INTEL CORP Q4 FY2024 earnings call

Michelle's Highlights - Focused investments, simplifying business, and listening to customers. - Client edge: Core Ultra success, aim to ship over 100M cumulative systems by 2025, launch Panther Lake in 2025, Nova Lake in 2026. - Traditional data center: Progress with Granite Rapids, Clearwater Forest in 2026, reengaging x86 ecosystem. - AI data center: Reevaluated Falcon Shores, focusing on system-level solutions with Jaguar Shores, leveraging core assets for total cost of ownership. ### Dave's Highlights - Intel Foundry progress on Intel 18A, focus on earning customer trust, improving financials with goal of break-even operating income by 2027. - Q4 and full-year financials: Revenue, gross margin, EPS details. - Q1 guidance: Revenue range $11.7B-$12.7B, down sequentially, Intel Products segments down similarly, Intel Foundry revenue flat to down modestly, midpoint gross margin 36%, break-even EPS non-GAAP.

Intel Products revenue was $13 billion, up 7% sequentially. CCG revenue was up 9% quarter-over-quarter. DCAI revenue was slightly up sequentially. NEX edge business revenue was up 7.5% sequentially and up more than 20% from Q2 lows. Intel Foundry delivered revenue of $4.5 billion, up 3% sequentially. Mobileye reported revenue of $490 million, up 1% sequentially. Altera delivered revenue of $429 million, up 4%. Intel Products operating profit was $3.6 billion, 28% of revenue, up $300 million quarter-over-quarter. Intel Foundry operating loss in Q4 of $2.3 billion improved sequentially as Q3 was impacted by $3.1 billion of impairments.

Q1 revenue forecast: $11.7 billion to $12.7 billion, down 11% to 18% sequentially. Intel Products segments expected to decline at similar rates. Intel Foundry revenue expected flat to down modestly. Midpoint gross margin approximately 36%, non-GAAP break-even EPS. 2025 gross capital investments approximately $20 billion, net CapEx $8B-$11B with offsets from government incentives and partner contributions.

Macro uncertainty, tariffs, PC inventory normalization, increased competition in markets, execution risks for Intel Foundry in achieving break-even and competitive process technology adoption.

Q: Ross Seymore asked about how much Granite is closing the gap in DCAI and updates on Clearwater Forest.

A: Michelle said Granite is a good first step, closing the gap, but it's a journey. Clearwater Forest is a niche market, expected to come to market in first half of 2026.

Q: Stacy Rasgon asked about why all product segments are down equally in Q1 and competitiveness weighing on margins.

A: David Zinsner said it's a combination of macro uncertainty and seasonality. Michelle added increased competition in CCG affects margins, but they aim to stem market share decline and win every socket.

Q: C.J. Muse asked about strategy evolution for IFS.

A: David Zinsner said more conservatism in deploying capital, focusing on generating best ROIC for shareholders while committed to building world-class foundry.

Q: Joseph Moore asked about tempering expectations of Falcon Shores.

A: Michelle said it's about delivering a complete rack scale solution with Jaguar Shores, leveraging Intel's IP and assets to address the market.

Q: Ben Reitzes asked about gross margins and non-controlling interest.

A: David Zinsner explained about margin dynamics, including impact of Lunar Lake and Foundry business improvements, and non-controlling interest includes Mobileye and SCIP impacts.

Q: Srini Pajjuri asked about foundry breakeven target and Panther Lake die in-house plan.

A: David Zinsner said aiming for breakeven in 2027 with focus on internal wafers and EUV mix, Michelle said Panther Lake is on 18A and next-gen client product will have mix of in-house and external die