INTC · Q1 2026 Earnings

Bullish

Intel

Reported April 23, 2026

30-second summary

Intel printed $13.58B revenue (+7% YoY) versus a $11.7–12.7B guide and $12.42B consensus — a $0.88B beat over the high end of its own range — with non-GAAP EPS of $0.29 versus breakeven guided and non-GAAP gross margin of 41.0% versus 34.5% guided, a 650bps margin beat. The print resolves the central question from the Q4 brief: Q1 was not the supply trough management feared, DCAI accelerated to +22% YoY (from +9% in Q4), and Foundry grew +16% YoY. The Q2 guide of $14.3B midpoint sustains sequential growth and implies 7–15% YoY — but the 39.0% Q2 gross margin guide and the FY26 OpEx raise to ~$16.5B are the caveats sitting underneath an otherwise vindicating print.

Headline numbers

EPS

Q1 FY2026

$0.29

Revenue

Q1 FY2026

$13.58B

+7.0% YoY

+9.3% vs est.

Gross margin

Q1 FY2026

39.4%

Free cash flow

Q1 FY2026

$-2.02B

Operating margin

Q1 FY2026

-23.1%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$13.58B	+7.0%	$13.70B	-0.9%
EPS	$0.29	—	$0.15	+93.3%
Gross margin	39.4%	—	36.1%	+330bps
Operating margin	-23.1%	—	4.2%	-2730bps
Free cash flow	$-2.02B	—	—	—

Guidance

Intel delivered a strong Q1 FY2026 beat across revenue (+$0.88B), gross margin (+6.5pts), and EPS (+$0.29), while raising F

Guidance is issued one quarter forward. The Prior-guide column references the guide issued last quarter for the period just reported; the New-guide column is for next quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q1 FY2026	$11.7B–$12.7B	$13.577B	+$0.88B above high end of guide	Beat
Gross Margin (non-GAAP)	Q1 FY2026	34.5%	41.0%	+6.5 percentage points above guide	Beat
EPS (non-GAAP)	Q1 FY2026	$0.00	$0.29	+$0.29 above break-even guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q2 FY2026	$13.8B–$14.8B	+7–15% YoY
Gross Margin (non-GAAP)	Q2 FY2026	39.0%	—
EPS (non-GAAP)	Q2 FY2026	$0.20	—
PC Unit TAM 2026	FY 2026	Down low double digit percent	—
Server CPU Unit Growth 2026	FY 2026	Double-digit percent for industry and Intel	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Operating Expenses (full year 2026)	FY 2026	$16.0B (non-GAAP)	~$16.5B (non-GAAP); ~$22.7B (GAAP)	+$0.5B non-GAAP raise	Raised
Capital Expenditures (full year 2026)	FY 2026	flat to down slightly	flat to 2025 levels	Shift from 'down slightly' to neutral 'flat'	Raised

Reaffirmed unchanged this quarter: Adjusted Free Cash Flow (full year 2026) (positive for full year (excluding FAB34 buyout))

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Client Computing Group (CCG)	$7.727B	+1.0%
Data Center and AI (DCAI)	$5.052B	+22.0%
Intel Foundry	$5.421B	+16.0%
DCAI YoY Growth	22%	—
Intel Foundry YoY Growth	16%	—

Capacity & utilization

Q1 FY2026

Segment	Q1 FY2026
Total Employees	83.2K

Profitability

Q1 FY2026

Segment	Q1 FY2026
Non-GAAP Gross Margin	41.0%
Non-GAAP Operating Margin	12.3%
Operating Cash Flow	$1.1B

Management tone

Q2 2025 "triage and survival" → Q3 2025 "demand outpacing supply" → Q4 2025 "supply trough and yield disappointment" → Q1 2026 "capacity expansion and CPU re-insertion."

From survival to scale-up, in twelve months. Three quarters ago Tan opened the call with the line "the capacity investment we made over the last several years were well ahead of demand and were unwise and excessive"; this quarter the framing is "A year ago, the conversation about Intel was about whether we could survive. Today, it's about how quickly we can add manufacturing capacity and scale our supply to meet enormous demand for our products." The verbatim symmetry — "survive" vs "scale" — is deliberate, and it's earned by the print. The FY26 CapEx guide moving from "down" to "flat" is the operational expression of the same shift.

From CPU as a declining asset in an AI world to CPU as the orchestration layer. The Q2 2025 brief flagged that Tan deferred Intel's AI strategy "to the coming months" — a tell, we wrote at the time, that there was no near-term answer to GPU dominance. The Q3 2025 narrative was ASIC-led. This quarter Tan offered a different and more credible framing: "The CPU is reinserting itself as the indispensable foundation of the AI era. CPU now serve as the orchestration layer and critical control plane for the entire AI stack." The CPU-to-GPU ratio compressing from 1:8 to 1:4 in inference workloads, cited in Q&A, gives the framing empirical anchor. This is the AI answer that was missing in Q2 2025 — not GPU competition, but a structural argument for CPU demand within the AI stack.

From "supply is the binding constraint" to supply improving with demand still pulling. In Q4 management was apologetic about yields ("below what I want them to be"); this quarter the framing is "Q1 revenue would have been meaningfully higher, but demand continues to outpace our growing supply... We expect sequential revenue growth in both CCG and DCAI on improved supply and a full quarter of pricing actions." The constraint is loosening, but management is keeping the demand-outpaces-supply line intact — which is now serving both as a growth signal and as a justification for the upward CapEx revision.

From "14A is a binary risk pending customer signup" to design commitments emerging on a defined timeline. In Q2 2025 Tan was explicit that he wouldn't deploy 14A capex without customer commitments; in Q3 he softened to "engagements progressing"; in Q4 he twice deferred named commits. This quarter: "We expect earlier design commitments for Intel 14A beginning in the second half of 2026 and expanding into the first half of 2027. Intel 14A maturity, yield, and performance are outpacing Intel 18A at a similar point in time." No named external customer yet, but the timeline has gone from "we'll see" to "H2 2026" — three consecutive quarters of marginal progress in the right direction, with the test still coming.

Hedging language is materially lighter, but inflation and component costs are flagged. Management used "we're prudently planning for" PC demand weakening in H2 and called out "rising input costs especially in memory" as a growing headwind. The CapEx and OpEx raises are framed against "inflationary pressures, variable compensation, and targeted investments." This is honest and incremental rather than alarming, but the input-cost flag is the one piece of the print that could erode the Q2 margin guide if it intensifies.

Recurring themes management leaned on this quarter:

CPU reinsertion as AI infrastructure backboneSustained Xeon/server CPU momentum into 2027Intel 18A and 14A execution inflection pointsAI-driven businesses now 60% of revenue growing 40% YoYFoundry design commitments emerging H2 2026Capacity expansion and supply chain control via 14A

Risks management surfaced:

Macroeconomic and geopolitical environment dynamismPC demand weakening in second half with low double-digit TAM declineRising input costs especially in memory presenting second-half headwindsKey component constraints and rising prices around memory, wafers, and substratesIntel 18A still early in ramp with associated costs and yield risks

Q&A highlights

Ben Reitzes · Milius

Asked about Long-Term Agreements (LTAs), specifically the Google deal structure, how other LTAs are structured, and how they provide visibility. Also asked about CapEx allocation toward foundry customers.

Google LTA announced as multi-year agreement demonstrating strong CPU and ASIC demand. Other LTAs typically 3-5 years with volume and pricing terms; some kept confidential per customer preference. CapEx flat year-over-year with space spend down materially and tool spend up ~25%. Foundry customer signals expected to be more concrete in H2 and early next year.

Google LTA signed in Q1LTAs typically 3-5 yearsTotal CapEx flat year-over-yearTool spending up ~25% year-over-year

Stacy Raskin · Bernstein Research

Asked about segment outlook and gross margin implications, specifically questioning why gross margins are not expanding more given strong data center growth and improving 18A yields. Also asked about full-year client revenue trajectory given industry headwinds.

Expected Q2 pricing benefit more meaningful than Q1. 18A still headwind to gross margins despite yield improvements. Panther Lake volume up 6-7x Q2 vs Q1 but still below corporate average margins, creating mix drag. Q2 gross margins roughly in line with Q1. Material costs (substrates, memory, tea glass) offsetting improvements in back half. Full-year client revenue modeling flat from Q2 onward despite industry volume down double digits, supported by pricing and inventory replenishment.

Q2 pricing benefit expected to be more meaningful than Q1Panther Lake volume up 6-7x Q2 vs Q1Q2 gross margins expected roughly flat to Q118A remains gross margin headwind despite yield improvements

Ross Seymour · Deutsche Bank

Asked about CPU competitive positioning—whether growth is driven by overall market strength or product differentiation versus x86 and ARM competitors. Follow-up asked how business model changes strategically when moving from survival to scaling mode.

CPU demand strong in inference workloads with CPU-to-GPU ratio improving from 1:8 to 1:4 as orchestration and control plane requirements increase. Intel has competitive advantages through architecture optimization and unique position combining CPU, advanced packaging, and foundry capabilities. Early Granite Rapids traction positive. On strategic spending: focused on efficiency gains, yield improvements on 18A (good progress), targeting 0.9 PDK on 14A. Cycle time improvements also helping meet demand without proportional CapEx increases.

CPU-to-GPU ratio improving from 1:8 to 1:4 in inferenceGranite Rapids showing good early traction18A yield improvements ongoing14A targeting 0.9 PDK completion

Vivek Arya · Bank of America Securities

Asked for more precision on server CPU growth rate (guidance was double-digit). Also asked about competitive positioning versus AMD on x86 and versus ARM providers (Amazon Graviton, Google Axion, NVIDIA Vera).

Market units expected up meaningfully (vs. down six months ago), with unit volume being biggest revenue driver, not ASP. Core count increasing significantly. On AMD x86 competition: Granite Rapids has multi-threading, accelerating Coral Rapids (with multi-threading), fine-tuning architecture, recruiting top talent. On ARM competition: respecting ARM's licensing model and loyalty fee increases; Amazon/Google using ARM are not new; Intel has OEM relationships, long-term customer relationships, and differentiated offerings via foundry and advanced packaging; hired Kavok (formerly ARM data center) and Srini (ARM optimization expert).

Server CPU units expected to be up meaningfully this yearCore count increasing significantly as primary volume driverGranite Rapids adding multi-threading capabilityCoral Rapids planned with multi-threading

CJ Muse · Cantor Fitzgerald

Asked how Intel plans to drive increased H2 output (yields, cycle times, incremental equipment, TSMC outsourcing). Follow-up asked about advanced packaging backlog status and revenue targets.

Increasing wafer starts across all nodes (Intel 10.7, Intel 3, 18A) with more emphasis on EUV nodes. Yields and throughput improvements primary lever (as achieved in Q1). External foundries flexed as needed; TSMC important partner with strong relationship. Advanced packaging demand exceeds initial expectations—billions of dollars per year level not hundreds of millions. Real value to customers through larger reticles. Advanced packaging margins expected at foundry average or better, representing significant foundry revenue growth through the decade.

Wafer starts increasing across Intel 10.7, Intel 3, and 18AYield and throughput improvements are primary supply leverTSMC used as flexible capacity partnerAdvanced packaging demand in billions of dollars per year

Answers to last quarter's watch list

Whether Q2 2026 revenue actually inflects up sequentially as Tan promised — Q2 guide of $14.3B midpoint is up 5% sequentially from Q1's $13.58B actual, with management explicitly guiding "sequential revenue growth in both CCG and DCAI on improved supply and a full quarter of pricing actions." The supply-trough thesis is intact; in fact Q1 itself printed $0.88B above its own high-end guide, meaning the trough was shallower than management feared.

Resolved positively

DCAI sustaining +9% YoY or better against tougher comps — DCAI accelerated to +22% YoY, more than doubling Q4's +9% print. Management guided Q2 DCAI up double-digits sequentially. The share-loss question is, for now, off the table.

Resolved positively

Q2 non-GAAP gross margin trajectory off the 34.5% Q1 base — Q1 actual non-GAAP GM was 41.0% (a 650bps beat versus the 34.5% guide), and Q2 is guided to 39.0%. Management was explicit in Q&A that Q2 GM is roughly flat to Q1 because Panther Lake ramp is mix-dilutive and 18A remains a headwind even with yield improvements. The structural margin story is intact but the path to the 40s is not a straight line.

Resolved positively

Named external 14A customer commits in H1 2026 — Still no named external 14A customers disclosed. Management's framing this quarter is that "earlier design commitments" will emerge "in the second half of 2026 and expanding into the first half of 2027" — a fresh deferral relative to the Q4 commitment of H1 2026. That said, 14A maturity is reportedly outpacing 18A at the equivalent point, which is at least a technical positive. The pure timing test from last quarter has now slipped one full quarter.

Resolved negatively

Whether the "flat to down slightly" 2026 CapEx guide creeps higher as the year progresses — CapEx guide moved from "flat to down slightly" to "flat to 2025 levels," driven explicitly by "increased capacity investments to support committed demand." This is the third consecutive upward CapEx revision. Whether this matters depends on your read: it's a quiet capex raise against still-negative free cash flow (Q1 FCF $(2.0)B), but it's underwritten by demand commits rather than speculative build — exactly the discipline test Tan set in Q2 2025. Status: Resolved negatively on the literal threshold; the underlying framing is defensible.

ASIC business sustaining >50% growth and progressing toward named hyperscaler customers — The Google LTA disclosed in Q1 explicitly includes ASIC demand, which is the first named hyperscaler ASIC commit. Management quantified AI-driven businesses as "60% of revenue growing 40% YoY." No standalone ASIC growth rate disclosed this quarter, but the trajectory is on track and a named hyperscaler customer is now in hand.

Resolved positively

What to watch into next quarter

Whether Q2 non-GAAP gross margin lands at or above the 39.0% guide despite Panther Lake dilution and rising memory/substrate costs — management has flagged rising input costs as a back-half headwind; a miss here would call into question the structural margin recovery thesis just as bulls are extrapolating from the 41% Q1 print.

DCAI YoY growth at +20% or better in Q2 — two consecutive quarters of >+20% YoY would convert the "AI inflection" framing from a thesis into a fact pattern; deceleration back toward +10% would re-open the share-loss debate against AMD.

A named external 14A customer commit by the Q3 print — Tan has now deferred this milestone three times; "H2 2026 design commitments" is a softer test than "named commits by Q1," and a fourth deferral effectively ends the leading-edge external foundry thesis on the original Tan-era timeline.

Whether FY26 OpEx stays at ~$16.5B or drifts higher — the raise from $16.0B to $16.5B is the first OpEx revision under Tan; another upward move would undermine the cost-discipline narrative that has anchored the turnaround story since Q2 2025.

CCG Q2 print holding above $7.5B against a low-double-digit PC TAM decline — management is implicitly betting that pricing and Panther Lake mix offset volume weakness; the test for the "client flat from Q2 onward" guide is whether the Q2 number actually shows up.

Advanced packaging revenue contribution made specific — management upgraded the framing to "billions per year" this quarter; an explicit number (or named customer) by Q3 would convert this from rhetoric to disclosed pipeline.

Sources

Intel Q1 2026 Earnings Press Release, SEC Archives: https://www.sec.gov/Archives/edgar/data/50863/000005086326000077/q126earningsrelease.htm
Intel Q1 2026 Earnings Call prepared remarks and Q&A (analyst exchanges)

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