0000050863-25-000179
SEC filingIntel reported a robust Q3 2025 with net income of $4.1B, driven by a $5.5B gain on the Altera divestiture, while revenue grew modestly 3% YoY.
Intel reported a transformative third quarter of 2025, with net income attributable to Intel of $4.06 billion, a dramatic improvement from a net loss of $16.6 billion in the prior-year quarter. Revenue grew 3% year-over-year to $13.65 billion, driven primarily by a 5% increase in Client Computing Group (CCG) revenue, which reached $8.54 billion thanks to higher client volume. Data Center and AI (DCAI) revenue was essentially flat at $4.12 billion, while Intel Foundry revenue declined 2% to $4.24 billion. Gross profit surged 161% to $5.22 billion, reflecting a 38.2% gross margin versus 15.0% in Q3 2024, largely because the prior year included $3.1 billion of non-cash impairment and accelerated depreciation charges. Operating income swung to positive $0.68 billion from a loss of $9.06 billion, boosted by a $5.5 billion pre-tax gain on the divestiture of Altera (recorded below the line) and significantly lower operating expenses. Research and development spending fell 20% to $3.23 billion, and marketing, general, and administrative expenses declined 18% to $1.13 billion, both driven by headcount reductions from restructuring plans. Earnings per share (diluted) was $0.90, compared to a loss of $3.88 in Q3 2024.
Total assets increased to $204.5 billion as of September 27, 2025, from $196.5 billion at year-end 2024. Cash and cash equivalents rose to $11.1 billion from $8.2 billion, and short-term investments jumped to $19.8 billion from $13.8 billion, reflecting proceeds from the Altera divestiture and the U.S. government agreements. Total debt decreased to $46.6 billion from $50.0 billion, as the company settled $1.5 billion in senior notes due March 2025 and $2.3 billion due July 2025. Stockholders' equity increased to $106.4 billion from $99.3 billion, driven by the issuance of 275 million shares to the U.S. Department of Commerce and a private placement to SoftBank Group. Non-controlling interests rose to $10.4 billion from $5.8 billion, largely due to partner contributions to the Arizona SCIP. The company’s current ratio stood at 1.6x, and it had no commercial paper or revolving credit facility borrowings outstanding at quarter end.
Operating cash flow for the nine months ended September 27, 2025 was $5.4 billion, up slightly from $5.1 billion in the prior-year period. The improvement reflects net income of $0.36 billion versus a loss of $19.1 billion, partially offset by non-cash adjustments including a $1.7 billion mark-to-market loss on escrowed shares and a $5.4 billion gain on divestitures. Free cash flow (operating cash flow less capex) was negative $5.8 billion for the nine-month period, compared to negative $13.0 billion in the prior year, as capital expenditures dropped to $11.2 billion from $18.1 billion. Investing activities also benefited from $6.2 billion in divestiture proceeds (Altera and NAND). Financing activities provided $5.7 billion, including $3.7 billion from the issuance of common stock and warrants to the U.S. government and $3.9 billion from the obligation to issue escrowed shares, offset by $3.8 billion in debt repayments. The company paid no dividends in the first nine months of 2025, conserving cash.
Management highlighted the completion of the Altera divestiture on September 12, 2025, which resulted in a $5.5 billion pre-tax gain, and the entry into a transformative U.S. Government Agreement that accelerated $5.7 billion of CHIPs Act funding and provides up to $3.2 billion for the Secure Enclave program in exchange for equity. The company also entered private placement agreements with SoftBank Group ($2.0 billion completed) and NVIDIA ($5.0 billion pending). The 2025 Restructuring Plan, initiated in Q2 2025, is expected to be substantially complete by Q4 2025, with total expected costs of $1.9 billion. Intel is taking a more disciplined approach to capital deployment, focusing future node development (Intel 14A) only if a significant external customer is secured. The company expects to release the first Intel 18A products by end of 2025. The U.S. government shutdown has delayed the conclusion of an SEC consultation on the accounting treatment for the U.S. government transactions, creating a risk of material revision to Q3 results.
The CCG segment generated $8.54 billion in revenue (+5% YoY) and $2.69 billion in operating income, with an operating margin of 32%. Higher client volume drove revenue, but product mix shift to newer generation products increased unit costs. DCAI revenue was $4.12 billion (-1% YoY) with operating income of $0.96 billion (23% margin), benefiting from lower operating expenses. Intel Foundry recorded a $2.32 billion operating loss on $4.24 billion in revenue, an improvement from a $5.80 billion loss in Q3 2024 due to the absence of prior-year asset impairments. All Other revenue (including Mobileye and IMS) was $0.99 billion, with operating income of $0.10 billion. The company recognized $1.0 billion in CHIPs Act grants in the first nine months of 2025, and $5.1 billion in Advanced Manufacturing Investment Credit claims. Non-controlling interests rose significantly, with Arizona SCIP partner contributions totaling $3.7 billion. The effective tax rate was 6.6% for Q3 2025, down from a negative 87.0% in Q3 2024, benefiting from the absence of a $9.9 billion valuation allowance recorded in the prior year.