Thanks Mark. And thanks to Navin and Murthy who will participate in the Q&A later in the call. Before I get into the results, I'll take a minute to address what I expect is a top of mind question, the status of Intel's CEO search. The Board continues to evaluate candidates for what I believe is the biggest and best open job on the planet. They are proceeding with a sense of urgency while also ensuring that they make the right choice for this great company. Meanwhile, Murthy, Navin, the entire management team and the 107,000 employees have come together as a team to continue driving Intel's transformation to a data centric company.
Our 2018 results demonstrate the progress we've made, and I'd like to share those results with you now. 2018 marked Intel's golden anniversary. It was a truly remarkable year for a remarkable company. Full-year revenue grew 13% and crossed the $70 billion mark for the first time, setting an all time revenue record for the third consecutive year. Our data center, Internet of Things, programmable solutions, memory, mobile eye and modem business businesses each set all time full year revenue record. 2018 was also a pivotal year in Intel's transformation to become a data centric company pursuing an expanded greater than $300 billion market opportunity. Intel's collection of data center businesses grew 20% in 2018 after adjusting for McAfee. The largest of our data centric businesses, the Data Center Group, delivered record annual revenue of $23 billion, up 21% year-over-year on strong cloud demand and growing share with communication service provider customers. Our PC centric business achieved 9% growth in 2018, as the PC market stabilized and we gained share in modem. While 2018 was a record year, we expected a stronger finish. Fourth quarter revenue of $18.7 billion was up 9% but short of our expectations as a result of a dramatically weakening modem demand, lower overall growth in China, cloud service providers absorbing capacity and a weakening NAND pricing environment. While revenue fell short, we exceeded our EPS outlook by $0.06 or about 5%. We continued to deliver outstanding new products for our customers and previewed new innovations that positions Intel to compete and win for years to come. And we also made significant progress in growth areas like AI, Autonomous Driving and 5G. I'll take a few minutes to give some specifics before we dive into the financial results. Over the course of the quarter and culminating at CES, we highlighted breakthrough innovations that will be central to our product leadership for years to come. We outlined our product design philosophy, which combine six pillars of innovation, process technology, architecture, memory, interconnect, security features and software to consistently and reliably deliver leadership products that solve our customers' most challenging problems. One example of this designed philosophy in action is our unique Foveros 3D packaging technology. Foveros enables active stacking of logic chiplets for the first time in the industry's history, and left those mix-and-match process technologies and architectures to deliver breakthrough products. The first such product Lakefield is slated for production in 2019. Lakefield features a 10-nanometer hybrid CPU architecture combining a Sunny Cove CPU core, four low-power Atom CPU cores, Gen 11 graphics and more in a dime sized product that enables the smallest PC motherboard ever possible. Foveros business tremendous design flexibility and pace away for a myriad of devices and systems combining high-performance, high density and low-power silicon process technologies. In the datacenter, we began shipping the new Cascade Lake family of high-performance EM processors with DL boots for accelerated AI performance, hardware-based security mitigations and the first implementation of Optane DC persistent memory. Many of our datacenter OEMs and cloud customers are now offering early trials with Intel Optane DC persistent memory, which is enabling entirely new usage models and improved system performance. In client computing, we launched our new 9th gen Intel Core desktop product line up for gaming and content creation, growth segments that demand Intel performance. We also previewed our upcoming 10 nanometer Ice Lake client CPUs, which will deliver unprecedented levels of integration, including DL Boost inference acceleration, Wi-Fi 6, thunderbolt 3 and Gen 11 graphics, our first integrated GPU with a full teraflop of performance. Our 10 nanometer yields continue to improve and Ice Lake remains on track to be in volume systems on retail shelves for the 2019 holiday selling season.
In Q4, we also made important progress in AI, 5G and autonomous driving. For artificial intelligence, we saw accelerating adoption of OpenVINO, our open source toolkit for neural network optimization and the rapid deployment of AI based computer vision. In addition to the strong adoption of OpenVINO by the developer community, we also launched several new products during the year, including our third generation vision processing unit. Our partners created a catalog and AI based vision accelerator cards with our VPU you and FPGA product. While digital video was once a vertical within the IoT business, AI based machine vision is becoming a critical horizontal capability that cuts across all IoTG verticals. And our leadership portfolio, both hardware and software solutions, is removing the barriers to deployment and accelerating IoTG's growth. We also highlighted a new AI product on our roadmap, the Nervana neural network processor for inference or NNPI, which is designed to accelerate inference workloads and achieve the highest performance per watt in the industry. We expect NNPI to be in production this year. 5G is another big opportunity for both our PC centric and data centric businesses. At CES, we unveiled the new 10 nanometer based network system on chip, codename Snow Ridge developed specifically for 5G wireless access and edge computing. Snow Ridge will bring Intel architecture into wireless access base stations, and allow more computing functions to be distributed out at the edge of the network. We expect to be in production on Snow Ridge in the second half of this year, which is also when we'll deliver our first 5G modem, the Intel XMN 8165 5G.
In autonomous driving and ADAS, Mobileye's efforts to lead this revolution continues to build momentum with 28 new design wins and 78 vehicle model launches in 2018. In the fourth quarter, we announced plans to commercialize mobility-as-a-service in Israel with Volkswagen and Champion Motors, making Mobileye's rest of products, technologies and services unmatched in the industry. Mobileye's products now span from open ADAS and AB compute platforms to turnkey vehicle retrofits to ultimately mobility-as-a-service. And they are enabled by the industry's best vision algorithms and driving policy software. The groundbreaking RSS model for AV safety and REM real-time crowdsourced maps. At CES, we announced important progress for both RFS and REM. IPS, China's leading industry organization for transportation standards approved a proposal to standardize RFS for the China market. We also completed the mapping of Japan's Highway system, 25,000 kilometers of roads using data harvested from a customer fleet of vehicles outfitted with EyeQ4 in just 24 hours. This is a path that would have previously required thousands of hours of driving and scanning using specialized vehicles. This sort of breakthrough is possible only with Mobileye's combination of technology and massive market scale, and it positions Mobileye to monetize ADAS and AV technology long before level four and five autonomy are deployed at scale. And REM will be monetized in areas beyond autonomous vehicles. We just announced the partnership with ordnance survey to use data collected via consumer vehicles outfitted with EyeQ4 to help utilities manage infrastructure. Looking back at 2018, it is abundantly clear that Intel's employees, the unstoppable engine driving our innovation, are more determined than at any point in our history to make Intel technology the foundation for the world's most important innovations and advances.
Not only was it a record year from a financial perspective, we achieved major milestones in terms of our diversity and inclusion goals. We reached full representation in our U.S. workforce two years ahead of our plan. We also achieved gender pay equity across our global workforce. And to celebrate 50 years of Intel, more than 68,000 employees volunteered approximately 1.5 million hours in the communities where we operate. I'm proud of what Intel employees achieved in 2018, and I'm equally proud on how they responded to challenges. With that, let's turn to the financial results.
The fourth quarter closed the record 50th anniversary year with strong data centric and PC centric growth. Revenue for the quarter was $18.7 billion, up 9% year-over-year. Our data centric businesses were collectively up 9% and our PC centric business was up 10%. Operating margin of 35% was approximately flat with strong mix and continued spending leverage, offset by 10 nanometer cost and growth in our adjacent businesses. Strong business performance, spending leverage and a lower tax rate resulted in non-GAAP net income of $5.9 billion, up 14% year-over-year. EPS of $1.28 was up 18% year-over-year.
For the full year of 2018, we generated $14.3 billion of free cash flow, returned $15.3 billion to shareholders, including $5.5 billion in dividends. We purchased 217 million shares and increased our buyback authorization by $15 billion. Free cash flow was $1.2 billion short of our October expectations due largely to an increase in accounts receivable. To summarize, we had a strong quarter and fantastic year with full year revenue up 13% or nearly $6 billion higher than our original forecast in January. Earnings per share was up 32% and free cash flow was up 38% over last year. We're expecting another record year in 2019. And as a result of our continued growth, we are raising the dividend 5%.
Our Leadership products continue to win share in our expanded TAM, as both our data centric and our PC centric businesses continue to grow in the fourth quarter. Our data centric businesses were up 9% for the quarter as customers choose our performance products to move, store and process more data faster from the cloud to the edge. And our PC centric business was up 10% as we saw continued strength in the commercial and gaming PC segments and we gained modem share.
Moving to earnings, we generated solid EPS expansion in the quarter, up 18% year-over-year. And our operating income increased $580 million with operating margin approximately flat year-over-year in the quarter. Our EPS improvement was driven by growing demand for higher performance products in the data center and client businesses, leading to higher volumes in ASPs, continued spending leverage, a lower tax rate and lower share count as a result of buybacks.
Our focus on operational efficiency continues to produce strong results with 2018 spending as a percentage of revenue at 28.6%, down over 7 points since 2015 and meeting our 30% commitments two full years ahead of our goal. R&D is up $1.4 billion over the same period as we continue to increase investments in areas that will drive growth in our expanded TAM, such as product leadership, artificial intelligence and autonomous driving. Over the last three years, we've grown annual revenue by more than $15 billion, while adding less than $250 million in spending, resulting in a more than 25% increase in revenue per employee. Now some Q4 performance highlights by segment. The Data Center Group delivered another greater than $6 billion revenue quarter and a growing storage and networking CPU TAM that is greater than 30 million units. Revenue of $6.1 billion was up 9% year-over-year but below our October expectations. Year-over-year growth decelerated as all three major verticals within DCG were impacted by weakness in China demand and as some CFPs move to consume capacity put in place earlier in the year.
Platform unit volume was up 9% and ASPs were up 1%. Our Xeon ASP grew mid single-digits as customers continue to transition to Xeon Scalable and a richer mix of higher performance products. We also saw ASP expansion in our SoC products and much higher SOC volume as we continue to have success in network transformation. The higher SoC volumes resulted in more modest blended platform ASP growth.
Non-CPU adjacencies were down 2%, driven by several large one-time deals in the fourth quarter of 2017 that did not repeat in the fourth quarter '18. Cloud revenue grew 24% year-over-year, decelerating from Q3 '18. Enterprise and government revenue declined 5% year-over-year on a very challenging compare versus fourth quarter of 2017 and weaker China demand. Com service provider revenue grew 12% year-over-year on continued MFS gains as customers choose to virtualize and transform their networks on Intel architecture. Our other data center business IoTG, NSG and PSG achieved solid growth in Q4, together were up 9% year-over-year or 13% excluding the Wind River divestiture. Our Internet of Things business had revenue of $816 million, down 7% or up 4% excluding Wind River with operating profit of $189 million, down 27% year-over-year due to primarily supply constraints. Mobileye revenue was $183 million, up 43% over the last year as design wins and ADAS adoption continues to accelerate. Our memory business delivered revenue of $1.1 billion, up 25% year-over-year due to strong data center growth and continued Optane adoption, offset by a weaker NAND pricing environment. The shift of our data center and client SSDs to our 64 layer 3D NAND continues in both the data center and client businesses with volume mix greater than 75%.
NSG was approximately breakeven for the year. As expected, Micron exercised its right to call Intel's interest in our joint venture I am/technologies. This announcement does not change Intel's plans in the coming quarters and the close of the call is at our discretion up to one year after the date of the call with a supply agreement that extends beyond the close. We have manufacturing options available and have been shipping a broad portfolio of Intel Optane's technology products for more than a year. We will continue to expand our product line and lead the industry with this exciting new technology. PSGs revenue came in at $612 million, up 8% and strength in the data center income segments. We saw continued momentum in PSG's datacenters segments, up 50% over last year and the advanced products category, our 20 and 14 nanometer solutions grew an outstanding 70%. Operating profit was $162 million, up 4% year-over-year. Finally, the client computing group delivered another outstanding quarter with revenue of $9.8 billion, up 10% year-over-year. Commercial and gaming demand continued to be strong. The notebook segment grew 8% year-over-year, the desktop segment grew 3% year-over-year.
Supply remains constrained, particularly at the value end of our product range. We are working closely with our customers to align demand with available supply, while we add capacity. And we expect supply demand balance to improve by midyear.
Client adjacencies grew 45% year-over-year, driven primarily by increased modem share gains. Though modem revenue fell significantly below our expectations as a result of weaker smartphone demand. Our operating profit grew 402 million year-over-year with operating margin up 1 point. While our PC volumes were down 2%, our leadership product performance and segmentation contributed to strong mix.
The investments we have made in the business organically in two acquisitions are delivering excellent cash flow generation. For 2018, we generated $29.4 billion in cash from operations. We invested $15.2 billion in capital expenditures and delivered $14.3 billion in free cash flow, up 38% year-on-year and closing the gap versus EPS by 4.5 points. During this period, we returned the 114% of our free cash flow to our shareholders. Buybacks totaled $10.7 billion and dividends totaled $5.5 billion. In addition, settlements of our convertible debt reduced fully diluted shares by $40 million. To wrap-up with our full year results, we ended 2018 our 50th anniversary year with our third consecutive year of record results.
Revenue of $70.8 billion up 13% year-on-year driven by 20% growth in our data centric businesses, and 9% growth in our PC centric businesses. We started the year in January and expecting to generate $65 billion in revenue, 30% operating margin, and $3.55 in EPS. The growth that we and the industry have seen has been remarkable. We ended the year approximately $6 billion higher in revenue with operating margin of 35% and $4.58 in EPS. Operating income of $25 billion was up 25% on strong execution across the businesses and disciplined spending.
In October, we provided a preview of our outlook for 2019. At the time, we described a combination of tailwinds and headwinds that were balanced. The tailwinds were in expanded and growing TAM, products momentum and business mix. The headwinds were tougher compares following an especially strong 2018, and increasingly competitive environment and global trade. Since that time, trade and macro concerns, especially in China have intensified. Cloud service providers shifted from building capacity to absorbing capacity and the demand pricing environment has further deteriorated. Those incremental headwinds are impacting our revenue expectations and slightly reducing our operating margin percentage forecast. The remaining factors are roughly consistent with our October assessment.
Now, turning to our outlook for 2019. We expect 2019 to be another record year for us as the world's appetite for the analysis, transmission and storage of data continues to grow.
We are forecasting revenue of approximately $71.5 billion, up 1% year-on-year and operating margin of approximately 34%, down less than a point year-on-year. We expect a modest decrease in gross margin percentage, driven by the 10 nanometer ramp and the growth of our adjacencies. This will be partially offset by increasing OpEx leverage as we continue to make thoughtful trade-offs and invest in R&D that will accelerate our growth and profitability. We expect the full year tax rate to be approximately 13.5% following several beneficial discrete events in 2018 and we expect EPS of $4.60. We expect gross capital expenditures of $15.5 billion with logic spending up and memory spending down. The increase in logic CapEx reflects our effort to meet our customers' needs and avoid constraining their growth, while our investment in memory is focused on the sit up of our independent technology development facility in New Mexico. And finally, we expect free cash flow of $16 billion, an increase of approximately 12%. As we look to the first quarter of 2019, we are forecasting revenue of approximately $16 billion flat year-on-year excluding Wind River. We expect PC centric revenues to be up low single digits on higher modems share and data centric revenues to be down low single digits on broad weakness in data center and continued NAND pricing pressure. We expect operating margin of 29% down 1point year-over-year with a decline in gross margin as a result of the 10 nanometer ramp and the growth of adjacencies, partially offset by increased spending leverage. We expect EPS of $0.87 flat year-on-year. We expect 2019 to be our fourth to record year in a row. We feel great about where we are and where we're going. Five years ago, we set out to transform Intel from a PC centric company to a data centric company. Today, our strategy, products and people, are delivering on that ambition with strong growth, record results and the largest TAM opportunity in the company's history. I've been inspired and humbled time and time again by our employees' commitment to this company, their colleagues and our customers, and we're just getting started. I am convinced the board will close on a new CEO in the near future and I believe the management team, myself and 107,000 employees will rally behind him or her to take this company to a whole new level. In the meantime, we will not be distracted by the board. With that, let me turn it over back to Mark and we'll get to your questions.