Intel Beats Q2 Earnings Estimates As CEO Promises A More Disciplined Foundry Play
Intel CEO Lip-Bu Tan remained upbeat as the chip maker disclosed a $2.9 billion loss for the second quarter of 2025, compared to a $1.6 billion loss in the same quarter from a year ago. However, Intel generated $12.9 billion revenue for the quarter, up slightly from $12.8 billion a year ago and ahead of what Wall Street was expecting. So from that perspective, Intel sees itself has having posted "solid Q2 financial results."
Breaking down the numbers further, Intel's Client Computing Group (CCG) dipped 3% year-over-year to $7.9 billion, while its Data Center an AI (DCAI) division grew 4% to $3.9 billion, for $11.8 billion in total product revenue (down 1%).
Intel also saw gains in its Foundry business, which increased 3% year-over-year to $4.4 billion, while all other segments went up 20% to $1.1 billion.
"Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency," Tan said. "We are laser-focused on strengthening our core product portfolio and our AI roadmap to better serve customers. We are also taking the actions needed to build a more financially disciplined foundry. It’s going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value."
It's been a tough stretch for Intel as it continues to make efforts to right the ship. This effort began in earnest under the previous CEO, Pat Gelsinger, who abruptly resigned last December (he was reportedly pushed out by the board). Several months later, Intel hired Tan to turn things around.
In an open memo to employees, Tan reiterated that Intel's latest revenue figures came in above the high end of its guidance. He also acknowledged that the "past few months have not been easy" while doubling down on plans to reduce Intel's workforce by around 15%. Much of that has already occurred, including "streamlining the number of management layers by about 50%."
The big question mark surrounding Intel is what impact these and other changes will have to its foundry model. In the same memo, Tan said the company is embarking on a "fundamentally different approach to building our foundry business," saying that in the past, the company "invested too much, too soon -- without adequate demand."
"In the process, our factory footprint became needlessly fragmented and underutilized. We must correct our course.
Going forward, we will follow a systematic approach to growing our factory footprint that’s fully aligned with the needs of our customers. We will be judicious and disciplined as we allocate capital – because that’s what great foundries do," Tan stated in the employee memo.
Beyond job losses, there are other repercussions for Intel's past missteps. Specifically, Tan said Intel is abandoning previous plans to build new chip plans in Germany and Poland. Intel will also further slow construction of new facilities in Ohio "to ensure our spending is aligned with demand."
At the same time, Intel says its first Panther Lake processor SKU is still on track to ship this year with more models planned for the first half of 2026. And looking ahead to the third quarter, Intel expects revenue to be around $12.6-$13.6 billion.
Shares of Intel are down around 9.5% in early morning trading today, on heels of its Q2 earnings report.
