INTC - Earnings call transcript Q4 2024

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Operator

Thank you for standing by, and welcome to Intel Corporation's Fourth Quarter 2024 Earnings Conference Call.

[Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. John Pitzer, Corporate Vice President, Investor Relations. ahead. go Please

John Pitzer

which and By Jonathan, of to joining both everyone QX Relations our Thank intc.com. website, you good should today. of presentation, earnings now, release copy available have us on earnings Investor you, and afternoon are received the a

those online earnings today, For presentation in available also joining window. webcast us our the is

I'm Zinsner. Dave Johnson Holthaus joined and today by our Interim Michelle Co-CEOs,

a as detail few before Intel know, Michelle Products; CEO and the Intel's including QX Michelle CFO. then to continues providing Products. overall you up In As open our and will of guidance. serve moments, comments will Intel with on is Dave summary Foundry discuss financials, Dave also some Intel more

forward-looking it environment we financial believe and to statements information based Before measures as please and, uncertainties. references to we our we to begin, on currently It as contains note various see non-GAAP are that discussion that subject such, contains risks useful also the provide investors. today's

release, factors most our risk other provide specific on annual XX-K actual from to more expectations. information differ the and on filings results materially with Form could SEC earnings cause that Our report recent

on appropriate financial turn financial our additional including reconciliations to measures, Michelle. where over things They provide With that, also to information GAAP corresponding me our non-GAAP measures. let

Michelle C. Holthaus

and credibility persistent delivers are are quick better to that fixes. drive There our day and Thank have you, tangible And Board we we Dave our roughly stepped I through performance to our John, together execution co-CEOs. X, since and committed closely let no months into From work results. of me strategy. as add been my our welcome. hard been X It's alongside improving roles the rebuilding working interim

differentiated more As people, drive to part cannot where of all we be we business. things We we and are all can driving value. areas focused investments prioritizing the are across this,

their are company. business all, And also are efficient to of listening become more needs. leaner, meet we continuing doing most job We and a to customers a of to better we our simplify our ensure

step QX And Intel revenue, in to executed in and key grant-related upside quarter, to continued operating delivered efficiencies normalize. Foundry was right incremental guide. inventory revenue to drove our the EPS which PC drive Intel the even We Products milestones, direction. supported as gross while margin a achieving margins. gross above solid

most nothing is create of We us Intel we for granted. This the to as a customers. can do important direct. co-CEOs, over core As foundation have is Innovating we firmly to are xXX our everything value. a We and believe shareholder very service take in that say ecosystems solid to what surest for that I we the have CEO expect the position invested in nearly commitments I business and my partners brought we not architecture great built and deliver. world-class mindset must to I solve IP of is you we do. decades and the as is only success. Products. what firmly But people, the be straightforward be This the from to cloud. edge design great confident we make believe And can path with to their pressing creating challenges products as

directions drive to commitments. improve priorities I and view. am in customers business need each better to outcomes. setting us clear this hit our they Our and execution share But our

AI center; Products about edge; in I third, traditional second, the center. client data and think first, buckets: Intel X data

in the new in That a becoming entrants gives the market as spend participate we competitive, In me on more every PC us strong that said, PCs. a CPUs XX roughly especially of AI is power category. Intel advantages moments Let market. X see client, is few each. out This trying position to the

the Personally, Intel our ship and Lunar more up The market do, motivation even we're It of in leader on thrive it success to more. and has using competition. remain healthy I as track we Lake, as across million a end game Meteor everything drives across of paranoia to and on systems AI Core Lake we Arrow CPUs, XXXX. than PC cumulative the Lake established XXX by Ultra

investments competitors. And compelling ecosystem through the a We migration display XX. to vPro. built corporations position we have are is around this enterprise unlike trust This Intel AI of at expect This versions their month with us with scale these any to at of well CES, launched testament new innovating strong as Windows departments we brand. on we features the begin earlier where security, our and our IT was manageability, CPUs to

in reach well our investments us AI consumer in markets. ecosystem PC our also Alongside enterprise, positions

pipeline the We over more are our seeing ISVs on that new to begin their software excited across silicon. the more to working optimize XXX the coming with applications I'm than proliferate XXX will than features about months. in I'm

partner is goal innovate, CPU the Our of and our position fortify as choice. preferred to

our Looking Intel with will year, product the client in the XXXX. XXA, ahead second strengthen the the our rest launch on map to lead of road we half of of Panther Lake,

is we production of the yields. as And of second our to As forward benefits in look world-class the design volume process see demonstrate in the the making half being XXA, progress on first technology performance capabilities. customer that I and I Foundry Intel Intel and

stack and perspective and family better competitive enhancing is client achieved customers. us, Panther our reinforcing we a significantly client our Both proposition our introduced XXXX for costs our more meaningful partners with PC and and exciting will next-generation position provide value across Lake performance margins strong to Nova even Lake. entire volumes, codenamed as from the

competition. has our good to The about gap traditional center good competitive This step. our a data year more fight made is better, now predictable Granite The of first as towards turn ramp we Xeon's driving Rapids close all me to has and offerings Let team business. to improving strengthening position progress harder the execution. been

progress year. Clearwater Intel also plan half our launch on product Forest, in we XXA good of first to first the that We making are server next

execute. foundation workloads still strong especially build to The on which as silicon, center we All provides Intel and within on ecosystem, strong data of enterprise. a a primarily run world's have we this

are to share we stabilize strengths our going as We leverage XXXX. work market to in these

One of ways the we'll do by is this the ecosystem. xXX reengaging

products. have enthusiasm response this by to share. more advisory and business, last is the formed the from talking both as we are a semi-custom for We to big news seen positive we encouraged opportunity area xXX group fall, look of have custom ecosystem a forward the about and This for we and building we

AI start but saying us we by is I this will an center. happy attractive market Turning data not that I are where for am to with the over time, today.

position at the as host applications leading continue And AI on-prem the a to have AI-infused we hand, one inference we CPU see proliferate. a significant edge servers. CPU-based the and as for opportunity On for

hand, AI other in the not yet way. in the On market data we're participating center meaningful cloud-based a

as We Gaudi, have learnings learned those we lot applying we going have are ramped forward. and a

address internal market. efforts support an solution scale test AI temper This One Falcon rack a system-level our immediate actions I our develop Shores Falcon have is resources. feedback, Shores the me we to month. the to as will Shores and plan chip data road with at without last it center. industry leverage you of taken to heard Based on concentrate of our on bringing only to to Many expectations Jaguar simplify map

an of AI edge. and I AI broadly, on focus enabling the More It's is the our compute. increase application center the as customers need span Most efficiency sense. think trying opportunity, problems needs the are my the about notably, the cost the our solve. that a compute is data in to continuum lower to from across not market to to traditional

can clear assets not in total ownership opportunities the to one-size-fits-all work, ways and of As approach leverage drive new core see the across such, cost continuum. most I a will to compelling our

by combine world-class call Foundry's the over to as Intel able products me Dave, technology, world-class with a When have let process approach. turn we I to we close I are customer. wafer pretty simple largest Before win. speaking

customers. Intel best process Intel for I my business of of earn as what Foundry just always the CEO day, I As is customers. based earn Products, business will decisions to every need technology make my will need And my on to

to confident I'm Foundry road map. my business you. technology And to to continues and I'm do A product with their overall. Products recipe excited is for support ability advance. to Dave, future Foundry's more for that, Intel current competitive stronger Intel said Having Intel combined team over process more with success in Intel them as a a

David Zinsner

Thanks, Michelle.

to me year full and and Intel my going today: third, QX guidance. Foundry; second, I'm on our update welcome. address X Let add QX financials; topics

I in customers over come our customers for by I've an opportunity us to succeed. meet the us, the front Intel couple a from of and last we feedback months. Foundry. what and have had meetings from with partners those number of Foundry to need on opportunity Intel potential encouraged Starting I've away of received clear our with

us. Intel starts customers, of and a on ramp XXA. that a been in excited competitive our volumes puts Panther and we takes XXXX. From there each that delivering them offering But increased any Lake Intel internal has the support confident progress. perspective This by overall, of a is we're been of the second of with launch area in improved have We're along of to XXA year an that good This and engage external Intel XXA execution will the the the new are profitability process, with competitive Like reason this very half way. gives process.

believe invest wins generally port transitions in That's with gradually also than is new to factor. a made of foundry suppliers pleased past IP trust efforts foundry foundry. Customers theirs. as new must accelerate with design team willing to best-known why execute their giving can #X progress. Job methods. the particularly on IP partners augmenting redouble However, volumes I'm be I'm customers have foundry with the then increasing Trust technology. our industry in and trust. more the and willingness a consistently work and ease just our to and to good smaller partners of hard are grows. started a about significant us, customer's the is availability to by We've asking this, engage But expertise to earning porting, you

every wins be we a RFQ gates. healthy potential The the have of updating where of success are out wins. win areas continue on become pipeline won't of focused you we And we the contributor we and Intel and XXA strategy, look forward good to selective as of But can our confident customers. we customer. meaningful design the date provide validation that deal to a be We'll RFQs to to

momentum with rates return. of In have utilize Tower packaging advanced Semiconductor we in our critical to UMC. for are good All and and higher in to continue X our longer addition, collaboration assets

we're P&L that deploying on other a Foundry, capital in At our Intel breakeven is than operating for into with billion highly key improving in good demonstrate but of not the going attack Foundry appropriately. gross this a for to larger billion segue Foundry greater of our our focused $XX focus we goal on $XX delivering improvements Intel operating That's sure clearly margins all XXXX. external year. XXXX, our This revenue, our expect negative of today and one We're financials reflected roughly and is my than areas costs remain foundry. by and end to and systematically income Intel making loss

along of fabs benefits important longer, our improving nodes efficiently drivers with more Intel of from our XXA, process X Intel be financial shifting our our learning run wafer to and will financials. to The volume

our flow cash return capital Beyond a XXXX, to capital. we drive from spending supports needs your generate operations great and need on that ultimately to

need very there our and silicon, of on Intel choice AI pervasive continues and the to driving greater Foundry. The and opportunity industry unmet overall demand for unprecedented growth be at optimistic manufacturing accelerating in capacity I an for remain is today.

to it leading-edge a continue players. products, a and partner a valued very overall And in important be R&D needs multiple world-class a But play they've supplier what standard takes an for and is the Intel to in market we to we the to and IMS, has foundry. where Foundry important high to capacity. TSMC manufacturing established as globally here Intel very execute, invest U.S., role especially

of agreement definitive a up We're the also sign billion $X.XX U.S. us grants. pleased Department to in Commerce to with awarding

in QX As know, billion these received $X.X have grants milestone-based you and billion an additional QX. have $X.X are we January and of in already received

we Defense. progress Enclave Trump our to continue advance continued to Department good in as engagement In to out U.S. leadership. support addition, of efforts partnership forward with work building and strengthen the we Secure their with We look the technology manufacturing and this administration make

This to beginning and subsidiary Intel Finally, funding also partners, provide structure both to which explore. clear Foundry operational seek as establish are we additional options we announced intention financial for governance you and now strategic will actively from our separation. to an to enables recall, independent structure us

to billion, end turn of a me range at results provided and the IMS, solid and QX Let as in and X% financial high October $XX.X business sales now [indiscernible] at sequentially our up equipment guidance. in growth result the of NEX. consolidated we of the edge CCG,

our capacity $X.XX. margin agreement income, improved other an Non-GAAP second planned guidance inventory of roughly CHIPS which includes came better in million, interest and and in basis our at in was of related operating to grant, SCIP of gross XXX of offset revenue, related reserves an costs offset gross receipt points partially of and Higher Ireland. per margin fourth by our delivered stronger ramp We guidance $XXX to first XX.X%, revenue, adjustment on our accrual reflecting earnings leverage by higher ahead Gaudi. share quarter $X.XX lower versus the

we modest plans the resizing more levels, expense our more adjusting including in impairments QX. this long-term process support began driving QX conservative structure QX, and accrual to our growth, of to In capacity in

cash negative CapEx billion of free $X.X in the outlays cash restructuring $X.X approximately billion, adjusted QX billion with of quarter, operating $X.X positive due charges. associated was had flow to billion. resulting QX $X.X with We $XXX offsets sequentially million an gross cash our flow of in the down

also I grants As we a this earlier, of mentioned the CHIPS quarter. received portion

Altera full revenue. end as year-over-year at was as packaging was billion, on offset the $XX.X the and in down lower For Modest well life than in traditional services the X.X% forecasted revenue Intel of revenue to products year-over-year. Mobileye foundry decline by growth more due year,

inventory Full due year lower and gross XXX lower down EPS year gross and basis margin down lower $X.XX Full to margin minus was XX% and $X.XX and impacts. points revenue was revenue, in QX and incentives. approximately impairments, $XX We higher period investments and of cash gross grants and billion generated made billion contributions offsets government $X.X capital billion generated from partner operations, from capital of $XX.X charges. SCIP on

of As adjusted the a minus $X.X billion and ended and investments. year free short-term cash flow cash we was result, $XX.X billion, with

Moving CCG was Products QX. digested X% sequentially. at customers from which $XX slowed to the up X% Intel quarter-over-quarter billion, rate segment results QX. revenue was as revenue our up for inventory meaningfully

sequentially While up difficult better-than-expected hedging quantify, suspect revenue for upside slightly sequentially up QX patterns, customers edge lows of for and now we off a from more business. potential to portion are Revenue was customers than NEX as stable. remain QX servers to XX% DCAI due QX revenue was was against demand up normal returning traditional a as to X.X% is more our buying especially tariffs. in

as Foundry Intel by billion, by revenue up XXXX. $X.X meaningfully billion billion, reduced grew sequentially sales in million revenue increased in of of improved up QX equipment was QX of X% revenue for of IMS. expenses. on quarter-over-quarter wafer $X.X Intel impairments. X% EUV than EUV total mix profit to Intel XX% wafer Operating from revenue operating $XXX loss revenue in higher greater Foundry billion and XXXX sequentially and Products was impacted delivered $X.X X% operating higher and on of $X.X

loss Excluding have flat quarter-on-quarter. impairments, would been roughly operating

XX% sequentially, versus of sequentially. Turning on revenue up and All profit million, million, operating X% guided for year income. $XXX revenue gross QX and operating Operating was better Other. XXXX operating $XXX to increases Mobileye earlier with $XXX margin delivered X% to revenue margins Altera million and reported both up full of of leverage. in X% today

expect be Altera Intel sequentially, to than we QX, consolidated. For down overall less revenue

for the see good a an to years. on coming IPO continue the and of We progress sale Altera in stake make path

year, average. of digits to percentage down historically been Now seasonally low single high on turning weakest has to sequentially quarter the double our guidance. QX

new added support outlook of inventory from see we tariffs, coming we PC mitigating These balancing increasing macro especially more revenue addition, around uncertainty, the and In come competition. as pressure factors a tempered year. into

XX% As revenue a sequentially. $XX.X billion a forecasting in to first between XXXX, range to the of XX% result, down $XX.X quarter we're billion of

revenue segments expect all roughly similar rates. Intel of to Within X we decline Products, across at our

shift $XX.X the to At tax Intel packaging. with all helped quarter-over-quarter, Foundry wafers, modestly expect by of XXA XX%, margin basis. and of roughly advanced of rate midpoint EPS, breakeven a expect Intel revenue gross samples flat and to continued a approximately We we down on billion, non-GAAP EUV XX% mix

and a take commentary helpful few from packaging, advanced XXXX XX%. some year gross both provide in year margin may this margin moments Foundry Products modeling. decline and to in full expected gross in CCG for depreciation to XXXX in me At growth level, be product improve the Intel Let we mix will XXXX mix XX% expect roughly growth that despite is on and to your QX. Intel to consolidated was improve margin of EUV expected DCAI. shift gross due

We of billion in OpEx XXXX with continue to further $XX.X target XXXX. reductions

and we $XX increase to what low growth SCIP $XX end that in construction NCI $XXX fabs NCI to our $XXX roughly our and billion XXXX as will we X year We the at Ireland XXXX of expect million future as in agreements year in approximately anticipate adjustments we better our to of range to in fiscal basis reflecting billion expected of be $XX capital further further basis. range on our in call this is $X.X $X.X increase a guide at income noncontrolled previous a wafer-outs progress. have of net capacity to to of where as or the to GAAP billion, and grow on a QX years partners. We billion billion million investments be well to with Ohio impact GAAP utilization

a at capital. spending efficiently ahead invested capital we level lower years, enable more the to will deploy investments and demand these expected Specifically, to drive demand past we as meet our of few us over of

half come of of operations, from top increased net cash to contributions. tax CapEx, our expected roughly across CapEx $XX non-core priority and remains billion, credits us government a incentives on and from offsets partner in XXXX the billion to assets. unlock half from expect and with De-levering XXXX $X We lower for value

I conjunction Finally, that QX with segment will new in provide will you our reporting earnings. we remind

changes segments, We including All of auto CCG. our edge to our and expect make Other business from CCG to further moving into the into portion NEX

networking to includes DCAI which portion In Foundry of Intel into expect the Into IMS addition, NEX, move the Xeon Other. All and we of equipment business out sales,

close With to we QX and I enhance be, wrap actions year. out operational I'll to competitive we're a becoming trajectory more challenging below a improve said, to confident that the position saying stronger Intel taking quarter must needs solid where is our stakeholders. the market. focused in these and was of financial to it continued efficient Foundry. And in a for up by We'll a areas, on and our ability Michelle our Products and Intel profitability business. the will unlock value our progress driving business that in continue by remain building

we search Before the to new be we report over worth Q&A. to progressing, search line won't to information intensely start but for that, is have With the it to open nothing additional able mentioning The Board focused the it's questions, on turn that permanent the topic a and add to CEO. remains today. on I'll this John

John Pitzer

Dave. Thank you,

portion We of transition our the will to now Q&A call.

each question, we please? reminder, the first of question a a question ask and one ask applicable. where With you we that, follow-up take can would Jonathan, brief to As

Operator

from for today Seymore comes Deutsche Ross from Certainly. first of the question our line And Bank.

Ross Seymore

MJ. the first would be for one guess, I

but no quick lot to about the road improve map. a fixes, things of talked You

like XXXX you It as far Forest the or not closing Clearwater launch a neither how DCAI nearly Granite think things, a is much revenue you mentioned from on event about from a perspective. of can much is sounds the Specifically as gap? as side talk

that? updates then any when there's will what you to going to if and do that take it's close overall, on just versus think gap see be competitors? able we So And externally

Michelle C. Holthaus

this Sure. Thanks for the way. question, at Ross. I it look

a really So X doing be quick road close Intel's continuing it's to to to the years good to consistent map. customers year and of I fixes, is Rapids gap. our about to execution when be back Granite first no step I excited products in that. talk going table think and does about see each bring It the better X

product customers and it, Our in the excited volume. see about competitiveness are of are we to materialize that starting

very we also clear-eyed I'm But about stand. where

when got cetera. And get we so continued that 'XX to et see we've just to Rapids, Diamond throughout

So Clearwater asked you also me about Forest.

center at kind look So X the buckets. I market in really of data

our is niche seen a we P-core you then know as Rapids, we equates that's and We fast which Granite have of we've products, materialize we more there have which and Forest. volume Clearwater seen expected. our haven't as to what market, products, E-core And is

XXXX. yield But to XXA look XXXX. that Clearwater does we it at we performance fine But move is we to be as expect Rapids, of to journey. a that a but the be this just come to first gap and it as expectations in that its It's and on destination. the product expect have Forest, to market good is packaging Granite complicated doing half But well. close some a continue to for going not

John Pitzer

a do Ross, you question? follow-up have

Ross Seymore

margin tailwinds what on on would Dave just XXXX the takes gross you puts are the Yes, some anything low the headwinds sequentially the and first to But you of a revenues of profitability it the first walk metric? in be margin us as through then side. Obviously, that as quarter? quarter. else? but the the down, in over the And be and Can on would that think year, through mentioned point gross whole you switching

David Zinsner

Ross. Thanks, Yes.

Okay.

to revenue is sequentially gross margins the the declining for midpoint, contributor over the billion. obvious biggest little quarter, At first a we're decline. $X So the

And obviously, it. does mostly fixed-cost business, a so that on that, affect

take it a cost the But was a had We One the benefit in of couple the we QX. so we other of that did of of before. was beat, offset signed as and the to expenses agreement, able grant revenue it revenue period a bluebirds because were sales elevated have and actually to the accrue spent some when CHIPS also kind we bit.

this the the In we for this that we've for materialized fourth from sure didn't gross margins year. think it the kind which last are why in quarter, of quarter. pushed guide I quarter, it what So and were guidance But to I in obviously, up telegraphed going to be now Intel is quarters. margins sign first fourth -- Products that gross pressure the under the we several -- and quarter. going I weren't

parts Some memory In cost. got a a Lake because higher you it's have cost, particular, Lunar of the as has and package. the higher know,

so around really And basically price, the selling so weighing buying it on turning we're and that memory and margins down same the that's at Lunar Lake.

So margins for and, under pretty to in products we'll throughout Products. addition, comes as Lake next be more margins that, the are in going some much on improvement Panther beyond volume Intel to year Then in pressure start year. see this materially products

spending get But to also more that part in Now of We kind second We're better mix see see They up. there throughout the of have margins a third of as was of quarter. doesn't show a period so Foundry. by up not first really reduction. the of ways a that year. wafers. a better expenses we of reducing always in cost start and improvement in until see lot pricing to with that offset improvement $XX our the quarter Intel mix into and be EUV spending cost, we'll the we it our overall billion-plus It's show

increases the going be have EU start as and improving to bigger the Intel with more selling of that as first Panther to and around the back, there of half really Lake margins benefit about. low Lake really then a benefits all are those wafers a becomes are big XXA year, next So is Intel back talked throughout volume of in a the point, come the get we wafers quarter. year, margins as wafers Foundry, mix higher It we we're those on the and in The year, particular, in on really Panther margin. we to at And overall. drivers

Operator

question from line next And from comes of Research. the Stacy our Bernstein Rasgon

Stacy Rasgon

businesses sounds when bad that segments more and roll-off guide product on the Why tariff as inventory down just client question, it as NEX just with What's a the on X and the First QX? are next the them the equally pull data center digestion, gotten maybe for like surface all in of of you've segment on PCs, forward? makes going some headwinds that into quarter.

David Zinsner

bit broadly, Well, we're little But all macro market think. cautious on where affects all markets. markets, I'd terms broadly, in of across and telegraph didn't and that every we say the necessarily we a

does most of markets, In as does impact first addition, the and seasonality play in well. the that quarter

So I the with just kind uncertainty seasonality across would combination say macro a of combined of businesses. all typical

John Pitzer

Stacy, do have follow-up question? you a

Stacy Rasgon

Yes, Thank I do. you.

also least at about on margins into increased weighing you So competitiveness talked QX.

question you about presume guess, year? right? I pricing on the on So across expect through again, that's and I a weighing in that potentially pricing. that And is do center? that persist to you Do client how competitiveness think especially the data

David Zinsner

okay. Yes,

to answer. trying should figure So are who the co-CEOs out

Michelle. ahead, Go Okay.

Stacy Rasgon

Whoever wants it. take to

Michelle C. Holthaus

going stem in competition to about That mirrors the and as well. look particularly margins the client, in decline entrants the I based to we increased we Dave CCG. are good We've to do have But every we that product. very market new at way going pressured there. as Lake we're on market see share segment are when Yes. product go talked Lunar the the data more winning product But is come itself a in of socket. market that you The on cost center think about, after as got

loss said, positive to share of very center. Granite data I but the Rapids direction, a we have step stem tide in is competitive in a As

win win And fighting they that is we in need with be I socket can we it look we at business. aggressive, customers and need share, way will every to we that so And show for be the to need us. our to

Operator

from line Cantor And Fitzgerald. from our the Muse next of question comes C.J.

Christopher Muse

I first I strategy would has your new how potentially specifically your evolved for to hear under IFS. guess, curious co-leadership, be question,

David Zinsner

talked we've I quarters. for mean, ahead about and looking over not we one, -- this think of are couple last I spend mean I success. the to of

And of in CapEx to down billion. billion to come saw range our the $XX down billion you support that $XX from so That's guide $XX strategy.

But customers. the to what be to well. to them that, absolutely do want careful we're as very promising wow around we've got We

conservatism So be a is including I a so want how every more to including suppliers, have customers, customers. to strategy. what every We you'll see engage of what more little stakeholder, much lot think we deploy bit how pretty turn, capital, with doing the we That's investors, we including what you. promised to around than

foundry, manufacturing -- in well. the semiconductor world-class in main goal another leading-edge in is absolutely U.S. The as space. building U.S., need government's particular, of interest the feel for that place. with In We player a aligns government there still a that's it the the

we're absolutely around ROIC It's now best and generating the So to committed cautious very shareholders. being about that. for the careful

John Pitzer

C.J., do follow-up you question? a have

Christopher Muse

I for Dave, I seeing was can guess, for believe the another to free positive? be question goal stated months path walk XXXX about through flow cash I to given in you kind positive. we're ago, kind you. of X weakness do. the of uncertainty, the you're I thinking how guess, turning free QX flow cash that and

David Zinsner

Yes.

And helped the tide. strong very we 'XX in by adjusted we did But would obviously cash not flow good driving capital working in a say, guiding a improvements. we're just challenging around beyond accordingly, stem first operations the and that quarter. job So I CapEx situation from

We're to have I'd flow cash about were been negative we while to We working of in as I focused the a results. relationship help. in the on outlook. it's 'XX. down, were top also well, managing the 'XX, X closer should to different offsets, acutely effectively. pretty going expect be will offsets same really we more as adjusted capital than some significant $XX We billion more we in than line about do which from talked operations, on CapEx So based say

won't it's a ours in of help that, see would year, a we that's a to improve. addition focus there. flow yet throw that say I where these but monetize to I XXXX. would that focus non-core adjusted That for we cash -- just opportunity for to out free -- in number us us businesses, say because of have de-lever and the we focus we I want will

have we'll we can something We I the help get that on to say are of the to cash next that some to earnings there de-lever. far use along will generate that quarter, we by process time suspect Altera.

Operator

Joe question next Stanley. the line from Morgan our comes And of from Moore

Joseph Moore

made of for of what Can expectations talk about tempering And it behind in space? the get what you Shores. Falcon sort the you remarks, competitive to does prepared that? of In reference that take you to kind of was

Michelle C. Holthaus

Joe. of course, I Yes, can,

customers think competitive in regards in to perspective as that they perspective, of is with the taking our execution resulted engage and at I my that teams, an a are it from the A to where look last really comes road really down the weeks maps, to lot over look see well at actively competitive to with and conversations needed be time right do X to and we what from the decision. deliver product.

that that's to -- be the deliver to what Gaudi And be of to we Gaudi with lot solution. we're learned obviously, me, working silicon. solution, But that is and of the what from so deliver able that, Shores product, in have that Shores. at is I learning of system, rack full-scale that. all not component a one excuse of really on to enough We looked complete able But will want our need when Jaguar process we're customers to with functions it's from help a the us that. Falcon rack-scale the we've things networking, do just memory, going Falcon

to so that to Jaguar Shores. And able we're get with

I a all. one excitement think not also this a fits lot the lot week of around we've with and seen DeepSeek size

map the at on look we address out to that great anything those that we've figure there's because different there this trying IP to if when as a ASICs, this we Product also they Co. say, deploy to Intel leverage need got harness I'm constraints are have out We've to market. seen assets and of can so we and week, how CPUs, to lot GPUs, we put And customers, ways technology. FPGAs, road figure

there. opportunity so also ways that and and that there's looking a I'm And we be disruptive at at that's if great something can looking

John Pitzer

have question? a you follow-up do Joe,

Joseph Moore

And that. candor do. thank all for you I of your about

some be color Just evidence I some about pervasive just Can might conservatism seeing you where that that, you mentioned Is seeing that's prepared that that about tariffs driving in happening? that's talk might you coming pull think on Are potentially separately, remarks happening? the how from. be? forward. that

David Zinsner

of sense fairly we of more quarter-to-quarter. I good customers mean from think have couple ordered digesting. they what we need than a obviously instances, in Yes. a customers were And

thought saw And analytics the insight so for by in and a region, was quarter. this. to for Asian that be of going bit A this region that tariffs. this reason, customers. big we from fourth extrapolate the that us the beyond what and might known we gave around subject lot's that really might It's quarter little you it plans on yet doing the on was in just revenue was the expect, a into I our it of just away pulled first the quarter. they're into hedging a tariffs not are know a of It hard lot customers me

Operator

the next our Arcuri question of line UBS. And Timothy comes from from

Timothy Arcuri

wanted gross to about margin. also I Dave, ask

and think off of and saying you down were kind came message XX% March. the was that you But you you QX. in XX.X% that incremental, of for and in one-timers, we're now these guided I of the is that had obviously, it's kind

just So to like of here? us from of think incrementals can kind you how sort level for the of set

David Zinsner

and words, X? -- saying? QX, other you're Is that from Incrementals into QX X in what

Timothy Arcuri

Yes. Yes.

Just Is kind of ]? around is [ it XX.X%? the like it XX.X% off

David Zinsner

get is as XX% this rule can about of Lake. is that think we like of way down pulls the That catch has to we we something dynamic fall-through in the right probably margin stabilized. The one pressure more The Yes. what dynamic. to fall-through to XX% it 'XX generally I XX% in Lunar been Obviously, kind like this probably around better do thumb probably call just the in period up. for product range of think more

to we into see and a 'XX you start XXA Panther Lake. Now through get lot more volume

at we're XX%-plus level. think I that in the range

John Pitzer

have Tim, question? you a do follow-on

Timothy Arcuri

keep that just to But $X.X is coming basis, cash to that? the that's year? of this is CapEx this in the out, figure going financing is down Yes, is to Dave, an do. so financing you in getting statement. flow low the also, What the a the end. really there's line outflow billion trying apples-to-apples section the And CapEx took on bigger I -- item that section, I year? I'm like guess,

David Zinsner

back in the the Yes. see, No, -- let's CapEx. me let go

$XX you really at billion If that a is the lower for function forecast, of what's under 'XX, look CapEx driving better assets construction. utilizing

required, invest the had I of balance was tune philosophy in kind mean, of up than billion. to assets $XX of our a to greater construction, ahead been pretty significant built and we under So what

have capital balance that a lot the we deployed. actually sheet of on been hasn't So really

them is get and And an allow the better the to going so amount to pushed return purchases that's make of externally. And limit effort have much of on that invested teams what capital we to drive possible as digest in to do down as to ROA the billion us that range. $XX and we to

give on we're and would -- But I any in in transparency, it's -- of place them when what CapEx I of you be would funky you be not orders this. financing cash. that It's things, doing X spirit equipment, right? the around say is the terms

depreciating, deployed. assets the pushing we the out CapEx, But there it's are because money as months lower we're improve is it honestly, we've construction working we've and on for the under by all to assets our before like CapEx. the And X spend goes of so it to it's probably even in. for in quite I spent suppliers payment terms time getting actually, and deployed ever sure, actually think, in cases, our That hangs

Operator

next of comes Bank Vivek Securities. Arya the line from America of Our from question

Vivek Arya

related gains better design So competitor, will help more, be better share few at kind if market. time of on you at or And you so fix? curious, regain because can external do And CPU last then you versus I'm their to does are that think on fixed? you any enterprise years? share? over center the to And First foundry, the outsource of seen manufacturing? your applies were MJ, have questions when look to what imagine what to all more I Intel to the xXX you data server shifts that are right, share And access take cloud. side,

Michelle C. Holthaus

said I competitiveness, Granite Vivek. the the of good earlier, step Thanks, did and you making we at a data center closing as stated Well, but first a still gap. have good or if versus competition, a look Rapids gap in job

feedback positive. be And And delivering for we've of so to the focused is Diamond laser those both Rapids. very early on next got products

process, think my this it market you have it When is to window. external at you within deliver in look have I've right the transparent to that and about The it right way have the pretty I manufacturing, been comes philosophy. way right about to product, in the the I

it for If high Lake across my is tell partners. do never be Forest. our and well. for Clearwater variety a we XX% earn you of the today, Panther both will XXA of for look going at Intel's X%. can today, where That's about overall we you externally manufacturing is obviously, probably are business, What but I They

will think But map. forward designs, future look ask at look at road the data in I competitive being I center as about I as more moving we every myself and that time question

unfathomable well product, outside I data put that if right that meant I be as I not the as my would customers. would the a performance hit So market right for think window product right it that center the

John Pitzer

Vivek, do you have question? a follow-up

Vivek Arya

Thank John. Yes. you,

for this maybe Dave noncontrolling on interest. So one

reversals, the Intel you I little grow to the $X.X But think $XXX $X.X a starts in-source, less million NCI for imagine. for to to is outsource Is right to what to it? I said lower Like or David, before. think, going right, bit it $XXX million you this had Because -- to million always you keep than, I guess, this Foundry, then would $XXX the the or billion year, increasing, us part, more on do you you have so right? to this more the more the way billion. on you model I give

to is EPS? there way to your a this of model much is reported reasonable how So headwind a

David Zinsner

actually exacerbates break good it X as I it's Mobileye in are But to just Altera, the X shows NCI. more a that also, Mobileye and SCIPs. sell SCIP just like it's up Yes, mean, noncontrolling out, it obviously than in companies interest. and stakes there. And down we question. in all

NCI, doesn't a sell soon Altera stake, have So going we as to as is any NCI. have it but

-- that have; into every to you have have you what what difficult going the have forecast things of you things are it there it, fabs that SCIPs. these your go with to like know little a one, share So a to know production bit in is you and which of asset of makes number certainty: X to two, kind because exactly look

and But 'XX for guiding was will soon comfortable identify an what to in number the like. think felt giving I 'XX. we indication up likely it's what actually It's you exact go too So 'XX. look probably to

Operator

Melius. comes question Reitzes Ben from of from next the line Our

Benjamin Reitzes

discussions with detail initial what your And what Have the they're I you and if your reached And the little Trump color leading talking particularly like talks and -- said Dave you working administration. wondering a remarks, prepared on about they interested more look any you're in? from who's wanted your forward know side? to with about could was them. MJ, in I to you give just I out? exactly

little sounds bit him love a you on kind obviously, get more of just I done would where and mean, what is hearings. to Howard during And follow-up. it's and where -- have you Lutnick, color far going. And think so like near this I'll he dear then to confirmation you his very a have

David Zinsner

Yes.

the as I'll co-CEO. Okay. How's that Thanks, that? take Ben. Maybe

Michelle C. Holthaus

fine. That's

David Zinsner

strong the the Yes, We've the good with them. since really level. back But them we have I with every government team day. affairs levels. also, have good outlook on that bringing to engages their CEO at really a we Obviously, the election manufacturing engaged been engagement semiconductor team at with U.S. about feel various

positive this very us. for think I is obviously, sign, a

the never we honestly, left Quite U.S.

manufacturing, regard. semiconductor in they understand R&D the So we're of advanced the positive. which in for value doing And the pole I also is position of a that in kind think U.S.

But with them positive importantly, make both see position the for them. this progress, Department the coming U.S. obviously that for both chain we're kind Trump to terms with I high-wage, the back for and the them. Michelle engaged imagine we'll in I about We to obviously go is reality regularly we their in officials jobs more Defense, a which to more fairly the more manufacturing this be of And make just be a to as that's U.S. goals supply will want pay also in do administration so of reality. high-tech secure meeting for They security, of but a jobs, to

John Pitzer

Ben, a you you had follow-up? said

Benjamin Reitzes

double-click little a caveman I gross question more incrementals. a and on in wanted on bit to prior rather margins terms than ask it

XQ year, server trying how I given talked to CPUs lot we goes sequentially being You heard. more high about and you're CPUs client be the price aggressive what as the it go a in bottom. sounds I'm throughout figure to out it going like from

trying to -- in that the for more thought with to I'm addition outsourcing So of balance to year, cetera. the TSMC et

you So it's give little prescriptive And then if made? a us pricing in light great. that color that's I the to low the of more can would just from point, I be I'm XQ, that comment more if right, say, we be go on trying guess where what

David Zinsner

in we mean, to the cost because Lake. I as structure be space. in intend of And competitive the is product I some particular, also, mentioned, under pressure, Yes. Lunar

in of lift of unit really that a that that lot some they, the very margins have market. on through to think, even I some a There competitive will not products. and year. competitive perhaps to Panther the that's it's I So part start that won't cost impact absolutely see better in be structure allows us relax think a that And business gross until comes Lake pressure

Foundry improvements. That said, will business the see

becomes the be following coming the even back. year. year, the it With wafers Lake, course Panther Over better in of more will

of the cost will plan, the business Foundry that also our help. so part overall structure spending improving of are reduction We as

beneficial the these say, and and the And margin better that on at And then relative we're than predecessors. price producing X have Intel that should mind, just -- much XXA side. keep wafers to structure cost foundry their will I in be structure relative structure

what to you in the thing get any you're go XX% the to somewhere quarter. sense, this XX% right probably the in quarter order the math best rough think that's revenue that probably like fall-through, will in on and margins based I take to to caveman be the macro is the in do So to where projecting

Operator

comes from Fargo. the Wells question next Aaron Rakers Our of from line

Aaron Rakers

of want bit. last little build to I that question off a

looking as delta the through EUV During margin cost of north of mix? had maybe you progressed And you remarks, of the to EUV mix, prepared Can how EUV define far XXXX us XXXX, exiting a dynamics the wafer? success this and that would wafer terms the give what year. of is in mentioned you X% an us X% remind wafer year in framework again as was structure,

David Zinsner

second of those goes Xx the Yes. maybe answer I Well, up the I'll it first. -- price part, cost, the in wafers. blended goes go dramatic cost ASP wafers you versus one at say improvement said pre-EUV as The move on sorry, and gross say the maybe would I'll versus wafers on that Xx margins wrong. those a so you as cost it's to into pretty up XXA XXA

node. guess probably to how or terms exactly Panther go up. year X. EUV. going XXA Panther is definitely Meteor be exit X-way on of Granite and this Intel I'd -- is on me our tough on Call in year. on Lake to X. of -- the It's Lake for Intel X on the is a Lake it X- we'll is hazard percentage

be of that 'XX. exit percentage jump So we as we'll in EUV the meaningful see a pretty wafers will

John Pitzer

Aaron, do question? follow-up you have a

Aaron Rakers

to million just it $X.X that probably $XXX little going ask billion. it's and just because I'm a do million confused going to But the impact, question. $XXX to I I'm SCIP this dumb a

-- Just EPS sure a make it that's sure remind modeling I Just net EPS that report in peers clear, number? so clear all all correctly. I've basis, got so I'm when us but non-GAAP head. to that I'm are on a already, my want again we're you we my

David Zinsner

be our that to income the non-GAAP not do yes, will number I It's just number. NCI, the take diluted and non-GAAP But include we includes in the fully to of that I income Mobileye to it Altera all want SCIP. extent. mean just clear. get some against our EPS

John Pitzer

Jonathan, time for we question. have one more

Operator

of Srini today our for final And comes Raymond question from line Pajjuri James. from Certainly. the

Srinivas Pajjuri

for maybe so, customers target XXXX, the to, I external mean, guess, there are If you that can think wafers? about sort behind we what with as I from breakeven? customers talk get you well? you mostly do do the do assumptions of guess, Or need achieve foundry I Dave, what internal revenue can breakeven, you need that? external on

David Zinsner

Yes.

sensitive original about Foundry has at more I be structure efficiency, and the a in existing business function, manufacturing was more from point to just creating on they capital do. be that different to ROIC to focused worked drive that this we're pointed more Products, or wafers more So based premise actually. It's to importantly, breakeven wafers, on from back say. on in wafers a better it's improves carry as to think out. get lot should And the you which margins. obviously 'XX, still mix And internal I EUV But of Intel that the the improves, as the significantly aiming a really that I margin. think to was out to think by just really P&L everything footprint, And squeeze ultimately

mean, that all money the in seen make attend I time. and hear that business. we've amazing, to I staff pivoted it -- in they're completely It's how that I transformation Michelle how meetings and they've the to

working. it's I so And think

and think 'XX we -- see 'XX. more we'll work through as I into go significantly efficiency into

get So to ability I feel good about our to breakeven.

Obviously, have we want to external customers.

it's in the feel regard assumed terms in something 'XX. looks like we versus from XXA customers, some we internal based hunts feedback that outperform very I so that that -- small of have on probably like and amount external mix for And customers. a of But will we've if customers

to all what drive ultimately, get the should gets. level to obviously, consistent get want the And 'XX will that's to a to industry we And foundry to breakeven. say, are those or So ultimately, we factors -- the that I profitable think business I want with profitability.

John Pitzer

quick follow-on? Srini, do a you have

Srinivas Pajjuri

Yes. A one. quick

expect to whether it think, it more to So set on die in die roughly die the And the you the of the is XXA do Is So flexibility trying back Panther if bring that in that less need Or plan? you're still or to? you past, to XX% sure? any for was the pretty of just comment the bring of in-house. I understand. think bringing I Dave, you Lake, back that the have then stone

David Zinsner

Michelle on Yes. products. to I'm how decision let she builds really because answer is her that it going her

Michelle C. Holthaus

Yes.

what's what's I right we So allows an move Panther what's to each win. Lake of generation stated we market the products what right window, did before, XXA it's as product, design and customers on inside, right based at the process, look win. and But the our

said, So in a XXA. performance for And Lake, where I yield process. from at the are point that we're very and as was with Panther we this perspective happy

So stay XXA. that will on

Then outside for Lake, next-generation look to and you client Nova process. die that forward inside product that, our as for we'll have both after actually

continue in said, That our balance. more wafers the as So Because across and of but I'll what Intel inside you'll I with our us Again, well. a it's end win, and allows to the actually overall customers, about the doing market, to product see to to optimizing portfolio be allows to our the us compute drives same Foundry we'll portfolio. if customers look successful, day, that And tiles allows and what are we outside. us win. win data win at in center the as have optimizing

David Zinsner

Great. Thanks, Michelle.

me we're as obviously, work we forward of but always, MJ have the a step actions and updating forward, taken. lot our let of with you, call. So to opportunity for good appreciate and to we we've as that, I progress was ahead and looking a saying joining you go discuss the thank hard wrap up QX us, by along. the

you Foundry will also Direct join April event hope will we'll to investors hosting Intel in the hope in and user Connect like at I'd be that person. their of And of be see on many team second San in QX. many highlight Jose, person to the conferences attending you We in annual we XX that

and So thank night. you, good

Michelle C. Holthaus

Thank you.

Operator

conclude conference. ladies and you, program. the for today's your in Thank This participation gentlemen, does

now You day. Good disconnect. may

Intel (INTC) 30 Jan 252024 Q4 Earnings call transcript