How INTC (Intel) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a semiconductor giant like Intel Corporation (INTC) makes money is essential for investors and anyone interested in the business of advanced computing. In this post, we break down Intel's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Intel Corporation Overview

Intel Corporation operates as a leading designer and manufacturer of semiconductor chips, powering everything from personal computers and data centers to edge devices and automotive systems. Revenue comes primarily from the sale of microprocessors, chipsets, and related silicon products to original equipment manufacturers (OEMs), cloud service providers, and enterprise customers. Intel’s business segments include client computing, data center, network and edge, and emerging businesses, though in Q3 2025, all reported revenue is consolidated under "Other" due to segment reporting changes.

Revenue Breakdown

• Total Revenue (Q3 2025): $13.7B (+2.8% YoY)
  • Other: $13.7B (100% of total)
  • Accelerated Computing System: $0.0B
  • Altera Revenue: $0.0B
  • Mobileye Revenue: $0.0B
  • Network and Edge Revenue: $0.0B
  • Growth is powered by steady demand for core CPU products and gradual recovery in enterprise and cloud spending.

Gross Profit and Margins

• Gross Profit: $5.32B (39.0% gross margin)
  • Cost of Revenue: $8.33B (-26.2% YoY)
  • Intel maintains moderate margins due to its scale, advanced manufacturing capabilities, and ongoing cost optimization.
• Most costs come from manufacturing, supply chain logistics, and depreciation of fabrication facilities.

Operating Income and Expenses

• Operating Income: $0.98B (flat YoY, 7.1% margin)
• Operating Expenses: $4.34B (-60.7% YoY)
  • R&D: $3.23B (-20.2% YoY, 23.7% of revenue) — Focused on next-generation process nodes, AI accelerators, and automotive silicon.
  • SG&A: $1.11B (-19.6% YoY, 8.1% of revenue) — Covers global sales, marketing, and administrative functions.
  • Intel continues to prioritize innovation and invest in future growth while maintaining efficiency in its cost structure.

Net Income

• Pre-Tax Income: $4.57B (33.5% margin)
• Income Tax: $0.30B (6.6% effective tax rate)
• Net Income: $4.06B (29.8% net margin)
• Intel converts a significant portion of sales into profit due to its manufacturing scale, operational efficiency, and favorable tax structure.

What Drives Intel's Money Machine?

• Core CPU and silicon sales: 100% of revenue in Q3 2025, as all segment reporting is consolidated under "Other."
• Net interest income: $3.67B, reflecting strong cash management and investment returns.
• R&D investment: $3.23B in Q3 2025, targeting advanced process technology, AI, and automotive.
• Future growth areas: AI accelerators, foundry services, and automotive chips, though these segments are not yet individually profitable or reported separately.

Visualizing Intel's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D) taking the largest chunk.
• Even after significant R&D investment, nearly 30% of revenue drops to the bottom line.

Key Takeaways

• Intel's money comes overwhelmingly from core silicon and processor sales to OEMs and cloud providers.
• High gross and net margins illustrate the power of Intel's manufacturing scale and operational efficiency.
• Heavy investment in R&D, balanced by disciplined control of SG&A and other operating costs.
• Ongoing growth is driven by demand for advanced chips in AI, cloud, and automotive markets.

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FAQ About Intel's Income Statement

1. What is the main source of Intel's revenue in 2025?

Intel generates over 100% of its revenue from core silicon and processor sales, consolidated under "Other" in Q3 2025. Segment reporting for Accelerated Computing, Altera, Mobileye, and Network & Edge was not individually disclosed this quarter.

2. How profitable is Intel in Q3 2025?

Intel reported net income of $4.06B in Q3 2025, with a net margin of approximately 29.8%, reflecting strong profitability driven by manufacturing scale, cost control, and favorable tax rates.

3. What are the largest expense categories for Intel?

The biggest expenses on Intel's income statement are operating expenses, particularly Research & Development (R&D) at $3.23B in Q3 2025, as Intel prioritizes advanced process technology, AI, and automotive silicon. SG&A costs totaled $1.11B.

4. Why does [segment/division] operate at a loss?

While segment-level losses are not disclosed in Q3 2025, Intel’s aggressive investment in R&D and emerging businesses (such as AI accelerators and automotive chips) can lead to operating losses in these divisions, as the company believes these will drive long-term growth—even if unprofitable today.

5. How does Intel's effective tax rate compare to previous years?

Intel's effective tax rate in Q3 2025 was 6.6%, consistent with recent years. This low rate is primarily due to international structuring and tax benefits from share-based compensation.