“Intel delivered strong first-quarter results driven by exceptional demand for our leadership products and outstanding execution by our team. The response to our new IDM 2.0 strategy has been extraordinary, our product roadmap is gaining momentum, and we’re rapidly progressing our plans with re-invigorated focus on innovation and execution,” said Pat Gelsinger, Intel CEO. “This is a pivotal year for Intel. We are setting our strategic foundation and investing to accelerate our trajectory and capitalize on the explosive growth in semiconductors that power our increasingly digital world.”
Q1 2021 Financial Highlights
First-quarter 2021 GAAP operating margin, net income, tax rate, and EPS results reflect the impact of a charge related to VLSI litigation. Intel strongly disagrees with the jury’s verdict in March and intends to appeal.
| GAAP | Non-GAAP | ||||||
| Q1 2021 | Q1 2020 | vs. Q1 2020 | Q1 2021 | Q1 2020 | vs. Q1 2020 | ||
| Revenue ($B) | $19.7 | $19.8 | down 1% | $18.6 | $18.6 | flat | |
| Gross Margin | 55.2% | 60.6% | down 5.4 ppt | 58.4% | 64.5% | down 6.1 ppt | |
| R&D and MG&A ($B) | $5.0 | $4.8 | up 3% | $4.8 | $4.6 | up 2% | |
| Operating Margin | 18.8% | 35.5% | down 16.7 ppt | 32.8% | 39.5% | down 6.7 ppt | |
| Tax Rate | 14.0% | 14.4% | down 0.5 ppt | 13.7% | 13.7% | flat | |
| Net Income ($B) | $3.4 | $5.7 | down 41% | $5.7 | $6.1 | down 6% | |
| Earnings Per Share | $0.82 | $1.31 | down 37% | $1.39 | $1.41 | down 1% |
In the first quarter, the company generated $5.5 billion in cash from operations, paid dividends of $1.4 billion, and used $2.3 billion to repurchase stock.
Business Unit Summary
| Key Business Unit Revenue and Trends | Q1 2021 | vs. Q1 2020 | |||
| CCG | $10.6 billion | up | 8% | ||
| DCG | $5.6 billion | down | 20% | ||
| Internet of Things | |||||
| IOTG | $914 million | up | 4% | ||
| Mobileye | $377 million | up | 48% | ||
| NSG | $1.1 billion | down | 17% | ||
| PSG | $486 million | down | 6% |
First-quarter revenue exceeded January guidance by $1.1 billion led by continued, strong PC demand. PC unit volumes were up 38 percent YoY, and notebook volumes set a new Intel record. The company also saw initial recovery of Enterprise and Government sales in the Data Center Group (DCG). Intel also achieved better-than-expected revenue in Internet of Things Group (IOTG) and Mobileye, and Mobileye set a new revenue record in the quarter.
In the first quarter of 2021, Intel shipped new CPU products and announced key customer design wins. The company also completed the CEO transition to Pat Gelsinger who unveiled Intel’s new, differentiated IDM 2.0 strategy for manufacturing, innovation and product leadership.
Business Highlights
Additional information regarding Intel’s results can be found in the Q1’21 Earnings Presentation available at: www.intc.com.
Business Outlook
Intel’s guidance for the second 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.
| Q2 2021 | GAAP | Non-GAAP | ||
| Approximately | Approximately | |||
| Revenue | $18.9 billion | $17.8 billion | ||
| Gross Margin | 55% | 57% | ||
| Tax rate | 13% | 13% | ||
| Earnings per share | $1.05 | $1.05 |
| Full-Year 2021 | GAAP | Non-GAAP | ||
| Approximately | Approximately | |||
| Revenue | $77.0 billion | $72.5 billion | ||
| Gross Margin | 54.5% | 56.5% | ||
| Tax rate | 19% | 13% | ||
| Earnings per share | $4.00 | $4.60 | ||
| Full-year capital spending | $19.0-20.0 billion | $19.0-20.0 billion^ | ||
| Free cash flow | N/A | $10.5 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.
Earnings Webcast
Intel will hold a public webcast at 2:00 p.m. PDT today to discuss the results for its first quarter of 2021. The live public webcast can be accessed on Intel’s Investor Relations website at www.intc.com. The Q1’21 Earnings Presentation, webcast replay, and audio download will also be available on the site.
Intel plans to report its earnings for the second quarter of 2021 on July 22, 2021 promptly after close of market, and related materials will be available at www.intc.com. A public webcast of Intel’s earnings conference call will follow at 2:00 p.m. PDT at www.intc.com.