Intel announced its Q2 2023 earnings this week, and they were a breath of fresh air for the beleaguered company. In its report, Intel posted an actual profit for the second quarter, reversing a sizable downslide in revenues for Chipzilla that began in Q4 2022 and saw a historic plunge in Q1. At the time, the company said it expected the bleeding to stop soon, and it has apparently done that. Though the company is still down from its numbers in 2022, it seems both Intel and the PC industry have begun to recover from the recent global PC downturn.
Regarding top-line numbers, Intel earned $12.9 billion in revenue in Q2, down 15% from the $15.9 billion it made a year ago. Of that revenue, $1.5 billion was profit, which marks a complete reversal over the previous quarters of historic losses. In Q4 of 2022, the company reported a $664 million loss, then followed that up in Q1 with a shocking $2.8 billion loss in Q1 of 2023, the largest quarterly decline in its 55-year history. Those brutal quarters prompted the company to take evasive maneuvers, as it embarked on a cost-cutting spree that saw it shelving future R&D plans, slashing executive compensation, and even driving a stake into the beloved NUC line of Mini PCs. In its earnings report, Intel CEO Pat Gelsinger attributed its newfound efficiencies as a partial contributor to its revenue rebound.
Overall, its Client Computing Services is still the company's leading business group in revenue. The company says strong demand for its current Raptor Lake CPUs drove it to $6.8 billion in revenue for the quarter. That's a 12% decline from a year ago but an increase of $1 billion from last quarter.
Its foundry services also saw a 307% increase in revenue year-over-year, indicating this nascent business unit is finally getting off the ground and pulling in some real cash. But it reported just $232 million in revenue for the quarter, so it's still the smallest earner among Intel's business units. It recently announced it had added 16nm FinFET to its menu for low-power clients looking to upgrade from older planar technology.
As far as the future goes, the company is projecting that it will remain on a slow upswing throughout the rest of 2023 but will still not match its 2022 numbers next quarter. It says it's currently "ramping wafer starts" for Intel 4, formerly known as 7nm. This will be for Meteor Lake, which is expected later this year. Beyond that, it says Intel 3, 20A, and 18A are still on track, which could mean we'll see Arrow and Lunar Lake in 2024. If Intel can remain on this trajectory, it will fulfill its "5 nodes in four years" strategy that CEO Pat Gelsinger laid out when he returned to the company in 2021.
