Intel Corporation
INTC · Nasdaq
Next quarter
Expected to report Oct 22, 2026 — estimated from last year’s reporting date.
Consensus is $0.28 EPS for Sep 2026 across 11 estimates, ranging $0.27 to $0.30.
INTC Jun 2026
- 200.00%
- -7.89%
- $0.10
- $0.30
- —
- $16.13B
Reported results
- $16.13B
- 40.36%
- $1.80B
- 11.14%
- -$11.03B
- -$2.16
Highlights
- Revenue growth: Q2 revenue reached $16.13 billion, up 25% year over year and 19% from Q1's $13.58 billion, which Intel described as its strongest growth in more than 15 years.
- Adjusted earnings beat: The supplied expectation set lists EPS of $0.30 versus a $0.10 consensus, a 200% surprise; Intel reported non-GAAP EPS of $0.42, while GAAP EPS was a loss of $2.16.
- Data center acceleration: DCAI revenue rose 59% year over year to $6.26 billion, driven by a 48% increase in server average selling prices and 9% higher server volume.
- Client improvement: CCPG revenue increased 13% to $8.88 billion, with client revenue up $1.1 billion as average selling prices rose 27%, despite an 8% decline in client volume.
- Margin recovery: GAAP gross margin improved to 40.4% from 27.5% a year earlier, and operating margin reached 11.1% versus negative 24.7%; non-GAAP operating margin was 17.2%.
- Foundry progress: Intel Foundry revenue rose 31% to $5.77 billion, but the segment still posted a $2.09 billion operating loss; external foundry revenue was only $293 million.
- GAAP distortion: A $12.5 billion mark-to-market loss on Escrowed Shares drove $12.58 billion of interest and other expense and turned operating income of $1.80 billion into a $11.03 billion net loss attributable to Intel.
- Heavy strategic funding: Intel paid $14.2 billion to reacquire Apollo's 49% Ireland SCIP stake, issued $6.5 billion of senior notes, and ended the quarter with $48.55 billion of debt.
- Near-term outlook: Q3 revenue is guided to $15.8 billion-$16.8 billion, with GAAP EPS of $0.31, non-GAAP EPS of $0.38, and non-GAAP gross margin of 42.0% at the revenue midpoint.
Analysis
Intel's Q2 FY2026 was a sharp operating rebound, led by AI-related data-center demand, pricing and better factory execution. Revenue of $16.13 billion increased 25% from $12.86 billion a year earlier and 19% from Q1's $13.58 billion. The supplied expectation set lists reported EPS of $0.30 against a $0.10 consensus, a 200% surprise; Intel's release reported non-GAAP EPS of $0.42 and GAAP EPS of negative $2.16. Operating income improved to $1.80 billion from a $3.18 billion loss a year ago and a $3.14 billion loss in Q1, while non-GAAP operating income was $2.77 billion.
The core print was the strength of Intel Products: DCAI revenue rose 59% to $6.26 billion and CCPG revenue increased 13% to $8.88 billion, lifting segment operating income to $4.82 billion from $2.69 billion. Gross margin expanded 12.9 percentage points year over year to 40.4%, helped by higher product profit and fewer impairment and restructuring charges. However, GAAP earnings were overwhelmed by a $12.5 billion non-cash mark-to-market loss on government Escrowed Shares. Foundry growth remains principally internal, with $5.77 billion of revenue but a $2.09 billion operating loss, while Intel increased capacity commitments and completed a $14.2 billion Ireland SCIP buyout.
AI product demand
- DCAI: Revenue increased 59% year over year to $6.26 billion and operating income rose to $2.47 billion from $633 million. Server revenue increased $2.0 billion, reflecting a 48% ASP increase and 9% higher volume, primarily from stronger hyperscaler demand.
- CCPG: Revenue grew 13% to $8.88 billion and operating income reached $2.34 billion, up from $2.05 billion. Client revenue rose $1.1 billion to $7.7 billion as ASPs increased 27%, although volume fell 8% because product supply did not meet market demand.
- Mix and constraints: Higher-priced premium products drove much of the ASP expansion in both businesses. Intel said shortages of substrates, memory and other components should ease for client products in the second half but persist for data-center products into next year.
Operating leverage
The quarter showed a meaningful improvement in the underlying cost structure. Gross profit increased 84% to $6.51 billion, with gross margin rising to 40.4% from 27.5% a year earlier. Intel attributed the improvement to $1.5 billion of higher product profit and $1.5 billion of lower period charges, including the absence of the $797 million of manufacturing-asset impairment and accelerated depreciation recorded in Q2 2025. R&D and MG&A fell 6% to $4.54 billion, helped by headcount reductions and cost controls. Restructuring charges declined to $170 million from $1.89 billion, though an inventory-related charge was recorded to align product mix with customer demand.
Foundry transition
Intel Foundry revenue rose 31% to $5.77 billion, primarily from higher internal wafer volumes on Intel 18A, Intel 3 and Intel 4. The segment's operating loss narrowed to $2.09 billion from $3.17 billion, but the business remains structurally loss-making: external revenue was just $293 million, versus $5.47 billion of intersegment revenue. Intel entered risk production for 18A-P, began high-volume manufacturing for a subset of Panther Lake processors using ASML High NA EUV, and committed to a €5 billion expansion for Xeon capacity. Management said the pace of further 14A expansion will depend on committed internal demand and external design wins.
Escrowed Share loss
The headline GAAP loss does not reflect the quarter's operating result. Intel recognized a $12.5 billion loss from the increase in fair value of Escrowed Shares associated with its Secure Enclave agreement with the U.S. government. That charge was recorded in interest and other, net, which swung to a $12.58 billion expense from a $95 million expense in Q2 2025. The related derivative liability was $15.6 billion at quarter end, compared with $2.7 billion at year-end 2025. Intel released 7 million shares during the quarter and had 143 million Escrowed Shares not yet released at June 27.
Capital and liquidity
Intel repurchased Apollo's 49% interest in Ireland SCIP for $14.2 billion, funded with cash, investments and temporary borrowing. It issued $6.5 billion of senior notes and repaid a $6.5 billion term loan during the quarter. Six-month operating cash flow was $8.10 billion, but adjusted free cash flow was negative $8.42 billion after capital spending, finance-lease payments and net partner contributions, including the Ireland SCIP distribution. Cash and short-term investments totaled $29.73 billion at quarter end, versus $37.42 billion at December 2025, while debt increased to $48.55 billion from $44.09 billion.
Third-quarter outlook
Intel expects Q3 revenue of $15.8 billion-$16.8 billion, implying a midpoint of $16.3 billion, broadly in line with Q2's $16.13 billion. The outlook calls for 41.0% GAAP gross margin, 42.0% non-GAAP gross margin, GAAP EPS of $0.31 and non-GAAP EPS of $0.38. The forecast embeds continued demand strength but also ongoing supply constraints, capacity investment and the cost of ramping newer process technologies.
