Intel $INTC reported second-quarter revenue of $16.1 billion, a 25% increase from a year earlier that marked the company's strongest quarterly revenue growth in more than 15 years, the company said Thursday.
AI-driven demand for server chips powered Intel's data center business to 59% growth, lifting total revenue to $16.1 billion
Cheng Xin / Getty Images
Intel $INTC reported second-quarter revenue of $16.1 billion, a 25% increase from a year earlier that marked the company's strongest quarterly revenue growth in more than 15 years, the company said Thursday.
The results topped analyst expectations. Wall Street had penciled in revenue of $14.42 billion and adjusted earnings of 21 cents per share, according to CNBC. Intel posted adjusted EPS of 42 cents. On a GAAP basis, the company reported a net loss of $11 billion, or $2.16 per share, driven by a $12.5 billion mark-to-market loss on escrowed shares tied to its CHIPS Act agreement with the U.S. government.
The growth was led by Intel's Data Center and AI segment, where revenue climbed 59% year over year to $6.3 billion. The client computing group, which makes chips for PCs, posted a 13% revenue gain to $8.9 billion. Intel Foundry revenue rose 31% to $5.8 billion.
"AI is driving unprecedented demand for compute," CEO Lip-Bu Tan said in a statement. "Our Q2 results represent our strongest revenue growth in more than fifteen years, enabled by greater speed, accountability, and customer focus."
CFO Dave Zinsner said the quarter exceeded financial guidance on the back of higher factory yields and faster production cycles. "AI-driven compute continues to strengthen, and to support expected growth this year and next across products and foundry, we are meaningfully increasing our investments in equipment, clean room space, and substrates," he said in a statement.
Intel said its data center operations cannot keep up with orders, leaving the company unable to fully meet customer demand. The company has signed 10 long-term contracts with server CPU buyers, structured around either fixed pricing commitments or guaranteed purchase volumes.
The company's gross margin recovered to 40.4% on a GAAP basis, up from 27.5% in the year-ago quarter. Intel generated $7 billion in cash from operations during the quarter.
Looking ahead to the third quarter, Intel guided for revenue of $15.8 billion to $16.8 billion, GAAP EPS of 31 cents, and adjusted EPS of 38 cents — comfortably above the consensus calls for $15.1 billion in revenue and 27 cents in adjusted EPS.
Intel stock jumped 11% in after-hours trading following the release.
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