Second-quar­ter reve­nue of $12.9 bil­li­on, down 15% year over year (YoY).

• Second-quar­ter ear­nings per share (EPS) attri­bu­ta­ble to Intel was $0.35; non-GAAP EPS attri­bu­ta­ble to Intel was $0.13.
• Second-quar­ter results on the top and bot­tom line excee­ded the high end of gui­dance; com­pa­ny con­ti­nues to exe­cu­te stra­tegy with momen­tum across pro­cess and pro­duct tech­no­lo­gy and foundry.
• Fore­cas­ting third-quar­ter 2023 reve­nue of appro­xi­m­ate­ly $12.9 bil­li­on to $13.9 bil­li­on; expec­ting third-quar­ter EPS attri­bu­ta­ble to Intel of $0.04; non-GAAP EPS attri­bu­ta­ble to Intel of $0.20.

 

SANTA CLARA, Calif., July 27, 2023 – Intel Cor­po­ra­ti­on today repor­ted second-quar­ter 2023 finan­cial results.

“Our Q2 results excee­ded the high end of our gui­dance as we con­ti­nue to exe­cu­te on our stra­te­gic prio­ri­ties, inclu­ding buil­ding momen­tum with our foundry busi­ness and deli­ve­ring on our pro­duct and pro­cess road­maps,” said Pat Gel­sin­ger, Intel CEO. “We are also well-posi­tio­ned to capi­ta­li­ze on the signi­fi­cant growth across the AI con­ti­nu­um by cham­pio­ning an open eco­sys­tem and sili­con solu­ti­ons that opti­mi­ze per­for­mance, cost and secu­ri­ty to demo­cra­ti­ze AI from cloud to enter­pri­se, edge and client.”

David Zins­ner, Intel CFO, said, “Strong exe­cu­ti­on, inclu­ding pro­gress towards our $3 bil­li­on in cost savings in 2023, con­tri­bu­ted to the upsi­de in the quar­ter. We remain focu­sed on ope­ra­tio­nal effi­ci­en­ci­es and our Smart Capi­tal stra­tegy to sup­port sus­tainable growth and finan­cial disci­pli­ne as we impro­ve our mar­gins and cash gene­ra­ti­on and dri­ve share­hol­der value.”

Q2 2023 Finan­cial Highlights

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

In the second quar­ter, the com­pa­ny gene­ra­ted $2.8 bil­li­on in cash from ope­ra­ti­ons and paid divi­dends of $0.5 billion.

 

Busi­ness Unit Summary

Intel pre­vious­ly announ­ced the orga­niza­tio­nal chan­ge to inte­gra­te its Acce­le­ra­ted Com­pu­ting Sys­tems and Gra­phics Group into its Cli­ent Com­pu­ting Group and Data Cen­ter and AI Group. This chan­ge is inten­ded to dri­ve a more effec­ti­ve go-to-mar­ket capa­bi­li­ty and to acce­le­ra­te the sca­le of the­se busi­nesses, while also redu­cing cos­ts. As a result, the com­pa­ny modi­fied its seg­ment report­ing in the first quar­ter of 2023 to ali­gn to this and cer­tain other busi­ness reor­ga­niza­ti­ons. All pri­or-peri­od seg­ment data has been retro­s­pec­tively adjus­ted to reflect the way the com­pa­ny intern­al­ly recei­ves infor­ma­ti­on and mana­ges and moni­tors ope­ra­ting seg­ment per­for­mance start­ing in fis­cal year 2023.

Busi­ness Unit Reve­nue and Trends		Q2 2023		vs. Q2 2022
Cli­ent Com­pu­ting Group (CCG)		$6.8 bil­li­on		down	12%
Data Cen­ter and AI (DCAI)		$4.0 bil­li­on		down	15%
Net­work and Edge (NEX)		$1.4 bil­li­on		down	38%
Mobi­leye		$454 mil­li­on		down	1%
Intel Foundry Ser­vices (IFS)		$232 mil­li­on		up	307%

Busi­ness Highlights

 

▪       Intel remains on track to meet its goal of achie­ving five nodes in four years and to regain tran­sis­tor per­for­mance and power per­for­mance lea­der­ship by 2025. The com­pa­ny announ­ced an indus­try-first imple­men­ta­ti­on of backside power using Intel Power­Via in a test chip, resul­ting in nota­ble per­for­mance and effi­ci­en­cy gains. Power­Via will be incor­po­ra­ted into Intel 20A, expec­ted to launch in the first half of 2024.

▪       IFS announ­ced that Boe­ing and Nor­throp Grum­man have com­mit­ted to joi­ning the U.S. Depart­ment of Defense’s RAMP‑C pro­gram, led by Intel. The pro­gram is inten­ded to assu­re dome­stic access to next-gene­ra­ti­on semi­con­duc­tors by estab­li­shing and demons­t­ra­ting a U.S.-based foundry eco­sys­tem to deve­lop and fabri­ca­te chips on Intel 18A.

▪       DCAI announ­ced the gene­ral avai­la­bi­li­ty of cloud ins­tances of its 4th Gen Intel® Xeon® Sca­lable pro­ces­sors by Goog­le Cloud. In addi­ti­on, Intel’s AI acce­le­ra­ti­on capa­bi­li­ties were reco­gni­zed through third-par­ty vali­da­ti­on from MLCom­mons®, which published MLPerf™ Trai­ning per­for­mance bench­mark data show­ing that 4th Gen Xeon and Haba­na® Gaudi®2 are two com­pel­ling, open alter­na­ti­ves in the AI mar­ket that com­pe­te on both per­for­mance and pri­ce. This fol­lows Intel’s recent col­la­bo­ra­ti­on with Bos­ton Con­sul­ting Group to deli­ver enter­pri­se-gra­de, secu­re gene­ra­ti­ve AI to cus­to­mers lever­aging Intel’s Gau­di® and 4th Gen Xeon offerings.

▪       In CCG, Intel con­tin­ued to see strong demand for its 13th Gen Intel® Core™ pro­ces­sor fami­ly, with more than 300 designs expec­ted from OEM part­ners this year. It also announ­ced a col­la­bo­ra­ti­on with Micro­soft to dri­ve the deve­lo­p­ment of AI on per­so­nal com­pu­ting, and pre­view­ed AI-enab­led capa­bi­li­ties of Intel’s upco­ming Mete­or Lake cli­ent PC pro­ces­sors at Microsoft’s Build 2023 con­fe­rence. In addi­ti­on, Intel intro­du­ced the Intel® Arc™ Pro A60 and Pro A60M as new mem­bers of the Intel Arc Pro A‑series pro­fes­sio­nal ran­ge of gra­phics pro­ces­sing units (GPUs).

▪       For NEX, Intel, Erics­son and HPE suc­cessful­ly demons­tra­ted the industry’s first vRAN solu­ti­on run­ning on the 4th Gen Intel® Xeon® Sca­lable pro­ces­sor with Intel® vRAN Boost. Intel also recent­ly com­ple­ted an agree­ment with Erics­son to part­ner broad­ly on its next-gene­ra­ti­on opti­mi­zed 5G infra­struc­tu­re, under which Erics­son will uti­li­ze Intel’s 18A pro­cess tech­no­lo­gy for its future cus­tom 5G SoC. In addi­ti­on, Intel and Erics­son will expand the col­la­bo­ra­ti­on announ­ced at Mobi­le World Con­gress 2023 to acce­le­ra­te indus­try-sca­le open RAN uti­li­zing stan­dard Intel Xeon-based plat­forms as tel­cos trans­form to a foun­da­ti­on of pro­gramma­ble, soft­ware-defi­ned infrastructure.

▪       Mobi­leye con­tin­ued to gene­ra­te strong pro­fi­ta­bi­li­ty in the second quar­ter and demons­tra­ted trac­tion with its advan­ced pro­duct port­fo­lio by announ­cing a Super­Vi­si­on eyes-on, hands-off design win with Por­sche and a mobi­li­ty-as-a-ser­vice col­la­bo­ra­ti­on with Volks­wa­gen Group that will soon begin testing.

Intel con­ti­nues to stra­te­gi­cal­ly invest in manu­fac­tu­ring capa­ci­ty to fur­ther advan­ce IDM 2.0, and during the quar­ter announ­ced the sel­ec­tion of Wro­cław, Pol­and, as the site of a new cut­ting-edge semi­con­duc­tor assem­bly and test faci­li­ty. This faci­li­ty, in which Intel expects to invest as much as $4.6 bil­li­on, will help meet cri­ti­cal demand for assem­bly and test capa­ci­ty that Intel anti­ci­pa­tes by 2027. Addi­tio­nal­ly, Intel and the Ger­man fede­ral govern­ment signed a revi­sed let­ter of intent for Intel’s plan­ned lea­ding-edge wafer fabri­ca­ti­on site in Mag­de­burg, Ger­ma­ny. The agree­ment encom­pas­ses Intel’s expan­ded invest­ment in the site, now expec­ted to be more than 30 bil­li­on euros for two first-of-a-kind semi­con­duc­tor faci­li­ties in Euro­pe, along with increased govern­ment sup­port that includes incen­ti­ves. Tog­e­ther, the­se invest­ments repre­sent a major step toward a balan­ced and resi­li­ent sup­p­ly chain for Europe.

Intel also agreed to sell an appro­xi­m­ate­ly 20% sta­ke in its IMS Nano­fa­bri­ca­ti­on GmbH busi­ness to Bain Capi­tal Spe­cial Situa­tions in a tran­sac­tion that values IMS at appro­xi­m­ate­ly $4.3 bil­li­on. This invest­ment will posi­ti­on IMS to cap­tu­re the signi­fi­cant mar­ket oppor­tu­ni­ty for mul­ti-beam mask wri­ting tools, which are cri­ti­cal to the semi­con­duc­tor eco­sys­tem for enab­ling EUV (extre­me ultra­vio­let litho­gra­phy) tech­no­lo­gy, by acce­le­ra­ting inno­va­ti­on and enab­ling deeper cross-indus­try collaboration.

Q3 2023 Dividend

The com­pa­ny announ­ced that its board of direc­tors declared a quar­ter­ly divi­dend of $0.125 per share on the company’s com­mon stock, which will be paya­ble on Sept. 1, 2023, to share­hol­ders of record as of Aug. 7, 2023.

 

Busi­ness Outlook

Intel’s gui­dance for the third quar­ter of 2023 includes both GAAP and non-GAAP esti­ma­tes. Recon­ci­lia­ti­ons bet­ween GAAP and non-GAAP finan­cial mea­su­res are included below.*

Q3 2023		GAAP*		Non-GAAP*
		Appro­xi­m­ate­ly		Appro­xi­m­ate­ly
Reve­nue		$12.9–13.9 bil­li­on		$12.9–13.9 bil­li­on^
Gross mar­gin		39.1%		43.0%
Tax rate		224%		13%
Ear­nings (loss) per share attri­bu­ta­ble to Intel — diluted		$0.04		$0.20

 

Actu­al results may dif­fer mate­ri­al­ly from Intel’s Busi­ness Out­look as a result of, among other things, the fac­tors descri­bed under “For­ward-Loo­king State­ments” below.

*Effec­ti­ve Janu­ary 2023, Intel increased the esti­ma­ted useful life of cer­tain pro­duc­tion machi­nery and equip­ment from five years to eight years. When com­pared to the esti­ma­ted useful life in place as of the end of 2022, Intel expects total depre­cia­ti­on expen­se in 2023 to be redu­ced by $4.2 bil­li­on. Intel expects this chan­ge will result in an appro­xi­m­ate­ly $2.5 bil­li­on increase to gross mar­gin, a $400 mil­li­on decrease in R&D expen­ses and a $1.3 bil­li­on decrease in ending inven­to­ry values.

Ear­nings Webcast

Intel will hold a public web­cast at 2 p.m. PDT today to dis­cuss the results for its second-quar­ter 2023. The live public web­cast can be acces­sed on Intel’s Inves­tor Rela­ti­ons web­site at www.intc.com. The cor­re­spon­ding ear­nings pre­sen­ta­ti­on and web­cast replay will also be available on the site.

^ No adjus­t­ment on a non-GAAP basis.

 

For­ward-Loo­king Statements

This release con­ta­ins for­ward-loo­king state­ments that invol­ve a num­ber of risks and uncer­tain­ties. Words such as “acce­le­ra­te,” “achie­ve,” “aim,” “ambi­ti­ons,” “anti­ci­pa­te,” “belie­ve,” “com­mit­ted,” “con­ti­nue,” “could,” “desi­gned,” “esti­ma­te,” “expect,” “fore­cast,” “future,” “goals,” “grow,” “gui­dance,” “intend,” “likely,” “may,” “might,” “mile­sto­nes,” “next gene­ra­ti­on,” “objec­ti­ve,” “on track,” “oppor­tu­ni­ty,” “out­look,” “pen­ding,” “plan,” “posi­ti­on,” “poten­ti­al,” “pos­si­ble,” “pre­dict,” “pro­gress,” “ramp,” “road­map,” “seeks,” “should,” “stri­ve,” “tar­gets,” “to be,” “upco­ming,” “will,” “would,” and varia­ti­ons of such words and simi­lar expres­si­ons are inten­ded to iden­ti­fy such for­ward-loo­king state­ments, which may include state­ments regarding:

• our busi­ness plans and stra­tegy and anti­ci­pa­ted bene­fits the­r­e­f­rom, inclu­ding with respect to our IDM 2.0 stra­tegy, our part­ner­ship with Brook­field, the tran­si­ti­on to an inter­nal foundry model, updates to our report­ing struc­tu­re and our AI strategy;
• pro­jec­tions of our future finan­cial per­for­mance, inclu­ding future reve­nue, gross mar­gins, capi­tal expen­dit­ures, and cash flows;
• pro­jec­ted cos­ts and yield trends;
• future cash requi­re­ments and the avai­la­bi­li­ty, uses, suf­fi­ci­en­cy, and cost of capi­tal resour­ces, and sources of fun­ding, inclu­ding future capi­tal and R&D invest­ments, cre­dit rating expec­ta­ti­ons, and expec­ted returns to stock­hol­ders, such as stock repurcha­ses and dividends;
• future pro­ducts, ser­vices and tech­no­lo­gies, and the expec­ted goals, time­line, ramps, pro­gress, avai­la­bi­li­ty, pro­duc­tion, regu­la­ti­on and bene­fits of such pro­ducts, ser­vices and tech­no­lo­gies, inclu­ding future pro­cess nodes and pack­a­ging tech­no­lo­gy, pro­duct road­maps, sche­du­les, future pro­duct archi­tec­tures, expec­ta­ti­ons regar­ding pro­cess per­for­mance, per-watt pari­ty, and metrics and expec­ta­ti­ons regar­ding pro­duct and pro­cess leadership;
• invest­ment plans, and impacts of invest­ment plans, inclu­ding in the US and abroad;
• inter­nal and exter­nal manu­fac­tu­ring plans, inclu­ding future inter­nal manu­fac­tu­ring volu­mes, manu­fac­tu­ring expan­si­on plans and the finan­cing the­r­e­for, and exter­nal foundry usage;
• future pro­duc­tion capa­ci­ty and pro­duct supply;
• sup­p­ly expec­ta­ti­ons, inclu­ding regar­ding cons­traints, limi­ta­ti­ons, pri­cing, and indus­try shortages;
• plans and goals rela­ted to Intel’s foundry busi­ness, inclu­ding with respect to future manu­fac­tu­ring capa­ci­ty and foundry ser­vice offe­rings, inclu­ding tech­no­lo­gy and IP offerings;
• expec­ted timing and impact of acqui­si­ti­ons, dives­ti­tures, and other signi­fi­cant tran­sac­tions, inclu­ding our pro­po­sed acqui­si­ti­on of Tower Semi­con­duc­tor Ltd. and the sale of our NAND memo­ry business;
• expec­ted com­ple­ti­on and impacts of res­truc­tu­ring acti­vi­ties and cost-saving or effi­ci­en­cy initia­ti­ves, inclu­ding tho­se rela­ted to the 2022 Res­truc­tu­ring Program;
• future social and envi­ron­men­tal per­for­mance goals, mea­su­res, stra­te­gies and results;
• our anti­ci­pa­ted growth, future mar­ket share, and trends in our busi­nesses and operations;
• pro­jec­ted growth and trends in mar­kets rele­vant to our businesses;
• anti­ci­pa­ted trends and impacts rela­ted to indus­try com­po­nent, sub­stra­te, and foundry capa­ci­ty uti­liza­ti­on, shorta­ges and constraints;
• expec­ta­ti­ons regar­ding govern­ment incentives;
• future tech­no­lo­gy trends and deve­lo­p­ments, such as AI;
• future macro envi­ron­men­tal and eco­no­mic con­di­ti­ons, inclu­ding regio­nal or glo­bal down­turns or recessions;
• future respon­ses to and effects of COVID-19, inclu­ding as to manu­fac­tu­ring, trans­por­ta­ti­on and ope­ra­tio­nal rest­ric­tions and dis­rup­ti­ons and broa­der eco­no­mic conditions;
• geo­po­li­ti­cal con­di­ti­ons, inclu­ding the impacts of Russia’s war on Ukrai­ne and rising ten­si­ons bet­ween the U.S. and China;
• tax- and accoun­ting-rela­ted expectations;
• expec­ta­ti­ons regar­ding our rela­ti­onships with cer­tain sanc­tion­ed par­ties; and
• other cha­rac­te­riza­ti­ons of future events or circumstances.

 

Such state­ments invol­ve many risks and uncer­tain­ties that could cau­se our actu­al results to dif­fer mate­ri­al­ly from tho­se expres­sed or impli­ed, including:

• chan­ges in demand for our products;
• chan­ges in pro­duct mix;
• the com­ple­xi­ty and fixed cost natu­re of our manu­fac­tu­ring operations;
• the high level of com­pe­ti­ti­on and rapid tech­no­lo­gi­cal chan­ge in our industry;
• the signi­fi­cant upfront invest­ments in R&D and our busi­ness, pro­ducts, tech­no­lo­gies, and manu­fac­tu­ring capabilities;
• vul­nerabi­li­ty to new pro­duct deve­lo­p­ment and manu­fac­tu­ring-rela­ted risks, inclu­ding pro­duct defects or erra­ta, par­ti­cu­lar­ly as we deve­lop next gene­ra­ti­on pro­ducts and imple­ment next gene­ra­ti­on pro­cess technologies;
• risks asso­cia­ted with a high­ly com­plex glo­bal sup­p­ly chain, inclu­ding from dis­rup­ti­ons, delays, trade ten­si­ons, or shortages;
• sales-rela­ted risks, inclu­ding cus­to­mer con­cen­tra­ti­on and the use of dis­tri­bu­tors and other third parties;
• poten­ti­al secu­ri­ty vul­nerabi­li­ties in our products;
• cyber­se­cu­ri­ty and pri­va­cy risks;
• invest­ment and tran­sac­tion risk;
• IP risks and risks asso­cia­ted with liti­ga­ti­on and regu­la­to­ry proceedings;
• evol­ving regu­la­to­ry and legal requi­re­ments across many jurisdictions;
• geo­po­li­ti­cal and inter­na­tio­nal trade conditions;
• our debt obligations;
• risks of lar­ge sca­le glo­bal operations;
• macroe­co­no­mic conditions;
• impacts of the COVID-19 or simi­lar such pandemic;
• other risks and uncer­tain­ties descri­bed in this release, our most recent Annu­al Report on Form 10‑K and our other filings with the U.S. Secu­ri­ties and Exch­an­ge Com­mis­si­on (SEC).

 

Given the­se risks and uncer­tain­ties, rea­ders are cau­tio­ned not to place undue reli­ance on such for­ward-loo­king state­ments. Rea­ders are urged to careful­ly review and con­sider the various dis­clo­sures made in this release and in other docu­ments we file from time to time with the SEC that dis­c­lo­se risks and uncer­tain­ties that may affect our business.

Unless spe­ci­fi­cal­ly indi­ca­ted other­wi­se, the for­ward-loo­king state­ments in this release do not reflect the poten­ti­al impact of any dives­ti­tures, mer­gers, acqui­si­ti­ons, or other busi­ness com­bi­na­ti­ons that have not been com­ple­ted as of the date of this fil­ing. In addi­ti­on, the for­ward-loo­king state­ments in this release are based on management’s expec­ta­ti­ons as of the date of this release, unless an ear­lier date is spe­ci­fied, inclu­ding expec­ta­ti­ons based on third-par­ty infor­ma­ti­on and pro­jec­tions that manage­ment belie­ves to be repu­ta­ble. We do not under­ta­ke, and express­ly dis­cla­im any duty, to update such state­ments, whe­ther as a result of new infor­ma­ti­on, new deve­lo­p­ments, or other­wi­se, except to the ext­ent that dis­clo­sure may be requi­red by law.

 

About Intel

Intel (Nasdaq: INTC) is an indus­try lea­der, crea­ting world-chan­ging tech­no­lo­gy that enables glo­bal pro­gress and enri­ches lives. Inspi­red by Moore’s Law, we con­ti­nuous­ly work to advan­ce the design and manu­fac­tu­ring of semi­con­duc­tors to help address our cus­to­mers’ grea­test chal­lenges. By embed­ding intel­li­gence in the cloud, net­work, edge and every kind of com­pu­ting device, we unleash the poten­ti­al of data to trans­form busi­ness and socie­ty for the bet­ter. To learn more about Intel’s inno­va­tions, go to newsroom.intel.com and intel.com.

© Intel Cor­po­ra­ti­on. Intel, the Intel logo, and other Intel marks are trade­marks of Intel Cor­po­ra­ti­on or its sub­si­dia­ries. Other names and brands may be clai­med as the pro­per­ty of others.

 

Intel Cor­po­ra­ti­on

Con­so­li­da­ted Con­den­sed State­ments of Inco­me and Other Information

		Three Months Ended
(In Mil­li­ons, Except Per Share Amounts; Unaudited)		Jul 1, 2023		Jul 2, 2022
Net reve­nue		$ 12,949		$ 15,321
Cost of sales		8,311		9,734
Gross mar­gin		4,638		5,587
Rese­arch and development		4,080		4,400
Mar­ke­ting, gene­ral, and administrative		1,374		1,800
Res­truc­tu­ring and other charges		200		87
Ope­ra­ting expenses		5,654		6,287
Ope­ra­ting inco­me (loss)		(1,016)		(700)
Gains (los­ses) on equi­ty invest­ments, net		(24)		(90)
Inte­rest and other, net		224		(119)
Inco­me (loss) befo­re taxes		(816)		(909)
Pro­vi­si­on for (bene­fit from) taxes		(2,289)		(455)
Net inco­me (loss)		1,473		(454)
Less: Net inco­me (loss) attri­bu­ta­ble to non-con­trol­ling interests		(8)		—
Net inco­me (loss) attri­bu­ta­ble to Intel		$ 1,481		$ (454)
Ear­nings (loss) per share attri­bu­ta­ble to Intel—basic		$ 0.35		$ (0.11)
Ear­nings (loss) per share attri­bu­ta­ble to Intel—diluted		$ 0.35		$ (0.11)
Weigh­ted avera­ge shares of com­mon stock outstanding:
Basic		$ 4,182		$ 4,100
Diluted		$ 4,196		$ 4,100

 

		Three Months Ended
(In Mil­li­ons)		Jul 1, 2023		Jul 2, 2022
Ear­nings per share of com­mon stock information:
Weigh­ted avera­ge shares of com­mon stock outstanding—basic		4,182		4,100
Dilu­ti­ve effect of employee equi­ty incen­ti­ve plans		14		—
Weigh­ted avera­ge shares of com­mon stock outstanding—diluted		4,196		4,100
Other infor­ma­ti­on:
Employees (in thousands)		122.2		128.2

 

 

Intel Cor­po­ra­ti­on

Con­so­li­da­ted Con­den­sed Balan­ce Sheets

(In Mil­li­ons, Except Par Value; Unaudited)		Jul 1, 2023		Dec 31, 2022
Assets
Cur­rent assets:
Cash and cash equivalents		$ 8,349		$ 11,144
Short-term invest­ments		15,908		17,194
Accounts receiva­ble, net		2,996		4,133
Invent­ories
Raw mate­ri­als		1,284		1,517
Work in process		6,638		7,565
Finis­hed goods		4,062		4,142
		11,984		13,224
Other cur­rent assets		4,119		4,712
Total cur­rent assets		43,356		50,407
Pro­per­ty, plant and equip­ment, net		90,945		80,860
Equi­ty investments		5,893		5,912
Good­will		27,591		27,591
Iden­ti­fied intan­gi­ble assets, net		5,173		6,018
Other long-term assets		12,671		11,315
Total assets		$ 185,629		$ 182,103
Lia­bi­li­ties and stock­hol­ders’ equity
Cur­rent liabilities:
Short-term debt		$ 2,711		$ 4,367
Accounts paya­ble		8,757		9,595
Accrued com­pen­sa­ti­on and benefits		2,887		4,084
Inco­me taxes payable		2,169		2,251
Other accrued liabilities		10,656		11,858
Total cur­rent liabilities		27,180		32,155
Debt		46,335		37,684
Other long-term liabilities		7,643		8,978
Stock­hol­ders’ equity:
Com­mon stock and capi­tal in excess of par value, 4,188 issued and out­stan­ding (4,137 issued and out­stan­ding as of Decem­ber 31, 2022)		34,330		31,580
Accu­mu­la­ted other com­pre­hen­si­ve inco­me (loss)		(544)		(562)
Retai­ned earnings		67,231		70,405
Total Intel stock­hol­ders’ equity		101,017		101,423
Non-con­trol­ling interests		3,454		1,863
Total stock­hol­ders’ equity		104,471		103,286
Total lia­bi­li­ties and stock­hol­ders’ equity		$ 185,629		$ 182,103

 

 

Intel Cor­po­ra­ti­on

Con­so­li­da­ted Con­den­sed State­ments of Cash Flows

		Six Months Ended
(In Mil­li­ons; Unaudited)		Jul 1, 2023		Jul 2, 2022
Cash and cash equi­va­lents, begin­ning of period		$ 11,144		$ 4,827
Cash flows pro­vi­ded by (used for) ope­ra­ting activities:
Net inco­me (loss)		(1,295)		7,659
Adjus­t­ments to recon­ci­le net inco­me to net cash pro­vi­ded by ope­ra­ting activities:
Depre­cia­ti­on		3,733		5,528
Share-based com­pen­sa­ti­on		1,661		1,599
Res­truc­tu­ring and other charges		255		73
Amor­tiza­ti­on of intangibles		909		968
(Gains) los­ses on equi­ty invest­ments, net		(146)		(4,230)
(Gains) los­ses on divestitures		—		(1,072)
Chan­ges in assets and liabilities:
Accounts receiva­ble		1,137		3,397
Invent­ories		1,240		(1,386)
Accounts paya­ble		(1,102)		117
Accrued com­pen­sa­ti­on and benefits		(1,340)		(1,985)
Inco­me taxes		(2,186)		(2,232)
Other assets and liabilities		(1,843)		(1,736)
Total adjus­t­ments		2,318		(959)
Net cash pro­vi­ded by (used for) ope­ra­ting activities		1,023		6,700
Cash flows pro­vi­ded by (used for) inves­t­ing activities:
Addi­ti­ons to pro­per­ty, plant, and equipment		(13,301)		(11,846)
Purcha­ses of short-term investments		(25,696)		(25,514)
Matu­ri­ties and sales of short-term investments		26,957		25,407
Sales of equi­ty investments		253		4,775
Pro­ceeds from divestitures		—		6,579
Other inves­t­ing		458		(1,820)
Net cash used for inves­t­ing activities		(11,329)		(2,419)
Cash flows pro­vi­ded by (used for) finan­cing activities:
Repay­ment of com­mer­cial paper		(3,944)		—
Pay­ments on finan­ce leases		(96)		(299)
Part­ner contributions		834		—
Pro­ceeds from sales of sub­si­dia­ry shares		1,573		—
Issu­an­ce of long-term debt, net of issu­an­ce costs		10,968		—
Repay­ment of debt		—		(1,688)
Pay­ment of divi­dends to stockholders		(2,036)		(2,986)
Other finan­cing		212		255
Net cash pro­vi­ded by (used for) finan­cing activities		7,511		(4,718)
Net increase (decrease) in cash and cash equivalents		(2,795)		(437)
Cash and cash equi­va­lents, end of period		$ 8,349		$ 4,390

 

 

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Ope­ra­ting Seg­ment Results

		Three Months Ended
(In Mil­li­ons)		Jul 1, 2023		Jul 2, 2022
Net reve­nue:
Cli­ent Computing
Desk­top		$ 2,370		$ 2,289
Note­book		3,896		4,751
Other		514		638
		6,780		7,678
Data Cen­ter and AI		4,004		4,695
Net­work and Edge		1,364		2,211
Mobi­leye		454		460
Intel Foundry Services		232		57
All other		115		220
Total net revenue		$ 12,949		$ 15,321
Ope­ra­ting inco­me (loss):
Cli­ent Computing		$ 1,039		$ 876
Data Cen­ter and AI		(161)		(80)
Net­work and Edge		(187)		294
Mobi­leye		129		190
Intel Foundry Services		(143)		(134)
All other		(1,693)		(1,846)
Total ope­ra­ting inco­me (loss)		$ (1,016)		$ (700)

 

We deri­ve a sub­stan­ti­al majo­ri­ty of our reve­nue from our prin­ci­pal pro­ducts that incor­po­ra­te various com­pon­ents and tech­no­lo­gies, inclu­ding a micro­pro­ces­sor and chip­set, a stand-alo­ne sys­tem-on-chip or a mul­ti­chip packa­ge, which are based on Intel architecture.

Reve­nue for our repor­ta­ble and non-repor­ta­ble ope­ra­ting seg­ments is pri­ma­ri­ly rela­ted to the fol­lo­wing pro­duct lines:

▪       CCG includes pro­ducts desi­gned for end-user form fac­tors, focu­sing on hig­her growth seg­ments of 2 in 1, thin-and-light, com­mer­cial and gam­ing, and gro­wing other pro­ducts such as con­nec­ti­vi­ty and graphics.

▪       DCAI includes a broad port­fo­lio of cen­tral pro­ces­sing units (CPUs), domain-spe­ci­fic acce­le­ra­tors and field pro­gramma­ble gate arrays (FPGAs), desi­gned to empower data cen­ter and hypers­ca­le solu­ti­ons for diver­se com­pu­ting needs.

▪       NEX includes pro­gramma­ble plat­forms and high-per­for­mance con­nec­ti­vi­ty and com­pu­te solu­ti­ons desi­gned for mar­ket seg­ments such as cloud net­wor­king, tele­com­mu­ni­ca­ti­ons net­works, on-pre­mi­ses edge, soft­ware and platforms.

▪       Mobi­leye includes the deve­lo­p­ment and deploy­ment of advan­ced dri­ver-assis­tance sys­tems (ADAS) and auto­no­mous dri­ving tech­no­lo­gies and solutions.

▪       IFS pro­vi­des dif­fe­ren­tia­ted full stack solu­ti­ons inclu­ding wafer fabri­ca­ti­on, pack­a­ging, chip­let stan­dard and software.

We have sales and mar­ke­ting, manu­fac­tu­ring, engi­nee­ring, finan­ce and admi­nis­tra­ti­on groups. Expen­ses for the­se groups are gene­ral­ly allo­ca­ted to the ope­ra­ting segments.

We have an “all other” cate­go­ry that includes reve­nue, expen­ses and char­ges such as:

▪       results of ope­ra­ti­ons from non-repor­ta­ble seg­ments not other­wi­se pre­sen­ted, and from start-up busi­nesses that sup­port our initiatives;

▪       his­to­ri­cal results of ope­ra­ti­ons from dive­s­ted businesses;

▪       amounts included within res­truc­tu­ring and other charges;

▪       employee bene­fits, com­pen­sa­ti­on, impair­ment char­ges, and other expen­ses not allo­ca­ted to the ope­ra­ting seg­ments; and

▪       acqui­si­ti­on-rela­ted cos­ts, inclu­ding amor­tiza­ti­on and any impair­ment of acqui­si­ti­on-rela­ted intan­gi­bles and goodwill.

 

Intel Cor­po­ra­ti­on

Expl­ana­ti­on of Non-GAAP Measures

In addi­ti­on to dis­clo­sing finan­cial results in accordance with US GAAP, this docu­ment con­ta­ins refe­ren­ces to the non-GAAP finan­cial mea­su­res below. We belie­ve the­se non-GAAP finan­cial mea­su­res pro­vi­de inves­tors with useful sup­ple­men­tal infor­ma­ti­on about our ope­ra­ting per­for­mance, enable com­pa­ri­son of finan­cial trends and results bet­ween peri­ods whe­re cer­tain items may vary inde­pen­dent of busi­ness per­for­mance, and allow for grea­ter trans­pa­ren­cy with respect to key metrics used by manage­ment in ope­ra­ting our busi­ness and mea­su­ring our per­for­mance. The­se non-GAAP finan­cial mea­su­res are used in our per­for­mance-based RSUs and our cash bonus plans.

Our non-GAAP finan­cial mea­su­res reflect adjus­t­ments based on one or more of the fol­lo­wing items, as well as the rela­ted inco­me tax effects. Begin­ning in 2023, inco­me tax effects are cal­cu­la­ted using a fixed long-term pro­jec­ted tax rate across all adjus­t­ments. We pro­ject this long-term non-GAAP tax rate on an annu­al basis using a five-year non-GAAP finan­cial pro­jec­tion that excludes the inco­me tax effects of each adjus­t­ment. The pro­jec­ted non-GAAP tax rate also con­siders fac­tors such as our tax struc­tu­re, our tax posi­ti­ons in various juris­dic­tions, and key legis­la­ti­on in signi­fi­cant juris­dic­tions whe­re we ope­ra­te. This long-term non-GAAP tax rate may be sub­ject to chan­ge for a varie­ty of reasons, inclu­ding the rapidly evol­ving glo­bal tax envi­ron­ment, signi­fi­cant chan­ges in our geo­gra­phic ear­nings mix, or chan­ges to our stra­tegy or busi­ness ope­ra­ti­ons. Manage­ment uses this non-GAAP tax rate in mana­ging inter­nal short- and long-term ope­ra­ting plans and in eva­lua­ting our per­for­mance; we belie­ve this approach faci­li­ta­tes com­pa­ri­son of our ope­ra­ting results and pro­vi­des useful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance. Pri­or-peri­od non-GAAP results have been retroac­tively adjus­ted to reflect this updated approach.

The­se non-GAAP finan­cial mea­su­res should not be con­side­red a sub­sti­tu­te for, or supe­ri­or to, finan­cial mea­su­res cal­cu­la­ted in accordance with US GAAP, and the finan­cial results cal­cu­la­ted in accordance with US GAAP and recon­ci­lia­ti­ons from the­se results should be careful­ly evaluated.

 

Non-GAAP adjus­t­ment or measure	Defi­ni­ti­on	Useful­ness to manage­ment and investors
Acqui­si­ti­on-rela­ted adjustments	Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intan­gi­ble assets con­sists of amor­tiza­ti­on of intan­gi­ble assets such as deve­lo­ped tech­no­lo­gy, brands, and cus­to­mer rela­ti­onships acqui­red in con­nec­tion with busi­ness com­bi­na­ti­ons. Char­ges rela­ted to the amor­tiza­ti­on of the­se intan­gi­bles are recor­ded within both cost of sales and MG&A in our US GAAP finan­cial state­ments. Amor­tiza­ti­on char­ges are recor­ded over the esti­ma­ted useful life of the rela­ted acqui­red intan­gi­ble asset, and thus are gene­ral­ly recor­ded over mul­ti­ple years.	We exclude amor­tiza­ti­on char­ges for our acqui­si­ti­on-rela­ted intan­gi­ble assets for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se the­se char­ges are incon­sis­tent in size and are signi­fi­cant­ly impac­ted by the timing and valua­ti­on of our acqui­si­ti­ons. The­se adjus­t­ments faci­li­ta­te a useful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance and com­pa­ri­son to our past ope­ra­ting per­for­mance and pro­vi­de inves­tors with addi­tio­nal means to eva­lua­te cost and expen­se trends.
Share-based com­pen­sa­ti­on	Share-based com­pen­sa­ti­on con­sists of char­ges rela­ted to our employee equi­ty incen­ti­ve plans.	We exclude char­ges rela­ted to share-based com­pen­sa­ti­on for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se we belie­ve the­se adjus­t­ments pro­vi­de bet­ter com­pa­ra­bi­li­ty to peer com­pa­ny results and becau­se the­se char­ges are not view­ed by manage­ment as part of our core ope­ra­ting per­for­mance. We belie­ve the­se adjus­t­ments pro­vi­de inves­tors with a useful view, through the eyes of manage­ment, of our core busi­ness model, how manage­ment curr­ent­ly eva­lua­tes core ope­ra­tio­nal per­for­mance, and addi­tio­nal means to eva­lua­te expen­se trends, inclu­ding in com­pa­ri­son to other peer companies.
Patent sett­le­ment	A por­ti­on of the char­ge from our IP sett­le­ments repres­ents a catch-up of cumu­la­ti­ve amor­tiza­ti­on that would have been incur­red for the right to use the rela­ted patents in pri­or peri­ods. This char­ge rela­ted to pri­or peri­ods is excluded from our non-GAAP results; amor­tiza­ti­on rela­ted to the right to use the patents in the cur­rent and ongo­ing peri­ods is included.	We exclude the catch-up char­ge rela­ted to pri­or peri­ods for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se this adjus­t­ment faci­li­ta­tes com­pa­ri­son to past ope­ra­ting results and pro­vi­des a useful eva­lua­ti­on of our cur­rent ope­ra­ting performance.
Opta­ne inven­to­ry impairment	In 2022, we initia­ted the wind-down of our Intel Opta­ne memo­ry business.	We exclude the­se impairm­ents for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se the­se char­ges do not reflect our cur­rent ope­ra­ting per­for­mance. This adjus­t­ment faci­li­ta­tes a useful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance and com­pa­ri­sons to past ope­ra­ting results.
Res­truc­tu­ring and other charges	Res­truc­tu­ring char­ges are cos­ts asso­cia­ted with a for­mal res­truc­tu­ring plan and are pri­ma­ri­ly rela­ted to employee sever­ance and bene­fit arran­ge­ments. Other char­ges may include peri­odic good­will and asset impairm­ents, cer­tain pen­si­on char­ges, and cos­ts asso­cia­ted with res­truc­tu­ring activity.	We exclude res­truc­tu­ring and other char­ges, inclu­ding any adjus­t­ments to char­ges recor­ded in pri­or peri­ods, for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se the­se cos­ts do not reflect our core ope­ra­ting per­for­mance. The­se adjus­t­ments faci­li­ta­te a useful eva­lua­ti­on of our core ope­ra­ting per­for­mance and com­pa­ri­sons to past ope­ra­ting results and pro­vi­de inves­tors with addi­tio­nal means to eva­lua­te expen­se trends.
(Gains) los­ses on equi­ty invest­ments, net	(Gains) los­ses on equi­ty invest­ments, net con­sists of ongo­ing mark-to-mar­ket adjus­t­ments on mar­ke­ta­ble equi­ty secu­ri­ties, obser­va­ble pri­ce adjus­t­ments on non-mar­ke­ta­ble equi­ty secu­ri­ties, rela­ted impair­ment char­ges, and the sale of equi­ty invest­ments and other.	We exclude the­se non-ope­ra­ting gains and los­ses for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se it pro­vi­des bet­ter com­pa­ra­bi­li­ty bet­ween peri­ods. The exclu­si­on reflects how manage­ment eva­lua­tes the core ope­ra­ti­ons of the business.
Gains (los­ses) from divestiture	Gains (los­ses) are reco­gni­zed at the clo­se of a dives­ti­tu­re, or over a spe­ci­fied defer­ral peri­od when defer­red con­side­ra­ti­on is recei­ved at the time of clo­sing. Based on our ongo­ing obli­ga­ti­on under the NAND wafer manu­fac­tu­ring and sale agree­ment ente­red into in con­nec­tion with the first clo­sing of the sale of our NAND memo­ry busi­ness on Decem­ber 29, 2021, a por­ti­on of the initi­al clo­sing con­side­ra­ti­on was defer­red and will be reco­gni­zed bet­ween first and second closing.	We exclude gains or los­ses resul­ting from dives­ti­tures for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se they do not reflect our cur­rent ope­ra­ting per­for­mance. The­se adjus­t­ments faci­li­ta­te a useful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance and com­pa­ri­sons to past ope­ra­ting results.
Adjus­ted free cash flow	We refe­rence a non-GAAP finan­cial mea­su­re of adjus­ted free cash flow, which is used by manage­ment when asses­sing our sources of liqui­di­ty, capi­tal resour­ces, and qua­li­ty of ear­nings. Adjus­ted free cash flow is ope­ra­ting cash flow adjus­ted for 1) addi­ti­ons to pro­per­ty, plant and equip­ment, net of pro­ceeds from capi­tal grants and part­ner con­tri­bu­ti­ons, 2) pay­ments on finan­ce lea­ses, and 3) pro­ceeds from the McA­fee equi­ty sale.	This non-GAAP finan­cial mea­su­re is hel­pful in under­stan­ding our capi­tal requi­re­ments and sources of liqui­di­ty by pro­vi­ding an addi­tio­nal means to eva­lua­te the cash flow trends of our busi­ness. Sin­ce the 2017 dives­ti­tu­re, McA­fee equi­ty dis­tri­bu­ti­ons and sales con­tri­bu­ted to pri­or ope­ra­ting and free cash flow, and while the McA­fee equi­ty sale in Q1 2022 would have typi­cal­ly been excluded from adjus­ted free cash flow as an equi­ty sale, we belie­ve inclu­ding the sale pro­ceeds in adjus­ted free cash flow faci­li­ta­te a bet­ter, more con­sis­tent com­pa­ri­son to past pre­sen­ta­ti­ons of liquidity.

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Recon­ci­lia­ti­ons of GAAP Actu­als to Non-GAAP Actuals

Set forth below are recon­ci­lia­ti­ons of the non-GAAP finan­cial mea­su­re to the most direct­ly com­pa­ra­ble US GAAP finan­cial mea­su­re. The­se non-GAAP finan­cial mea­su­res should not be con­side­red a sub­sti­tu­te for, or supe­ri­or to, finan­cial mea­su­res cal­cu­la­ted in accordance with US GAAP, and the recon­ci­lia­ti­ons from US GAAP to Non-GAAP actu­als should be careful­ly eva­lua­ted. Plea­se refer to “Expl­ana­ti­on of Non-GAAP Mea­su­res” in this docu­ment for a detail­ed expl­ana­ti­on of the adjus­t­ments made to the com­pa­ra­ble US GAAP mea­su­res, the ways manage­ment uses the non-GAAP mea­su­res, and the reasons why manage­ment belie­ves the non-GAAP mea­su­res pro­vi­de useful infor­ma­ti­on for investors.

		Three Months Ended
(In Mil­li­ons, Except Per Share Amounts)		Jul 1, 2023		Jul 2, 2022
GAAP gross margin		$ 4,638		$ 5,587
Acqui­si­ti­on-rela­ted adjustments		306		329
Share-based com­pen­sa­ti­on		210		190
Patent sett­le­ment		—		204
Opta­ne inven­to­ry impairment		—		559
Non-GAAP gross margin		$ 5,154		$ 6,869
GAAP gross mar­gin percentage		35.8 %		36.5 %
Acqui­si­ti­on-rela­ted adjustments		2.4 %		2.2 %
Share-based com­pen­sa­ti­on		1.6 %		1.2 %
Patent sett­le­ment		— %		1.3 %
Opta­ne inven­to­ry impairment		— %		3.6 %
Non-GAAP gross mar­gin percentage		39.8 %		44.8 %
GAAP R&D and MG&A		$ 5,454		$ 6,200
Acqui­si­ti­on-rela­ted adjustments		(44)		(48)
Share-based com­pen­sa­ti­on		(712)		(702)
Non-GAAP R&D and MG&A		$ 4,698		$ 5,450
GAAP ope­ra­ting inco­me (loss)		$ (1,016)		$ (700)
Acqui­si­ti­on-rela­ted adjustments		350		377
Share-based com­pen­sa­ti­on		922		892
Patent sett­le­ment		—		204
Opta­ne inven­to­ry impairment		—		559
Res­truc­tu­ring and other charges		200		87
Non-GAAP ope­ra­ting inco­me (loss)		$ 456		$ 1,419
GAAP ope­ra­ting mar­gin (loss)		(7.8) %		(4.6) %
Acqui­si­ti­on-rela­ted adjustments		2.7 %		2.5 %
Share-based com­pen­sa­ti­on		7.1 %		5.8 %
Patent sett­le­ment		— %		1.3 %
Opta­ne inven­to­ry impairment		— %		3.6 %
Res­truc­tu­ring and other charges		1.5 %		0.6 %
Non-GAAP ope­ra­ting mar­gin (loss)		3.5 %		9.3 %
GAAP tax rate		280.5 %		50.1 %
Inco­me tax effects		(267.5) %		(37.1) %
Non-GAAP tax rate		13.0 %		13.0 %
(In Mil­li­ons, Except Per Share Amounts)		Jul 1, 2023		Jul 2, 2022
GAAP net inco­me (loss) attri­bu­ta­ble to Intel		$ 1,481		$ (454)
Acqui­si­ti­on-rela­ted adjustments		350		377
Share-based com­pen­sa­ti­on		922		892
Patent sett­le­ment		—		204
Opta­ne inven­to­ry impairment		—		559
Res­truc­tu­ring and other charges		200		87
(Gains) los­ses on equi­ty invest­ments, net		24		90
(Gains) los­ses from divestiture		(39)		19
Adjus­t­ments attri­bu­ta­ble to non-con­trol­ling interest		(18)		—
Inco­me tax effects		(2,373)		(626)
Non-GAAP net inco­me (loss) attri­bu­ta­ble to Intel		$ 547		$ 1,148
GAAP ear­nings (loss) per share attri­bu­ta­ble to Intel—diluted		$ 0.35		$ (0.11)
Acqui­si­ti­on-rela­ted adjustments		0.08		0.09
Share-based com­pen­sa­ti­on		0.22		0.22
Patent sett­le­ment		—		0.05
Opta­ne inven­to­ry impairment		—		0.14
Res­truc­tu­ring and other charges		0.05		0.02
(Gains) los­ses on equi­ty invest­ments, net		0.01		0.02
(Gains) los­ses from divestiture		(0.01)		—
Adjus­t­ments attri­bu­ta­ble to non-con­trol­ling interest		—		—
Inco­me tax effects		(0.57)		(0.15)
Non-GAAP ear­nings (loss) per share attri­bu­ta­ble to Intel—diluted		$ 0.13		$ 0.28

 

		Three Months Ended
(In Mil­li­ons)		Jul 1, 2023		Jul 2, 2022
GAAP net cash pro­vi­ded by (used for) ope­ra­ting activities		$ 2,808		$ 809
Net addi­ti­ons to pro­per­ty, plant and equipment		(5,454)		(7,190)
Pay­ments on finan­ce leases		(81)		—
Adjus­ted free cash flow		$ (2,727)		$ (6,381)
GAAP net cash used for inves­t­ing activities		$ (2,808)		$ 220
GAAP net cash pro­vi­ded by (used for) finan­cing activities		$ 117		$ (2,854)

 

 

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Recon­ci­lia­ti­ons of GAAP Out­look to Non-GAAP Outlook

Set forth below are recon­ci­lia­ti­ons of the non-GAAP finan­cial mea­su­re to the most direct­ly com­pa­ra­ble US GAAP finan­cial mea­su­re. The­se non-GAAP finan­cial mea­su­res should not be con­side­red a sub­sti­tu­te for, or supe­ri­or to, finan­cial mea­su­res cal­cu­la­ted in accordance with US GAAP, and the finan­cial out­look pre­pared in accordance with US GAAP and the recon­ci­lia­ti­ons from this Busi­ness Out­look should be careful­ly evaluated.

Plea­se refer to “Expl­ana­ti­on of Non-GAAP Mea­su­res” in this docu­ment for a detail­ed expl­ana­ti­on of the adjus­t­ments made to the com­pa­ra­ble US GAAP mea­su­res, the ways manage­ment uses the non-GAAP mea­su­res, and the reasons why manage­ment belie­ves the non-GAAP mea­su­res pro­vi­de useful infor­ma­ti­on for investors.

		Q3 2023 Out­look1
		Appro­xi­m­ate­ly
GAAP gross mar­gin percentage		39.1 %
Acqui­si­ti­on-rela­ted adjustments		2.5 %
Share-based com­pen­sa­ti­on		1.4 %
Non-GAAP gross mar­gin percentage		43.0 %
GAAP tax rate		224 %
Inco­me tax effects		(211) %
Non-GAAP tax rate		13 %
GAAP ear­nings (loss) per share attri­bu­ta­ble to Intel—diluted		$ 0.04
Acqui­si­ti­on-rela­ted adjustments		0.10
Share-based com­pen­sa­ti­on		0.20
(Gains) los­ses on equi­ty invest­ments, net		(0.03)
(Gains) los­ses from divestiture		(0.01)
Adjus­t­ments attri­bu­ta­ble to non-con­trol­ling interest		(0.01)
Inco­me tax effects		(0.09)
Non-GAAP ear­nings (loss) per share attri­bu­ta­ble to Intel—diluted		$ 0.20