tapebrief
INTC · Q3 2025
INTC · Q1 2026

INTC · Q4 2025 Earnings

Cautious

Intel

Reported January 22, 2026

30-second summary

Intel printed $13.7B Q4 revenue at the high end of its $12.8–13.8B guide, with non-GAAP EPS of $0.15 versus $0.08 guided and non-GAAP gross margin of 37.9% versus 36.5% guided — a clean beat across the line. But the Q1 2026 guide tells the more important story: revenue of $11.7–12.7B (midpoint $12.2B), non-GAAP EPS of $0.00, and non-GAAP gross margin of 34.5% — a 340bps sequential margin step-down and a return to breakeven profitability as supply hits its trough before recovering in Q2. The cautious posture reflects management's own framing — Tan said yields "are still below what I want them to be" and that supply constraints will limit revenue in 2026.

Headline numbers

EPS

Q4 FY2025

$0.15

Revenue

Q4 FY2025

$13.70B

-4.0% YoY

Gross margin

Q4 FY2025

36.1%

Operating margin

Q4 FY2025

4.2%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$13.70B-4.0%$13.70B+0.0%
EPS$0.15—$0.23-34.8%
Gross margin36.1%—38.2%-210bps
Operating margin4.2%—5.0%-80bps

Guidance

Intel delivered a strong Q4 FY2025 beat across revenue, non-GAAP EPS, and gross margin, while providing conservative Q1 FY2026 guidance with modest CapEx revision upward and a return to positive FCF targeted for FY2026.

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
RevenueQ4 FY2025$12.8B–$13.8B$13.7B+$0.1B–$0.9B above range; at top end of guidanceBeat
Non-GAAP EPSQ4 FY2025$0.08$0.15+$0.07 above guideBeat
Gross Margin (Non-GAAP)Q4 FY202536.5%37.9%+140 bps above guideBeat
Gross Margin (GAAP)Q4 FY202534.5%36.1%+160 bps above guideBeat

New guidance

MetricPeriodGuideYoY
Operating ExpensesFY 2026$16 billion—
Capital ExpendituresFY 2026flat to down slightly—
Adjusted Free Cash FlowFY 2026positive for full year—
RevenueQ1 FY2026$11.7B–$12.7B—
Non-GAAP Gross MarginQ1 FY202634.5%—
Tax Rate (Non-GAAP)Q1 FY202611%—
Non-GAAP EPSQ1 FY2026$0.00—

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
Client Computing Group (CCG)$8.2B-7.0%
Data Center and AI (DCAI)$4.7B+9.0%
Intel Foundry$4.5B+4.0%
All Other$0.6B-48.0%
DCAI Revenue Growth YoY+9%—
CCG Revenue Decline YoY-7%—
Intel Foundry Revenue Growth YoY+4%—

Profitability

Q4 FY2025
SegmentQ4 FY2025
Non-GAAP Gross Margin37.9%
Non-GAAP Operating Margin8.8%
Operating Cash Flow (Q4)$4.3B
Full-Year Operating Cash Flow$9.7B
Full-Year Non-GAAP Gross Margin36.7%

Management tone

Q2 "triage and reset" → Q3 "demand outpacing supply" → Q4 "supply is the binding constraint and yields are below my target"

From "demand outpacing supply" as a tailwind to supply constraints as a structural multi-quarter limit. Last quarter Tan and Zinsner framed the demand/supply imbalance as a bullish signal that would persist into 2026; this quarter Tan was uncharacteristically direct: "I'm disappointed that we are not able to fully meet the demand in our markets... while yields are in line with our internal plans, they are still below what I want them to be." The shift from "tailwind we'll capture in 2026" to "constraint that could limit our revenue opportunity this year" is the single most important tone change in the print, and it is reflected in the Q1 guide sitting at the low end of seasonal rather than breaking seasonality upward as Zinsner had hinted at on the Q3 call.

From "foundry as long-term bet" to foundry with concrete revenue milestones. Tan's verbatim "Intel Foundry is the only semiconductor manufacturer in the world shipping gate-all-around transistors with backside power for revenue" is a deliberate rhetorical pivot — past Intel foundry framing was about achieving process milestones (yield, tapeout, PDK release); this framing is about revenue-generating wafers in customers' hands. EUV wafer revenue went from <1% of wafers out in 2023 to >10% in 2025. The narrative is now built on shipping volume, not roadmap claims, which is the appropriate evolution but also raises the bar for what counts as progress.

From "ASICs as one of several AI plays" to "ASICs as a $100B TAM priority." Tan's commitment of "significantly more focus, resources, and investment dollars" to ASICs — backed by a >50% growth print and >$1B annualized Q4 run rate — repositions the AI accelerator strategy from exploratory (Q2: "deferred to coming months") to a defined integrated x86+accelerator platform play. The Q2 brief flagged the AI strategy deferral as a tell of having no near-term answer; six months later, the answer is ASICs co-developed with hyperscalers, not a head-on GPU competitor. Whether that bet pays off is unresolved; the strategic clarity is real.

From "Q1 may break seasonality upward" to Q1 as supply trough. The most subtle but important shift. On the Q3 call, Zinsner said Q1 "may actually be at our peak in terms of shortages" but framed this constructively as evidence of strong demand. On this call, Tan was explicit: "we expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond" — and the Q1 guide of $12.2B midpoint is an 11% sequential decline, well within normal seasonal range despite a sold-out backdrop. The bullish "demand outpacing supply" framing has lost narrative force; it is now a clearance issue not yet recoverable.

Recurring themes management leaned on this quarter:

AI-driven compute demand across heterogeneous silicon (CPUs, GPUs, ASICs, XPUs)Supply constraints as primary near-term limiting factor to growth captureFoundry milestone execution and yield improvement as critical pathx86 architecture resilience and expanding role in AI (orchestration, inference, agentic)Hybrid AI as emerging client market opportunityMulti-year transformation requiring continued execution discipline

Risks management surfaced:

Supply constraints limiting ability to fully meet market demand in Q1 2026 and into 2026Industry-wide component supply pressure (DRAM, NAND, substrates) could constrain client TAM opportunityYield improvement on Intel 18A and 14A processes still below internal targetsExecution risk on multi-year foundry roadmap to reach competitive parityCompetitive dynamics in AI accelerator market and need to 'truly disrupt and differentiate'

Q&A highlights

Ross Seymour · Deutsche Bank

On short-term supply: are yield improvements sufficient to handle Q1 seasonality? On long-term: when will Intel loosen CapEx constraints on 14A and 18A given improved confidence in customer engagements and roadmap?

Yield and throughput improvements have good ROI without incremental capital. CapEx is down significantly in fab space but ramping tool spending in 2026. Wafer starts increasing quarterly across Intel 7, 3, and 18A. On 14A: Lipu will not spend on capacity until customers are secured, with customer windows expected in H2 2025 and H1 2026. Monthly yield improvement of 7-8% targeted.

Tool spending ramping significantly in 2026 vs 2025Wafer starts increasing every quarter across Intel 7, Intel 3, 18A7-8% monthly yield improvement target for Panther Lake14A capacity CapEx contingent on customer commitments in H2 2025/H1 2026

Tim McCarty · UBS

What would unconstrained Q1 guidance look like pro forma if Intel could meet all demand? On foundry: what defines success in the business and is the $30B revenue target by 2030 still relevant?

Unconstrained revenue would be well above seasonal; current 12-2B guidance is at low end of seasonal despite 13-7B in Q4. For foundry: building world-class business with 14A development on track, simplified process flow, strong IP portfolio. Advanced packaging opportunities measured in hundreds of millions; wafer opportunities exceed $1B per customer. PDK 0.5 Q1 release enabling customer engagement. Second half 2025 expects firm capacity commitments.

12-2B Q1 guidance at low end of seasonal range14A PDK 0.5 released, enabling customer test chip designAdvanced packaging opportunities: hundreds of millions; wafer opportunities: north of $1B per customerYield variation improving; targeting industry-leading defect density

Joe Moore · Morgan Stanley

What is the timeframe for Copper Rapids (Colorado Rapids) launch to address Diamond Rapids' lack of symmetric multithreading? How will this affect market share dynamics?

Hired Cavok to lead data center and AI efforts with new team in place. Laser-focused on 16-channel Diamond Rapids with simplified roadmap. Accelerating Colorado Rapids introduction to reintroduce multithreading to data center. Team and roadmap now clear and decisive. Currently shifting limited wafer supply toward data center and away from low-end client to prioritize main customers.

16-channel Diamond Rapids focus with simplified product roadmapColorado Rapids will reintroduce multithreading to data center lineupNew leadership team in place under Cavok for data center/AIShifting mix: prioritizing mid/high-end client, pushing available supply to data center

Stacey Raskin · Bernstein Research

If math is correct, DCIA down high single digits and client down mid-teens in Q1. Why would data center be down so much given prioritization? Why is inventory situation occurring despite owning fabs and having $11.6B inventory not in right place at right time?

Both segments down due to supply constraints; shifting what they can to data center but cannot completely vacate client. First quarter is trough; improvement in Q2. Finished goods inventory now at 40% of peak levels, causing hand-to-mouth management. Root cause: six months ago, outlook signaled core count increases but not unit increases; hyperscalers unexpectedly signaled significant unit increases in Q3/Q4 which management believes will persist for years.

Finished goods inventory down to 40% of peak levelsQ1 expected to be supply trough; improvement expected Q2Inventory miscalibration: planned for core count growth without unit growth, but hyperscalers signaled significant unit increasesManaging hand-to-mouth: limited to actual fab output vs. customer demand

Harlan Sir · JP Morgan

Have customers already commenced or advanced 14A test chip designs following PDK 0.5 release? What is the timeline for Diamond Rapids tape-out/tape-in and ramp?

A couple of key customers already engaging on PDK 0.5 and working on test chips. Customers assessing 14A yield performance and pricing discussions underway. 14A realistic risk production in late 2027, volume production in 2028 (similar to leading foundry timelines). Clearwater Forest still being supported; 16-channel Diamond Rapids focused for high-end. Coral Rapids multithreading acceleration being explored with Cavok's team to potentially pull in earlier due to customer demand.

Couple of key customers already engaged on PDK 0.5 and test chip designs14A risk production: late 2027; volume production: 2028Customers discussing capacity, pricing, and required IP in parallelClearwater Forest (18A server platform) still supported despite roadmap shift

Answers to last quarter's watch list

Whether Q4 non-GAAP gross margin lands at the 36.5% guide or pierces it lower — Q4 non-GAAP GM printed 37.9%, beating the 36.5% guide by 140bps. But the Q1 guide of 34.5% confirms the suspicion that Q3's 40.0% and Q4's 37.9% are mix-elevated, not the new run-rate. Status: Resolved positively (for Q4 print); the trajectory question is unresolved given the Q1 step-down.
DCAI YoY growth re-accelerating from -1% — DCAI grew +9% YoY in Q4, the cleanest data center print in many quarters and a strong reversal from Q3's -1%. Driven by hyperscaler unit demand and ASIC strength (>$1B annualized run rate).
Resolved positively
A named external 14A customer commit by the Q4 print — Management referenced "a couple of key customers" engaged on PDK 0.5 with test chip designs, but no named external 14A commits were disclosed. Firm capacity commitments are now expected in H2 2025/H1 2026 — a continued deferral from the Q2 timeline.
Continue monitoring
Q1 2026 revenue guide breaking the normal high-single-to-double-digit sequential decline — Q1 midpoint of $12.2B represents an ~11% sequential decline, fully within normal seasonal range. Management explicitly said unconstrained revenue would be "well above seasonal" but supply caps the print. The demand-outpacing-supply thesis is technically intact but the optics are bearish — the seasonal pattern was not broken.
Resolved negatively
Foundry segment revenue re-accelerating from -2% YoY — Foundry grew +4% YoY in Q4, reversing two quarters of contraction. Management expects double-digit QoQ Foundry growth in Q1.
Resolved positively
18A yield progression toward "fully cost-accretive" levels — Tan was unusually candid that yields are "still below what I want them to be" despite being in line with internal plans. Monthly yield improvement on Panther Lake of 7-8% is the target. Improvement is happening but the gap to "fully cost-accretive" remains a 2026 journey.
Continue monitoring

What to watch into next quarter

Whether Q2 2026 revenue actually inflects up sequentially as Tan promised — the entire bull case rests on Q1 being the supply trough; a Q2 guide that does not show meaningful sequential improvement breaks the narrative.

DCAI sustaining +9% YoY or better against tougher comps — one quarter is data, two is a trend; a deceleration here re-opens the share-loss question.

Q2 non-GAAP gross margin trajectory off the 34.5% Q1 base — if margin doesn't recover from the Panther Lake ramp dilution by Q2, the structural margin story breaks given Q4's print was mix-elevated.

Named external 14A customer commits in H1 2026 — Tan has now twice promised firm commits within ~6 months; a third deferral effectively ends the leading-edge foundry thesis on the original timeline.

Whether the "flat to down slightly" 2026 CapEx guide creeps higher as the year progresses — Tan moved it from "down" to "flat to down slightly" this quarter; another upward revision against negative FCF would re-raise balance sheet concerns.

ASIC business sustaining >50% growth and progressing toward named hyperscaler customers — the $100B TAM framing requires customer concentration that management hasn't yet disclosed.

Sources

  1. Intel Q4 2025 Earnings Press Release, SEC Archives: https://www.sec.gov/Archives/edgar/data/50863/000005086326000009/q425earningsrelease.htm
  2. Intel Q4 2025 Earnings Call Q&A commentary (analyst exchanges)

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