Here's our initial take on Intel's (INTC +1.29%) fiscal 2025 second-quarter financial report.
Key Metrics
| Metric | Q2 2024 | Q2 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $12.8 billion | $12.9 billion | 1% | Beat |
| Adjusted EPS | $0.02 | -$0.10 | n/m | Missed |
| Gross margin | 35.4% | 27.5% | -790 bp | n/a |
| Intel Foundry revenue | $4.3 billion | $4.4 billion | 2% | n/a |
Intel Works to Get Its House in Order
Intel posted better-than-expected revenue in the second quarter but noted an unexpected loss due to impairment charges related to "excess tools with no identified reuse." This is the first full quarter under new CEO Lip-Bu Tan, who joined in March, and the new chief executive outlined his plan for the company, including significant cost cuts.
Intel management said it has completed the majority of a plan to cut its workforce by 15% and is taking action to optimize its manufacturing footprint. The company said it no longer intends to move forward with planned projects in Germany and Poland. In addition, Intel said it would "further slow" the pace of construction at a plant in Ohio to ensure the spending is aligned with market demand.
Revenue was boosted by strong demand from the personal-computer business, driven by efforts by PC makers to boost inventories ahead of potential tariffs. The company's client computing group, which includes PCs, saw revenue grow by $300 million on a sequential-quarter basis to $7.6 billion.
Intel's Foundry unit, which has been touted as a future driver for growth, did $4.4 billion in revenue in the quarter compared to $4.7 billion in the first quarter of 2025 and $4.3 billion a year ago.
Data center revenue came in at $3.9 billion.
NASDAQ: INTC
Key Data Points
Immediate Market Reaction
Investors seem to be taking the earnings miss in stride. Shares of Intel were up about 2% in after-market trading immediately following the announcement on Thursday but ahead of the company's conference call with investors.
What to Watch
Intel and Tan are at the early stages of a very long journey, with the CEO focused for now on getting costs under control before focusing attention on reestablishing Intel's legacy as an innovation powerhouse. That will take time, and investors can only gather so much information from a single quarter's results.
Intel is guiding for revenue of $12.6 billion to $13.6 billion in the current quarter, which would be down slightly from a year ago at the midpoint. It expects to be breakeven on a per-share basis, which would be substantially better than last year's third-quarter loss.
The jury's still out on Intel. But for those who have bought into the turnaround story, there is ample reason for optimism that Tan is aggressively taking important first steps.
