Intel Q3 Revenue Rises 21% to $16.5 Billion as Data Center Sales Jump 78%

Intel reported third-quarter revenue of $16.5 billion on October 29, up 21% from a year earlier, led by a 78% increase in data center and AI sales, according to its earnings release.

Segment results

• Intel Products: $15.4 billion, up 22%
• Data Center and AI (DCAI): $7.3 billion, up 78%
• Client Computing and Physical AI Group (formerly Client Computing): $8.1 billion, down 5%
• Intel Foundry: $6.7 billion, up 58%

Profitability

GAAP gross margin was 43.0%, up 4.8 percentage points, and non-GAAP gross margin was 44.1%. GAAP earnings per share were $0.60, down from $0.90 a year earlier, while non-GAAP earnings per share rose to $0.52 from $0.23. GAAP net income attributable to Intel was $3.3 billion. Intel excluded a $1.005 billion mark-to-market gain on escrowed shares from its non-GAAP results.

Operating cash flow was $5.1 billion. Gross capital expenditures were $4.2 billion in the quarter and $10.2 billion for the first nine months.

Supply and the PC market

CEO Lip-Bu Tan said Intel's "immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family." Chief Financial Officer David Zinsner pointed to "the PC slowdown continuing at least through the first half of next year."

Fourth-quarter guidance

• Revenue: $15.0 billion to $16.0 billion
• Gross margin: 37.1% GAAP and 38.0% non-GAAP at the midpoint
• Earnings per share: $0.10 GAAP and $0.25 non-GAAP

Other announcements

The release also noted that Intel completed a $23 billion public equity offering, announced plans to acquire Classiq, and appointed Dean Jarnac as executive vice president and chief sales officer.

Intel's data center growth comes as AI workloads drive demand for server processors alongside accelerators, a trend also visible in recent server launches from partners such as HPE.