Intel Struggles To Regain Footing As Weakest Full-Year Revenue Since 2010 Slows Q4 Recovery

Intel’s Q4 Earnings Reveal Rocky Path to Recovery Following Weakest Full-Year Revenue Since 2010

Intel’s financial results for the fourth quarter of 2025 and for the whole year have been published, revealing a mixed bag. The company’s earnings contracted both in Q4 and for the year, resulting in a full-year revenue of $52.9 billion, which is Intel’s weakest result since 2010.

Despite dropping earnings, the company managed to shrink its losses in the back half of the year, posting a net loss of only $300 million for the whole of 2025. However, there are several catches with this result. Additionally, it appears that Intel has a looming challenge for 2026, namely meeting demand for its products.

Q4 Earnings Results

For the fourth quarter of 2025, Intel reported $13.7 billion in revenue, down from $14.3 billion in the same quarter a year prior, representing a 4% year-over-year (YoY) decline. During the quarter, Intel lost $0.6 billion on a GAAP basis as its gross margin dropped to 36.1% from 39.2% in Q4 2024.

Intel exceeded expectations in Q4 amid a very tight supply of products due to its inability to get enough wafers from internal and external suppliers, which is a good sign for Intel as it signals strong demand. “We exceeded Q4 expectations across revenue, gross margin, and EPS even as we navigated industry-wide supply shortages,” said David Zinsner, Intel CFO.

Full-Year 2025 Results

For the whole fiscal year 2025, the company recorded revenue of $52.9 billion, which is more or less flat compared to the $53.1 billion posted in 2024. However, in 2024, the company lost some whopping $18.8 billion on a GAAP basis, and its gross margin was at 32.7%.

Intel’s financial results for the year from a pure numbers point of view suggest that the company did pretty well in 2025. However, a closer look reveals that Intel received significant external financial injections, including $2 billion from SoftBank, $4.46 billion from Silver Lake (for a 51% stake in Altera), $5 billion from Nvidia, and $8.9 billion from the U.S. government. In total, Intel got some $20.36 billion, yet it still lost a moderate $300 million.

Client Computing Group Performance

When it comes to segment reporting, the results were a mixed bag: Intel’s Client Computing Group (CCG) somewhat disappointed, whereas Data Center and AI Group (DCAI) performed better than expected. The CCG delivered $8.2 billion in revenue in Q4 2025, down 3.5% from $8.5 billion in Q3 2025 and down 6.8% from $8.8 billion in Q4 2024.

Traditionally, sales of Intel consumer products grow in the fourth quarter. However, although demand for Intel’s CPUs for client PCs was strong, CCG revenue declined sequentially in Q4 2025 because the company prioritized constrained internal wafer supply toward higher-demand data center products, thus relying more on externally sourced wafers for client CPUs, which tends to hurt margins significantly.

“While maintaining support for our client OEM partners, where possible, we are prioritizing our internal wafer supply to data center and leveraging an increased mix of externally sourced wafers,” said Zinsner. Intel’s efforts to reallocate internal supply from CCG to DCAI paid off, with DCAI reporting $4.7 billion in revenue, up sequentially from $4.1 billion in Q3 2025 and up from $4.4 billion in Q4 2024.

Data Center and AI Group Performance

Intel’s Data Center and AI Group (DCAI) delivered operating income of $1.3 billion, compared with $1.0 billion in the prior quarter and $0.4 billion a year earlier, resulting in an operating margin of 26.4%, up from 23.4% in Q3 2025 and skyrocketing from 8.6% in Q4 2024.

Intel’s efforts to reallocate internal supply from CCG to DCAI paid off, with unit demand for server CPUs skyrocketing beyond expectations in the second half of the year. According to Zinsner, “Every hyperscaler we spoke with was signaling that core counts were expected to increase, but unit volumes were not… Over the third and fourth quarters, unit demand increased rapidly, and in conversations just before this call, it became clear that this is likely a multi-year demand trend.”

Intel Foundry Performance

Intel’s All Other segment — which now includes its Mobileye business, IMS photomask printing operations, and some startups — posted $574 million in revenue in Q4 2025, down sequentially from $993 million in Q3 2025 and down from $1.113 billion YoY.

For the first time in quarters, the All Other segment turned red, losing a modest $8 billion with a negative operating margin on 1.4%. Intel Foundry posted $4.5 billion in revenue in Q4 2025, up 6.4% sequentially, driven by a higher mix of advanced manufacturing amid an increase in EUV wafer revenue due to increased supply of Intel 3-based Xeon 6 CPUs.

External foundry revenue totaled $222 million in the quarter, which was supported by U.S. government projects and the post-deconsolidation structure of Altera. However, Intel Foundry recorded an operating loss of about $2.5 billion, reflecting early ramp-up costs for new processes like Intel 18A as well as continuous investments in internal capacity for existing process technologies.

Q1 2026 Outlook

For the first quarter of 2026, Intel expects revenue of $11.7 billion to $12.7 billion, which means a year-over-year decline of about $0.5 billion. The prediction stems from continued supply constraints and the lack of buffer inventory that Intel sold in Q3 and Q4 2025.

Intel does not have that [finished goods inventory] to rely on, so it is literally hand-to-mouth — what we can get out of the fab and what we can get to customers is how we are managing it. Meanwhile, Intel expects supply constraints to ease later in the year. “We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond,” Zinsner said.

The outlook for Intel in 2026 is uncertain as it struggles to balance demand with supply constraints. The company’s management has expressed confidence that demand fundamentals remain healthy across its core markets, driven by the rapid adoption of AI and reinforcement of the importance of the x86 ecosystem.