Intel has reported a net loss of $800m for the first quarter of 2025 (Q1 2025), translating to a GAAP diluted loss per share of $0.19. Revenue remained flat year-over-year at $12.7bn, while non-GAAP earnings stood at $0.13 per share, based on non-GAAP net income of $580m. The results prompted a 5% drop in Intel’s stock during after-hours trading, with investor sentiment turning cautious following weaker-than-expected forward guidance.
The market response followed a muted Q2 2025 outlook. Intel forecast revenue in the range of $11.2bn to $12.4bn, falling short of analyst expectations. The company expects a GAAP loss per share of $0.32 and break-even performance on a non-GAAP basis. Analysts noted that while certain segments delivered moderate growth, the overall earnings quality reflected margin pressures and weak volume recovery in key business units.
Segment breakdown for Intel in Q1 2025
The Client Computing Group, Intel’s largest revenue-generating segment, posted an 8% year-on-year decline to $7.6bn. The drop was attributed to subdued demand across consumer and commercial PC markets, alongside inventory adjustments within the channel.
The Data Centre and AI (DCAI) segment reported revenue of $4.1bn, reflecting an 8% increase from the prior-year period. Growth was driven by higher demand for Xeon processors used in cloud infrastructure and AI workloads.
Intel Foundry Services (IFS) delivered $4.7bn in revenue, up 7% year-over-year. However, the business continues to operate at a loss, with an operating margin of -49.7%, reflecting ongoing investments in foundry capacity and process node advancement.
The “All Other” category, which includes Mobileye and the Programmable Solutions Group, generated $943m in revenue. The group posted an operating income of $103m, reversing a $170m operating loss reported in Q1 2024. Intel attributed this turnaround to improving demand in automotive solutions and FPGA-based products.
Gross margin stood at 36.9%, a decrease from 41% in the year-ago quarter, as weaker product mix and lower utilisation of manufacturing assets weighed on profitability. Operating expenses were reduced by 19% year-on-year to $4.8bn, in line with broader cost containment initiatives.
CEO Lip-Bu Tan, who assumed the role in March 2025, announced operational changes to simplify organisational structure and improve technical execution. “As we refocus on engineering, we will also remove organisational complexity,” said Tan. “Many teams are eight or more layers deep, which creates unnecessary bureaucracy that slows us down. I have asked the executive team to take a fresh look at their respective orgs, with a focus on removing layers, increasing spans of control and empowering top performers. Our competitors are lean, fast and agile — and that’s what we must become to improve our execution.”
Intel has targeted a reduction in annual operating expenses to $17bn in 2025 and $16bn by 2026. Capital expenditure will be reduced by $2bn, with planned investments revised to $18bn in 2025. These actions are being implemented in parallel with the $7.86bn awarded to Intel through the US CHIPS and Science Act to expand domestic semiconductor manufacturing capacity.
Read more: Intel set to cut over one fifth of global workforce amid cost pressures
