Intel Corporation (INTC) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 28, 2026. Intel operates through three primary reportable segments: Client Computing Group (CCG), Data Center and AI (DCAI), and Intel Foundry, alongside an "All Other" category which includes Mobileye. The quarter was significantly impacted by a major goodwill impairment charge, ongoing restructuring initiatives, and geopolitical tensions affecting operations in Israel and global supply chains.
Key Financial Metrics
| Metric (in millions, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Revenue | $13,577 | $12,667 |
| Gross Profit | $5,347 | $4,672 |
| Gross Margin | 39.4% | 36.9% |
| Operating Income (Loss) | $(3,136) | $(301) |
| Net Income (Loss) Attributable to Intel | $(3,728) | $(821) |
| Diluted EPS | $(0.73) | $(0.19) |
| Operating Cash Flow | $1,096 | $813 |
| Total Cash & Short-Term Investments | $32,789 | $37,416 |
| Total Debt | $45,031 | $46,585 |
Material Changes vs. Prior Period
- Revenue Growth: Net revenue increased 7% year-over-year to $13.6 billion, driven by a 22% increase in DCAI revenue (higher server ASPs) and modest growth in CCG. However, volumes declined in both segments due to supply constraints.
- Restructuring and Impairment Charges: Operating loss widened significantly due to $4.07 billion in restructuring and other charges, compared to $156 million in Q1 2025. This includes a non-cash goodwill impairment of $3.9 billion primarily attributed to the Mobileye reporting unit.
- Segment Performance:
- Intel Products (CCG + DCAI): Generated $4.1 billion in operating income, up from $2.9 billion in Q1 2025, driven by higher product profit and lower period charges.
- Intel Foundry: Reported an operating loss of $2.4 billion, slightly wider than the $2.3 billion loss in Q1 2025, due to higher costs associated with the ramp of the Intel 18A process node.
- All Other: Revenue decreased to $628 million due to the deconsolidation of Altera (completed in Q3 2025), though Mobileye revenue increased.
- Non-Controlling Interests: Net loss attributable to non-controlling interests was $553 million, largely driven by the Mobileye impairment charge allocated to minority holders.
Guidance, Outlook, and Risks
- Supply Constraints: Intel expects supply constraints to persist through at least the first half of 2026, limiting the ability to meet full customer demand. The company is ramping production on the Intel 18A node to mitigate this.
- Geopolitical Risks: Escalating conflict involving Iran and Israel poses significant risks. Intel's Fab 34 in Israel is a key revenue generator (Intel 7 node) and is self-insured against war/political violence. The conflict has also caused global helium shortages, impacting semiconductor manufacturing.
- Future Node Strategy: Intel is taking a disciplined approach to capital deployment. If sufficient demand for the next-generation Intel 14A node is not secured, the company may pause or discontinue its development, potentially shifting future advanced products to external foundries.
- Recent Transactions: In April 2026 (post-period), Intel repurchased Apollo's 49% minority interest in Ireland SCIP for approximately $14.2 billion, funded by cash and a new $6.5 billion term loan. This transaction will be reflected in Q2 2026 results.
- Legal Contingencies: Significant litigation remains, including VLSI patent disputes (accrued liability of $1.0 billion) and European Commission competition fines.
Investor Verification Checklist
- Mobileye Impairment: Verify the assumptions used in the $3.9 billion goodwill impairment, specifically the discount rate adjustments related to Middle East geopolitical risks.
- Supply Chain Capacity: Assess the timeline for resolving supply constraints on Intel 18A and the impact on Q2/Q3 revenue guidance.
- Israel Operations: Monitor the status of the Israel facility and potential business interruption risks given the ongoing conflict and lack of war insurance.
- Intel 14A Viability: Track progress on securing external design wins for the Intel 14A node to determine if the roadmap remains viable.
- Liquidity Post-Transaction: Review the impact of the $14.2 billion Ireland SCIP buyback and the new $6.5 billion term loan on the balance sheet in the upcoming Q2 filing.