Intel Reports Second-Quarter 2023 Financial Results

 Second-quar짯ter reve짯nue of $12.9 bil짯li짯on, down 15% year over year (YoY).

  • Second-quar짯ter ear짯nings per share (EPS) attri짯bu짯ta짯ble to Intel was $0.35; non-GAAP EPS attri짯bu짯ta짯ble to Intel was $0.13.
  • Second-quar짯ter results on the top and bot짯tom line excee짯ded the high end of gui짯dance; com짯pa짯ny con짯ti짯nues to exe짯cu짯te stra짯tegy with momen짯tum across pro짯cess and pro짯duct tech짯no짯lo짯gy and foundry.
  • Fore짯cas짯ting third-quar짯ter 2023 reve짯nue of appro짯xi짯m짯ate짯ly $12.9 bil짯li짯on to $13.9 bil짯li짯on; expec짯ting third-quar짯ter EPS attri짯bu짯ta짯ble to Intel of $0.04; non-GAAP EPS attri짯bu짯ta짯ble to Intel of $0.20.

 

SANTA CLARA, Calif., July 27, 2023 Intel Cor짯po짯ra짯ti짯on today repor짯ted second-quar짯ter 2023 finan짯cial results.

Our Q2 results excee짯ded the high end of our gui짯dance as we con짯ti짯nue to exe짯cu짯te on our stra짯te짯gic prio짯ri짯ties, inclu짯ding buil짯ding momen짯tum with our foundry busi짯ness and deli짯ve짯ring on our pro짯duct and pro짯cess road짯maps, said Pat Gel짯sin짯ger, Intel CEO. 쏻e are also well-posi짯tio짯ned to capi짯ta짯li짯ze on the signi짯fi짯cant growth across the AI con짯ti짯nu짯um by cham짯pio짯ning an open eco짯sys짯tem and sili짯con solu짯ti짯ons that opti짯mi짯ze per짯for짯mance, cost and secu짯ri짯ty to demo짯cra짯ti짯ze AI from cloud to enter짯pri짯se, edge and client.

David Zins짯ner, Intel CFO, said, 쏶trong exe짯cu짯ti짯on, inclu짯ding pro짯gress towards our $3 bil짯li짯on in cost savings in 2023, con짯tri짯bu짯ted to the upsi짯de in the quar짯ter. We remain focu짯sed on ope짯ra짯tio짯nal effi짯ci짯en짯ci짯es and our Smart Capi짯tal stra짯tegy to sup짯port sus짯tainable growth and finan짯cial disci짯pli짯ne as we impro짯ve our mar짯gins and cash gene짯ra짯ti짯on and dri짯ve share짯hol짯der value.

Q2 2023 Finan짯cial Highlights

  GAAP   Non-GAAP
  Q2 2023 Q2 2022 vs. Q2 2022   Q2 2023 Q2 2022 vs. Q2 2022
Reve짯nue ($B) $12.9 $15.3 down 15%        
Gross Mar짯gin 35.8% 36.5% down 0.7 ppt   39.8% 44.8% down 5 ppts
R&D and MG&A ($B) $5.5 $6.2 down 12%   $4.7 $5.5 down 14%
Ope짯ra짯ting Margin (7.8)% (4.6)% down 3.2 ppts   3.5% 9.3% down 5.8 ppts
Tax Rate 280.5% 50.1% n/m*   13.0% 13.0%
Net Inco짯me (loss) Attri짯bu짯ta짯ble to Intel ($B) $1.5 $(0.5) n/m*   $0.5 $1.1 down 52%
Ear짯nings (loss) Per Share Attri짯bu짯ta짯ble to Intel $0.35 $(0.11) n/m*   $0.13 $0.28 down 54 %

In the second quar짯ter, the com짯pa짯ny gene짯ra짯ted $2.8 bil짯li짯on in cash from ope짯ra짯ti짯ons and paid divi짯dends of $0.5 billion.

 

Busi짯ness Unit Summary

Intel pre짯vious짯ly announ짯ced the orga짯niza짯tio짯nal chan짯ge to inte짯gra짯te its Acce짯le짯ra짯ted Com짯pu짯ting Sys짯tems and Gra짯phics Group into its Cli짯ent Com짯pu짯ting Group and Data Cen짯ter and AI Group. This chan짯ge is inten짯ded to dri짯ve a more effec짯ti짯ve go-to-mar짯ket capa짯bi짯li짯ty and to acce짯le짯ra짯te the sca짯le of the짯se busi짯nesses, while also redu짯cing cos짯ts. As a result, the com짯pa짯ny modi짯fied its seg짯ment report짯ing in the first quar짯ter of 2023 to ali짯gn to this and cer짯tain other busi짯ness reor짯ga짯niza짯ti짯ons. All pri짯or-peri짯od seg짯ment data has been retro짯s짯pec짯tively adjus짯ted to reflect the way the com짯pa짯ny intern짯al짯ly recei짯ves infor짯ma짯ti짯on and mana짯ges and moni짯tors ope짯ra짯ting seg짯ment per짯for짯mance start짯ing in fis짯cal year 2023.

Busi짯ness Unit Reve짯nue and Trends   Q2 2023   vs. Q2 2022  
Cli짯ent Com짯pu짯ting Group (CCG)   $6.8 bil짯li짯on   down 12%  
Data Cen짯ter and AI (DCAI)   $4.0 bil짯li짯on   down 15%  
Net짯work and Edge (NEX)   $1.4 bil짯li짯on   down 38%  
Mobi짯leye   $454 mil짯li짯on   down 1%  
Intel Foundry Ser짯vices (IFS)   $232 mil짯li짯on   up 307%  

Busi짯ness Highlights

 

뼧       Intel remains on track to meet its goal of achie짯ving five nodes in four years and to regain tran짯sis짯tor per짯for짯mance and power per짯for짯mance lea짯der짯ship by 2025. The com짯pa짯ny announ짯ced an indus짯try-first imple짯men짯ta짯ti짯on of backside power using Intel Power짯Via in a test chip, resul짯ting in nota짯ble per짯for짯mance and effi짯ci짯en짯cy gains. Power짯Via will be incor짯po짯ra짯ted into Intel 20A, expec짯ted to launch in the first half of 2024.

뼧       IFS announ짯ced that Boe짯ing and Nor짯throp Grum짯man have com짯mit짯ted to joi짯ning the U.S. Depart짯ment of Defense셲 RAMP멌 pro짯gram, led by Intel. The pro짯gram is inten짯ded to assu짯re dome짯stic access to next-gene짯ra짯ti짯on semi짯con짯duc짯tors by estab짯li짯shing and demons짯t짯ra짯ting a U.S.-based foundry eco짯sys짯tem to deve짯lop and fabri짯ca짯te chips on Intel 18A.

뼧       DCAI announ짯ced the gene짯ral avai짯la짯bi짯li짯ty of cloud ins짯tances of its 4th Gen Intel짰 Xeon짰 Sca짯lable pro짯ces짯sors by Goog짯le Cloud. In addi짯ti짯on, Intel셲 AI acce짯le짯ra짯ti짯on capa짯bi짯li짯ties were reco짯gni짯zed through third-par짯ty vali짯da짯ti짯on from MLCom짯mons짰, which published MLPerf꽓 Trai짯ning per짯for짯mance bench짯mark data show짯ing that 4th Gen Xeon and Haba짯na짰 Gaudi짰2 are two com짯pel짯ling, open alter짯na짯ti짯ves in the AI mar짯ket that com짯pe짯te on both per짯for짯mance and pri짯ce. This fol짯lows Intel셲 recent col짯la짯bo짯ra짯ti짯on with Bos짯ton Con짯sul짯ting Group to deli짯ver enter짯pri짯se-gra짯de, secu짯re gene짯ra짯ti짯ve AI to cus짯to짯mers lever짯aging Intel셲 Gau짯di짰 and 4th Gen Xeon offerings.

뼧       In CCG, Intel con짯tin짯ued to see strong demand for its 13th Gen Intel짰 Core꽓 pro짯ces짯sor fami짯ly, with more than 300 designs expec짯ted from OEM part짯ners this year. It also announ짯ced a col짯la짯bo짯ra짯ti짯on with Micro짯soft to dri짯ve the deve짯lo짯p짯ment of AI on per짯so짯nal com짯pu짯ting, and pre짯view짯ed AI-enab짯led capa짯bi짯li짯ties of Intel셲 upco짯ming Mete짯or Lake cli짯ent PC pro짯ces짯sors at Microsoft셲 Build 2023 con짯fe짯rence. In addi짯ti짯on, Intel intro짯du짯ced the Intel짰 Arc꽓 Pro A60 and Pro A60M as new mem짯bers of the Intel Arc Pro A몊eries pro짯fes짯sio짯nal ran짯ge of gra짯phics pro짯ces짯sing units (GPUs).

뼧       For NEX, Intel, Erics짯son and HPE suc짯cessful짯ly demons짯tra짯ted the industry셲 first vRAN solu짯ti짯on run짯ning on the 4th Gen Intel짰 Xeon짰 Sca짯lable pro짯ces짯sor with Intel짰 vRAN Boost. Intel also recent짯ly com짯ple짯ted an agree짯ment with Erics짯son to part짯ner broad짯ly on its next-gene짯ra짯ti짯on opti짯mi짯zed 5G infra짯struc짯tu짯re, under which Erics짯son will uti짯li짯ze Intel셲 18A pro짯cess tech짯no짯lo짯gy for its future cus짯tom 5G SoC. In addi짯ti짯on, Intel and Erics짯son will expand the col짯la짯bo짯ra짯ti짯on announ짯ced at Mobi짯le World Con짯gress 2023 to acce짯le짯ra짯te indus짯try-sca짯le open RAN uti짯li짯zing stan짯dard Intel Xeon-based plat짯forms as tel짯cos trans짯form to a foun짯da짯ti짯on of pro짯gramma짯ble, soft짯ware-defi짯ned infrastructure.

뼧       Mobi짯leye con짯tin짯ued to gene짯ra짯te strong pro짯fi짯ta짯bi짯li짯ty in the second quar짯ter and demons짯tra짯ted trac짯tion with its advan짯ced pro짯duct port짯fo짯lio by announ짯cing a Super짯Vi짯si짯on eyes-on, hands-off design win with Por짯sche and a mobi짯li짯ty-as-a-ser짯vice col짯la짯bo짯ra짯ti짯on with Volks짯wa짯gen Group that will soon begin testing.

Intel con짯ti짯nues to stra짯te짯gi짯cal짯ly invest in manu짯fac짯tu짯ring capa짯ci짯ty to fur짯ther advan짯ce IDM 2.0, and during the quar짯ter announ짯ced the sel짯ec짯tion of Wro짯c흢aw, Pol짯and, as the site of a new cut짯ting-edge semi짯con짯duc짯tor assem짯bly and test faci짯li짯ty. This faci짯li짯ty, in which Intel expects to invest as much as $4.6 bil짯li짯on, will help meet cri짯ti짯cal demand for assem짯bly and test capa짯ci짯ty that Intel anti짯ci짯pa짯tes by 2027. Addi짯tio짯nal짯ly, Intel and the Ger짯man fede짯ral govern짯ment signed a revi짯sed let짯ter of intent for Intel셲 plan짯ned lea짯ding-edge wafer fabri짯ca짯ti짯on site in Mag짯de짯burg, Ger짯ma짯ny. The agree짯ment encom짯pas짯ses Intel셲 expan짯ded invest짯ment in the site, now expec짯ted to be more than 30 bil짯li짯on euros for two first-of-a-kind semi짯con짯duc짯tor faci짯li짯ties in Euro짯pe, along with increased govern짯ment sup짯port that includes incen짯ti짯ves. Tog짯e짯ther, the짯se invest짯ments repre짯sent a major step toward a balan짯ced and resi짯li짯ent sup짯p짯ly chain for Europe.

Intel also agreed to sell an appro짯xi짯m짯ate짯ly 20% sta짯ke in its IMS Nano짯fa짯bri짯ca짯ti짯on GmbH busi짯ness to Bain Capi짯tal Spe짯cial Situa짯tions in a tran짯sac짯tion that values IMS at appro짯xi짯m짯ate짯ly $4.3 bil짯li짯on. This invest짯ment will posi짯ti짯on IMS to cap짯tu짯re the signi짯fi짯cant mar짯ket oppor짯tu짯ni짯ty for mul짯ti-beam mask wri짯ting tools, which are cri짯ti짯cal to the semi짯con짯duc짯tor eco짯sys짯tem for enab짯ling EUV (extre짯me ultra짯vio짯let litho짯gra짯phy) tech짯no짯lo짯gy, by acce짯le짯ra짯ting inno짯va짯ti짯on and enab짯ling deeper cross-indus짯try collaboration.

Q3 2023 Dividend

The com짯pa짯ny announ짯ced that its board of direc짯tors declared a quar짯ter짯ly divi짯dend of $0.125 per share on the company셲 com짯mon stock, which will be paya짯ble on Sept. 1, 2023, to share짯hol짯ders of record as of Aug. 7, 2023.

 

Busi짯ness Outlook

Intel셲 gui짯dance for the third quar짯ter of 2023 includes both GAAP and non-GAAP esti짯ma짯tes. Recon짯ci짯lia짯ti짯ons bet짯ween GAAP and non-GAAP finan짯cial mea짯su짯res are included below.*

Q3 2023   GAAP*   Non-GAAP*
    Appro짯xi짯m짯ate짯ly   Appro짯xi짯m짯ate짯ly
Reve짯nue   $12.913.9 bil짯li짯on   $12.913.9 bil짯li짯on^
Gross mar짯gin   39.1%   43.0%
Tax rate   224%   13%
Ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel diluted   $0.04   $0.20

 

Actu짯al results may dif짯fer mate짯ri짯al짯ly from Intel셲 Busi짯ness Out짯look as a result of, among other things, the fac짯tors descri짯bed under 쏤or짯ward-Loo짯king State짯ments below.

*Effec짯ti짯ve Janu짯ary 2023, Intel increased the esti짯ma짯ted useful life of cer짯tain pro짯duc짯tion machi짯nery and equip짯ment from five years to eight years. When com짯pared to the esti짯ma짯ted useful life in place as of the end of 2022, Intel expects total depre짯cia짯ti짯on expen짯se in 2023 to be redu짯ced by $4.2 bil짯li짯on. Intel expects this chan짯ge will result in an appro짯xi짯m짯ate짯ly $2.5 bil짯li짯on increase to gross mar짯gin, a $400 mil짯li짯on decrease in R&D expen짯ses and a $1.3 bil짯li짯on decrease in ending inven짯to짯ry values.

Ear짯nings Webcast

Intel will hold a public web짯cast at 2 p.m. PDT today to dis짯cuss the results for its second-quar짯ter 2023. The live public web짯cast can be acces짯sed on Intel셲 Inves짯tor Rela짯ti짯ons web짯site at www.intc.com. The cor짯re짯spon짯ding ear짯nings pre짯sen짯ta짯ti짯on and web짯cast replay will also be available on the site.

No adjus짯t짯ment on a non-GAAP basis.

 

For짯ward-Loo짯king Statements

This release con짯ta짯ins for짯ward-loo짯king state짯ments that invol짯ve a num짯ber of risks and uncer짯tain짯ties. Words such as 쏿cce짯le짯ra짯te, 쏿chie짯ve, 쏿im, 쏿mbi짯ti짯ons, 쏿nti짯ci짯pa짯te, 쐀elie짯ve, 쐁om짯mit짯ted, 쐁on짯ti짯nue, 쐁ould, 쐂esi짯gned, 쐃sti짯ma짯te, 쐃xpect, 쐄ore짯cast, 쐄uture, 쐅oals, 쐅row, 쐅ui짯dance, 쐇ntend, 쐋ikely, 쐌ay, 쐌ight, 쐌ile짯sto짯nes, 쐍ext gene짯ra짯ti짯on, 쐎bjec짯ti짯ve, 쐎n track, 쐎ppor짯tu짯ni짯ty, 쐎ut짯look, 쐏en짯ding, 쐏lan, 쐏osi짯ti짯on, 쐏oten짯ti짯al, 쐏os짯si짯ble, 쐏re짯dict, 쐏ro짯gress, 쐒amp, 쐒oad짯map, 쐓eeks, 쐓hould, 쐓tri짯ve, 쐔ar짯gets, 쐔o be, 쐕pco짯ming, 쐗ill, 쐗ould, and varia짯ti짯ons of such words and simi짯lar expres짯si짯ons are inten짯ded to iden짯ti짯fy such for짯ward-loo짯king state짯ments, which may include state짯ments regarding:

  • our busi짯ness plans and stra짯tegy and anti짯ci짯pa짯ted bene짯fits the짯r짯e짯f짯rom, inclu짯ding with respect to our IDM 2.0 stra짯tegy, our part짯ner짯ship with Brook짯field, the tran짯si짯ti짯on to an inter짯nal foundry model, updates to our report짯ing struc짯tu짯re and our AI strategy;
  • pro짯jec짯tions of our future finan짯cial per짯for짯mance, inclu짯ding future reve짯nue, gross mar짯gins, capi짯tal expen짯dit짯ures, and cash flows;
  • pro짯jec짯ted cos짯ts and yield trends;
  • future cash requi짯re짯ments and the avai짯la짯bi짯li짯ty, uses, suf짯fi짯ci짯en짯cy, and cost of capi짯tal resour짯ces, and sources of fun짯ding, inclu짯ding future capi짯tal and R&D invest짯ments, cre짯dit rating expec짯ta짯ti짯ons, and expec짯ted returns to stock짯hol짯ders, such as stock repurcha짯ses and dividends;
  • future pro짯ducts, ser짯vices and tech짯no짯lo짯gies, and the expec짯ted goals, time짯line, ramps, pro짯gress, avai짯la짯bi짯li짯ty, pro짯duc짯tion, regu짯la짯ti짯on and bene짯fits of such pro짯ducts, ser짯vices and tech짯no짯lo짯gies, inclu짯ding future pro짯cess nodes and pack짯a짯ging tech짯no짯lo짯gy, pro짯duct road짯maps, sche짯du짯les, future pro짯duct archi짯tec짯tures, expec짯ta짯ti짯ons regar짯ding pro짯cess per짯for짯mance, per-watt pari짯ty, and metrics and expec짯ta짯ti짯ons regar짯ding pro짯duct and pro짯cess leadership;
  • invest짯ment plans, and impacts of invest짯ment plans, inclu짯ding in the US and abroad;
  • inter짯nal and exter짯nal manu짯fac짯tu짯ring plans, inclu짯ding future inter짯nal manu짯fac짯tu짯ring volu짯mes, manu짯fac짯tu짯ring expan짯si짯on plans and the finan짯cing the짯r짯e짯for, and exter짯nal foundry usage;
  • future pro짯duc짯tion capa짯ci짯ty and pro짯duct supply;
  • sup짯p짯ly expec짯ta짯ti짯ons, inclu짯ding regar짯ding cons짯traints, limi짯ta짯ti짯ons, pri짯cing, and indus짯try shortages;
  • plans and goals rela짯ted to Intel셲 foundry busi짯ness, inclu짯ding with respect to future manu짯fac짯tu짯ring capa짯ci짯ty and foundry ser짯vice offe짯rings, inclu짯ding tech짯no짯lo짯gy and IP offerings;
  • expec짯ted timing and impact of acqui짯si짯ti짯ons, dives짯ti짯tures, and other signi짯fi짯cant tran짯sac짯tions, inclu짯ding our pro짯po짯sed acqui짯si짯ti짯on of Tower Semi짯con짯duc짯tor Ltd. and the sale of our NAND memo짯ry business;
  • expec짯ted com짯ple짯ti짯on and impacts of res짯truc짯tu짯ring acti짯vi짯ties and cost-saving or effi짯ci짯en짯cy initia짯ti짯ves, inclu짯ding tho짯se rela짯ted to the 2022 Res짯truc짯tu짯ring Program;
  • future social and envi짯ron짯men짯tal per짯for짯mance goals, mea짯su짯res, stra짯te짯gies and results;
  • our anti짯ci짯pa짯ted growth, future mar짯ket share, and trends in our busi짯nesses and operations;
  • pro짯jec짯ted growth and trends in mar짯kets rele짯vant to our businesses;
  • anti짯ci짯pa짯ted trends and impacts rela짯ted to indus짯try com짯po짯nent, sub짯stra짯te, and foundry capa짯ci짯ty uti짯liza짯ti짯on, shorta짯ges and constraints;
  • expec짯ta짯ti짯ons regar짯ding govern짯ment incentives;
  • future tech짯no짯lo짯gy trends and deve짯lo짯p짯ments, such as AI;
  • future macro envi짯ron짯men짯tal and eco짯no짯mic con짯di짯ti짯ons, inclu짯ding regio짯nal or glo짯bal down짯turns or recessions;
  • future respon짯ses to and effects of COVID-19, inclu짯ding as to manu짯fac짯tu짯ring, trans짯por짯ta짯ti짯on and ope짯ra짯tio짯nal rest짯ric짯tions and dis짯rup짯ti짯ons and broa짯der eco짯no짯mic conditions;
  • geo짯po짯li짯ti짯cal con짯di짯ti짯ons, inclu짯ding the impacts of Russia셲 war on Ukrai짯ne and rising ten짯si짯ons bet짯ween the U.S. and China;
  • tax- and accoun짯ting-rela짯ted expectations;
  • expec짯ta짯ti짯ons regar짯ding our rela짯ti짯onships with cer짯tain sanc짯tion짯ed par짯ties; and
  • other cha짯rac짯te짯riza짯ti짯ons of future events or circumstances.

 

Such state짯ments invol짯ve many risks and uncer짯tain짯ties that could cau짯se our actu짯al results to dif짯fer mate짯ri짯al짯ly from tho짯se expres짯sed or impli짯ed, including:

  • chan짯ges in demand for our products;
  • chan짯ges in pro짯duct mix;
  • the com짯ple짯xi짯ty and fixed cost natu짯re of our manu짯fac짯tu짯ring operations;
  • the high level of com짯pe짯ti짯ti짯on and rapid tech짯no짯lo짯gi짯cal chan짯ge in our industry;
  • the signi짯fi짯cant upfront invest짯ments in R&D and our busi짯ness, pro짯ducts, tech짯no짯lo짯gies, and manu짯fac짯tu짯ring capabilities;
  • vul짯nerabi짯li짯ty to new pro짯duct deve짯lo짯p짯ment and manu짯fac짯tu짯ring-rela짯ted risks, inclu짯ding pro짯duct defects or erra짯ta, par짯ti짯cu짯lar짯ly as we deve짯lop next gene짯ra짯ti짯on pro짯ducts and imple짯ment next gene짯ra짯ti짯on pro짯cess technologies;
  • risks asso짯cia짯ted with a high짯ly com짯plex glo짯bal sup짯p짯ly chain, inclu짯ding from dis짯rup짯ti짯ons, delays, trade ten짯si짯ons, or shortages;
  • sales-rela짯ted risks, inclu짯ding cus짯to짯mer con짯cen짯tra짯ti짯on and the use of dis짯tri짯bu짯tors and other third parties;
  • poten짯ti짯al secu짯ri짯ty vul짯nerabi짯li짯ties in our products;
  • cyber짯se짯cu짯ri짯ty and pri짯va짯cy risks;
  • invest짯ment and tran짯sac짯tion risk;
  • IP risks and risks asso짯cia짯ted with liti짯ga짯ti짯on and regu짯la짯to짯ry proceedings;
  • evol짯ving regu짯la짯to짯ry and legal requi짯re짯ments across many jurisdictions;
  • geo짯po짯li짯ti짯cal and inter짯na짯tio짯nal trade conditions;
  • our debt obligations;
  • risks of lar짯ge sca짯le glo짯bal operations;
  • macroe짯co짯no짯mic conditions;
  • impacts of the COVID-19 or simi짯lar such pandemic;
  • other risks and uncer짯tain짯ties descri짯bed in this release, our most recent Annu짯al Report on Form 10멚 and our other filings with the U.S. Secu짯ri짯ties and Exch짯an짯ge Com짯mis짯si짯on (SEC).

 

Given the짯se risks and uncer짯tain짯ties, rea짯ders are cau짯tio짯ned not to place undue reli짯ance on such for짯ward-loo짯king state짯ments. Rea짯ders are urged to careful짯ly review and con짯sider the various dis짯clo짯sures made in this release and in other docu짯ments we file from time to time with the SEC that dis짯c짯lo짯se risks and uncer짯tain짯ties that may affect our business.

Unless spe짯ci짯fi짯cal짯ly indi짯ca짯ted other짯wi짯se, the for짯ward-loo짯king state짯ments in this release do not reflect the poten짯ti짯al impact of any dives짯ti짯tures, mer짯gers, acqui짯si짯ti짯ons, or other busi짯ness com짯bi짯na짯ti짯ons that have not been com짯ple짯ted as of the date of this fil짯ing. In addi짯ti짯on, the for짯ward-loo짯king state짯ments in this release are based on management셲 expec짯ta짯ti짯ons as of the date of this release, unless an ear짯lier date is spe짯ci짯fied, inclu짯ding expec짯ta짯ti짯ons based on third-par짯ty infor짯ma짯ti짯on and pro짯jec짯tions that manage짯ment belie짯ves to be repu짯ta짯ble. We do not under짯ta짯ke, and express짯ly dis짯cla짯im any duty, to update such state짯ments, whe짯ther as a result of new infor짯ma짯ti짯on, new deve짯lo짯p짯ments, or other짯wi짯se, except to the ext짯ent that dis짯clo짯sure may be requi짯red by law.

 

About Intel

Intel (Nasdaq: INTC) is an indus짯try lea짯der, crea짯ting world-chan짯ging tech짯no짯lo짯gy that enables glo짯bal pro짯gress and enri짯ches lives. Inspi짯red by Moore셲 Law, we con짯ti짯nuous짯ly work to advan짯ce the design and manu짯fac짯tu짯ring of semi짯con짯duc짯tors to help address our cus짯to짯mers grea짯test chal짯lenges. By embed짯ding intel짯li짯gence in the cloud, net짯work, edge and every kind of com짯pu짯ting device, we unleash the poten짯ti짯al of data to trans짯form busi짯ness and socie짯ty for the bet짯ter. To learn more about Intel셲 inno짯va짯tions, go to newsroom.intel.com and intel.com.

짤 Intel Cor짯po짯ra짯ti짯on. Intel, the Intel logo, and other Intel marks are trade짯marks of Intel Cor짯po짯ra짯ti짯on or its sub짯si짯dia짯ries. Other names and brands may be clai짯med as the pro짯per짯ty of others.

 

Intel Cor짯po짯ra짯ti짯on

Con짯so짯li짯da짯ted Con짯den짯sed State짯ments of Inco짯me and Other Information

    Three Months Ended
(In Mil짯li짯ons, Except Per Share Amounts; Unaudited)   Jul 1, 2023   Jul 2, 2022
Net reve짯nue   $ 12,949   $ 15,321
Cost of sales   8,311   9,734
Gross mar짯gin   4,638   5,587
Rese짯arch and development   4,080   4,400
Mar짯ke짯ting, gene짯ral, and administrative   1,374   1,800
Res짯truc짯tu짯ring and other charges   200   87
Ope짯ra짯ting expenses   5,654   6,287
Ope짯ra짯ting inco짯me (loss)   (1,016)   (700)
Gains (los짯ses) on equi짯ty invest짯ments, net   (24)   (90)
Inte짯rest and other, net   224   (119)
Inco짯me (loss) befo짯re taxes   (816)   (909)
Pro짯vi짯si짯on for (bene짯fit from) taxes   (2,289)   (455)
Net inco짯me (loss)   1,473   (454)
Less: Net inco짯me (loss) attri짯bu짯ta짯ble to non-con짯trol짯ling interests   (8)  
Net inco짯me (loss) attri짯bu짯ta짯ble to Intel   $ 1,481   $ (454)
Ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel봟asic   $ 0.35   $ (0.11)
Ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel봡iluted   $ 0.35   $ (0.11)
         
Weigh짯ted avera짯ge shares of com짯mon stock outstanding:        
Basic   $ 4,182   $ 4,100
Diluted   $ 4,196   $ 4,100

 

    Three Months Ended
(In Mil짯li짯ons)   Jul 1, 2023   Jul 2, 2022
Ear짯nings per share of com짯mon stock information:        
Weigh짯ted avera짯ge shares of com짯mon stock outstanding봟asic   4,182   4,100
Dilu짯ti짯ve effect of employee equi짯ty incen짯ti짯ve plans   14  
Weigh짯ted avera짯ge shares of com짯mon stock outstanding봡iluted   4,196   4,100
         
Other infor짯ma짯ti짯on:        
Employees (in thousands)   122.2   128.2

 

 

Intel Cor짯po짯ra짯ti짯on

Con짯so짯li짯da짯ted Con짯den짯sed Balan짯ce Sheets

(In Mil짯li짯ons, Except Par Value; Unaudited)   Jul 1, 2023   Dec 31, 2022
Assets        
Cur짯rent assets:        
Cash and cash equivalents   $ 8,349   $ 11,144
Short-term invest짯ments   15,908   17,194
Accounts receiva짯ble, net   2,996   4,133
Invent짯ories        
Raw mate짯ri짯als   1,284   1,517
Work in process   6,638   7,565
Finis짯hed goods   4,062   4,142
    11,984   13,224
Other cur짯rent assets   4,119   4,712
Total cur짯rent assets   43,356   50,407
         
Pro짯per짯ty, plant and equip짯ment, net   90,945   80,860
Equi짯ty investments   5,893   5,912
Good짯will   27,591   27,591
Iden짯ti짯fied intan짯gi짯ble assets, net   5,173   6,018
Other long-term assets   12,671   11,315
Total assets   $ 185,629   $ 182,103
         
Lia짯bi짯li짯ties and stock짯hol짯ders equity        
Cur짯rent liabilities:        
Short-term debt   $ 2,711   $ 4,367
Accounts paya짯ble   8,757   9,595
Accrued com짯pen짯sa짯ti짯on and benefits   2,887   4,084
Inco짯me taxes payable   2,169   2,251
Other accrued liabilities   10,656   11,858
Total cur짯rent liabilities   27,180   32,155
         
Debt   46,335   37,684
Other long-term liabilities   7,643   8,978
Stock짯hol짯ders equity:        
Com짯mon stock and capi짯tal in excess of par value, 4,188 issued and out짯stan짯ding (4,137 issued and out짯stan짯ding as of Decem짯ber 31, 2022)   34,330   31,580
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve inco짯me (loss)   (544)   (562)
Retai짯ned earnings   67,231   70,405
Total Intel stock짯hol짯ders equity   101,017   101,423
Non-con짯trol짯ling interests   3,454   1,863
Total stock짯hol짯ders equity   104,471   103,286
Total lia짯bi짯li짯ties and stock짯hol짯ders equity   $ 185,629   $ 182,103

 

 

Intel Cor짯po짯ra짯ti짯on

Con짯so짯li짯da짯ted Con짯den짯sed State짯ments of Cash Flows

    Six Months Ended
(In Mil짯li짯ons; Unaudited)   Jul 1, 2023   Jul 2, 2022
         
Cash and cash equi짯va짯lents, begin짯ning of period   $ 11,144   $ 4,827
Cash flows pro짯vi짯ded by (used for) ope짯ra짯ting activities:        
Net inco짯me (loss)   (1,295)   7,659
Adjus짯t짯ments to recon짯ci짯le net inco짯me to net cash pro짯vi짯ded by ope짯ra짯ting activities:        
Depre짯cia짯ti짯on   3,733   5,528
Share-based com짯pen짯sa짯ti짯on   1,661   1,599
Res짯truc짯tu짯ring and other charges   255   73
Amor짯tiza짯ti짯on of intangibles   909   968
(Gains) los짯ses on equi짯ty invest짯ments, net   (146)   (4,230)
(Gains) los짯ses on divestitures     (1,072)
Chan짯ges in assets and liabilities:        
Accounts receiva짯ble   1,137   3,397
Invent짯ories   1,240   (1,386)
Accounts paya짯ble   (1,102)   117
Accrued com짯pen짯sa짯ti짯on and benefits   (1,340)   (1,985)
Inco짯me taxes   (2,186)   (2,232)
Other assets and liabilities   (1,843)   (1,736)
Total adjus짯t짯ments   2,318   (959)
Net cash pro짯vi짯ded by (used for) ope짯ra짯ting activities   1,023   6,700
Cash flows pro짯vi짯ded by (used for) inves짯t짯ing activities:        
Addi짯ti짯ons to pro짯per짯ty, plant, and equipment   (13,301)   (11,846)
Purcha짯ses of short-term investments   (25,696)   (25,514)
Matu짯ri짯ties and sales of short-term investments   26,957   25,407
Sales of equi짯ty investments   253   4,775
Pro짯ceeds from divestitures     6,579
Other inves짯t짯ing   458   (1,820)
Net cash used for inves짯t짯ing activities   (11,329)   (2,419)
Cash flows pro짯vi짯ded by (used for) finan짯cing activities:        
Repay짯ment of com짯mer짯cial paper   (3,944)  
Pay짯ments on finan짯ce leases   (96)   (299)
Part짯ner contributions   834  
Pro짯ceeds from sales of sub짯si짯dia짯ry shares   1,573  
Issu짯an짯ce of long-term debt, net of issu짯an짯ce costs   10,968  
Repay짯ment of debt     (1,688)
Pay짯ment of divi짯dends to stockholders   (2,036)   (2,986)
Other finan짯cing   212   255
Net cash pro짯vi짯ded by (used for) finan짯cing activities   7,511   (4,718)
Net increase (decrease) in cash and cash equivalents   (2,795)   (437)
Cash and cash equi짯va짯lents, end of period   $ 8,349   $ 4,390

 

 

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Ope짯ra짯ting Seg짯ment Results

    Three Months Ended
(In Mil짯li짯ons)   Jul 1, 2023   Jul 2, 2022
Net reve짯nue:        
Cli짯ent Computing        
Desk짯top   $ 2,370   $ 2,289
Note짯book   3,896   4,751
Other   514   638
    6,780   7,678
         
Data Cen짯ter and AI   4,004   4,695
Net짯work and Edge   1,364   2,211
Mobi짯leye   454   460
Intel Foundry Services   232   57
All other   115   220
Total net revenue   $ 12,949   $ 15,321
         
Ope짯ra짯ting inco짯me (loss):        
Cli짯ent Computing   $ 1,039   $ 876
Data Cen짯ter and AI   (161)   (80)
Net짯work and Edge   (187)   294
Mobi짯leye   129   190
Intel Foundry Services   (143)   (134)
All other   (1,693)   (1,846)
Total ope짯ra짯ting inco짯me (loss)   $ (1,016)   $ (700)

 

We deri짯ve a sub짯stan짯ti짯al majo짯ri짯ty of our reve짯nue from our prin짯ci짯pal pro짯ducts that incor짯po짯ra짯te various com짯pon짯ents and tech짯no짯lo짯gies, inclu짯ding a micro짯pro짯ces짯sor and chip짯set, a stand-alo짯ne sys짯tem-on-chip or a mul짯ti짯chip packa짯ge, which are based on Intel architecture.

Reve짯nue for our repor짯ta짯ble and non-repor짯ta짯ble ope짯ra짯ting seg짯ments is pri짯ma짯ri짯ly rela짯ted to the fol짯lo짯wing pro짯duct lines:

뼧       CCG includes pro짯ducts desi짯gned for end-user form fac짯tors, focu짯sing on hig짯her growth seg짯ments of 2 in 1, thin-and-light, com짯mer짯cial and gam짯ing, and gro짯wing other pro짯ducts such as con짯nec짯ti짯vi짯ty and graphics.

뼧       DCAI includes a broad port짯fo짯lio of cen짯tral pro짯ces짯sing units (CPUs), domain-spe짯ci짯fic acce짯le짯ra짯tors and field pro짯gramma짯ble gate arrays (FPGAs), desi짯gned to empower data cen짯ter and hypers짯ca짯le solu짯ti짯ons for diver짯se com짯pu짯ting needs.

뼧       NEX includes pro짯gramma짯ble plat짯forms and high-per짯for짯mance con짯nec짯ti짯vi짯ty and com짯pu짯te solu짯ti짯ons desi짯gned for mar짯ket seg짯ments such as cloud net짯wor짯king, tele짯com짯mu짯ni짯ca짯ti짯ons net짯works, on-pre짯mi짯ses edge, soft짯ware and platforms.

뼧       Mobi짯leye includes the deve짯lo짯p짯ment and deploy짯ment of advan짯ced dri짯ver-assis짯tance sys짯tems (ADAS) and auto짯no짯mous dri짯ving tech짯no짯lo짯gies and solutions.

뼧       IFS pro짯vi짯des dif짯fe짯ren짯tia짯ted full stack solu짯ti짯ons inclu짯ding wafer fabri짯ca짯ti짯on, pack짯a짯ging, chip짯let stan짯dard and software.

We have sales and mar짯ke짯ting, manu짯fac짯tu짯ring, engi짯nee짯ring, finan짯ce and admi짯nis짯tra짯ti짯on groups. Expen짯ses for the짯se groups are gene짯ral짯ly allo짯ca짯ted to the ope짯ra짯ting segments.

We have an 쏿ll other cate짯go짯ry that includes reve짯nue, expen짯ses and char짯ges such as:

뼧       results of ope짯ra짯ti짯ons from non-repor짯ta짯ble seg짯ments not other짯wi짯se pre짯sen짯ted, and from start-up busi짯nesses that sup짯port our initiatives;

뼧       his짯to짯ri짯cal results of ope짯ra짯ti짯ons from dive짯s짯ted businesses;

뼧       amounts included within res짯truc짯tu짯ring and other charges;

뼧       employee bene짯fits, com짯pen짯sa짯ti짯on, impair짯ment char짯ges, and other expen짯ses not allo짯ca짯ted to the ope짯ra짯ting seg짯ments; and

뼧       acqui짯si짯ti짯on-rela짯ted cos짯ts, inclu짯ding amor짯tiza짯ti짯on and any impair짯ment of acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles and goodwill.

 

Intel Cor짯po짯ra짯ti짯on

Expl짯ana짯ti짯on of Non-GAAP Measures

In addi짯ti짯on to dis짯clo짯sing finan짯cial results in accordance with US GAAP, this docu짯ment con짯ta짯ins refe짯ren짯ces to the non-GAAP finan짯cial mea짯su짯res below. We belie짯ve the짯se non-GAAP finan짯cial mea짯su짯res pro짯vi짯de inves짯tors with useful sup짯ple짯men짯tal infor짯ma짯ti짯on about our ope짯ra짯ting per짯for짯mance, enable com짯pa짯ri짯son of finan짯cial trends and results bet짯ween peri짯ods whe짯re cer짯tain items may vary inde짯pen짯dent of busi짯ness per짯for짯mance, and allow for grea짯ter trans짯pa짯ren짯cy with respect to key metrics used by manage짯ment in ope짯ra짯ting our busi짯ness and mea짯su짯ring our per짯for짯mance. The짯se non-GAAP finan짯cial mea짯su짯res are used in our per짯for짯mance-based RSUs and our cash bonus plans.

Our non-GAAP finan짯cial mea짯su짯res reflect adjus짯t짯ments based on one or more of the fol짯lo짯wing items, as well as the rela짯ted inco짯me tax effects. Begin짯ning in 2023, inco짯me tax effects are cal짯cu짯la짯ted using a fixed long-term pro짯jec짯ted tax rate across all adjus짯t짯ments. We pro짯ject this long-term non-GAAP tax rate on an annu짯al basis using a five-year non-GAAP finan짯cial pro짯jec짯tion that excludes the inco짯me tax effects of each adjus짯t짯ment. The pro짯jec짯ted non-GAAP tax rate also con짯siders fac짯tors such as our tax struc짯tu짯re, our tax posi짯ti짯ons in various juris짯dic짯tions, and key legis짯la짯ti짯on in signi짯fi짯cant juris짯dic짯tions whe짯re we ope짯ra짯te. This long-term non-GAAP tax rate may be sub짯ject to chan짯ge for a varie짯ty of reasons, inclu짯ding the rapidly evol짯ving glo짯bal tax envi짯ron짯ment, signi짯fi짯cant chan짯ges in our geo짯gra짯phic ear짯nings mix, or chan짯ges to our stra짯tegy or busi짯ness ope짯ra짯ti짯ons. Manage짯ment uses this non-GAAP tax rate in mana짯ging inter짯nal short- and long-term ope짯ra짯ting plans and in eva짯lua짯ting our per짯for짯mance; we belie짯ve this approach faci짯li짯ta짯tes com짯pa짯ri짯son of our ope짯ra짯ting results and pro짯vi짯des useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance. Pri짯or-peri짯od non-GAAP results have been retroac짯tively adjus짯ted to reflect this updated approach.

The짯se non-GAAP finan짯cial mea짯su짯res should not be con짯side짯red a sub짯sti짯tu짯te for, or supe짯ri짯or to, finan짯cial mea짯su짯res cal짯cu짯la짯ted in accordance with US GAAP, and the finan짯cial results cal짯cu짯la짯ted in accordance with US GAAP and recon짯ci짯lia짯ti짯ons from the짯se results should be careful짯ly evaluated.

 

Non-GAAP adjus짯t짯ment or measure Defi짯ni짯ti짯on Useful짯ness to manage짯ment and investors
Acqui짯si짯ti짯on-rela짯ted adjustments Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble assets con짯sists of amor짯tiza짯ti짯on of intan짯gi짯ble assets such as deve짯lo짯ped tech짯no짯lo짯gy, brands, and cus짯to짯mer rela짯ti짯onships acqui짯red in con짯nec짯tion with busi짯ness com짯bi짯na짯ti짯ons. Char짯ges rela짯ted to the amor짯tiza짯ti짯on of the짯se intan짯gi짯bles are recor짯ded within both cost of sales and MG&A in our US GAAP finan짯cial state짯ments. Amor짯tiza짯ti짯on char짯ges are recor짯ded over the esti짯ma짯ted useful life of the rela짯ted acqui짯red intan짯gi짯ble asset, and thus are gene짯ral짯ly recor짯ded over mul짯ti짯ple years. We exclude amor짯tiza짯ti짯on char짯ges for our acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble assets for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se the짯se char짯ges are incon짯sis짯tent in size and are signi짯fi짯cant짯ly impac짯ted by the timing and valua짯ti짯on of our acqui짯si짯ti짯ons. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯son to our past ope짯ra짯ting per짯for짯mance and pro짯vi짯de inves짯tors with addi짯tio짯nal means to eva짯lua짯te cost and expen짯se trends.
Share-based com짯pen짯sa짯ti짯on Share-based com짯pen짯sa짯ti짯on con짯sists of char짯ges rela짯ted to our employee equi짯ty incen짯ti짯ve plans. We exclude char짯ges rela짯ted to share-based com짯pen짯sa짯ti짯on for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se we belie짯ve the짯se adjus짯t짯ments pro짯vi짯de bet짯ter com짯pa짯ra짯bi짯li짯ty to peer com짯pa짯ny results and becau짯se the짯se char짯ges are not view짯ed by manage짯ment as part of our core ope짯ra짯ting per짯for짯mance. We belie짯ve the짯se adjus짯t짯ments pro짯vi짯de inves짯tors with a useful view, through the eyes of manage짯ment, of our core busi짯ness model, how manage짯ment curr짯ent짯ly eva짯lua짯tes core ope짯ra짯tio짯nal per짯for짯mance, and addi짯tio짯nal means to eva짯lua짯te expen짯se trends, inclu짯ding in com짯pa짯ri짯son to other peer companies.
Patent sett짯le짯ment A por짯ti짯on of the char짯ge from our IP sett짯le짯ments repres짯ents a catch-up of cumu짯la짯ti짯ve amor짯tiza짯ti짯on that would have been incur짯red for the right to use the rela짯ted patents in pri짯or peri짯ods. This char짯ge rela짯ted to pri짯or peri짯ods is excluded from our non-GAAP results; amor짯tiza짯ti짯on rela짯ted to the right to use the patents in the cur짯rent and ongo짯ing peri짯ods is included. We exclude the catch-up char짯ge rela짯ted to pri짯or peri짯ods for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se this adjus짯t짯ment faci짯li짯ta짯tes com짯pa짯ri짯son to past ope짯ra짯ting results and pro짯vi짯des a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting performance.
Opta짯ne inven짯to짯ry impairment In 2022, we initia짯ted the wind-down of our Intel Opta짯ne memo짯ry business. We exclude the짯se impairm짯ents for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se the짯se char짯ges do not reflect our cur짯rent ope짯ra짯ting per짯for짯mance. This adjus짯t짯ment faci짯li짯ta짯tes a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯sons to past ope짯ra짯ting results.
Res짯truc짯tu짯ring and other charges Res짯truc짯tu짯ring char짯ges are cos짯ts asso짯cia짯ted with a for짯mal res짯truc짯tu짯ring plan and are pri짯ma짯ri짯ly rela짯ted to employee sever짯ance and bene짯fit arran짯ge짯ments. Other char짯ges may include peri짯odic good짯will and asset impairm짯ents, cer짯tain pen짯si짯on char짯ges, and cos짯ts asso짯cia짯ted with res짯truc짯tu짯ring activity. We exclude res짯truc짯tu짯ring and other char짯ges, inclu짯ding any adjus짯t짯ments to char짯ges recor짯ded in pri짯or peri짯ods, for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se the짯se cos짯ts do not reflect our core ope짯ra짯ting per짯for짯mance. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our core ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯sons to past ope짯ra짯ting results and pro짯vi짯de inves짯tors with addi짯tio짯nal means to eva짯lua짯te expen짯se trends.
(Gains) los짯ses on equi짯ty invest짯ments, net (Gains) los짯ses on equi짯ty invest짯ments, net con짯sists of ongo짯ing mark-to-mar짯ket adjus짯t짯ments on mar짯ke짯ta짯ble equi짯ty secu짯ri짯ties, obser짯va짯ble pri짯ce adjus짯t짯ments on non-mar짯ke짯ta짯ble equi짯ty secu짯ri짯ties, rela짯ted impair짯ment char짯ges, and the sale of equi짯ty invest짯ments and other. We exclude the짯se non-ope짯ra짯ting gains and los짯ses for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se it pro짯vi짯des bet짯ter com짯pa짯ra짯bi짯li짯ty bet짯ween peri짯ods. The exclu짯si짯on reflects how manage짯ment eva짯lua짯tes the core ope짯ra짯ti짯ons of the business.
Gains (los짯ses) from divestiture Gains (los짯ses) are reco짯gni짯zed at the clo짯se of a dives짯ti짯tu짯re, or over a spe짯ci짯fied defer짯ral peri짯od when defer짯red con짯side짯ra짯ti짯on is recei짯ved at the time of clo짯sing. Based on our ongo짯ing obli짯ga짯ti짯on under the NAND wafer manu짯fac짯tu짯ring and sale agree짯ment ente짯red into in con짯nec짯tion with the first clo짯sing of the sale of our NAND memo짯ry busi짯ness on Decem짯ber 29, 2021, a por짯ti짯on of the initi짯al clo짯sing con짯side짯ra짯ti짯on was defer짯red and will be reco짯gni짯zed bet짯ween first and second closing. We exclude gains or los짯ses resul짯ting from dives짯ti짯tures for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se they do not reflect our cur짯rent ope짯ra짯ting per짯for짯mance. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯sons to past ope짯ra짯ting results.
Adjus짯ted free cash flow We refe짯rence a non-GAAP finan짯cial mea짯su짯re of adjus짯ted free cash flow, which is used by manage짯ment when asses짯sing our sources of liqui짯di짯ty, capi짯tal resour짯ces, and qua짯li짯ty of ear짯nings. Adjus짯ted free cash flow is ope짯ra짯ting cash flow adjus짯ted for 1) addi짯ti짯ons to pro짯per짯ty, plant and equip짯ment, net of pro짯ceeds from capi짯tal grants and part짯ner con짯tri짯bu짯ti짯ons, 2) pay짯ments on finan짯ce lea짯ses, and 3) pro짯ceeds from the McA짯fee equi짯ty sale. This non-GAAP finan짯cial mea짯su짯re is hel짯pful in under짯stan짯ding our capi짯tal requi짯re짯ments and sources of liqui짯di짯ty by pro짯vi짯ding an addi짯tio짯nal means to eva짯lua짯te the cash flow trends of our busi짯ness. Sin짯ce the 2017 dives짯ti짯tu짯re, McA짯fee equi짯ty dis짯tri짯bu짯ti짯ons and sales con짯tri짯bu짯ted to pri짯or ope짯ra짯ting and free cash flow, and while the McA짯fee equi짯ty sale in Q1 2022 would have typi짯cal짯ly been excluded from adjus짯ted free cash flow as an equi짯ty sale, we belie짯ve inclu짯ding the sale pro짯ceeds in adjus짯ted free cash flow faci짯li짯ta짯te a bet짯ter, more con짯sis짯tent com짯pa짯ri짯son to past pre짯sen짯ta짯ti짯ons of liquidity.

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Recon짯ci짯lia짯ti짯ons of GAAP Actu짯als to Non-GAAP Actuals

Set forth below are recon짯ci짯lia짯ti짯ons of the non-GAAP finan짯cial mea짯su짯re to the most direct짯ly com짯pa짯ra짯ble US GAAP finan짯cial mea짯su짯re. The짯se non-GAAP finan짯cial mea짯su짯res should not be con짯side짯red a sub짯sti짯tu짯te for, or supe짯ri짯or to, finan짯cial mea짯su짯res cal짯cu짯la짯ted in accordance with US GAAP, and the recon짯ci짯lia짯ti짯ons from US GAAP to Non-GAAP actu짯als should be careful짯ly eva짯lua짯ted. Plea짯se refer to 쏣xpl짯ana짯ti짯on of Non-GAAP Mea짯su짯res in this docu짯ment for a detail짯ed expl짯ana짯ti짯on of the adjus짯t짯ments made to the com짯pa짯ra짯ble US GAAP mea짯su짯res, the ways manage짯ment uses the non-GAAP mea짯su짯res, and the reasons why manage짯ment belie짯ves the non-GAAP mea짯su짯res pro짯vi짯de useful infor짯ma짯ti짯on for investors.

    Three Months Ended
(In Mil짯li짯ons, Except Per Share Amounts)   Jul 1, 2023   Jul 2, 2022
GAAP gross margin   $ 4,638   $ 5,587
Acqui짯si짯ti짯on-rela짯ted adjustments   306   329
Share-based com짯pen짯sa짯ti짯on   210   190
Patent sett짯le짯ment     204
Opta짯ne inven짯to짯ry impairment     559
Non-GAAP gross margin   $ 5,154   $ 6,869
GAAP gross mar짯gin percentage   35.8 %   36.5 %
Acqui짯si짯ti짯on-rela짯ted adjustments   2.4 %   2.2 %
Share-based com짯pen짯sa짯ti짯on   1.6 %   1.2 %
Patent sett짯le짯ment   %   1.3 %
Opta짯ne inven짯to짯ry impairment   %   3.6 %
Non-GAAP gross mar짯gin percentage   39.8 %   44.8 %
GAAP R&D and MG&A   $ 5,454   $ 6,200
Acqui짯si짯ti짯on-rela짯ted adjustments   (44)   (48)
Share-based com짯pen짯sa짯ti짯on   (712)   (702)
Non-GAAP R&D and MG&A   $ 4,698   $ 5,450
GAAP ope짯ra짯ting inco짯me (loss)   $ (1,016)   $ (700)
Acqui짯si짯ti짯on-rela짯ted adjustments   350   377
Share-based com짯pen짯sa짯ti짯on   922   892
Patent sett짯le짯ment     204
Opta짯ne inven짯to짯ry impairment     559
Res짯truc짯tu짯ring and other charges   200   87
Non-GAAP ope짯ra짯ting inco짯me (loss)   $ 456   $ 1,419
GAAP ope짯ra짯ting mar짯gin (loss)   (7.8) %   (4.6) %
Acqui짯si짯ti짯on-rela짯ted adjustments   2.7 %   2.5 %
Share-based com짯pen짯sa짯ti짯on   7.1 %   5.8 %
Patent sett짯le짯ment   %   1.3 %
Opta짯ne inven짯to짯ry impairment   %   3.6 %
Res짯truc짯tu짯ring and other charges   1.5 %   0.6 %
Non-GAAP ope짯ra짯ting mar짯gin (loss)   3.5 %   9.3 %
GAAP tax rate   280.5 %   50.1 %
Inco짯me tax effects   (267.5) %   (37.1) %
Non-GAAP tax rate   13.0 %   13.0 %
         
(In Mil짯li짯ons, Except Per Share Amounts)   Jul 1, 2023   Jul 2, 2022
GAAP net inco짯me (loss) attri짯bu짯ta짯ble to Intel   $ 1,481   $ (454)
Acqui짯si짯ti짯on-rela짯ted adjustments   350   377
Share-based com짯pen짯sa짯ti짯on   922   892
Patent sett짯le짯ment     204
Opta짯ne inven짯to짯ry impairment     559
Res짯truc짯tu짯ring and other charges   200   87
(Gains) los짯ses on equi짯ty invest짯ments, net   24   90
(Gains) los짯ses from divestiture   (39)   19
Adjus짯t짯ments attri짯bu짯ta짯ble to non-con짯trol짯ling interest   (18)  
Inco짯me tax effects   (2,373)   (626)
Non-GAAP net inco짯me (loss) attri짯bu짯ta짯ble to Intel   $ 547   $ 1,148
 
GAAP ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel봡iluted   $ 0.35   $ (0.11)
Acqui짯si짯ti짯on-rela짯ted adjustments   0.08   0.09
Share-based com짯pen짯sa짯ti짯on   0.22   0.22
Patent sett짯le짯ment     0.05
Opta짯ne inven짯to짯ry impairment     0.14
Res짯truc짯tu짯ring and other charges   0.05   0.02
(Gains) los짯ses on equi짯ty invest짯ments, net   0.01   0.02
(Gains) los짯ses from divestiture   (0.01)  
Adjus짯t짯ments attri짯bu짯ta짯ble to non-con짯trol짯ling interest    
Inco짯me tax effects   (0.57)   (0.15)
Non-GAAP ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel봡iluted   $ 0.13   $ 0.28

 

    Three Months Ended
(In Mil짯li짯ons)   Jul 1, 2023   Jul 2, 2022
GAAP net cash pro짯vi짯ded by (used for) ope짯ra짯ting activities   $ 2,808   $ 809
Net addi짯ti짯ons to pro짯per짯ty, plant and equipment   (5,454)   (7,190)
Pay짯ments on finan짯ce leases   (81)  
Adjus짯ted free cash flow   $ (2,727)   $ (6,381)
GAAP net cash used for inves짯t짯ing activities   $ (2,808)   $ 220
GAAP net cash pro짯vi짯ded by (used for) finan짯cing activities   $ 117   $ (2,854)

 

 

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Recon짯ci짯lia짯ti짯ons of GAAP Out짯look to Non-GAAP Outlook

Set forth below are recon짯ci짯lia짯ti짯ons of the non-GAAP finan짯cial mea짯su짯re to the most direct짯ly com짯pa짯ra짯ble US GAAP finan짯cial mea짯su짯re. The짯se non-GAAP finan짯cial mea짯su짯res should not be con짯side짯red a sub짯sti짯tu짯te for, or supe짯ri짯or to, finan짯cial mea짯su짯res cal짯cu짯la짯ted in accordance with US GAAP, and the finan짯cial out짯look pre짯pared in accordance with US GAAP and the recon짯ci짯lia짯ti짯ons from this Busi짯ness Out짯look should be careful짯ly evaluated.

Plea짯se refer to 쏣xpl짯ana짯ti짯on of Non-GAAP Mea짯su짯res in this docu짯ment for a detail짯ed expl짯ana짯ti짯on of the adjus짯t짯ments made to the com짯pa짯ra짯ble US GAAP mea짯su짯res, the ways manage짯ment uses the non-GAAP mea짯su짯res, and the reasons why manage짯ment belie짯ves the non-GAAP mea짯su짯res pro짯vi짯de useful infor짯ma짯ti짯on for investors.

    Q3 2023 Out짯look1  
    Appro짯xi짯m짯ate짯ly  
GAAP gross mar짯gin percentage   39.1 %  
Acqui짯si짯ti짯on-rela짯ted adjustments   2.5 %  
Share-based com짯pen짯sa짯ti짯on   1.4 %  
Non-GAAP gross mar짯gin percentage   43.0 %  
       
GAAP tax rate   224 %  
Inco짯me tax effects   (211) %  
Non-GAAP tax rate   13 %  
       
GAAP ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel봡iluted   $ 0.04  
Acqui짯si짯ti짯on-rela짯ted adjustments   0.10  
Share-based com짯pen짯sa짯ti짯on   0.20  
(Gains) los짯ses on equi짯ty invest짯ments, net   (0.03)  
(Gains) los짯ses from divestiture   (0.01)  
Adjus짯t짯ments attri짯bu짯ta짯ble to non-con짯trol짯ling interest   (0.01)  
Inco짯me tax effects   (0.09)  
Non-GAAP ear짯nings (loss) per share attri짯bu짯ta짯ble to Intel봡iluted   $ 0.20