | | | | | | | | | | | | | | | | | (Gains) losses on mark-to-market of Escrowed Shares | | 2.45 | | | — | | Adjustments attributable to non-controlling interest | | (0.01) | | | — | | | | | | | Income tax effects | | (0.05) | | | 0.07 | | | | | | | Non-GAAP earnings (loss) per share attributable to Intel—diluted | | $ | 0.42 | | | $ | (0.10) | | | | | | | GAAP net cash provided by (used for) operating activities | | $ | 7,006 | | | $ | 2,050 | | Additions to property, plant, and equipment (gross capital expenditures) | | (2,652) | | | (4,492) | | Proceeds from capital-related go…

26. #26in this document for

    Explanation of Non-GAAP Measures

27. #27prepared remarks

    1 Non-GAAP gross margin percentage and non-GAAP earnings (loss) per share attributable to Intel outlook based on the mid-point of the revenue range.

28. #28in this document for

    Explanation of Non-GAAP Measures

29. #29prepared remarks

    Contacts: Investor Relations investor.relations@intel.com Abby Zhang Media Relations abby.zhang@intel.com