Slide 1: 1st Quarter Earnings Presentation
1st Quarter Earnings Presentation Pat Gelsinger David Zinsner Executive Vice President and Chief Executive Officer Chief Financial Officer
Slide 2: Non-GAAP measures and forward-looking statements
• This presentation contains non-GAAP financial measures. Intel gross margin, and earnings per share, including year-over-year comparisons, are presented on a non-GAAP basis. This presentation also includes a non-GAAP adjusted free cash flow (FCF) measure. The Appendix provides a reconciliation of t
Slide 3: Q1 beat expectations on the top and bottom line
Q1 beat expectations on the top and bottom line Despite navigating through global challenges Expecting modest 2H’23 recovery Executing on our commitment to manage costs On our way to deliver $3B of cost savings in 2023, $8-10B annually exiting 2025 Establishing internal foundry model central to IDM
Slide 4: Navigating Macro Headwinds, Long-Term Sustainable Demand
Navigating Macro Headwinds Long-Term Sustainable Demand ▪ PC inventory correction as expected ▪ PC usage remains strong; long-term TAM 300M +/- ▪ Continued year over year server TAM contraction ▪ Mid-20s CAGR for server CPU cores; AI tailwind ▪ Network & Edge demand softened further ▪ PSG, IFS, MBLY
Slide 5: Process and Manufacturing, CCG, DCAI, NEX
Process and Manufacturing CCG DCAI NEX Gained share in Q1’23 Raptor Lake NB introduced Emerald Rapids in Q4’23 Launched 4th Gen Intel Meteor Lake in 2H’23 Sierra Forest in 1H’24 Xeon Scalable with vRAN Arrow Lake & Lunar Lake in Granite Rapids thereafter Boost 2024 Clearwater Forest in 2025 5 nodes
Slide 6: Revenue, Gross Margin, EPS
Revenue Gross Margin EPS Down 36% YoY Down 14.7 ppts YoY Down 105% YoY $0.7B above January outlook 0.6 ppt below January outlook $0.11 above January outlook mid-point 1 Gross margin and EPS comparisons are based on the mid-point of revenue outlook. 6
Slide 7: Client Computing Group: Revenue down 38%, Operating Income down 81%
Revenue down 38% Operating Income down 81% Revenue • Lower revenue on overall TAM and OEM inventory reductions $9.3B Operating Income • Lower revenue, higher unit cost and excess capacity charges $5.8B $2.7B Operating $0.5B Margin 29% Operating Margin 9% Q1'22 Q1'23 Q1'22 Q1'23 7
Slide 8: Data Center and AI: Revenue down 39%, Operating Income down 137%
Revenue down 39% Operating Income down Revenue 137% • Lower revenue on TAM contraction and $6.1B competitive pressure Operating Income • Lower revenue, higher unit costs, and excess capacity charges $3.7B $1.4B Operating Margin 23% ($0.5B) Operating Margin -14% Q1'22 Q1'23 Q1'22 Q1'23 8
Slide 9: Network and Edge: Revenue down 30%, Operating Income down 172%
Revenue down 30% Operating Income down Revenue 172% • Softening demand as broad-based consumption remains slow and customer $2.1B inventories remain high Operating Income $1.5B • Lower revenue and increased inventory reserves $416M Operating Operating Margin -20% Margin 19% Q1'22 Q1'23 Q1'22 Q1'23 (
Slide 10: Mobileye and Intel Foundry Services
Mobileye Intel Foundry Services (IFS) Revenue Operating Income Revenue Operating Income $156M $148M $123M $118M $458M ($23M) ($140M) $394M Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 ▪ Revenue up 16% year-over-year on higher ▪ Revenue down 24% year-over-year demand for EyeQ products ▪ Operating
Slide 11: Outlook
Outlook intel. 1
Slide 12: Q2 2023 Outlook
Q2 2023 Outlook1 Revenue Gross Margin EPS Down 22% YoY Down 7.3 ppt YoY Down 114% YoY 1 Gross margin and EPS outlook based on the mid-point of the revenue range. 12
Slide 13: Appendix
Appendix
Slide 14: FY2022 and FY2021 segment revenue and operating income reconciliation
(In Millions, unaudited) FY 2022 FY 2021 CCG $31,773 $41,081 DCAI 19,445 22,774 NEX 8,409 7,665 Mobileye 1,869 1,386 IFS 469 347 All Other 1,089 5,771 GAAP Revenue 63,054 79,024 Less: NAND memory business - (4,306) Non-GAAP Revenue $63,054 $74,718 CCG $5,569 $15,523 DCAI 1,300 7,376 NEX 1,033 1,935
Slide 15: 2022 quarterly segment revenue and operating income reconciliation
(In Millions, unaudited) Q1 2022 Q2 2022 Q3 2022 Q4 2022 CCG $9,322 $7,678 $8,129 $6,644 DCAI 6,074 4,696 4,255 4,420 NEX 2,139 2,210 2,133 1,927 Mobileye 394 460 450 565 IFS 156 57 78 178 All Other 268 220 293 308 Total net revenue $18,353 $15,321 $15,338 $14,042 CCG $2,722 $876 $1,447 $524 DCAI 1,
Slide 16: Q1 gross margin and EPS reconciliation
Three Months Ended Apr 1, 2023 Apr 2, 2022 GAAP gross margin percentage 34.2% 50.4% Acquisition-related adjustments 2.8% 1.9% Share-based compensation 1.4% 0.8% Non-GAAP gross margin percentage 38.4% 53.1% GAAP earnings (loss) per share attributable to Intel—diluted $(0.66) $1.98 Acquisition-related
Slide 17: Q2 2023 outlook gross margin and EPS reconciliation
Q2 2022 Actuals Q2 2023 Outlook1 Approximately GAAP gross margin percentage 36.5% 33.2% Acquisition-related adjustments 2.2% 2.6% Share-based compensation 1.2% 1.7% Patent settlement 1.3% -- Optane inventory impairment 3.6% -- Non-GAAP gross margin percentage 44.8% 37.5% GAAP earnings (loss) per sha
Slide 18: Talay
Talay