Intel Faces Significant Financial Losses Despite Increased Revenue
Intel Corporation has reported another disappointing financial quarter, revealing a staggering net loss of $2.9 billion, despite generating nearly $12.9 billion in revenue for the second quarter of 2025. This figure surpassed the company's initial projections by $500 million, yet the losses were more severe than Intel had anticipated just three months prior.
One of the primary factors contributing to these financial woes is the persistent high cost of chip manufacturing within its Intel Foundry division, coupled with substantial expenses related to its ongoing restructuring efforts. The company reported intersegment eliminations totaling $4.4 billion, indicating the costs incurred by design teams for the production of their processors at Intel Foundry. Although these costs are intended to be competitive with other semiconductor foundries such as TSMC, they have not been sufficient to cover the extensive expenses associated with Intel's own chip production.
As a result, Intel Foundry has recorded an operating loss of $3.2 billion, marking a 39% increase in losses since the beginning of the year. Additionally, the restructuring and other associated costs accounted for nearly $1.9 billion, primarily stemming from severance packages following the layoffs of thousands of employees, with more job cuts expected by year-end.
The gross margin has consequently dipped to 27.5%, and even when adjusted for severance (non-GAAP), the gross margin remains low at 29.8%. Intel continues to operate in the red, with an operational cash flow reported at -$3.9 billion.
On a more positive note, the company continues to see solid performance in its Client Computing Group (CCG), which specializes in processors for laptops and desktop computers. This division generated $7.9 billion in revenue, contributing an operating profit of $2.1 billion, although this reflects a slight decrease of 3% year-on-year.
Intel's Data Center and AI (DCAI) sector, however, has stalled with stagnant revenue of $3.9 billion and an operating profit of $633 million. Notably, Intel has integrated its networking division into the DCAI group, resulting in a retrospective revenue increase of 4%.
Other business segments, including the FPGA manufacturer Altera and the automotive hardware provider Mobileye, collectively accounted for just over $1 billion in revenue, yielding a modest operating profit of $69 million.
Looking ahead to the third quarter, Intel forecasts revenue between $12.6 billion and $13.6 billion, along with an anticipated net loss of approximately $1 billion. Since the stock market opened on July 24, Intel's shares have plummeted by around 9%, leading to a market capitalization that has fallen below $100 billion.