01—Abstract
Summary
Summary of the 10-K filed January 26, 2024. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation (INTC) reported a significant year-over-year revenue decline of 14% in 2023, totaling $54.2 billiona.
This downturn was driven by weakened demand across key segments, including Client Computing Group (CCG), Data Center and AI (DCAI), and Network and Edge (NEX). The company experienced lower unit volumes in its CCG segment, particularly in notebooks, while ASPs saw a slight decrease due to product mix. The DCAI segment was impacted by a softening data center market and reduced server volumes, despite higher ASPs driven by a shift in customer mix.
NEX revenue declined substantially as customers worked to reduce inventory levels. Despite the revenue challenges, Intel continued to make substantial investments in its IDM 2.0 strategy, focusing on regaining process technology leadership and expanding its foundry business (IFS).
The company invested $16.0 billionb in R&D and $25.8 billion in capital expenditures, signaling a commitment to long-term growth and technological advancement. Intel also took steps to optimize its portfolio, including strategic sales of minority stakes in its IMS Nanofabrication business and Mobileye stock, to fund these critical investments.
02—Key points
Key Highlights
- Total net revenue for 2023 was $54.2 billion, a 14% decrease from $63.1 billion in 2022.
- Client Computing Group (CCG) revenue decreased by 8% due to lower volumes, partially offset by higher desktop ASPs.
- Data Center and AI (DCAI) revenue decreased by 20% driven by lower server volumes in a softening market.
- Network and Edge (NEX) revenue saw a significant 31% decrease as customers managed inventory.
- Intel invested $16.0 billion in R&D and $25.8 billion in capital expenditures to support its IDM 2.0 transformation and process technology roadmap.
- The company continued to make progress on its product roadmap, launching new processors like Intel Core Ultra with integrated NPUs for AI acceleration.
- Intel generated $11.5 billion in cash from operations but reported an adjusted free cash flow of $(11.9) billion, reflecting substantial investments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Intel Corp kept $0.03.
- Revenue$54.23B100.0%
- Cost of revenue−$32.52B60.0%
- Gross profit$21.71B40.0%
- Operating costs−$21.62B39.9%
- Operating income$93.0M0.2%
- Interest, other & tax$1.60B2.9%
- Net income$1.69B3.1%
Where FY2023 revenue went
$54.23B- Cost of revenue: $32.52B, 60% of revenue
- R&D: $16.05B, 30% of revenue
- Operating income: $93.0M, 0.2% of revenue
- SG&A: $5.63B, 10% of revenue
Kept 0.2% as operating incomeOperating income $93.0M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed January 26, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $54.23B$63.05B | −14.0% |
| Cost of Revenue | $32.52B$36.19B | −10.1% |
| Gross Profit | $21.71B$26.87B | −19.2% |
| R&D Expenses | $16.05B$17.53B | −8.5% |
| SG&A Expenses | $5.63B$7.00B | −19.5% |
| Operating Expenses | $21.62B$24.53B | −11.9% |
| Operating Income | $93.00M$2.33B | −96.0% |
| Interest Expense | $878.00M$496.00M | +77.0% |
| Net Income | $1.69B$8.01B | −78.9% |
| EPS (Basic) | $0.40$1.95 | −79.5% |
| EPS (Diluted) | $0.40$1.94 | −79.4% |
| Shares Outstanding (Basic) | 4.19B4.11B | +2.0% |
| Shares Outstanding (Diluted) | 4.21B4.12B | +2.2% |
05—Questions
Frequently Asked Questions
What was Intel's overall financial performance in 2023 compared to 2022?
Intel experienced a significant revenue decline of 14% in 2023, reporting $54.2 billion compared to $63.1 billion in 2022. This was primarily driven by lower demand and unit volumes across its Client Computing Group (CCG) and Data Center and AI (DCAI) segments, as well as a substantial drop in Network and Edge (NEX) revenue.
How is Intel progressing with its IDM 2.0 strategy and foundry ambitions?
Intel continued to heavily invest in its IDM 2.0 strategy, with $16.0 billion in R&D and $25.8 billion in capital expenditures. The company is focused on regaining process technology leadership by 2025 and expanding its Intel Foundry Services (IFS) business. Key product launches, such as the Intel Core Ultra processors with integrated NPUs, demonstrate progress in delivering advanced technology. The company is also investing heavily in expanding manufacturing capacity in the US and Europe.
What is the outlook for Intel's main business segments?
The Client Computing Group (CCG) saw lower volumes but stabilizing demand in the latter half of the year. The Data Center and AI (DCAI) segment faced a softening market with reduced server volumes, though ASPs improved. The Network and Edge (NEX) segment experienced a significant revenue decrease as customers focused on inventory reduction. Mobileye, an automotive technology segment, showed revenue growth. Intel Foundry Services (IFS) revenue increased, reflecting growing interest in its foundry offerings.
How did Intel manage its capital allocation and cash flow in 2023?
Intel generated $11.5 billion in cash from operations but reported an adjusted free cash flow of $(11.9) billion, indicating substantial investments in its strategic initiatives. Capital allocation priorities have shifted heavily towards investing in the business and capacity expansion, leading to a reduction in dividend payouts and a curtailment of stock repurchases. The company also unlocked value by selling minority stakes in IMS Nanofabrication and Mobileye to fund its strategic investments.
06—Continue