Intel's Q2 revenue increased by 25% year-on-year, turning from a loss to a profit under GAAP, and non-GAAP performance exceeded expectations, with increased capital expenditures

Intel's total revenue for the second quarter was $16.128 billion, a year-on-year increase of 25%, marking the highest growth rate in the past fifteen years, primarily driven by strong computing demand, improved product delivery efficiency, and increased manufacturing yield.

The quarterly GAAP operating profit was $1.796 billion, compared to a loss of $3.176 billion in the same period last year, with an operating profit margin of 11.1%; the non-GAAP operating profit was $2.770 billion, with a non-GAAP operating profit margin of 17.2%, positively impacted by a reduction in operating expenses such as R&D and MG&A (down 6% year-on-year).

At the end of the quarter, cash and cash equivalents along with short-term investments totaled $29.727 billion, a significant decrease quarter-on-quarter due to capital investments in equipment and cleanroom construction during the quarter, with adjusted free cash flow at -$8.419 billion.

Revenue from the Client Computing and Physical AI business (CCPG) was $8.877 billion, a year-on-year increase of 13%; revenue from Data Center and Artificial Intelligence (DCAI) was $6.262 billion, a substantial increase of 59%; revenue from Intel Foundry was $5.765 billion, up 31%.

GAAP net loss attributable to shareholders was $11.033 billion (affected by non-operating items such as the valuation of held stocks at market value); non-GAAP net profit attributable to shareholders was $2.197 billion; GAAP diluted loss per share was $2.16, while non-GAAP diluted earnings per share were $0.42.

Data Center and AI: Launched the next-generation data center CPU based on Xeon 6+, the first server-grade product based on Intel 18A process; partnered with SambaNova and Foxconn to introduce rack-level AI infrastructure for agentic workloads.

Physical AI and Edge: Over 130 customers have adopted or tested Intel Core Ultra Series 3 and Core Series 3 processors; launched the open-source OpenVINO Physical AI framework.

Foundry and Manufacturing: Intel 18A-P has entered the risk production phase; utilized ASML EXE High NA EUV technology to achieve high-volume production of Panther Lake (a subset of Core Ultra Series 3); announced a €5 billion investment to expand Xeon capacity under the Intel 3 process.

Networking and Handheld: Launched Intel Arc G series handheld processors; released the Ethernet E835 product line, covering 10GbE to 200GbE Management and Organization: Appointed Alex Katouzian to lead CCPG, Pushkar Ranade as CTO, and Seok-Hee Lee to lead Advanced Packaging. Deepening the long-term strategic partnership with Google Cloud.

Outlook

Revenue is expected to be between $15.8 billion and $16.8 billion in the third quarter of 2026.

GAAP gross margin is expected to be approximately 41.0%, and non-GAAP gross margin is expected to be approximately 42.0% in the third quarter.

GAAP diluted earnings per share are expected to be $0.31, and non-GAAP diluted earnings per share are expected to be $0.38 in the third quarter.

The company will continue to maintain a strong balance sheet and ample liquidity to support investments in equipment, clean rooms, and substrates.

In the long term, AI will continue to drive strong growth in computing demand, and the company will achieve sustainable growth through CPU architecture, ASICs, advanced packaging, and foundry networks