Intel Corporation has released its financial results for the second quarter of 2025, painting a complex picture of stability in sales but deep short-term losses as the company undergoes one of the most significant operational restructurings in its history.
While revenue of $12.9 billion was essentially flat compared to the same period in 2024, a series of one-time charges primarily from workforce reductions, asset impairments, and manufacturing adjustments, pushed the company into a GAAP net loss of $(2.9) billion, or $(0.67) per diluted share.
These results reflect both the challenges Intel faces in realigning its operations for a more competitive technology landscape and the costs of streamlining to prepare for future growth. On a non-GAAP basis, which excludes the impact of restructuring, impairments, and certain other charges, Intel posted a narrower loss of $(0.4) billion, or $(0.10) per share. The disparity between GAAP and non-GAAP earnings underlines the extraordinary impact of the restructuring program now underway.
$12.9 Billion Revenue Flat Year-Over-Year
For the quarter ended June 28, 2025, Intel generated $12.9 billion in revenue, almost unchanged from the $12.8 billion reported in Q2 2024. While flat revenue can sometimes signal stagnation, in Intel’s case it represents resilience amid turbulent market conditions. Demand trends in the semiconductor sector have been uneven, with AI infrastructure and data center demand showing strength while PC-related sales remain subdued.
The company’s revenue stability also reflects the diversity of its business portfolio. While certain segments saw declines, others achieved double-digit growth, helping to offset weaknesses elsewhere.
The headline loss of $(2.9) billion for Q2 2025 shows a significant shift from breakeven or modest profit periods in the past, but the majority of this loss is tied to deliberate restructuring choices. The GAAP loss per share of $(0.67) contrasts with a non-GAAP figure of just $(0.10), illustrating how heavily one-time events weighed on the quarter.
These figures are not purely reflective of Intel’s core operational performance. Instead, they are an accounting snapshot of a company making aggressive moves to cut costs, reallocate capital, and reposition for strategic priorities such as AI and foundry services.
Intel’s GAAP gross margin came in at 27.5%, down from 35.4% in Q2 2024. On a non-GAAP basis, gross margin was 29.7%, compared to 38.7% a year earlier, a drop of nine percentage points. This contraction is largely explained by restructuring and impairment-related costs, which together accounted for an eight-point impact to margins.
Restructuring costs alone contributed to a 7% margin impact. The remainder was influenced by $800 million in asset impairments, mostly manufacturing tools deemed to have no future use and $200 million in one-time period manufacturing costs. These are extraordinary items, meaning they are not expected to recur in future quarters at the same magnitude.
$1.9 Billion Restructuring Charges and a 15% Workforce Reduction
A central feature of Intel’s Q2 2025 story is the $1.9 billion in restructuring charges booked during the quarter. This figure, equivalent to $(0.45) per GAAP share, is primarily tied to a substantial headcount reduction. Intel plans to reduce its core workforce by about 15%, with a target of roughly 75,000 employees by the end of the year.
Management has positioned these workforce cuts as essential for creating a leaner, more agile organization capable of competing in fast-evolving markets. The company has already executed most of these reductions as of Q2, meaning the financial benefits of lower payroll and operating expenses should begin to appear in the second half of 2025 and beyond.
The quarter also included $800 million in asset impairments, a non-cash expense arising from the write-down of manufacturing tools with no identified future re-use. These impairments reduced GAAP earnings per share by $(0.23) and non-GAAP EPS by $(0.20). While they represent an accounting loss, they are also an acknowledgment of Intel’s commitment to redeploying capital into assets and technologies that align with its strategic roadmap.
In addition to restructuring and impairments, Intel incurred $200 million in one-time period manufacturing costs. Such costs, while smaller in scale than restructuring charges, still had a material impact on gross margin and profitability. They also signal the scale of operational adjustments Intel is making across its global manufacturing network.
$2.1 Billion in Operating Cash Flow
Despite the headline GAAP loss, Intel maintained positive operating cash flow of $2.1 billion in the quarter. This indicates that core operations continue to generate liquidity, a critical factor for funding research and development, capital expenditures, and ongoing restructuring activities without over-reliance on external financing.
Intel’s diversified revenue base reveals varied performance across its business units in Q2 2025. The Client Computing Group (CCG), which includes CPUs for PCs and laptops, posted $7.9 billion in revenue, down 3% year-over-year, reflecting the ongoing softness in the consumer PC market.
The Data Center and AI (DCAI) business generated $3.9 billion, a 4% increase from the prior year, benefiting from growing demand for AI infrastructure and high-performance computing solutions.
Intel’s Foundry business contributed $4.4 billion, up 3% year-over-year, underscoring the company’s ambition to compete as a contract chip manufacturer for external clients.
The Other category, which includes Mobileye and other emerging businesses, delivered $1.1 billion, marking a robust 20% increase year-over-year.
Intel is taking a disciplined approach to expenses, aiming for non-GAAP operating expenses of $17 billion in 2025, with a further reduction to $16 billion in 2026. These reductions will come from headcount optimization, footprint rationalization, and operational efficiencies across the organization.
For 2025, Intel expects gross capital expenditures of $18 billion, though the effective outlay will be lowered through partner contributions and government incentives. This capital will be deployed strategically, with a focus on advanced manufacturing capabilities that support both Intel’s own products and its foundry customers.
As part of its cost and efficiency measures, Intel has cancelled planned manufacturing projects in Germany and Poland. The company is also consolidating its assembly and test operations by shifting production from Costa Rica to larger, more cost-effective sites in Vietnam and Malaysia. Additionally, construction of the new Ohio fabrication facility will proceed at a slower pace, in line with market demand.
Product Roadmap: Xeon 6, Panther Lake, and 18A Technology
Product innovation remains central to Intel’s strategy, even amid restructuring. In Q2 2025, the company launched its Xeon 6 processor family, including a version designed for NVIDIA’s DGX B300 AI systems, highlighting Intel’s role in enabling advanced AI computing.
Looking ahead, the Panther Lake CPU is on track for shipment in late 2025, promising architectural and performance advancements. Intel also began wafer production on its 18A manufacturing process in Arizona during the quarter, a key milestone in its pursuit of process technology leadership.
Intel’s guidance for the third quarter of 2025 anticipates revenue between $12.6 billion and $13.6 billion, with GAAP earnings per share projected at $(0.24) and non-GAAP EPS expected to be at breakeven. Gross margins are forecast to improve to 34–36%, reflecting the absence of some Q2-specific charges and the early benefits of cost-saving measures.
Intel’s leadership framed the quarter as a transitional period. The CEO underscored a focus on execution discipline, delivering competitive core products, advancing AI capabilities, and maintaining capital discipline. The CFO emphasized the company’s progress in refining its cost structure, enhancing capital efficiency, and monetizing non-core assets to strengthen the balance sheet.
While Intel’s Q2 2025 results highlight significant short-term financial pain, the restructuring, asset realignment, and operational optimization efforts are aimed at building a more competitive, efficient, and innovation-driven company. Stable revenue, continued investment in advanced products, and a clear roadmap for cost reduction suggest that Intel is positioning itself for margin recovery and long-term growth in the highly competitive semiconductor industry.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
