📈 Apple reports Q1 FY24 earnings with revenue of $119.6B, up 2% YoY, despite a shorter quarter and COVID-19 impacts. 📈
📱 iPhone revenue hits $69.7B, up 6% YoY, driven by the success of the new iPhone 15 lineup. 📈
💻 Mac revenue reaches $7.8B, up 1% YoY, thanks to the strength of M3-powered MacBook Pro models. 📈
🌍 Services revenue sets a new record at $23.1B, up 11% YoY, with all-time records across advertising, cloud services, payment services, and video. 📈
🔧 Apple announces the revolutionary Apple Vision Pro, the most advanced personal electronics device ever, and announces an installed base of over 2.2 billion active devices. 💡
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Apple Inc., a technology powerhouse, reported strong financial results for the December quarter of its fiscal year 2024, with revenue of $119.6 billion, a 2% increase from the previous year. The company achieved record-breaking results in Europe and rest of Asia-Pacific, with its CEO, Tim Cook, highlighting all-time records in several countries and regions.
One of Apple’s star performers was the iPhone, with revenue of $69.7 billion, up 6%. The iPhone 15 lineup, including the iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max, has earned glowing reviews and been embraced by customers. The new designs, featuring color-infused back glass and contoured edges, as well as Dynamic Island, A16 Bionic, and a new 48-megapixel camera system, have made a significant impact.
Mac computers continued their success story, with revenue of $7.8 billion, up 1%, despite having one less week of sales. MacBook Pro models, powered by the latest M3 chips, have been well-received, with Apple recently celebrating Mac’s 40th birthday.
iPad revenue was $7 billion, down 25%, due to a difficult compare with the launch of new M2 iPad Pro and 10th-generation iPad models the previous year and one less week of sales. However, iPad remains the most versatile, capable, and elegant tablet on the market today, with customers loving its incredible combination of portability and performance.
Wearables, Home, and Accessories revenue was $12 billion, down 11%, due to a challenging compare with the launch timing of several products and the impact of the 14th week the previous year. Apple WatchSeries 9 and Apple Watch Ultra 2, which feature new double-tap gestures, have seen strong customer interest, while AirPods continue to be a holiday favorite.
Services revenue set an all-time record of $23.1 billion, up 11%, with Apple TV+, Apple Arcade, Apple Music, and other services contributing to the growth. Apple TV+, for example, has earned 2050 award nominations and 450 wins since its introduction.
Looking ahead, Apple announced its new product, the Apple Vision Pro, a revolutionary device in the new category of spatial computing. This groundbreaking device, which will be available in Apple stores starting tomorrow, is built on decades of Apple innovation and is years ahead of anything else on the market. Apple Vision Pro features a groundbreaking new input system and thousands of innovations, and it will unlock incredible experiences for users and developers that are simply not possible on any other device.
Apple also highlighted its ongoing investment in artificial intelligence, promising to share more details later in the year. With a strong focus on pushing technology to its limits and enriching the lives of its users, Apple remains optimistic about the future.
Apple, a technology powerhouse, continues to innovate and push the boundaries of what’s possible. The company’s long-term vision is to enrich the lives of their users through groundbreaking products and services, while remaining intentional about showing up with their values and being a force for good in the world.
One of the major upcoming milestones for Apple is the launch of Apple Vision Pro, a revolutionary device in the field of spatial computing. This advanced personal electronics device is built on decades of Apple innovation and offers a groundbreaking new input system and thousands of innovations. Apple Vision Pro will unlock incredible experiences for users and developers that are simply not possible on any other device.
Another key area of focus for Apple is expanding their Services business. They have already set an all-time revenue record of $23.1 billion and an 11% year-over-year increase. They plan to continue growing their offerings to give users even more to love. With the redesigned Apple TV app, users can enjoy all their favorite shows, movies, and sports, including Apple TV+ hits like Masters of the Air, Monarch, and Slow Horses. They also continue to invest in artificial intelligence, where they have been spending a tremendous amount of time and effort. They’re excited to share the details of their ongoing work in this space later this year.
However, the road ahead is not without risks. The company faces macroeconomic conditions that may impact their business and results of operations. They may also face competition, regulatory and geopolitical risks, and supply chain risks. To mitigate these risks, Apple plans to be agile and responsive, maintain a strong balance sheet, and have a diverse and global supply chain. They will continue to invest in innovations and technologies that will shape the future.
In conclusion, Apple remains committed to groundbreaking innovation and pushing technology to its limits. They plan on achieving their long-term vision through innovative products and services, while maintaining a strong focus on user experience and a diverse and global supply chain. With the upcoming launch of Apple Vision Pro and continued expansion of their Services business, Apple is well-positioned to continue leading the technology industry.
Two of the most interesting questions from the Apple Q1 Fiscal Year 2024 Earnings Call are:
Mike Ng asked about the enterprise opportunities with Apple Vision Pro and the efforts to support the Vision Pro developer ecosystem: “Could you maybe just talk about some of the efforts to support Vision Pro developer ecosystem? And it was also good to hear about the potential upcoming announcements on AI. So any thoughts there would also be helpful.” Answer: Tim Cook replied, “We are incredibly excited about the Enterprise opportunities with Vision Pro. We’ve seen several demos from different companies, and there are applications that are for collaboration design apps, field service applications, control center command kind of things. SAP has really gotten behind it, and of course, SAP is in so many of companies. I think there will be a great opportunity for us in Enterprise, and we couldn’t be more excited about where things are right now.”
Erik Woodring asked about the drivers of Services growth and the growth rates for the March quarter: “And congrats on the nice quarter here. Luca, maybe if we start with you. Can you unpackage some of the Services drivers a bit for us? And I’d also like to ask, why won’t it be potentially faster for the March quarter, given that the December quarter obviously had a headwind from the extra week comp, and I’d also think that some of the pricing uplifts on select Apple One services that were implemented last winter should help in the March quarter?” Answer: Luca Maestri responded, “We will continue to grow double-digits at a percentage that is similar to what we reported for the December quarter. We don’t provide guidance around the different services categories. We’ll provide more color when we report in three months.”
These questions provide valuable insights into the enterprise opportunities with Apple Vision Pro and the growth prospects of Apple’s Services business, making them two of the most interesting from the earnings call.
Argument for Buying: Apple’s strong financial performance in the December quarter, with revenue records across more than two dozen countries and regions, including Europe and rest of Asia-Pacific, is a testament to its global appeal and market dominance. The company’s ecosystem, with a large and growing installed base of active devices, a loyal customer base, and a growing Services business, provides a significant competitive advantage. Apple’s focus on innovation, particularly in areas like artificial intelligence and machine learning, positions it well for future growth, and its significant cash position provides financial flexibility.
Argument for Selling: The macroeconomic environment and potential worsening of the outlook, as well as the impact of foreign exchange on revenue performance, pose risks for Apple’s financial performance. The company faced significant supply constraints on the iPhone 14 Pro and 14 Pro Max due to COVID-19 factory shutdowns last year, and it’s unclear if the same level of demand will continue in the March quarter. Additionally, the increasing competition in the smartphone market and the potential impact of emerging technologies, such as virtual and augmented reality, on Apple’s core business could put pressure on the company’s market position and growth prospects.
