Apple Inc.
CEO : Mr. Timothy D. Cook
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q1 | -5.5% YoY | -13.2% | -10.4% | 2023-02-02 |
Timothy Cook says,
Revenue Performance
- Revenue of $117.2 billion for the December quarter, down 5% YoY due to foreign exchange headwinds and a challenging macroeconomic environment
- iPhone revenue came in at $65.8 billion, down 8% YoY on weak supply of iPhone 14 Pro and iPhone 14 Pro Max
- Mac revenue was $7.7 billion, in line with expectations despite foreign exchange headwinds
- iPad revenue grew 30% to $9.4 billion, driven by the new iPad Pro and iPad 10th Generation
- Wearables, Home and Accessories revenue was $13.5 billion, down 8% YoY due to foreign exchange headwinds and a challenging macroeconomic environment
Product Updates
- New MacBook Pro models powered by M2 Pro and M2 Max chips were introduced, providing unprecedented performance with longer battery life
- Next-generation HomePod was announced, featuring advanced computational audio and sound recognition for smoke and carbon monoxide alarms
- Apple Watch Series 8 and Apple Watch Ultra with health and safety features for extreme athletes were praised by customers
- Freeform, a new app for real-time collaboration, was released for iPhone, iPad, and Mac
Services
- Set all-time revenue record of $20.8 billion in services, achieving double-digit revenue growth from App Store subscriptions
- More than 935 million paid subscriptions now active
- Launched historic 10-year partnership with Major League Soccer and MLS Season Pass
- Apple TV+ showcased hit movie Spirited and upcoming series Sharper and Tetris, along with Emmy Award winner Ted Lasso returning this spring
- Fitness+ expanded catalog of workouts and meditations, featuring artist spotlight series with Beyonce
- Apple Business Connect launched, giving businesses more control over how customers engage with their products and services on Apple apps
Environmental and Social Responsibility
- Strengthened commitment to privacy and security with new tools to protect sensitive data
- Using 100% recycled aluminum and rare earth elements in new Mac mini and MacBook Pro models
- Released Black Unity collection for Black History Month and expanding support of 5 organizations focused on lifting up communities of color through technology
- Donated more than $880 million to humanitarian efforts, disaster relief, childhood education, and more since inception of Giving program 11 years ago
- RED-supported grants have helped more than 11 million people get the care and support services they need
Luca Maestri says,
Revenue Performance
- Revenue for the December quarter was $117.2 billion, down 5% from last year mainly due to foreign exchange headwinds, supply constraints, and a challenging macroeconomic environment.
- Products revenue was $96.4 billion, down 8% from last year.
- While services set an all-time revenue record of $20.8 billion, up 6% over a year ago.
- For the March quarter, Apple expects its year-over-year revenue performance to be similar to the December quarter, with a negative year-over-year impact of 5 percentage points due to foreign exchange headwinds.
Product Performance
- iPhone revenue was $65.8 billion, despite significant headwinds, supply constraints, and a challenging macroeconomic environment, iPhone’s installed base of active devices grew double digits and achieved all-time records in each geographic segment and in each major product category, reaching over 2 billion active devices.
- Mac revenue was $7.7 billion, down 29% YoY, and the installed base of active Macs reached an all-time high across all geographic segments.
- iPad revenue was $9.4 billion, up 30% YoY, with the installed base of active iPads reaching a new all-time high due to incredible customer loyalty and a high number of new customers.
- Wearables, Home, and Accessories revenue was $13.5 billion, down 8% YoY, with the installed base of devices in the category setting a new all-time record.
Services Performance
- Services revenue reached an all-time revenue record of $20.8 billion, up 6% over a year ago, despite a difficult foreign exchange environment, and macroeconomic headwinds impacting certain categories.
- Apple Pay is now available to millions of merchants in nearly 70 countries and regions, and a record-breaking number of purchases made using Apple Pay were observed globally during the holiday shopping season.
- Paid subscriptions grew, with more than 935 million paid subscriptions across the services on the platform.
Gross Margin and Operating Expenses
- Company gross margin was 43%, up 70 basis points from last quarter due to leverage and favorable mix, partially offset by foreign exchange.
- Products gross margin was 37%, up 240 basis points sequentially, and Services gross margin was 70.8%, up 30 basis points sequentially.
- Operating expenses of $14.3 billion were significantly below the guidance range provided at the beginning of the quarter.
- Apple expects gross margin to be between 43.5% and 44.5%, while operating expenses are expected to be between $13.7 billion and $13.9 billion for the March quarter.
Capital Return Program and Cash Position
- Apple returned over $25 billion to shareholders during the December quarter to become net cash-neutral over time.
- Net cash was $54 billion at the end of the quarter, with $165 billion in cash and marketable securities.
Q & A sessions,
Supply Chain Optimization and Resilience
- Production disruption from early November to most of December but now resolved
- Apple builds products everywhere and continues to optimize the supply chain over time to improve
- Last 3 years have been difficult due to COVID and silicon shortages, but Apple has a resilient supply chain in the aggregate
Supply Availability and Margins
- Decent supply on most products for the current quarter
- Good margin for the December quarter at 43% with favorable mix
- Foreign exchange is an issue with negative impact on margins, -110 basis points sequentially and -300 basis points YoY
- March quarter expected to have margin expansion from 43.5% to 44.5%
- Cost structure optimization is paying off and mix will continue to help with margin improvement
- Foreign exchange is still a negative, about 50 basis points sequentially, but it’s mitigating
No bad stock 