Intel's Q2 revenue jumps 25% to $16.1B, but a $12.5B non-cash charge drives an $11B net loss
INTC has more than doubled off its 52-week low of $18.965.
Summary
Intel's Q2 revenue surged 25% to $16.1B with strong margins, but a $12.5B non-cash charge from the U.S. government's equity stake drove a reported net loss of $11B. The company also bought out Apollo's Ireland fab stake for $14.2B and took a $3.9B Mobileye impairment.
Key Events · Earnings and Guidance · INTC
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Revenue Surges 25%
Q2 revenue reached $16.1B, up from $12.9B a year ago, driven by 59% growth in Data Center and AI (DCAI) and 13% growth in Client Computing (CCPG). Gross margin expanded to 40.4% from 27.5%.
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$12.5B Non-Cash Charge from Escrowed Shares
A $12.5B mark-to-market loss on the derivative liability for Escrowed Shares issued to the U.S. government, reflecting Intel's higher stock price. This is a non-cash item with no impact on operations or cash flow.
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Ireland SCIP Buyout for $14.2B
Intel repurchased Apollo's 49% stake in the Ireland SCIP joint venture for $14.2B in cash, funded by a $6.5B term loan that was subsequently refinanced with new senior notes. The transaction eliminates future partner distributions.
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$3.9B Mobileye Goodwill Impairment
A non-cash goodwill impairment charge of $3.9B was recognized in Q1 2026 related to the Mobileye reporting unit, driven by a sustained decline in Mobileye's market capitalization and increased geopolitical risks.
Analysis · INTC · Manufacturing
Operationally, Intel delivered a sharp recovery in Q2, with revenue climbing 25% year-over-year and gross margin expanding to 40.4%, fueled by robust demand and a richer product mix across both client and data center segments. The bottom line, however, was crushed by a $12.5 billion non-cash mark-to-market loss on Escrowed Shares tied to the U.S. government's equity stake — a paper loss that reflects Intel's surging stock price, not a cash outflow. The quarter also included a $14.2 billion buyout of Apollo's minority interest in Ireland SCIP, funded by new debt, and a $3.9 billion Mobileye goodwill impairment taken in Q1. While operational execution is strong, the financial statements are noisy with large non-cash items and strategic financing moves.
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