INTC Financial Analysis

Analysis Date: 1/31/2025

Business Model

Intel generates revenue through multiple business segments including Client Computing Group (CCG), Data Center and AI (DCAI), Network and Edge (NEX), and Intel Foundry Services

Revenue Sources

• Client Computing Group (CCG): $8.0B (56% of Q4 revenue)
• Data Center and AI (DCAI): $3.4B (24% of Q4 revenue)
• Network and Edge (NEX): $1.6B (11% of Q4 revenue)
• Intel Foundry: $4.5B

Revenue Distribution by Channel

• 7 out of 10 PCs powered by Intel CPUs

Income Statement Analysis

• Revenue declined 7.4% YoY to $14.26B but exceeded guidance
• Gross margin contracted 650 basis points YoY to 39.2% on GAAP basis
• Operating income declined 84% YoY to $412M on lower revenue and margins

Balance Sheet Analysis

• Cash position declined 11.9% YoY to $22.1B
• Total debt increased slightly to $50.0B
• Equity declined 4.5% YoY to $105.0B

Cash Flow Analysis

• Operating cash flow declined 31.6% YoY to $3.2B
• Capital expenditures reduced by 21.3% YoY to $4.7B
• Free cash flow remained negative at -$1.5B

Capital Allocation

Intel is focused on deleveraging in 2025 through lower capital expenditures ($20B planned), improved operating cash flows, and monetization of non-core assets. The company received $1.1B in CHIPS Act funding in Q4 2024 and another $1.1B in January 2025.

Management Commentary

Q4 delivered revenue, gross margin and EPS above guidance

Intel 18A process technology on track for volume production in 2H 2025

Q1 outlook reflects seasonal weakness magnified by macro uncertainties

Competitive pressures impacting margins and market share

Overall Sentiment: Cautiously optimistic about execution improvements while acknowledging near-term challenges

Recommendation

Rating: Hold

Reason for Rating: Mixed near-term outlook balanced against potential long-term process technology recovery

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/31/2025, 12:33:47 PM