Intel Reports First-Quarter 2024 Financial Results
“Q1 revenue was in line with our expectations, and we delivered non-GAAP EPS above our guidance, driven by better-than-expected gross margins and strong expense discipline,” said David Zinsner, Intel CFO. “Our new foundry operating model, which provides greater transparency and accountability, is already driving better decision-making across the business. Looking ahead, we expect to deliver year-over-year revenue and non-GAAP EPS growth in fiscal year 2024, including roughly 200 basis points of full-year gross margin improvement.” In the first quarter, the company used $1.2 billion in cash from operations and paid dividends of $0.5 billion.
Business Unit Summary
Intel previously announced the implementation of an internal foundry operating model, which took effect in the first quarter of 2024 and created a foundry relationship between its Intel Products business (collectively CCG, DCAI, and NEX) and its Intel Foundry business (including Foundry Technology Development, Foundry Manufacturing and Supply Chain, and Foundry Services (formerly IFS)). The foundry operating model is a key component of the company’s strategy and is designed to reshape operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. The company also previously announced its intent to operate Altera, an Intel Company (previously Intel’s Programmable Solutions Group), as a standalone business beginning in the first quarter of 2024. Altera was previously included in DCAI’s segment results. As a result of these changes, the company modified its segment reporting in the first quarter of 2024 to align to this new operating model. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally receives information and manages and monitors its operating segment performance starting in fiscal year 2024. There are no changes to Intel’s consolidated financial statements for any prior periods.
Intel Products Highlights
- CCG: Intel continues to advance its mission to bring AI everywhere. As of the end of the first quarter, more than 5 million AI PCs have shipped since the December 2023 launch of Intel Core Ultra processors, supported by more than 100 software vendors. Intel expects to exceed its prior forecast of 40 million AI PCs by the end of 2024.
- DCAI: At Intel Vision, the company introduced the Intel Gaudi 3 AI accelerator, projected to deliver on-average 50% faster inference and 40% greater inference power efficiency than Nvidia H1001 on leading generative AI (GenAI) models. Intel also announced new Intel Gaudi accelerator customers and partners, including NAVER, Dell Technologies, Bosch, Supermicro and many others. Additionally, the next-generation E-core Intel Xeon, code-named Sierra Forest, achieved product release this week, and Intel expects Granite Rapids to be released in the third quarter.
- NEX: At Mobile World Congress in Barcelona, Intel introduced the new Intel Edge Platform – a modular, open software platform enabling enterprises to develop, deploy, and manage edge and AI applications at scale. The Intel Edge Platform has broad ecosystem support from Amazon Web Services, Lenovo, Red Hat, SAP and Wipro. Intel also announced the Open Platform for Enterprise AI, which aims to accelerate secure, cost-effective GenAI deployments for businesses by driving interoperability across a diverse and heterogeneous ecosystem, starting with retrieval-augmented generation (RAG).
Intel Foundry Highlights
- At its inaugural Direct Connect event in February, Intel launched Intel Foundry, the world’s first systems foundry for the AI era, supported by nearly 300 ecosystem partners in attendance. At Direct Connect, Intel Foundry announced an increased expected lifetime deal value for external customers of more than $15 billion.
- Intel continues to drive customer adoption of Intel 18A, with a major U.S. aerospace and defense customer committing to Intel 18A, bringing Intel Foundry’s external customer commitments on Intel 18A to six. This quarter, Microsoft also announced its plans to design a chip on Intel 18A.
- Intel unveiled its process technology roadmap beyond its five-nodes-in-four-years process goal, adding Intel 14A to its leading-edge node lineup following Intel 18A and announcing several specialized node evolutions for Intel 3, Intel 18A and Intel 14A to enable customers to develop and deliver products tailored to their specific needs.
- Intel Foundry has a strong pipeline of nearly 50 customer test chips, and has engagements with almost every foundry customer in the industry on advanced packaging, including five design awards.
Also during the quarter, Intel convened more than 140 organizations across the industry at its inaugural Sustainability Summit. Advancing sustainability efforts across the semiconductor ecosystem is a critical step as Intel works to become the industry’s most sustainable foundry. The company shared notable progress as of the end of 2023, including preliminary estimates showing that Intel used 99% renewable electricity in its factories worldwide and achieved net positive water in the United States, Costa Rica, Mexico and India.
Q2 2024 Dividend
The company announced that its board of directors has declared a quarterly dividend of $0.125 per share on the company’s common stock, which will be payable June 1, 2024, to shareholders of record as of May 7, 2024.
