Intel Reports Fourth-Quarter and Full-Year 2023 Financial Results
Intel Corporation today reported fourth-quarter and full-year 2023 financial results. “We delivered strong Q4 results, surpassing expectations for the fourth consecutive quarter with revenue at the ...
News Summary
- Fourth-quarter revenue was $15.4 billion, up 10 percent year-over-year (YoY). Full-year revenue was $54.2 billion, down 14 percent YoY.
- Fourth-quarter earnings per share (EPS) attributable to Intel was $0.63; non-GAAP EPS attributable to Intel was $0.54. Full-year EPS attributable to Intel was $0.40; non-GAAP EPS attributable to Intel was $1.05.
- Forecasting first-quarter 2024 revenue of $12.2 billion to $13.2 billion; expecting first-quarter EPS attributable to Intel of $(0.25) (non-GAAP EPS attributable to Intel of $0.13).
SANTA CLARA, Calif.: Intel Corporation today reported fourth-quarter and full-year 2023 financial results.
“We delivered strong Q4 results, surpassing expectations for the fourth consecutive quarter with revenue at the higher end of our guidance,” said Pat Gelsinger, Intel CEO. “The quarter capped a year of tremendous progress on Intel's transformation, where we consistently drove execution and accelerated innovation, resulting in strong customer momentum for our products. In 2024, we remain relentlessly focused on achieving process and product leadership, continuing to build our external foundry business and at-scale global manufacturing, and executing our mission to bring AI everywhere as we drive long-term value for stakeholders.”
David Zinsner, Intel CFO, said, “We continued to drive operational efficiencies in the fourth quarter, and comfortably achieved our commitment to deliver $3 billion in cost savings in 2023. We expect to unlock further efficiencies in 2024 and beyond as we implement our new internal foundry model, which is designed to drive greater transparency and accountability and higher returns on our owners’ capital.”
Q4 2023 Financial Results
| GAAP |
| Non-GAAP | ||||
| Q4 2023 | Q4 2022 | vs. Q4 2022 |
| Q4 2023 | Q4 2022 | vs. Q4 2022 |
Revenue ($B) | $15.4 | $14.0 | up 10% |
|
|
|
|
Gross margin | 45.7% | 39.2% | up 6.5 ppts |
| 48.8% | 43.8% | up 5 ppts |
R&D and MG&A ($B) | $5.6 | $6.2 | down 9% |
| $4.9 | $5.5 | down 11% |
Operating margin (loss) | 16.8% | (8.1)% | up 24.9 ppts |
| 16.7% | 4.3% | up 12.4 ppts |
Tax rate | 4.6% | 17.0% | down 12.4 ppts |
| 13.0% | 13.0% | — |
Net income (loss) attributable to Intel ($B) | $2.7 | $(0.7) | n/m* |
| $2.3 | $0.6 | up 263% |
Earnings (loss) per share attributable to Intel—diluted | $0.63 | $(0.16) | n/m* |
| $0.54 | $0.15 | up 260% |
In the fourth quarter, the company generated $4.6 billion in cash from operations and paid dividends of $0.5 billion.
*Not meaningful
Full reconciliations between GAAP and non-GAAP measures are provided below.
Full-Year 2023 Financial Results
| GAAP |
| Non-GAAP | ||||
| 2023 | 2022 | vs. 2022 |
| 2023 | 2022 | vs. 2022 |
Revenue ($B) | $54.2 | $63.1 | down 14% |
|
|
|
|
Gross margin | 40.0% | 42.6% | down 2.6 ppts |
| 43.6% | 47.3% | down 3.7 ppts |
R&D and MG&A ($B) | $21.7 | $24.5 | down 12% |
| $19.0 | $21.9 | down 13% |
Operating margin | 0.2% | 3.7% | down 3.5 ppts |
| 8.6% | 12.6% | down 4 ppts |
Tax rate | (119.8)% | (3.2)% | down 116.6 ppts |
| 13.0% | 13.0% | — |
Net income attributable to Intel ($B) | $1.7 | $8.0 | down 79% |
| $4.4 | $6.9 | down 36% |
Earnings per share attributable to Intel—diluted | $0.40 | $1.94 | down 79% |
| $1.05 | $1.67 | down 37% |
For the full year, the company generated $11.5 billion in cash from operations and paid dividends of $3.1 billion.
Business Unit Summary
Intel previously announced the organizational change to integrate its Accelerated Computing Systems and Graphics Group into its Client Computing Group and Data Center and AI Group. This change is intended to drive a more effective go-to-market capability and to accelerate the scale of these businesses, while also reducing costs. As a result, the company modified its segment reporting in the first quarter of 2023 to align to this and certain other business reorganizations. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally receives information and manages and monitors operating segment performance starting in fiscal year 2023.
Business Unit Revenue and Trends |
| Q4 2023 |
| vs. Q4 2022 |
| 2023 |
| vs. 2022 | ||
Client Computing Group (CCG) |
| $8.8 billion |
| up | 33% |
| $29.3 billion |
| down | 8% |
Data Center and AI (DCAI) |
| $4.0 billion |
| down | 10% |
| $15.5 billion |
| down | 20% |
Network and Edge (NEX) |
| $1.5 billion |
| down | 24% |
| $5.8 billion |
| down | 31% |
Mobileye |
| $637 million |
| up | 13% |
| $2.1 billion |
| up | 11% |
Intel Foundry Services (IFS) |
| $291 million |
| up | 63% |
| $952 million |
| up | 103% |
Business Highlights
- Intel remains on track to meet its goal of achieving five nodes in four years and regain transistor performance and power performance leadership by 2025. Intel 3 became Intel's first advanced node offered to IFS customers, with solid performance and yield progression. Aimed at addressing challenges beyond Intel 18A, Intel began installation of the industry’s first on-site High-NA EUV tool in Oregon, one of the world’s leading semiconductor innovation and productization centers.
- IFS won a key design award with a new high-performance computing customer, its fourth external Intel 18A customer win in 2023. IFS has taped out more than 75 ecosystem and customers test chips and has more than 50 test chips in the pipeline across 2024 and 2025, 75% of which are on Intel 18A. Intel also won three additional advanced packaging design wins during the fourth quarter. Intel and UMC also announced a collaboration on the development of a 12-nanometer process platform to address high-growth markets, such as mobile, communication infrastructure and networking.
- In DCAI, momentum with Intel’s 4th Gen Intel® Xeon® Scalable processor remains strong, with more than 2.5 million units shipped since its introduction in January 2023. In the fourth quarter, DCAI launched its 5th Gen Intel® Xeon® processor, which is optimized for AI workloads and provides up to 42% higher AI inference performance compared to the industry-leading 4th Gen Intel Xeon processor. 5th Gen Intel Xeon has reached general availability at Alibaba Cloud, is entering public and private preview with several cloud service providers, and is on track to ship with OEMs early next month.
- In client computing, Intel ushered in the age of the AI PC with Intel® Core™ Ultra processors. Built on Intel 4, the Intel Core Ultra processor is Intel’s most AI-capable and power-efficient client processor with dedicated acceleration capabilities across the CPU, GPU and NPU. Intel announced at CES 2024 the full Intel® Core™ 14th Gen mobile and desktop processor lineup, as well as the new Intel® Core™ mobile processor Series 1 family for performant mainstream thin-and-light mobile systems.
- In network and edge, OpenVINO™ adoption grew by 60% sequentially in the fourth quarter as it became a core software layer for AI inference on the edge, on the PC and in the data center. Additionally, AT&T and Ericsson announced plans to lead the U.S. in commercial scale Open RAN deployment in collaboration with Intel and others as it plans for 70% of its wireless network traffic to flow across open-capable platforms by late 2026. Cisco is working with Intel and others to create solutions including Ethernet technologies, GPU-enabled infrastructure, and jointly tested and validated reference architectures with a commitment to advancing AI networking.
- Mobileye announced that it was awarded a series of production design wins by a major western automaker across the company’s three key platforms: Mobileye SuperVision™, Mobileye Chauffeur™ and Mobileye Drive™. In addition, Intel Automotive announced the launch of AI-enhanced software-defined vehicle SoCs, with Geely’s Zeekr brand as its first OEM partner, and Intel’s agreement to acquire Silicon Mobility, a fabless silicon and software company specializing in power management SoCs focused on EVs, subject to necessary approvals. These announcements build on shared IP across client and data center and on Intel’s existing SoC footprint of more than 50 million vehicles worldwide.
IFS Direct Connect Event
On Feb. 21, Intel will host its annual flagship foundry event, IFS Direct Connect, in San Jose, California. CEO Pat Gelsinger, Stuart Pann, senior vice president and general manager of Intel Foundry Services, and other leaders will deliver keynotes and news that showcase the breadth of Intel’s foundry ecosystem and define the next era of silicon design, development and manufacturing. For information about the event, please visit the event page.
Q1 2024 Dividend
The company announced that its board of directors has declared a quarterly dividend of $0.125 per share on the company’s common stock, which will be payable March 1, 2024, to shareholders of record as of Feb. 7, 2024.
Business Outlook
Intel's guidance for the first quarter of 2024 includes both GAAP and non-GAAP estimates. Reconciliations between GAAP and non-GAAP financial measures are included below.
Q1 2024 |
| GAAP |
| Non-GAAP |
Revenue |
| $12.2-13.2 billion |
| $12.2-13.2 billion^ |
Gross Margin |
| 40.7% |
| 44.5% |
Tax Rate |
| (43)% |
| 13% |
Earnings (Loss) Per Share Attributable to Intel—Diluted |
| $(0.25) |
| $0.13 |
^ No adjustment on a non-GAAP basis. |
Actual results may differ materially from Intel’s Business Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below. The gross margin and EPS outlook are based on the mid-point of the revenue range.
Earnings Webcast
Intel will hold a public webcast at 2 p.m. PST today to discuss the results for its fourth-quarter and full-year 2023. The live public webcast can be accessed on Intel's Investor Relations website at www.intc.com. The corresponding earnings presentation and webcast replay will also be available on the site.
Forward-Looking Statements
This release contains forward-looking statements that involve a number of risks and uncertainties. Words such as "accelerate", "achieve", "aim", "ambitions", "anticipate", "believe", "committed", "continue", "could", "designed", "estimate", "expect", "forecast", "future", "goals", "grow", "guidance", "intend", "likely", "may", "might", "milestones", "next generation", "objective", "on track", "opportunity", "outlook", "pending", "plan", "position", "possible", "potential", "predict", "progress", "ramp", "roadmap", "seek", "should", "strive", "targets", "to be", "upcoming", "will", "would", and variations of such words and similar expressions are intended to identify such forward-looking statements, which may include statements regarding:
- our business plans and strategy and anticipated benefits therefrom, including with respect to our IDM 2.0 strategy, our Smart Capital strategy, our partnership with Brookfield, the transition to an internal foundry model, updates to our reporting structure, and our AI strategy;
- projections of our future financial performance, including future revenue, gross margins, capital expenditures, and cash flows;
- projected costs and yield trends;
- future cash requirements, the availability, uses, sufficiency, and cost of capital resources, and sources of funding, including for future capital and R&D investments and for returns to stockholders, such as stock repurchases and dividends, and credit ratings expectations;
- future products, services, and technologies, and the expected goals, timeline, ramps, progress, availability, production, regulation, and benefits of such products, services, and technologies, including future process nodes and packaging technology, product roadmaps, schedules, future product architectures, expectations regarding process performance, per-watt parity, and metrics, and expectations regarding product and process leadership;
- investment plans and impacts of investment plans, including in the US and abroad;
- internal and external manufacturing plans, including future internal manufacturing volumes, manufacturing expansion plans and the financing therefor, and external foundry usage;
- future production capacity and product supply;
- supply expectations, including regarding constraints, limitations, pricing, and industry shortages;
- plans and goals related to Intel's foundry business, including with respect to anticipated customers, future manufacturing capacity and service, technology, and IP offerings;
- expected timing and impact of acquisitions, divestitures, and other significant transactions, including the sale of our NAND memory business;
- expected completion and impacts of restructuring activities and cost-saving or efficiency initiatives
- future social and environmental performance goals, measures, strategies, and results;
- our anticipated growth, future market share, and trends in our businesses and operations;
- projected growth and trends in markets relevant to our businesses;
- anticipated trends and impacts related to industry component, substrate, and foundry capacity utilization, shortages, and constraints;
- expectations regarding government incentives;
- future technology trends and developments, such as AI;
- future macro environmental and economic conditions;
- geopolitical tensions and conflicts and their potential impact on our business;
- tax- and accounting-related expectations;
- expectations regarding our relationships with certain sanctioned parties; and
- other characterizations of future events or circumstances.
Such statements involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied, including those associated with:
- the high level of competition and rapid technological change in our industry;
- the significant long-term and inherently risky investments we are making in R&D and manufacturing facilities that may not realize a favorable return;
- the complexities and uncertainties in developing and implementing new semiconductor products and manufacturing process technologies;
- our ability to time and scale our capital investments appropriately and successfully secure favorable alternative financing arrangements and government grants;
- implementing new business strategies and investing in new businesses and technologies;
- changes in demand for our products;
- macroeconomic conditions and geopolitical tensions and conflicts, including geopolitical and trade tensions between the US and China, the impacts of Russia's war on Ukraine, tensions and conflict affecting Israel, and rising tensions between the US and Taiwan;
- the evolving market for products with AI capabilities;
- our complex global supply chain, including from disruptions, delays, trade tensions and conflicts, or shortages;
- product defects, errata and other product issues, particularly as we develop next-generation products and implement next-generation manufacturing process technologies;
- potential security vulnerabilities in our products;
- increasing and evolving cybersecurity threats and privacy risks;
- IP risks including related litigation and regulatory proceedings;
- the need to attract, retain, and motivate key talent;
- strategic transactions and investments;
- sales-related risks, including customer concentration and the use of distributors and other third parties;
- our significantly reduced return of capital in recent years;
- our debt obligations and our ability to access sources of capital;
- complex and evolving laws and regulations across many jurisdictions;
- fluctuations in currency exchange rates;
- changes in our effective tax rate;
- catastrophic events;
- environmental, health, safety, and product regulations;
- our initiatives and new legal requirements with respect to corporate responsibility matters; and
- other risks and uncertainties described in this release, our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission (SEC).
Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this release and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.
Unless specifically indicated otherwise, the forward-looking statements in this release do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed as of the date of this filing. In addition, the forward-looking statements in this release are based on management's expectations as of the date of this release, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable. We do not undertake, and expressly disclaim any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.
About Intel
Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.
© Intel Corporation. Intel, the Intel logo, and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.
Intel Corporation Consolidated Statements of Income and Other Information | ||||||||||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||||||||||
(In Millions, Except Per Share Amounts) |
| Dec 30, 2023 |
| Dec 31, 2022 |
| Dec 30, 2023 |
| Dec 31, 2022 | ||||||||
Net revenue |
| $ | 15,406 |
|
| $ | 14,042 |
|
| $ | 54,228 |
|
| $ | 63,054 |
|
Cost of sales |
|
| 8,359 |
|
|
| 8,542 |
|
|
| 32,517 |
|
|
| 36,188 |
|
Gross margin |
|
| 7,047 |
|
|
| 5,500 |
|
|
| 21,711 |
|
|
| 26,866 |
|
Research and development |
|
| 3,987 |
|
|
| 4,464 |
|
|
| 16,046 |
|
|
| 17,528 |
|
Marketing, general, and administrative |
|
| 1,617 |
|
|
| 1,706 |
|
|
| 5,634 |
|
|
| 7,002 |
|
Restructuring and other charges |
|
| (1,142 | ) |
|
| 462 |
|
|
| (62 | ) |
|
| 2 |
|
Operating expenses |
|
| 4,462 |
|
|
| 6,632 |
|
|
| 21,618 |
|
|
| 24,532 |
|
Operating income (loss) |
|
| 2,585 |
|
|
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