Uncategorized 

Apple Inc (AAPL) Q4 2024 Earnings Call Highlights: Record Revenue and Strong Services Growth

Posted By:
view original post

  • Revenue: $94.9 billion, a September quarter record, up 6% year over year.

  • iPhone Revenue: $46.2 billion, a September quarter record, up 6% year over year.

  • Mac Revenue: $7.7 billion, up 2% year over year.

  • iPad Revenue: $7 billion, up 8% year over year.

  • Wearables, Home, and Accessories Revenue: $9 billion, down 3% year over year.

  • Services Revenue: $25 billion, an all-time record, up 12% year over year.

  • Gross Margin: 46.2%, near the high end of guidance range.

  • Products Gross Margin: 36.3%, up 100 basis points sequentially.

  • Services Gross Margin: 74%, unchanged from the prior quarter.

  • Operating Expenses: $14.3 billion, up 6% year over year.

  • Net Income (excluding onetime tax charge): $25 billion.

  • Diluted Earnings Per Share: $1.64, up 12% year over year.

  • Operating Cash Flow: $26.8 billion, a new September quarter record.

  • Cash and Marketable Securities: $157 billion.

  • Total Debt: $107 billion.

  • Net Cash: $50 billion.

  • Shareholder Returns: Over $29 billion, including $3.8 billion in dividends and $25 billion in share repurchases.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

  • Apple Inc (NASDAQ:AAPL) reported a September quarter revenue record of $94.9 billion, up 6% year over year.

  • iPhone revenue set a September quarter record of $46.2 billion, with growth in every geographic segment.

  • Services achieved an all-time revenue record of $25 billion, up 12% year over year.

  • The installed base of active devices reached an all-time high across all products and geographic segments.

  • Apple Intelligence marks a new chapter for innovation, with features rolling out across iPhone, iPad, and Mac.

  • Wearables, home, and accessories revenue was $9 billion, down 3% year over year.

  • The company recorded a one-time income tax charge of $10.2 billion related to the reversal of a European General Court decision.

  • Despite strong revenue growth, the gross margin for services remained unchanged from the prior quarter at 74%.

  • The rollout of Apple Intelligence is staggered, which may affect the demand cadence across different regions.

  • The company faces potential challenges from macroeconomic conditions and foreign exchange impacts, particularly in China.

Q: Can you expand on the early feedback for Apple Intelligence and its impact on iPhone performance? A: Tim Cook, CEO: We’ve received positive feedback from developers and customers. The adoption rate for iOS 18.1 is twice as fast as the previous version, indicating strong interest. We plan to roll out more features and languages in the coming months, which we believe will enhance the iPhone experience.

Q: Could you discuss the CapEx outlook and investments in Private Cloud Compute? A: Luca Maestri, CFO: We operate a hybrid model for data centers, using both our own and third-party providers. We are making necessary investments to support Apple Intelligence features. Our CapEx for fiscal ’24 will be detailed in our 10-K, and we will continue to invest in fiscal ’25.

Q: How do you view the current iPhone demand and supply balance, especially with the iPhone 16 cycle? A: Tim Cook, CEO: We aim to balance supply and demand quickly. While the iPhone 16 Pro models were constrained in October, we expect to resolve this soon. Apple Intelligence is a compelling upgrade reason, and we are seeing strong interest.

Q: What is your perspective on gross margins given the current commodity prices? A: Luca Maestri, CFO: Most commodities are decreasing in price, except for NAND and DRAM, which are increasing. We are pleased with our gross margins, which are at record levels, and we expect them to remain strong in the December quarter.

Q: Can you discuss the growth potential of Apple’s services, particularly the recurring versus transactional components? A: Luca Maestri, CFO: Our services have reached a $100 billion run rate, with the recurring portion growing faster than transactional. We have over 1 billion paid subscriptions, which continue to grow double digits, indicating strong momentum.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.