tapebrief
INTC · Q4 2025

INTC · Q1 2026 Earnings

Cautious

Intel

Reported April 23, 2026

30-second summary

Intel printed $13.6B in Q1 revenue (+7% YoY), $0.9B above the high end of its own $11.7–12.7B guide, with non-GAAP EPS of $0.29 versus $0.00 guided and non-GAAP gross margin of 41.0% versus 34.5% guided — a 650bps beat that breaks the seasonal pattern Tan flagged as the supply trough. DCAI grew +22% YoY and Foundry +16% YoY, both meaningful re-accelerations from Q4's +9% and +4%. But Q2 non-GAAP GM guides to 39.0% (a 200bps step-down from the just-printed 41.0%), FY2026 non-GAAP OpEx is now likely to run modestly above the prior $16.0B target (~$16.5B) on inflation, variable comp, and targeted investments, FY2026 CapEx was nudged up from "flat to down slightly" to "flat YoY," and Q1 adjusted free cash flow was -$2.0B — the supply trough is over, but cost pressure is building.

Headline numbers

EPS

Q1 FY2026

$0.29

Revenue

Q1 FY2026

$13.60B

+7.0% YoY

+9.5% vs est.

Gross margin

Q1 FY2026

39.4%

Free cash flow

Q1 FY2026

$-2.90B

Operating margin

Q1 FY2026

-23.1%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$13.60B+7.0%$13.70B-0.7%
EPS$0.29—$0.15+93.3%
Gross margin39.4%—36.1%+330bps
Operating margin-23.1%—4.2%-2730bps
Free cash flow$-2.90B———

Guidance

Intel significantly beat Q1 FY2026 revenue and margin guidance driven by AI demand strength, while raising FY2026 GAAP operating expense guidance substantially to reflect foundry and manufacturing expansion investments.

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

MetricPeriodPrior guideActualΔResult
RevenueQ1 FY2026$11.7B - $12.7B$13.6B+$0.9B above high end of guideBeat
Non-GAAP EPSQ1 FY2026$0.00$0.29+$0.29 above guideBeat
Non-GAAP Gross MarginQ1 FY202634.5%41.0%+6.5pts above guideBeat

New guidance

MetricPeriodGuideYoY
RevenueQ2 FY2026$13.8B - $14.8B+7% to +15% YoY
GAAP EPSQ2 FY2026$0.08—
Non-GAAP EPSQ2 FY2026$0.20—
GAAP Gross MarginQ2 FY202637.5%—
Non-GAAP Gross MarginQ2 FY202639.0%—

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
2026 GAAP Operating Expenses
FY 2026
$16.0B$22.7B+$6.7BRaised
2026 Non-GAAP Operating Expenses
FY 2026
Not explicitly provided in prior guidance$16.5B—Raised

Segment performance

Q1 FY2026
SegmentQ1 FY2026YoY
Client Computing Group (CCG)$7.7B+1.0%
Data Center and AI (DCAI)$5.1B+22.0%
Intel Foundry$5.4B+16.0%
All Other$0.6B-33.0%
Data Center and AI Revenue Growth+22%—
Intel Foundry Revenue Growth+16%—

Profitability

Q1 FY2026
SegmentQ1 FY2026
Non-GAAP Gross Margin41.0%
Non-GAAP Operating Margin12.3%
Operating Cash Flow$1.1B

Management tone

Q2 "triage and reset" → Q3 "demand outpacing supply" → Q4 "supply is the constraint, yields below target" → Q1 "supply unlocking, agentic AI as the durable tailwind"

From "we missed an AI-driven inflection" to "agentic AI is structurally lifting our CPU TAM." Three quarters ago Tan conceded the planning model had assumed core count increases without unit increases and that Intel had been caught flat-footed. This quarter, Vivek Arya pressed on whether the server CPU outlook had really changed in six months, and Zinsner answered with the cleanest framing yet: six months ago the team expected server CPU units up modestly; now they expect units up meaningfully, with double-digit growth for the industry and for Intel. The CPU-to-GPU ratio in inference is moving from 1:8 toward 1:4 and possibly parity as agentic workloads scale. Intel is no longer apologizing for missing the AI inflection — it is claiming a structural beneficiary position in inference.

From "foundry as long-term bet" to LTAs as forward-revenue scaffolding. Q4's pivot was framing foundry as shipping revenue wafers, not roadmap milestones. This quarter, Tan disclosed a multi-year (3–5 year) Google LTA with volume and pricing commitments, plus multiple unnamed additional LTAs. The Foundry +16% YoY print and Google LTA together convert the foundry narrative from "engagements progressing" (the Q3 hedge) to multi-year contracted backlog. The conspicuous absence remains a named external 14A customer commit — Tan deferred again, six months after the Q3 promise.

From "supply is the binding constraint" to a more honest yield-and-cost trade-off. Last quarter Tan was unusually direct that yields were "still below what I want them to be." This quarter that frame evolved in Q&A: yields and throughput are now the "primary lever" for output growth in H2, with external foundries (notably TSMC) characterized as a "very important partner" flexed as a demand variable. The pivot from "TSMC is a partner" abstractly to TSMC as an explicit capacity-overflow variable is a meaningful concession that internal capacity alone cannot fully meet demand even with yield improvements.

From CapEx discipline rhetoric to a modest cost creep. The Q2 2025 thesis under Tan was financial discipline and capex deployed only against tangible volume commitments. Twelve months later, non-GAAP OpEx is now targeted at ~$16.5B vs. the $16B prior target — a modest ~3% step-up Zinsner attributed to inflationary pressures, variable compensation, and targeted investments — while CapEx moved from "flat to down slightly" to "flat YoY" with tool spend up ~25%. Adjusted FCF was -$2.0B in Q1 alone, and management's "positive for full year" claim now has to absorb a slightly heavier expense base and rising substrate/memory costs in the back half. The discipline narrative is bent, not broken.

Recurring themes management leaned on this quarter:

Foundry business execution and ramp uncertaintyProcess technology competitive positioning under pressureCost structure and operational efficiency in uncertain demand environmentCustomer concentration risk in AI/accelerator segment

Risks management surfaced:

Competitive process leadership challengesFoundry customer ramp timing and volumesData center and accelerator market demand volatilityCapital intensity of fab operations amid uncertain returns

Q&A highlights

Ben Reitzes · Milius

How are long-term agreements (LTAs) structured, particularly the Google deal, and how do they provide visibility for the data center business?

Google LTA is multi-year (3-5 years), structured with volume and pricing commitments. Other LTAs signed but not announced due to customer confidentiality preferences. LTAs provide visibility on volumes and allow customers confidence in supply and pricing expectations.

Google multi-year LTA announced in Q1LTA structure typically 3-5 yearsLTAs structured with volume and pricing termsMultiple additional LTAs signed but confidential

Ross Seymour · Deutsche Bank

How is Intel positioned competitively in server CPUs versus x86 competitors and ARM offerings? What are the product differentiations?

Intel highlights CPU importance in inference workloads (CPU-to-GPU ratio improving from 1:8 to 1:4 toward parity), architectural improvements, and integrated advantages (CPU + packaging + foundry). Early Granite Rapids traction is positive. Company is building GPU capabilities and pursuing 'XPU' strategy.

CPU-to-GPU ratio moving from 1:8 to 1:4 toward parity in inferenceGranite Rapids showing strong early tractionNew hires to build GPU capabilitiesXPU strategy combining CPU, GPU, and accelerators

Stacy Raskin · Bernstein Research

How can gross margins be roughly flat Q1-to-Q2 given server growth and 18A yield improvements, given that 18A and Panther Lake mix appear to be significant headwinds?

Q2 gross margin ~39% (down ~200 bps from Q1's 41%) due to: 18A still early in ramp with below-corporate-average margins, Panther Lake volume up 6-7x but below-average margins, partial offset from pricing and high-margin DCAI growth. Back-half headwinds include rising material costs (substrates, memory).

Q2 gross margin guidance: 39%Panther Lake volume up 6-7x Q1-to-Q2Panther Lake margins below corporate average18A is headwind to gross margins through ramp

Vivek Arya · Bank of America Securities

What is the specific unit growth guidance for server CPUs this year, and how has the outlook changed in 6 months? How will agentic workloads impact unit and ASP growth?

Server CPU units expected to grow double digits for industry and Intel. Six months ago expected decline; now expects meaningful growth. Core count increases drive significant ASP lift. Unit volume, not ASP, is biggest revenue driver. Agentic/inference workloads are primary driver of revised outlook.

Server CPU unit growth: double digits (specific range not provided)Six months ago: expected decline; now: meaningful growthCore count increases driving significant ASP lift on per-unit basisUnit growth, not ASP growth, is primary revenue driver

CJ Muse · Cantor Fitzgerald

How will Intel drive output growth in H2: through yield improvements, cycle time, wafer equipment investment, or outsourcing to TSMC?

Output growth driven by: (1) increasing wafer starts across all nodes (Intel 7, 3, 18A), (2) yield and throughput improvements as primary lever (emphasis from Lipu), (3) external foundry partnerships flexed as needed. TSMC is important strategic partner; multi-foundry approach used.

Wafer starts increasing across Intel 7, 3, and 18A nodesYield and throughput improvements emphasized as primary leverExternal foundries flexed as demand variableTSMC characterized as 'very important partner'

Answers to last quarter's watch list

Whether Q2 2026 revenue actually inflects up sequentially as Tan promised — Q2 guide midpoint of $14.3B is up ~5% sequentially from the $13.6B Q1 actual, and the Q1 print itself broke seasonality upward by $0.9B versus guide. The "Q1 as supply trough, Q2 inflects" narrative is fully validated.
Resolved positively
DCAI sustaining +9% YoY or better against tougher comps — DCAI grew +22% YoY in Q1, more than doubling the Q4 print. Two consecutive quarters of YoY growth after a year of contraction, with agentic/inference workloads cited as a structural driver and the CPU-to-GPU ratio shifting in Intel's favor.
Resolved positively
Q2 non-GAAP gross margin trajectory off the 34.5% Q1 base — The Q1 base wasn't 34.5% — it was 41.0%, a 650bps beat. But Q2 guide of 39.0% is a 200bps step-down, with Zinsner attributing it to Panther Lake ramp dilution and 18A still in early ramp. Margin progress is real (Q2 39.0% vs. prior Q1 34.5% trajectory) but the Q1 print was inventory-benefit-elevated. Status: Resolved positively, with the caveat that the 41.0% is not the run-rate.
Named external 14A customer commits in H1 2026 — No named 14A customer commits disclosed this quarter. Google LTA disclosed but is a demand-side commitment, not a 14A capacity commit. Tan has now deferred this milestone three quarters running.
Resolved negatively
Whether the "flat to down slightly" 2026 CapEx guide creeps higher as the year progresses — CapEx was explicitly raised on the call from "flat to down slightly" to "flat YoY," with tool spend up ~25% YoY offset by lower space spend. The step-up directly reflects committed demand and supply-chase investments. Status: Resolved — CapEx crept higher as expected.
ASIC business sustaining >50% growth and progressing toward named hyperscaler customers — ASIC revenue was up >30% sequentially and nearly doubled YoY, and a named hyperscaler LTA (Google) was disclosed. Multiple additional LTAs were signed but kept confidential. Clean progress on both the growth and named-customer concentration questions.
Resolved positively

What to watch into next quarter

Whether Q2 non-GAAP gross margin lands at the 39.0% guide or pierces it lower as Panther Lake volumes 6-7x — Zinsner explicitly flagged substrate and memory cost inflation as back-half headwinds; a Q2 miss here would mean the structural margin story is compromised even as units accelerate.

DCAI sustaining +20% YoY against meaningfully tougher Q2 comps — back-to-back +22% prints would convert the agentic AI thesis from claim to demonstrated trend; deceleration to single digits would reopen the share-loss question.

An explicit named 14A external customer commit by the Q2 print — three deferrals running; a fourth effectively ends the leading-edge foundry thesis on the original timeline, regardless of how the Google LTA is framed.

Free cash flow trajectory off the -$2.0B Q1 base, against management's "positive for full year" claim — the math requires ~$2B+ of cumulative adjusted FCF generation over Q2-Q4 to hit positive; any commentary on Q2 cash flow will be the cleanest read on whether that trajectory is achievable.

Whether advanced packaging revenue gets explicit quantification — Q1 Q&A revealed management is now describing it as starting "with a B" (billions) up from prior hundreds-of-millions framing but declined specifics. A named figure on the Q2 call would be the cleanest validation that foundry economics are improving.

Foundry segment sustaining double-digit YoY growth — +16% in Q1 was the inflection; a Q2 print holding above +15% confirms the segment Tan has staked the strategy on is now self-sustaining on revenue, even as operating losses persist.

Sources

  1. Intel Q1 2026 Earnings Press Release, SEC Archives: https://www.sec.gov/Archives/edgar/data/50863/000005086326000077/q126earningsrelease.htm
  2. Intel Q1 2026 Earnings Conference Call transcript, April 23, 2026 (prepared remarks and analyst Q&A)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.