Intel Outpaces Q3 Earnings Estimates on Solid Revenues

Intel Corporation INTC reported strong third-quarter 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. With solid traction from an accelerated ramp-up of artificial intelligence (AI) PCs, a diligent execution of operational plans amid stringent cost discipline and initiatives to drive higher efficiency and agility buoyed margins. 

Intel has made significant strides in its cost-cutting plan to rebuild a sustainable growth engine. With better-than-expected quarterly results, shares were significantly up in after-market trading.

Net Income

The company reported GAAP earnings of $4.06 billion or 90 cents per share against a net loss of $16.64 billion or a loss of $3.88 per share in the year-ago quarter. The radical improvement was primarily due to high restructuring costs and income tax provision in the year-earlier period. 

Excluding non-recurring items, non-GAAP earnings in the reported quarter were $1.02 billion or 23 cents per share against a loss of $1.98 billion or a loss of 46 cents per share a year ago. The bottom line surpassed the Zacks Consensus Estimate by 22 cents.

Revenues

GAAP revenues in the reported quarter were up 2.79% year over year to $13.65 billion. The quarterly revenues exceeded the higher end of the guided range and beat the consensus estimate of $13.11 billion. The company witnessed healthy growth momentum in the Intel 18A process node and Lunar Lake. Management envisions robust growth opportunities with a strong product roadmap and semiconductor ecosystem, likely setting it apart from the competition.

Segment Performance

Client Computing Group (CCG) revenues increased to $8.53 billion from $8.16 billion, driven by a seasonally stronger total addressable market (TAM), Windows 11-driven refreshes and a stronger pricing mix with the ramp of Lunar Lake and Arrow Lake. Intel witnessed healthy traction in AI PCs that have taken the market by storm and remains firmly on track to ship more than 100 million by 2025. Panther Lake – the chip based on Intel 18A and the architectural successor to the well-received Lunar Lake – is slated to be widely available in the market later this year after its launch in early October, while Clearwater Forest – the first Intel 18A server product – is likely to be unveiled in the first half of 2026. 

Datacenter and AI Group (DCAI) revenues declined to $4.12 billion from $4.14 billion, as solid demand for host CPUs for AI servers and storage compute led by Xeon 6 processors (code-named Granite Rapids) was more than offset by supply constraints.

While total Intel Products revenues were up to $12.65 billion from $12.3 billion, Intel Foundry revenues decreased to $4.23 billion from $4.34 billion owing to a challenging macroeconomic environment. All Other revenues, which include Altera, Mobileye and Other businesses, were $993 million.

Other Operating Details

Non-GAAP gross margin increased to 40% from 18% a year ago, while non-GAAP operating margin was up from negative 17.8% to 11.2%. Margins were boosted by higher revenues, a more favorable product mix and lower inventory reserves. The company has reduced its capital expenditures and is focusing on simplifying parts of its portfolio to unlock efficiencies and create value.

Cash Flow & Liquidity

As of Sept. 27, 2025, Intel had cash and cash equivalents of $11.14 billion with $44.06 billion of long-term debt. For the first nine months of 2025, Intel generated $5.41 billion of cash from operating activities compared with $5.12 billion a year ago.

During the quarter, Intel secured a $5 billion investment from NVIDIA to jointly develop cutting-edge solutions that are likely to play an integral role in the evolution of the AI infrastructure ecosystem. In August 2025, Softbank invested $2 billion in Intel to propel AI research and development initiatives that support digital transformation, cloud computing and next-generation infrastructure. The U.S. government will also invest $8.9 billion in Intel (out of which $5.7 billion was received during the reported quarter) to support critical semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon, likely paving the way for innovation and growth.

Outlook

For the fourth quarter of 2025, Intel expects GAAP revenues to be within $12.8-$13.8 billion. Non-GAAP gross margin is likely to be 36.5%. Non-GAAP earnings are expected to be 8 cents per share.

Zacks Rank

Intel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Arista Networks Inc. ANET is scheduled to release third-quarter 2025 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 72 cents per share, suggesting a growth of 20% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 18.7%. Arista delivered an average earnings surprise of 12.8% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release third-quarter 2025 earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.64 per share, indicating a 3.1% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 4.9%. Akamai delivered an average earnings surprise of 7.1% in the last four reported quarters.

Pinterest, Inc. PINS is set to release third-quarter 2025 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 42 cents per share, implying a growth of 5% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.9%. Pinterest delivered an average negative earnings surprise of 1.1% in the last four reported quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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