Intel Q3 2025 Earnings: A Deep Dive into its Return to Profitability

Intel just dropped its third-quarter 2025 financial report, and it’s a document that reveals a company in the midst of a dramatic transformation. After a bruising period of heavy losses, Intel has swung back to profitability. But as we'll see, the headline numbers are bolstered by some strategic moves, while the core operational story remains a work in progress. Let's dive into the details from the latest 10-Q filing.

For the third quarter ended September 27, 2025, Intel reported a net income attributable to shareholders of $4.1 billion, or $0.90 per share. This is a staggering reversal from the same period last year, which saw a net loss of $16.6 billion, or ($3.88) per share. So, what fueled this massive turnaround?

A big piece of the puzzle is a one-time gain. In "Interest and other, net," the company recorded a $5.5 billion gain from the divestiture of Altera, its programmable chip business. Additionally, restructuring charges plummeted from $5.6 billion in Q3 2024 to a mere $175 million this quarter.

However, it's not just financial engineering. Operationally, gross profit more than doubled to $5.2 billion, with gross margin expanding from a slim 15.0% last year to a much healthier 38.2%. This suggests better cost control and improved manufacturing efficiency—a key goal of its current strategy.

A Tale of Two Intels: Products vs. Foundry

To better understand Intel's performance, it's helpful to look at its revenue streams and costs. The following flow diagram visualizes the company's income statement for the third quarter.

You'll notice a significant unallocated negative revenue bar labeled "Intersegment Eliminations." This represents internal sales between Intel's divisions that are removed from the final consolidated numbers to prevent double-counting. For example, Intel Foundry manufactures wafers that it then "sells" to the Client Computing and Data Center groups. In Q3, these internal transactions totaled about $4.2 billion.

Now, let's break down the segments:

• Intel Products (CCG and DCAI): This is Intel's traditional core business. The Client Computing Group (CCG), which makes chips for PCs, saw revenue climb 4% to $8.5 billion, a sign of stability in the PC market. However, the Data Center and AI (DCAI) group's revenue was flat at $4.1 billion. In an era of explosive AI growth, stagnation in this key segment is a point of concern for investors. Together, these product segments generated a solid $3.7 billion in operating income.

• Intel Foundry: This is the cornerstone of CEO Pat Gelsinger's "IDM 2.0" strategy to manufacture chips for other companies. Foundry revenue was down slightly at $4.2 billion. More importantly, the segment posted an operating loss of $2.3 billion. While this is a substantial improvement over last year's $5.8 billion loss for the same quarter, it underscores the immense, ongoing investment required to build a competitive foundry business from the ground up.

The Road Ahead

Intel's Q3 2025 results paint a picture of a company making tangible progress on its turnaround plan. The return to profitability is a major milestone, driven by both operational improvements and strategic asset sales. R&D and administrative expenses were down a combined 20% year-over-year, showing disciplined cost management.

However, the journey is far from over. The Foundry business remains a significant cash drain, and the DCAI segment is struggling to keep pace in the fiercely competitive AI landscape dominated by rivals like NVIDIA and AMD. The filing itself notes a key risk: a potential "pause or discontinuation" of its next-generation Intel 14A process technology if a significant external customer isn't secured. This highlights the high stakes of its foundry ambitions. While the ship has been righted, Intel still has challenging waters to navigate.