Apple (AAPL) 2 Nov 232023 Q4 Earnings call transcript

Good day, and welcome to the Apple Q4 Fiscal Year 2023 Earnings Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Suhasini Chandramouli, Director of Investor Relations. Please go ahead.

Thank you. you us. thank and afternoon, for joining Good

hear of Speaking that, questions we'll is forward-looking Apple's statements, information from consist limitation, today Cook. gross taxes, of operations. These business outlook, business potential After CEO, impact macroeconomic expenses, Tim uncertainties margin, on cause future and you'll the involve that open of regarding other Please materially including, that first including actual our of note trends discussion statements and will our results income today risks and analysts. results capital allocation some during forecast. those the revenue, and without to call company's conditions to operating expenses, from the may the differ or

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it volatile and on While prior macroeconomic X% was basis despite currency environment. constant down the from grew a year, it a uneven

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in particularly emerging and in pleased reaching double-digit growth performance currency. with all-time an are with XXXX record in markets, constant fiscal our We revenue

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that we As current a projecting color are referred ahead the on from of today quarter, the what our December call. Suhasini are includes the doesn't which to providing we point. macroeconomic expect quarter. the to outlook the X outlook, year-over-year percentage forward-looking for we I'd of foreign today review into information impact negative beginning that assumes worsen revenue like The at move types Also, exchange, of the we about

this a weeks. will spanned XX quarter the the last usual quarter year As December ago XX a the year reminder, December weeks, whereas

expect X less last For revenue. similar week percentage X total to be week company from quarter's year approximately this total clarity, December quarter having last to points to the we year, added our year. revenue extra Despite revenue the

year-over-year basis. on revenue absolute We to grow an expect iPhone

year's for last disruptions extra after expect and X both to week. also grow We the supply normalizing

We Mac from performance quarter. accelerate year-over-year to expect September significantly the

revenue to during and the both the September timing launched of iPad from performance expect December significantly a Pro generation We and iPad new decelerate the for quarter year-over-year and product Home due we tenth On Wearables, a iPad, year a different launches. iPad Accessories to quarter ago.

For last first launches Watch benefit quarter and the year, Ultra. Pro the the generation, of second December AirPods we category, SE the had Watch the the from full Wearables

the grow business, did Services expect week rate average our revenue quarter. per September to similar For strong during as a we double-digit the it at

to gross be We margin expect XX% XX%. between and

expect billion and We between $XX.X to $XX.X be billion. OpEx

$XXX to minority excluding mark-to-market our potential any and the OI&E be negative to impact around rate expect million, around from tax We of investments XX%. be

Board Directors has stock let's cash Finally, XX, to of payable of on questions. shareholders open today, our a dividend per of XXXX. XXXX, call that, November declared of share the as XX, of record $X.XX common With to November

Thank you, the Operator, please? [Operator we first Instructions] may Luca. have question,

go will Sachs. take We Mike of and first our ahead from question Goldman Ng

demand just versus question I on have iCloud. and storage a iPhone

demand of the you penetration? and storage Or a iCloud think models? are mix some strategic As here about trade-offs What iCloud+? higher mostly towards versus iPhone opting financial uptake grows, are for seeing are same storage higher of shift models as because and of consumers considerations increased you towards the mix for shift storage the

Michael, it's Tim.

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it. as the sort the that so I look underlying the at -- of wouldn't XX% business of of net negative representative performance is And

clear. That's Excellent. very

Our next from Fargo. question is Wells with Rakers Aaron

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Yes.

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good, confident guidance so feel think the about And margin we very very this coming year, gross and that. I reflects

is Our Morgan Stanley. Woodring with Erik next question from

iPhone if balance Maybe I Max suggest you think start, the Pro constrained back I your quarter should Luca, Pro supply-demand that comments but are be know XX today, of end. and before some to I

So a any And is to for have quantify my quarter your And if I account revenue supply constraints? question revenue December of supply quarter any way how I is, does follow-up. performance? December be so, much kind then limiting guess guidance there your would

correct. it's Yes,

very to iPhone XX working are on constrained Max. the hands hard it. XX and today the of Pro product iPhone that have ordered customers all the get We Pro We're in

that going that. supply-demand end so to in the of by be as expect, the of guidance We reflects today, the quarter, we're balance

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is Vogt question with next David UBS. from Our

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an in Wearables margin So are quarter, of I trajectory on guess? sort December of and the the less the in weakness iPad impact

that's correct, That's correct.

is from next question Our Amit with Evercore. Daryanani

as driving been a that have fairly December. acceleration, acceleration? flush a it Are I meaningful quarter there there first growth. I stepped was I it's about is like tremendous rate, going off, products Services just to guess few seeing sounds growth what in well you've it's notable quarters. Can you just the the hold last driving pretty X a talk to into way? this And of what acceleration compared just out like well. up the is XX% in Just there because think, very couple what maybe to have September

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from Our next question Harsh is Sandler. Kumar Piper with

Congratulations very on is and question tremendous perfect doing last Vision given your you Pro. a a macro. here, segue the execution with tough what are Tim, Actually,

curious But AI. have. some curious about able glimpse I'm about monetize if you I'm experimenting have. are there I into with with companies Vision ] efforts you can (sic) Vision sure are Pro of AI. what of us was to give generative might these generative you you of a how be efforts Pro [ lots that kind on segues So

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I had philosophical my a for And clear. Very question. follow-up,

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back. And I so I transition we've see going made was day the last I happier don't than that than was of week, every made benefit the yesterday, I no, am see we've today that it. and I

is Mohan next America. Wamsi Our Bank from from of question

much, share you've last over gained of China. a the pretty in Tim, decade lot

China see continued the I in would and please. for especially was perspective? have domestic how how a a you are China? look reemerge, China, As space. And linearity I demand some opportunity in here, gains, starting follow-up, touched phone high-end from you in on players the you positioning particularly the Apple's but of share to And know

an would that very set in that. we -- predictions market In market quarter, we're iPhone seen revenue The and contracting. obviously I've the proud And we the have record China, grew. record September of

And so we are quarter. share correct, if then last -- gained that's those

very proud very I'm is term, will important just optimistic a and about an the we we're quarter over market of so China know view hold, quarter. And But of give on color bit current the I don't long incredibly that. and what I obviously, every it.

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Cowen. Sankar comes with TD next Our question from Krish

I had too. of X them,

on the quarters, for I curious, margin definitely when thanks then from over if color it most And when basis, like Luca, Services one, for gross I at step reductions cost are look you I X I'm there functions Mac margins cetera, on the here? et and year-over-year go-forward is gross the expansion declined, just revenue basis, of done? helps. margin. and had follow-up. that look kind And big Silicon Or the room a on even at the more understand a conversion, last First have a of improved,

know, tend structures we products, replace. that side, life Well, that. tend products December to be product, time curve technologies, that always get goes and you we're for new guidance new features, we reflects we It adding to provided higher and on all -- products then products we cycle launch when those of cost new the work the because the happens through they of the than benefits by. The we the as the over as cost

year from the general. ago so in a There other starting past play And role. are position factors we're in than or better a that a

gross the has that we profile. sell. the products For mix of margin example, Not every same product

product reflective we that. depends also they our And are so the results different on have a specific lot sell of category, profiles. within models margin because our guidance, a kind And that of

our the things I customers and installment well offer factor to has reason few over the a to been that low-cost financing therefore, and reduce of think accomplished what customers, the of affordability margin our options at last plans, big is general. one threshold the years That can in is solutions that ranges. And our product in the more trading done they affordability in of our we've for buy top for is the expansion. form

for now has of because, some things about we we guidance because You the beginning don't we're net-net, very or provide been variables that these drag different very of margins. that know of we bit many good we need has 'XX. But color had provide for gross in so been foreign us. and we current obviously, fiscal we've affect difficult trajectory that and the environment there's past the guidance feel quarter the obviously a exchange where But the our are. a pleased And XXXX

just to follow-up units? opportunity, do look for ASP way in think the share point so Obviously, look relative the these there China momentum geography? that at you're compare How amazing you growth And the as the you India or And contrast momentum a at kind hardware a decade gains same seeing maybe rollout geographies? rest is it. of do Got of a that then to ago on how of versus the like you versus or growth in I'm curious, about when Tim. at India. the -- India

for great question. focus grew strong digits. a We an record revenue in ours. it's major all-time and Yes, India. an We double of a It's incredibly us market had very exciting

have a We low share market. large in

haven't you a We going would as want and bother I and market, has journey its it of happier but to positives. we It doing the most -- lots start. terms how early see I but country comparison in going of still sure to moving couldn't ASPs, us own people off at anticipated. doesn't that a than And a there. The game, retail distribution the so put lot say They're they're of just I'm is getting each know. the class, things are be better, there, extraordinary better at It's with stores an into the moment. good middle X we recently similarity, I they're that lot And all. wouldn't worldwide. but lower that would seem But headroom there's them than at of play I looked the

Research. Our with next Ben Reitzes from is question Melius

your your I around great where was supply optimism. ask what It priority is Tim, as you also the the in of hear diversify supply supply feel wanted there particular, a chain. -- about you U.S. kind about do think to China. I potential the priority appreciate your growth all well? or commentary world? your And Apple's do to further And around investments How the chain? do in you have about about to chain

we're venture focused so it's world, and global, different U.S. semiconductors. truly worked the the over on the United were or of or a Face in glass U.S., advanced is investing on very chain with the We the ID on manufacturing Corning our whether supply have in all number States. module the Our including projects for and

so be think and of And are all these the would are good I the and kinds U.S. things manufacturing, advanced very, very at. that exactly of

world invest in and other chain. continually the also of the regions we're optimizing We

so are we moment we tweaking -- didn't exactly right, And we learn the something that work it.

global will chain. it that, but end a the at And going so to do we're be to the continue of day, supply still

Got it.

Luca. for X Next

I what that that, week? normalized somewhat Is the some benefit Just give year, this the what contrast was chain possible where around really and the color to is supply last that lockdowns with quick with maybe production, in from there year, this extra hit the There having it year a guess, on dynamic. X-point extra an issue China. COVID iPhone was week also, the

did on during December the it grow extra the on for last to Pro year disruptions, X Ben. normalize factors, the said the is expect and phone, XX ago. I points of We Max And we I in we Pro have still a revenue. when year prepared iPhone. remarks, for X quarter call, question, during week disruptions those the the Thanks the Yes. mentioned supply on

it account those we to iPhone. for still not are compare with of when going into the you you to this that normalize expect year. X disruptions the things, grow week, extra loss take you hopefully repeat supply So the on And

And we'll take question last the now.

Richard Our question Arete Research. Kramer from with comes last

content Tim, about innovation us like that's $XX the new tough questions Pro the of behind Apple's Silicon? drivers X% you investors increase one of sense that Can the services? X/X give or sales Is up by it first are components products off, billion in higher or over it is to -- $X a and past billion think X over if spend? support we Vision R&D look about years, Is Apple higher. some I or new of main have.

of expenditure and a the and It's the that number Mac in sort Pro. silicon. I competitive all other would the It's investment the Richard. AI of can't It's It's the It's that of Sure. think find talk I silicon Vision others. versus ML. some things, with things those It's making, R&D about. the transition you very aggregate things. we're But looks

on add, this front, making would I that some we're also one of in drivers investments of Richard, R&D expansion. And are the the margin the for gross

that I think it's important about to way. it So think

run? and Tim the how and lifetime you value, how other Luca, long Macs you we your Services or of lifetime a you're relatively the growing mentioned products customer increases with entering So customer but revenue. What you understand about help to lot record do ecosystem especially metrics think the or That's even over growing users great. mentioned think when Apple And ecosystem choosing investors refurbished see measures college students value could mentioned, you do lower-priced you provide devices?

we sure that attention that Well, the ecosystem. installed we acquired in -- product and and engagement some at of behavior And the want metrics the a make look base good obviously, us, by we then with we base, visibility I've the to active at that, that daily lot and look of have mentioned of the the we of so customers before, We remain pay we see both geography. installed to over devices. the by

move we over are why That's model we that's obviously free a on model if, pay in our us. things a a see accounts. paid to We attention to very want very, accounts, important from of transacting to for time. fact, lot So like able paid customers

understand are joins more so a on in now the features right? So in when account. we -- all people all a our attracted then are and over able years, obviously, a because progress different when add services, in -- that, that device. so We and we happens and think We that, they what like very new and we that and there's devices, it's of monetize we because made very, primary more that's customer actually markets understand And to buy really using important take example, these what behavior the us, for I on versus that used keep additional is into we recent we've payments track do things. device And -- on. this important we time, that

the pretty of and the size we're ago. think, that I $XX a in was bigger good have, years significantly did the And we months. couple making in I Fortune billion of visibility. we So last progress XX Services, just a think XX it than That's

(XXX) available Thank us call you, XXXXXXX available additional on weeks today's a will Time with can replay by Rosenstock XXX-XXXX. XXX-XXXX, confirmation apple.com/investor These as webcast will the replay Chandramouli, the A Thank Members for for X today. of be Apple press additional joining contact Pacific (XXX) for followed on be today. with and Suhasini at number by at of p.m. sign. the me, questions X:XX pound contact Richard. you Please and again Josh The analysts questions financial is via approximately Podcasts, telephone. replays enter can code XXX-XXXX. telephone (XXX)

your today's Once do appreciate conclude does again, conference. this We participation.