Despite eking out a surprise profit on an adjusted basis, Intel ultimately posted a net loss of $821 million for Q1 2025, underscoring the uphill battle it faces as revenue stagnates, margins shrink, and macroeconomic uncertainty persists.
Lip-Bu Tan, Intel’s new CEO, described the results as a “step in the right direction” but echoed comments from earlier this month that there are no quick fixes.
“We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”
Following news that Intel was cutting 20% of its global workforce, adding to the 15% it slashed last year, the firm posted flat year-on-year revenue of $12.7 billion, with ongoing weakness in its core PC business and declining margins.
While its Data Centre and AI segment showed some growth, it was not enough to offset persistent softness elsewhere, leaving investors with little reassurance that a turnaround is imminent.
Wall Street’s reaction reflected cautious optimism, with shares ticking up on the modest earnings beat, rising from $19.90 to $21.49.
The relief rally belied the underlying reality: Intel’s core businesses continue to remain under pressure, and the company’s own guidance points to further turbulence ahead.
For the second quarter, Intel forecasts revenue as low as $11.2 billion and expects to break even on a non-GAAP basis, a clear signal that the path to recovery will be anything but smooth.
David Zinsner, CFO at Intel, said: “The current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook.
“We are taking a disciplined and prudent approach to support continued investment in our core products and foundry businesses while maximising operational cost savings and capital efficiency.”
As part of its restructuring efforts, Intel said it plans to eliminate management layers to enable faster decision making and “empower engineering talent to create great products and drive greater accountability”.
The company's latest numbers paint a stark picture: gross margin continued to shrink, falling to 36.9% (down from 41% a year ago), while Intel posted a net loss of $821 million for the quarter, more than double the loss in Q1 2024.
Although Data Centre & AI revenue grew 8% and foundry sales increased by 7%, the company’s core PC business declined by 8% year-on-year.
Notably, Intel’s foundry business—the previously listed-for-sale unit now central to its turnaround ambitions—posted a 7% increase in revenue to $4.7 billion.
Despite this top-line growth, the segment remains unprofitable, highlighting just how much ground Intel must cover to challenge industry giants like TSMC, which is rumoured to be in talks over a potential takeover deal.
Cash flow from operations reached $813 million, a positive shift from last year’s outflow, but the broader outlook remains muted.
For the second quarter, Intel projects revenue as low as $11.2 billion and expects to break even on an adjusted basis, reflecting continued pressure on margins and persistent headwinds across its core markets.
The company has also cut its 2025 operating expense target to $17 billion, having raised cash through the partial sale of Altera to Silver Lake, and also trimmed its capital expenditure plans, aiming to restore discipline as it continues to navigate sweeping restructuring plans.
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