Investors3
2 days ago
MacDailyNews presents live notes from Apple’s Q224 conference call
Thursday, May 2, 2024 4:47 pm
3 Comments
MacDailyNews presents live notes from Apple’s Q224 Conference Call with analysts starting at 2pm PT / 5pm ET today, May 2, 2024.
This stream is best experienced on an iPhone 7 or later, iPad (5th generation or later), or iPod touch (7th generation) using Safari on iOS 12 or later; or a Mac using Safari on macOS Mojave 10.14 or later. Streaming to your TV requires an AirPlay 2–capable device, or via AirPlay to an Apple TV (2nd generation or later) with the latest Apple TV software or tvOS. Other platforms may also be able to access the stream using recent versions of Chrome, Firefox, or Microsoft Edge (MSE, H.264, and AAC required).
Apple’s live conference call webcast will begin at 2pm PT / 5pm ET here.
Apple today posted quarterly revenue of $90.753 billion (vs. $94.836 billion YoY), down 4 percent year over year, and quarterly earnings per diluted share of $1.53 (vs. $1.53 YoY).
For the quarter, analysts’ consensus estimates (per LSEG) called for Apple to report EPS of $1.50 EPS on revenue of $$90.01 billion, both of which Apple beat.
Live notes:
• AAPL After hours: $184.25 +$11.22 (+6.48%) @ 5:57PM EDT
• Luca: 45.5% – 46.5% gross margins for June; memory and foreign exchange will be slight headwinds
• Q: Commodity pricing for June quarter
• Cook: I am hearing about so many use cases; similar to how the Mac is used – you use it for everything, so, too, with the Vision Pro. It’s an enormous number of different verticals; we’re off to a good start with Vision Pro in the enterprise
• Q: Top 2-3 Vision Pro uses cases?
• Luca: We you look aver the long arc of time, we’ve gone thru a long period of a very strong dollar; so that’s something to keep in mind when you look at results
• Cook: We price our product for the value we are delivering
• Cook: Innovation spurs the upgrade cycle; economic factors play in there; carrier promotions, etc.
• Q: Do you see ways to deploy capital more to spur demand Promotions? Price decreases?
• Luca: China is by far the largest emerging market, but when you look at all of the others, the numbers are getting large; the populations are large and growing and our products are makign a lot of progress in those markets. It is very good for us, So the gap vs. China is reducing
• Q: Emerging markets growth? Can they, added up, surpass China?
• Cook: We decreased during the quarter as normal and are very comfortable with the channel inventory
• Q: iPhone channel inventory
• Cook: I can’t address the data points; I can only address our results. We did accelerate last quarter and iPhone grew in mainland China; I can’t speak to numbers coming from outside Apple
• Q: What are we missing in China, at a high level?
• Cook: We are producing there. You need to produce in China to be competitive. We continue to expand channels and are optimistic in China
• Q: China supply chain?
• Luca: Growth rates improved during 2023, so the comps are difficult, but Apple expects Services to grow double digits in Q3 Services, similar to Q2
• Luca: Overall very strong. All-time records in both developed and emerging markets
• Q: Drivers of Services growth?
• Luca: we expect to grow low single digits in Q324
• Cook: If you make the YoY adjustment on iPhone, it would be flattish YoY, not down
• Cook: GenAI is an opportunity for many of Apple’s devices; I am extremely optimistic
• Q: June quarter iPhone business to be down again? Is AI (lack thereof so far) an issue?
• Cook: Long term in China, Apple sees a lot of customers moving into the middle class; continues to be optimistic
• Cook: Acceleration from Q1, driven by iPhone, especially in mainland China, but Apple has work to do in other product categories
• Q: Economy in China?
• Luca: One step at a time. We are working very hard to get there; free cash flow has been very strong for the last several years, so that’s one reason why Apple is increasing buybacks
• Q: $58 billion net cash currently; how to get to net cash neutral?
• Luca: In general, we continue to see a lot of interest at the top of the range of our products in each category
• Q: iPhone mix tilted towards Pro models?
• Cook: Enterprise is focused on selling iPhone, iPad, Mac, and Vision Pro units
• Q: AI for the enterprise
• Cook: I think AI and GenAI both are big opportunities across our products; I think there are numerous ways that are great for Apple and the company is well-positioned; we’ll talk more about AI soon
• Q: Is AI an opportunity to monetize your mobile real estate?
• Trip to China was fantastic; I maintain a great view of China long term
• Cook: iPhone in mainland China, we grew before normalization (before supply destruction we mentioned earlier)
• Cook: In Q2, for greater China, we were down 8% due to iPhone sales
• Q: China confidence?
• Luca: Generally favorable during the quarter
• Q: Rising costs for commodity and components?
• Cook: I don’t want to get in front of our announcements; we see GenAI as a big opportunity across our products
• Generative AI monetization?
• We haven’t seen anything different within the product categories
• Luca: Down sequentially primarily due to different mix YoY, leverage plays a big role
• Q: Product gross margins? Are customers mixing down within or across product lines?
• Cook: It’s really too early to answer the question
• Q: Effect of 3rd party app stores on iPhone and iPad in the EU?
• On the CapEx front, Apple has its own data center capacity and also with 3rd parties and plans to continue along the same lines going forward
• Luca: We are obviously very excited about GenAI
• Q: Artificial Intelligence to affect historical CapEX cadence?
• Services: We’ve seen very strong, brod-based performance across the board
• Luca: We expect total revenue to grow low single digitis YoY
• Q: Outlook for products?
• Expect 45.5% – 46.5% gross margin
• Expect iPad revenue to grow double digits
• Expect Services to grow double digits
• Color: June quarter total revenue to grow low single digitis YoY
• Apple continues to plan for annual dividend increases going forward
• Apple’s board of directors has declared a cash dividend of $0.25 per share of the Company’s common stock, an increase of 4 percent
• Board of directors has authorized an additional program to repurchase up to $110 billion of the Company’s common stock
• $105 billion total debt
• Apple $162 cash and marketable securities
• Apple particularly pleased with strong performance in emerging markets
• Maestri touts Mac and Vision Pro in the enterprise
• Apple has well over 1 billion paid subscriptions across Services
• Both transacting and paid accounts reached new all-time highs
• Services revenue: $23.867 billion
• Almost 2/3rd of Apple Watch customers were new to the product in the quarter
• Wearables, home and accessories revenue: $7.913 billion
• iPad U.S. customer sat = 96%
• iPad install base hit new all-time high
• iPad revenue: $5.559 billion
• Mac sales driven by M3 MacBook Air
• Mac revenue: $7.451 billion
• iPhone customer sat in U.S = 99%
• iPhone active installed base grew to an all-time high
• iPhone revenue: $45.963 billion
• OpEx $14.4 billion, up 5% YoY
• Installed base of active devices reached an all-time high
• iPhone had a challenging compare YoY
• Luca Maestri: Revenue: $90.753 billion
• AAPL After hours: $185.21 +$12.18 (+7.04%) @ 05:12PM EDT
• Cook talks “carbon removal” projects
• Cook touts emission reductions, recycling, solar and wind power
• Apple want to become “carbon neutral” by 2030
• Cook touts privacy and protections against quantum computing
• Retail: Shanghai store opening was very exciting
• Apple Sports app released during quarter
• Promos Apple TV+ productions which win major awards
• Services revenue: $23.867 billion; all-time revenue record
• Wearables, home and accessories revenue: $7.913 billion
• Cook talks up Apple Watch; mentions AI and ML again
• iPad revenue: $5.559 billion; down 17% YoY due to difficult compare
• Cook touts M3 MacBook Air; mentions AI again
• Mac revenue: $7.451 billion, up 4% YoY
• Cook visited Southeast Asia; excited for the future
• iPhone revenue: $45.963 billion
• iPhone faced a difficult compare YoY
• Apple believes it has AI advantage that will distinguish itself; mentions neural engines and privacy focus
• Apple bullish on generative AI
• Next month WWDC – exciting!
• Exciting event coming next week
• Cook talks up Vision Pro
• Services set all-time revenue record
• Cook: Set revenue records in Latin America and Middle East, Canada, India, Span, Turkey, Indonesia
• Conference call begins
• AAPL After hours: $185.51 +$12.48 (+7.21%) @ 04:56PM EDT
• AAPL After hours: $183.99 +$10.96 (+6.33%) @ 04:46PM EDT
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https://macdailynews.com/2024/05/02/macdailynews-presents-live-notes-from-apples-q224-conference-call/#google_vignette
Investors3
2 days ago
Apple reports second quarter results
May 02 2024 - 4:30PM
Business Wire
Services revenue reaches new all-time record
EPS sets March quarter record
Apple® today announced financial results for its fiscal 2024 second quarter ended March 30, 2024. The Company posted quarterly revenue of $90.8 billion, down 4 percent year over year, and quarterly earnings per diluted share of $1.53.
“Today Apple is reporting revenue of $90.8 billion for the March quarter, including an all-time revenue record in Services,” said Tim Cook, Apple’s CEO. “During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks. We’re also looking forward to an exciting product announcement next week and an incredible Worldwide Developers Conference next month. As always, we are focused on providing the very best products and services for our customers, and doing so while living up to the core values that drive us.”
“Thanks to very high levels of customer satisfaction and loyalty, our active installed base of devices has reached a new all-time high across all products and all geographic segments, and our business performance drove a new EPS record for the March quarter,” said Luca Maestri, Apple’s CFO. “Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $110 billion for share repurchases. We are also raising our quarterly dividend for the twelfth year in a row.”
Apple’s board of directors has declared a cash dividend of $0.25 per share of the Company’s common stock, an increase of 4 percent. The dividend is payable on May 16, 2024 to shareholders of record as of the close of business on May 13, 2024. The board of directors has also authorized an additional program to repurchase up to $110 billion of the Company’s common stock.
Apple will provide live streaming of its Q2 2024 financial results conference call beginning at 2:00 p.m. PT on May 2, 2024 at apple.com/investor/earnings-call. The webcast will be available for replay for approximately two weeks thereafter.
Apple periodically provides information for investors on its corporate website, apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and details related to its annual meeting of shareholders.
This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company’s plans for return of capital, the payment of its quarterly dividend, and future business plans. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: effects of global and regional economic conditions, including as a result of government policies, war, terrorism, natural disasters, and public health issues; risks relating to the design, manufacture, introduction, and transition of products and services in highly competitive and rapidly changing markets, including from reliance on third parties for components, technology, manufacturing, applications, and content; risks relating to information technology system failures, network disruptions, and failure to protect, loss of, or unauthorized access to, or release of, data; and effects of unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements, which speak only as of the date they are made.
Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, AirPods, Apple Watch, and Apple Vision Pro. Apple’s six software platforms — iOS, iPadOS, macOS, watchOS, visionOS, and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, iCloud, and Apple TV+. Apple’s more than 150,000 employees are dedicated to making the best products on earth and to leaving the world better than we found it.
NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or email Apple’s Media Helpline at media.help@apple.com.
© 2024 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
Three Months Ended
Six Months Ended
March 30,
2024
April 1,
2023
March 30,
2024
April 1,
2023
Net sales:
Products
$
66,886
$
73,929
$
163,344
$
170,317
Services
23,867
20,907
46,984
41,673
Total net sales (1)
90,753
94,836
210,328
211,990
Cost of sales:
Products
42,424
46,795
100,864
107,560
Services
6,058
6,065
12,338
12,122
Total cost of sales
48,482
52,860
113,202
119,682
Gross margin
42,271
41,976
97,126
92,308
Operating expenses:
Research and development
7,903
7,457
15,599
15,166
Selling, general and administrative
6,468
6,201
13,254
12,808
Total operating expenses
14,371
13,658
28,853
27,974
Operating income
27,900
28,318
68,273
64,334
Other income/(expense), net
158
64
108
(329
)
Income before provision for income taxes
28,058
28,382
68,381
64,005
Provision for income taxes
4,422
4,222
10,829
9,847
Net income
$
23,636
$
24,160
$
57,552
$
54,158
Earnings per share:
Basic
$
1.53
$
1.53
$
3.72
$
3.42
Diluted
$
1.53
$
1.52
$
3.71
$
3.41
Shares used in computing earnings per share:
Basic
15,405,856
15,787,154
15,457,810
15,839,939
Diluted
15,464,709
15,847,050
15,520,675
15,901,384
(1) Net sales by reportable segment:
Americas
$
37,273
$
37,784
$
87,703
$
87,062
Europe
24,123
23,945
54,520
51,626
Greater China
16,372
17,812
37,191
41,717
Japan
6,262
7,176
14,029
13,931
Rest of Asia Pacific
6,723
8,119
16,885
17,654
Total net sales
$
90,753
$
94,836
$
210,328
$
211,990
(1) Net sales by category:
iPhone
$
45,963
$
51,334
$
115,665
$
117,109
Mac
7,451
7,168
15,231
14,903
iPad
5,559
6,670
12,582
16,066
Wearables, Home and Accessories
7,913
8,757
19,866
22,239
Services
23,867
20,907
46,984
41,673
Total net sales
$
90,753
$
94,836
$
210,328
$
211,990
Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares, which are reflected in thousands, and par value)
March 30,
2024
September 30,
2023
ASSETS:
Current assets:
Cash and cash equivalents
$
32,695
$
29,965
Marketable securities
34,455
31,590
Accounts receivable, net
21,837
29,508
Vendor non-trade receivables
19,313
31,477
Inventories
6,232
6,331
Other current assets
13,884
14,695
Total current assets
128,416
143,566
Non-current assets:
Marketable securities
95,187
100,544
Property, plant and equipment, net
43,546
43,715
Other non-current assets
70,262
64,758
Total non-current assets
208,995
209,017
Total assets
$
337,411
$
352,583
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
$
45,753
$
62,611
Other current liabilities
57,298
58,829
Deferred revenue
8,012
8,061
Commercial paper
1,997
5,985
Term debt
10,762
9,822
Total current liabilities
123,822
145,308
Non-current liabilities:
Term debt
91,831
95,281
Other non-current liabilities
47,564
49,848
Total non-current liabilities
139,395
145,129
Total liabilities
263,217
290,437
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,337,686 and 15,550,061 shares issued and outstanding, respectively
78,815
73,812
Retained earnings/(Accumulated deficit)
4,339
(214
)
Accumulated other comprehensive loss
(8,960
)
(11,452
)
Total shareholders’ equity
74,194
62,146
Total liabilities and shareholders’ equity
$
337,411
$
352,583
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Six Months Ended
March 30,
2024
April 1,
2023
Cash, cash equivalents and restricted cash, beginning balances
$
30,737
$
24,977
Operating activities:
Net income
57,552
54,158
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization
5,684
5,814
Share-based compensation expense
5,961
5,591
Other
(1,971
)
(1,732
)
Changes in operating assets and liabilities:
Accounts receivable, net
7,727
9,596
Vendor non-trade receivables
12,164
14,785
Inventories
53
(2,548
)
Other current and non-current assets
(4,438
)
(4,092
)
Accounts payable
(16,710
)
(20,764
)
Other current and non-current liabilities
(3,437
)
1,757
Cash generated by operating activities
62,585
62,565
Investing activities:
Purchases of marketable securities
(25,042
)
(11,197
)
Proceeds from maturities of marketable securities
27,462
17,124
Proceeds from sales of marketable securities
4,314
1,897
Payments for acquisition of property, plant and equipment
(4,388
)
(6,703
)
Other
(729
)
(247
)
Cash generated by investing activities
1,617
874
Financing activities:
Payments for taxes related to net share settlement of equity awards
(2,875
)
(2,734
)
Payments for dividends and dividend equivalents
(7,535
)
(7,418
)
Repurchases of common stock
(43,344
)
(39,069
)
Repayments of term debt
(3,150
)
(3,651
)
Repayments of commercial paper, net
(3,982
)
(7,960
)
Other
(132
)
(455
)
Cash used in financing activities
(61,018
)
(61,287
)
Increase in cash, cash equivalents and restricted cash
3,184
2,152
Cash, cash equivalents and restricted cash, ending balances
$
33,921
$
27,129
Supplemental cash flow disclosure:
Cash paid for income taxes, net
$
14,531
$
4,894
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502965412/en/
Press Contact:
Josh Rosenstock
Apple
jrosenstock@apple.com
(408) 862-1142
Investor Relations Contact:
Suhasini Chandramouli
Apple
suhasini@apple.com
(408) 974-3123
https://ih.advfn.com/stock-market/NASDAQ/apple-AAPL/stock-news/93770672/apple-reports-second-quarter-results
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