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SANTA CLARA, Calif., July 23, 2021 — Intel Corporation reported second-quarter 2021 financial results.
“There’s never been a more exciting time to be in the semiconductor industry. The digitization of everything continues to accelerate, creating a vast growth opportunity for us and our customers across core and emerging business areas. With our scale and renewed focus on both innovation and execution, we are uniquely positioned to capitalize on this opportunity, which I believe is merely the beginning of what will be a decade of sustained growth across the industry,” said Pat Gelsinger, Intel CEO. “Our second-quarter results show that our momentum is building, our execution is improving, and customers continue to choose us for leadership products.”
Q2 2021 Financial Highlights
- Second-quarter GAAP revenue of $19.6 billion, flat year over year (YoY), and non-GAAP revenue of $18.5 billion, up 2% YoY, which exceeded April guidance by $700 million.
- Second-quarter GAAP earnings-per-share (EPS) was $1.24; non-GAAP EPS was $1.28, which exceeded April guidance by $0.23.
- Exceeded Q2 guidance for revenue, EPS, and gross margin; record Q2 revenue in PC and Mobileye businesses.
- Raising full-year 2021 guidance. Now expecting GAAP revenue of $77.6 billion and non-GAAP revenue of $73.5 billion; GAAP EPS of $4.09 and non-GAAP EPS of $4.80.1
| GAAP | Non-GAAP | ||||||
| Q2 2021 | Q2 2020 | vs. Q2 2020 | Q2 2021 | Q2 2020 | vs. Q2 2020 | ||
| Revenue ($B) | $19.6 | $19.7 | flat | $18.5 | $18.2 | up 2% | |
| Gross Margin | 57.1% | 53.3% | up 3.8 ppt | 59.2% | 56.3% | up 2.9 ppt | |
| R&D and MG&A ($B) | $5.3 | $4.8 | up 11% | $5.1 | $4.6 | up 11% | |
| Operating Margin | 28.3% | 28.9% | down 0.6 ppt | 31.6% | 31.0% | up 0.6 ppt | |
| Tax Rate | 11.9% | 14.0% | down 2.1 ppt | 11.9% | 14.1% | down 2.3 ppt | |
| Net Income ($B) | $5.1 | $5.1 | down 1% | $5.2 | $4.9 | up 6% | |
| Earnings Per Share | $1.24 | $1.19 | up 4% | $1.28 | $1.14 | up 12% | |
In the second quarter, the company generated $8.7 billion in cash from operations and paid dividends of $1.4 billion.
Business Unit Summary
| Key Business Unit Revenue and Trends | Q2 2021 | vs. Q2 2020 | |||
| CCG | $10.1 billion | up | 6% | ||
| DCG | $6.5 billion | down | 9% | ||
| Internet of Things | |||||
| IOTG | $984 million | up | 47% | ||
| Mobileye | $327 million | up | 124% | ||
| NSG | $1.1 billion | down | 34% | ||
| PSG | $486 million | down | 3% | ||
Second-quarter revenue exceeded April guidance led by continued strength in Intel’s Client Computing Group (CCG) and strong recovery in both Intel’s Internet of Things Group (IOTG) and the Enterprise portion of its Data Center Group (DCG).
The PC and Mobileye businesses both achieved record Q2 revenue. In the second quarter, PC platform volumes were up 33 percent YoY and Mobileye closed 10 additional design wins for more than 16 million total lifetime units.
Business Highlights
▪ Announced a $3.5 billion investment to equip Intel’s New Mexico operations for the manufacturing of advanced semiconductor packaging technologies, including Foveros.
▪ Launched 12 new processors for client, including 11th Gen Intel Core with Intel Iris Xe graphics and Intel Xeon W-11000 series processors with more than 300 designs expected this year.
▪ Announced partnership with Microsoft including Intel Bridge Technology to deliver better mobile experiences on Windows-powered PCs.
▪ Leading cloud service providers, including Alibaba, Baidu, Microsoft, and Oracle are offering services based on the latest 3rd Gen Intel Xeon Scalable (“Ice Lake”) processors.
▪ Unveiled the Intel Network Platform and expanded networking leadership product portfolio with new FPGA, software, and Ethernet solutions.
▪ Announced partnership with Ericsson to expand cloud radio access network to increase 5G performance.
▪ Mobileye and ZF were selected by Toyota Motor Corp to develop advanced driver assistance systems.
▪ Announced Mobileye as the only company holding an autonomous vehicle testing permit in New York.
▪ Announced new organizational changes and welcomed renowned technologists to strengthen execution and innovation in critical business areas.
As part of its IDM 2.0 strategy, Intel is accelerating its annual cadence of innovation with new advancements in semiconductor process and packaging. Join the public webcast at newsroom.intel.com at 2 p.m. PDT on Monday, July 26, for more information on Intel’s process and packaging roadmaps.
Additional information regarding Intel’s results can be found in the Q2’21 Earnings Presentation available at:
Business Outlook
Intel’s guidance for the third quarter and full year includes both GAAP and non-GAAP estimates. Our Non-GAAP measures exclude the NAND memory business, which is subject to a previously-announced pending sale, as well as certain other items. Reconciliations between GAAP and non-GAAP financial measures are included below. Intel’s guidance includes a one-time tax benefit to EPS of approximately $0.10 in Q3.
| Q3 2021 | GAAP | Non-GAAP | ||
| Approximately | Approximately | |||
| Revenue | $19.1 billion | $18.2 billion | ||
| Gross Margin | 53% | 55% | ||
| Tax rate | 4% | 4% | ||
| Earnings per share | $1.08 | $1.10 |
| Full-Year 2021 | GAAP | Non-GAAP | ||
| Approximately | Approximately | |||
| Revenue | $77.6 billion | $73.5 billion | ||
| Gross Margin | 54.2% | 56.5% | ||
| Tax rate | 16% | 11% | ||
| Earnings per share | $4.09 | $4.80 | ||
| Full-year capital spending | $19.0-20.0 billion | $19.0-20.0 billion^ | ||
| Free cash flow | N/A | $11.0 billion |
Actual results may differ materially from Intel’s Business Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.
Intel Corporation
Consolidated Condensed Statements of Income and Other Information
| Three Months Ended | Six Months Ended | |||||||||||||||
| (In Millions, Except Per Share Amounts; unaudited) | Jun 26, 2021 | Jun 27, 2020 | Jun 26, 2021 | Jun 27, 2020 | ||||||||||||
| Net revenue | $ | 19,631 | $ | 19,728 | $ | 39,304 | $ | 39,556 | ||||||||
| Cost of sales | 8,425 | 9,221 | 17,244 | 17,033 | ||||||||||||
| Gross margin | 11,206 | 10,507 | 22,060 | 22,523 | ||||||||||||
| Research and development | 3,715 | 3,354 | 7,338 | 6,629 | ||||||||||||
| Marketing, general and administrative | 1,599 | 1,447 | 2,927 | 2,988 | ||||||||||||
| Restructuring and other charges | 346 | 9 | 2,555 | 171 | ||||||||||||
| Operating expenses | 5,660 | 4,810 | 12,820 | 9,788 | ||||||||||||
| Operating income | 5,546 | 5,697 | 9,240 | 12,735 | ||||||||||||
| Gains (losses) on equity investments, net | 295 | 267 | 663 | 156 | ||||||||||||
| Interest and other, net | (96) | (29) | (252) | (342) | ||||||||||||
| Income before taxes | 5,745 | 5,935 | 9,651 | 12,549 | ||||||||||||
| Provision for taxes | 684 | 830 | 1,229 | 1,783 | ||||||||||||
| Net income | $ | 5,061 | $ | 5,105 | $ | 8,422 | $ | 10,766 | ||||||||
| Earnings per share—basic | $ | 1.25 | $ | 1.20 | $ | 2.08 | $ | 2.53 | ||||||||
| Earnings per share—diluted | $ | 1.24 | $ | 1.19 | $ | 2.06 | $ | 2.50 | ||||||||
| Weighted average shares of common stock outstanding: | ||||||||||||||||
| Basic | 4,049 | 4,246 | 4,053 | 4,256 | ||||||||||||
| Diluted | 4,084 | 4,284 | 4,090 | 4,298 | ||||||||||||
| Three Months Ended | ||||||||
| (In Millions) | Jun 26, 2021 | Jun 27, 2020 | ||||||
| Earnings per share of common stock information: | ||||||||
| Weighted average shares of common stock outstanding—basic | 4,049 | 4,246 | ||||||
| Dilutive effect of employee equity incentive plans | 35 | 38 | ||||||
| Weighted average shares of common stock outstanding—diluted | 4,084 | 4,284 | ||||||
| Stock buyback: | ||||||||
| Shares repurchased | — | — | ||||||
| Cumulative shares repurchased (in billions) | 5.8 | 5.5 | ||||||
| Remaining dollars authorized for buyback (in billions) | $ | 7.2 | $ | 19.7 | ||||
| Other information: | ||||||||
| Employees (in thousands) | 113.7 | 110.8 | ||||||
Intel Corporation
Consolidated Condensed Balance Sheets
| (In Millions) | Jun 26, 2021 | Dec 26, 2020 | ||||||
| Assets | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,746 | $ | 5,865 | ||||
| Short-term investments | 3,014 | 2,292 | ||||||
| Trading assets | 17,097 | 15,738 | ||||||
| Accounts receivable | 7,460 | 6,782 | ||||||
| Inventories | ||||||||
| Raw materials | 1,010 | 908 | ||||||
| Work in process | 5,968 | 5,693 | ||||||
| Finished goods | 1,839 | 1,826 | ||||||
| 8,817 | 8,427 | |||||||
| Assets held for sale | 5,817 | 5,400 | ||||||
| Other current assets | 2,421 | 2,745 | ||||||
| Total current assets | 49,372 | 47,249 | ||||||
| Property, plant and equipment, net | 58,166 | 56,584 | ||||||
| Equity investments | 5,655 | 5,152 | ||||||
| Other long-term investments | 1,262 | 2,192 | ||||||
| Goodwill | 26,768 | 26,971 | ||||||
| Identified intangible assets, net | 8,018 | 9,026 | ||||||
| Other long-term assets | 5,356 | 5,917 | ||||||
| Total assets | $ | 154,597 | $ | 153,091 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Short-term debt | $ | 3,695 | $ | 2,504 | ||||
| Accounts payable | 5,917 | 5,581 | ||||||
| Accrued compensation and benefits | 3,176 | 3,999 | ||||||
| Other accrued liabilities | 12,048 | 12,670 | ||||||
| Total current liabilities | 24,836 | 24,754 | ||||||
| Debt | 31,714 | 33,897 | ||||||
| Contract liabilities | 68 | 1,367 | ||||||
| Income taxes payable | 4,172 | 4,578 | ||||||
| Deferred income taxes | 3,271 | 3,843 | ||||||
| Other long-term liabilities | 5,329 | 3,614 | ||||||
| Stockholders’ equity | ||||||||
| Common stock and capital in excess of par value, 4,057 issued and outstanding (4,062 issued and outstanding as of December 26, 2020) | 26,655 | 25,556 | ||||||
| Accumulated other comprehensive income (loss) | (1,095) | (751) | ||||||
| Retained earnings | 59,647 | 56,233 | ||||||
| Total stockholders’ equity | 85,207 | 81,038 | ||||||
| Total liabilities and stockholders’ equity | $ | 154,597 | $ | 153,091 | ||||
Intel Corporation
Consolidated Condensed Statements of Cash Flows
| Six Months Ended | ||||||||
| (In Millions; unaudited) | Jun 26, 2021 | Jun 27, 2020 | ||||||
| Cash and cash equivalents, beginning of period | $ | 5,865 | $ | 4,194 | ||||
| Cash flows provided by (used for) operating activities: | ||||||||
| Net income | 8,422 | 10,766 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 4,862 | 5,248 | ||||||
| Share-based compensation | 1,044 | 941 | ||||||
| Restructuring and other charges | 2,555 | 171 | ||||||
| Amortization of intangibles | 897 | 865 | ||||||
| (Gains) losses on equity investments, net | (555) | (92) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (678) | 224 | ||||||
| Inventories | (126) | (271) | ||||||
| Accounts payable | 425 | 208 | ||||||
| Accrued compensation and benefits | (836) | (1,025) | ||||||
| Prepaid supply agreements | (1,571) | (161) | ||||||
| Income taxes | 114 | 1,203 | ||||||
| Other assets and liabilities | (259) | (762) | ||||||
| Total adjustments | 5,872 | 6,549 | ||||||
| Net cash provided by operating activities | 14,294 | 17,315 | ||||||
| Cash flows provided by (used for) investing activities: | ||||||||
| Additions to property, plant and equipment | (7,574) | (6,676) | ||||||
| Additions to held for sale NAND property, plant and equipment | (682) | — | ||||||
| Purchases of available-for-sale debt investments | (2,000) | (4,558) | ||||||
| Maturities and sales of available-for-sale debt investments | 2,126 | 1,303 | ||||||
| Purchases of trading assets | (14,637) | (11,429) | ||||||
| Maturities and sales of trading assets | 12,936 | 7,430 | ||||||
| Other investing | 380 | (416) | ||||||
| Net cash used for investing activities | (9,451) | (14,346) | ||||||
| Cash flows provided by (used for) financing activities: | ||||||||
| Issuance of long-term debt, net of issuance costs | — | 10,247 | ||||||
| Repayment of debt and debt conversion | (500) | (2,775) | ||||||
| Proceeds from sales of common stock through employee equity incentive plans | 589 | 512 | ||||||
| Repurchase of common stock | (2,415) | (4,229) | ||||||
| Payment of dividends to stockholders | (2,821) | (2,811) | ||||||
| Other financing | (815) | 629 | ||||||
| Net cash provided by (used for) financing activities | (5,962) | 1,573 | ||||||
| Net increase (decrease) in cash and cash equivalents | (1,119) | 4,542 | ||||||
| Cash and cash equivalents, end of period | $ | 4,746 | $ | 8,736 | ||||
About Intel
Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to intel.com.
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Source: Intel
