Executive Summary
Intel Corporation reported revenues of $14.26 billion in Q4 2024, reflecting a sequential growth of 7.35% primarily driven by solid performance in client computing and edge business segments. However, the company faced a net loss of $126 million, translating to an EPS of -$0.0292, signaling ongoing struggles amid fierce competition and recovery attempts in the semiconductor market. Management emphasized a commitment to focused investments, stating, 'We cannot be all things to all people...' indicating a strategic pivot towards areas with the highest potential for differentiation and profitability. Risks remain due to macroeconomic uncertainties and a competitive landscape, yet the initiation of the Intel 18A process technology is expected to enhance future production efficiencies.
Management's focus on customer needs and operational efficiencies was apparent, with co-CEO Michelle Johnston Holthaus stating, 'We are prioritizing areas where we can drive differentiated value.' This approach aims to address the challenges posed by overstocked PC inventories and the evolving AI PC market. While Q4 performance shows progress, sustained profitability remains contingent on successful execution and customer engagement in 2025 and beyond.
Key Performance Indicators
QoQ: -104.55% | YoY:-138.54%
QoQ: -99.24% | YoY:-66.93%
QoQ: -99.25% | YoY:-67.48%
Key Insights
**Revenue**: $14.26 billion, up 7.35% QoQ, indicating gradual recovery from earlier losses.
**Gross Margin**: 39.3%, improved sequentially, but still under pressure due to high production costs.
**Operating Income**: $412 million, reflecting a strong operational performance on increased revenues even as persistent losses continue.
**Net Income**: -$126 million, a stark decline year-over-year but less negative than previous quarters.
**EPS**: -$0.0292 reflecting ongoing inefficiencies and ...
Financial Highlights
Revenue: $14.26 billion, up 7.35% QoQ, indicating gradual recovery from earlier losses.
Gross Margin: 39.3%, improved sequentially, but still under pressure due to high production costs.
Operating Income: $412 million, reflecting a strong operational performance on increased revenues even as persistent losses continue.
Net Income: -$126 million, a stark decline year-over-year but less negative than previous quarters.
EPS: -$0.0292 reflecting ongoing inefficiencies and cost pressures.
Cash Flow: Operating cash flow positive at $3.2 billion, underscoring improved operational activities despite a negative free cash flow of -$1.5 billion.
Current Ratio: 1.33, indicating adequate liquidity although closely monitored given the loss reported in the quarter.
Quick Ratio: Equal to the current ratio, reflecting stability as the company manages its cash flow and working capital effectively.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
14.26B |
12.07% |
7.35% |
| Gross Profit |
5.58B |
7.03% |
179.62% |
| Operating Income |
412.00M |
-138.54% |
-104.55% |
| Net Income |
-126.00M |
-66.93% |
-99.24% |
| EPS |
-0.03 |
-67.48% |
-99.25% |
Key Financial Ratios
operatingProfitMargin
2.89%
operatingCashFlowPerShare
$0.73
freeCashFlowPerShare
$-0.35
priceEarningsRatio
-173.96
Management Commentary
Key Themes:
1. Strategic Focus: Management highlighted the necessity of prioritizing core areas for growth. Michelle Johnston Holthaus emphasized, 'We are doing a better job of listening to our customers to ensure we meet their needs.'
2. Competitive Landscape: Discussing competition, she noted a healthy market rivalry exists, particularly in the AI PC segment: 'The market is becoming more competitive... I thrive on competition.'
3. Operational Improvements: CFO Dave Zinsner spoke about improving gross margins through cost management and the importance of an efficient capital allocation strategy: 'We are going to systematically attack our costs.'
4. Future Guidance: Zinsner provided cautious optimism for Q1 2025 stating a revenue forecast of $11.7 - $12.7 billion, indicating awareness of a challenging outlook amidst sector competition.
'Q4 was a step in the right direction. We delivered revenue, gross margin and EPS above our guide.' - Michelle Johnston Holthaus
â Michelle Johnston Holthaus
'We are âĻ going to systematically attack our costs and remain highly focused on our goal of delivering break-even operating income for Intel Foundry by the end of 2027.' - David Zinsner
â David Zinsner
Forward Guidance
Management anticipates Q1 2025 will remain tough due to seasonality, projecting revenue declines of up to 18%. However, they expect improvements in gross margin as operational efficiencies in Intel Foundry begin to solidify and new products launch. Outlook for 2025 includes focused investments, particularly in AI-driven products, with a target to improve margin structures significantly with the introduction of next-generation technologies like Intel 18A. The trajectory towards breakeven operating income and a stronger product offering underlines their commitment to restoring profitability.