Apple Inc. (AAPL) Q4 2024 Earnings Report

Apple Inc. (AAPL) has announced a record-breaking revenue for its fourth fiscal quarter of 2024. CEO Tim Cook and CFO Luca Maestri reported substantial year-over-year growth. The tech giant's revenue climbed to $94.9 billion, marking a 6% increase from the previous year, driven by strong iPhone sales and a surge in services revenue.

Despite facing a one-time tax charge that impacted net income, the company delivered a robust financial performance and expressed a cautious yet optimistic outlook for the December quarter.

Key Takeaways

• Apple's Q4 revenue hit a record $94.9 billion, up 6% year-over-year.
• iPhone sales reached $46.2 billion, with the launch of the iPhone 16 as a key driver.
• Services achieved an all-time high with $25 billion in revenue, a 12% increase.
• Apple announced a cash dividend of $0.25 per share, payable in November 2024.
• CFO Luca Maestri will transition to a new role, with Kevan Parekh stepping in as the new CFO.
• The company is reallocating R&D resources to focus on AI, enhancing current investment levels.

Company Outlook

• Apple expects low- to mid-single-digit revenue growth in the December quarter.
• Services revenue is anticipated to grow in double-digits.
• The company maintains a cautious outlook for iPhone and Mac sales in the December quarter.

Bearish Highlights

• A one-time tax charge of $10.2 billion affected net income.
• Wearables, Home, and Accessories revenue declined by 3%.
• Apple's performance in China was relatively flat year-over-year.

Bullish Highlights

• Apple's gross margin stood strong at 46.2%.
• The active device installed base reached an all-time high.
• Double-digit growth of 11% was reported in Europe, with records set in emerging markets.

Misses

• The company did not provide specific guidance for future product demand.
• Concerns were raised regarding the lack of significant differentiation between iPhone 16 models.

Q&A Highlights

• Tim Cook discussed the iPhone 16 cycle, noting shorter lead times and no supply shortages.
• Luca Maestri provided insights on gross margins, expecting 46% to 47% for the December quarter.
• Questions about Apple's Services segment were addressed, highlighting a $100 billion run rate.
• The company is focusing on AI investments and reallocating resources to enhance R&D in this area.

Apple's financial achievements in the fourth quarter were underscored by the successful launch of the iPhone 16 and the continued growth of its services sector. The company's commitment to sustainability was evident with the introduction of its first carbon-neutral Mac and options for Apple Watch.

Apple's operational strategy, including its balanced approach to capital expenditures and shareholder returns, along with its focus on AI and quality of services, positions the company to navigate the upcoming quarter's challenges while maintaining its trajectory of growth and innovation.

InvestingPro Insights

Apple's record-breaking fourth quarter revenue of $94.9 billion aligns with the company's strong financial position, as reflected in recent InvestingPro data. The tech giant's market capitalization stands at an impressive $3.37 trillion, underscoring its dominance in the Technology Hardware, Storage & Peripherals industry.

The company's robust performance is further evidenced by its trailing twelve-month revenue of $385.6 billion and an EBITDA of $131.78 billion. These figures support Apple's ability to maintain its dividend payments, which it has done for 13 consecutive years according to an InvestingPro Tip. This consistency in dividend payments, coupled with a current dividend yield of 0.44%, demonstrates Apple's commitment to returning value to shareholders.

Apple's strong financial health is also reflected in its ability to cover interest payments with its cash flows, as noted in another InvestingPro Tip. This financial stability allows the company to continue investing in innovation and AI, as mentioned in the earnings call.

The stock's recent performance has been noteworthy, with a 33.77% price total return over the past six months. This aligns with the InvestingPro Tip indicating that Apple has seen a large price uptick over the last six months. The stock is currently trading near its 52-week high, which could be attributed to investor confidence in Apple's consistent growth and innovation.

For investors seeking a deeper understanding of Apple's financial health and market position, InvestingPro offers 15 additional tips, providing a comprehensive analysis of the company's strengths and potential challenges.

Full transcript – Apple Inc (AAPL) Q4 2024

Suhasini Chandramouli: Good afternoon, and welcome to the Apple Q4 Fiscal Year 2024 Earnings Conference Call. My name is Suhasini Chandramouli, Director of Investor Relations. Today's call is being recorded. Speaking first today are Apple CEO, Tim Cook, and CFO, Luca Maestri, and they'll be joined by Kevan Parekh, Vice President of Financial Planning and Analysis. ….

Tim Cook: Thank you, Suhasini. Good afternoon, everyone, and thanks for joining the call. Today, Apple is reporting revenue of $94.9 billion, a September quarter record and up 6% from a year ago. iPhone grew in every geographic segment, marking a new September quarter revenue record for the category, and Services set an all-time revenue record, up 12% year-over-year. We also set September quarter segment revenue records in Americas, Europe, and the Rest of Asia Pacific…

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Tim Cook: I don't want to speculate on that from a legal point of view. It's an ongoing case, and I will save that for another day.

Thank you for your participation.