Intel Q1 2025 Earnings Report: Lip Bu-Tan Avoids Layoffs, But Guidance Proves Disappointing

Disclaimer: This article does not constitute investment advice. The author does not hold positions in any of the mentioned stocks.

In light of significant shifts in market dynamics, Intel has emerged as a focal point of discussion among analysts and investors. The increased demand noted in the first quarter of 2025 may be attributed to retailers and consumers rushing to procure products before the anticipated import tariffs proposed by the Trump administration. This situation has led to a cautiously optimistic outlook from Wall Street regarding Intel’s near-term performance, despite the ongoing narrative of diminishing market share for the once-dominant semiconductor company.

Intel (NASDAQ: INTC) Q1 2025 Earnings Overview

Intel recently disclosed its financial results for the first quarter ending March 31, 2025, reporting $12.667 billion in non-GAAP revenue. This figure surpasses Wall Street’s consensus forecast of $12.32 billion, providing a glimpse of potential recovery amidst broader concerns about the company’s market position.

Intel Revenue Segments — Revenue Breakdown by Intel’s Business Segments

A comparison of Intel’s key business segments—Data Center and AI (DCAI) and Client Computing Group (CCG)—illustrates significant developments against Wall Street forecasts (source: Yahoo Finance).

Segment Performance Comparison — Segment Performance Forecast for Q1 2025

Analysts, including Stacy A. Rasgon from Bernstein, suggest that Intel’s results were positively influenced by accelerated demand before the expected tariff implementations. Rasgon describes this scenario as “eminently possible, ”although cautioning about a “channel flush”in the latter half of 2025. Retailers may need to balance their elevated inventories, which could pose challenges for Intel.

In terms of gross margin, Intel reported a notable non-GAAP figure of 39.2%, outperforming its internal guidance of 36%.Additionally, the company achieved earnings per share (EPS) of $0.13 (non-GAAP), exceeding the consensus of just $0.01.

Looking toward the second quarter of 2025, Intel has provided guidance that has raised concerns among analysts. The company projects revenue of approximately $11.8 billion, falling short of the anticipated $12.8 billion.

The forecast for non-GAAP EPS in this period also disappoints, with analysts expecting $0.06, reflecting a cautious market sentiment towards Intel’s future.

Adding to the company’s challenges, earlier reports indicated that Intel was contemplating substantial layoffs, potentially slashing around 20% of its workforce—over 21, 000 jobs. This reduction follows similar cuts of 15, 000 jobs in both 2023 and 2024.

However, despite earlier forecasts, Intel has refrained from executing additional layoffs at this time. Instead, the company is focusing on improving operational efficiency, specifically reducing its non-GAAP operating expense targets.

Intel is reducing its non-GAAP operating expense target to approximately $17 billion in 2025, down from its previously stated goal of $17.5 billion, and is now targeting $16 billion in 2026. Operating expenses include research and development (R&D) as well as marketing and administrative costs. Intel anticipates associated restructuring charges, which are currently excluded from the guidance as they have not yet been estimated.

Further operational efficiencies and better asset utilization have allowed Intel to lower its gross capital expenditures target to $18 billion for 2025, down from an earlier target of $20 billion, while still expecting net capital expenditures of approximately $8 billion to $11 billion. The company remains focused on core investment areas to drive operational efficiency.

Following the earnings announcement, investor reaction has been predominantly negative, with Intel’s stock declining approximately 7% in after-hours trading. The disappointing guidance and persistent concerns regarding the company’s management structure contribute to this downturn, signaling possible ongoing volatility in Intel’s stock performance.

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