Apple (AAPL) 31 Oct 242024 Q4 Earnings call transcript

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's CEO, Tim Cook; and CFO, Luca Maestri; and they'll be joined by Kevan Parekh, Vice President of Financial Planning and Analysis. After that, we'll open the call to questions from analysts.

operating of consist you'll without and of regarding business gross of some discussion during limitation, results future that and and conditions revenue, will income on the today forward-looking margin, of business note outlook, the capital potential hear information our those expense, including Please taxes, other impact allocation macroeconomic expenses, operations. statements, company's including, the

from trends our and risks that cause to uncertainties differ or materially These statements involve forecast. actual may results

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quarter our fiscal turn the Let me results to the of for now fourth year.

revenue to September new very are record report grew in markets track majority the quarter We quarter achieved the Americas, and X% we rest of revenue of of pleased September up records billion, in the $XX.X a Europe We Pacific. vast year-over-year. Asia and

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thanks to customer segments, reached high a base products. are of devices number loyalty customers and large an all levels and across installed of products very of our geographic active high Our to all-time and who new satisfaction

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near guidance the was end high points Company sequentially, of driven from XXX XX.X%, gross up gross was the margin favorable our basis Services gross XX.X%, mix. Products unchanged margin prior by quarter. was range. margin XX%, primarily

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of ecosystem. the momentum our all-time devices, transacting accounts digits an Services high the future double base and of all-time reached record growing $XX of Our year-over-year. billion, accounts engagement a expansion Both for installed setting double subscriptions of customer foundation offerings. solid with revenue our Paid paid increased a strong with with see continued also accounts And Services grew growing digits. new year-over-year. we active our XX% Services see to growth reached paid

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and increased us leaving Let debt in $X turn position in We capital me now to billion. paper billion securities. the by $X.X billion and maturing $XXX program. return cash debt repaid our $XXX with cash marketable of and commercial quarter total ended billion, We with

$XX billion at As end the a was the result, quarter. net of cash

open $XX dividends the quarter, During shareholders, we to and returned over equivalents billion XXX and billion including in through $X.X shares. million repurchases of $XX market Apple billion

the to move As the call. for we the information of are outlook, macroeconomic projecting we which Suhasini review today ahead referred providing assumes current December outlook to today I'd quarter, doesn't our the the forward-looking color includes into types at of The that what like from that we beginning worsen the quarter. are

digits low year-over-year. We our company quarter mid-single revenue expect grow to December total to

similar digits XXXX. grow to revenue in reported double year services to at we expect We the what fiscal a rate

be gross and between we $XX.X between -- to be margin billion. $XX.X XX% and XX%. to billion We expect And expect OpEx

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

XX, Finally, today, Directors declared shareholders of our as XXXX. XX, stock November dividend of payable XXXX, November of per cash share record Board of $X.XX of on to common a has

With to that, let questions. us open the call

We have X Luca. question, the questions. limit you, Operator, ask to please? Thank first you we that yourself may

take go Michael we with Sachs. our Ng Certainly, first question will ahead from Goldman and

I just have X.

the feedback intelligence the beta that both would could you I XX.X was on to Tim is X capital if a seen and on far for for bit of the you iOS developer just any intelligence, some whether we've but so expand attribute Apple early to wondering performance little Apple first also The strong of Intelligence. date? iPhone

Michael. Thanks,

and in noted Monday, on features Apple my iPhone, in the set this for U.S. As Mac. I we of iPad first English week just intelligence comments, available made

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ago feedback XX.X And in lot year a adoption positive the Monday, and we fact, look twice getting in adoption the just quarter. as if developers at of first which from from X We're is the fast all customers. obviously, you the XX.X days, as was have, is

definitely for there's out so And interest Apple there Intelligence.

even Carrying include visual that Intelligence and addition writing builds December, on ChatGPT and other powerful integration Apple intelligence more in forward in to the in will and features are looking on tools quarter, this bringing to even we experience more features.

we'll English several Canada. the As localized and countries well bring that to Australia as U.K., include

quite So Monday turn quarter it's 'XX more well be the release -- the software well. rolling -- release starting and And as a the going and out have in then as more on between to in we December. in in languages we'll April corner to features as

so And more drumbeat, strong couldn't it's very, it's about be very it. and -- we excited a

Great. And just Luca. one, second my for

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private overlap will bit little think, outlook and you I about talk the change of with in the that roughly historical $XX Could just a year. question range CapEx as cloud new investments whether a CapEx compute well. things your like billion could role A

you, Thank Michael.

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features. is for are we all that these capacity needed available so making And the

the of are we course will amount course, the fiscal that CapEx our to CapEx we've 'XX. the And we of all during be 'XX, related You -- incurred fiscal in XX-K in the continue investments will that you make will -- of see made. in necessary. investments And will AI

Our next from Stanley. with Morgan question Woodring Erik is

as start have maybe well. you. if Tim, I we X with

last I you've exited iPhone said quarter think years, X supply. the you the December outpacing with demand

year quarter been past to years. known maybe shortages. are we better XX cycle, As I'm on lead whether relatively there the relative curious look And are get a cycle you've this read iPhone short, demand to no iPhone this in to able times just early supply

And if price XX down about overall, I sensitive? impact more iPhone may have trade-ups switching rates, then being have so, Apple what on And you've any follow-up. learned rates, and trading versus upgrade that cells? Intelligence a And

a we lot but There's compelling there. days And Apple reason. we On just believe X upgrade Intelligence, a launched it -- we'll it's ago.

what of of so now number twice data XX.X point we've the got XX.X. is adoption view the referenced And has just from rate that a I

that so interest a out clearly And shows level there. of

That's environment In happened would kind my quarter not we We flood But for COVID, in there demand December terms for want -- our the that's of and a to balance as possible. into had greater that, as of exiting of not don't in spilled all having thing, regular to supply. something the some we're XXX-year quickly a years. products. customers over. We more where disruptions where recollection than having wait X would clearly desire get during that is were cases

so quickly on this you year, at look we've did very And we XX. if the that how done

be that we've Pro soon Max, we'll Pro XX of Pro On in and out constraint. constrained the but we family, October the been believe the

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say I what there. that's So would

pleasure next just helpful. the it's to obviously, the and I with all Okay. in we been And you turn best That's wish role. a really you, working you, if Luca, then,

now have the us will just There's market commodity up you the margins. you December for input prices on impact and margins gross points quarter. about basis debate in told Historically, about guide cost the sequentially, gross plenty and right which XX that do

and should that we maybe And gross you or become component help prices you tailwinds can whether be view broadly, sustainable tailwind So as those as understand might see a how your just look margins? of still headwind that whether us forward? to

Eric. Yes,

margins specifically quarter, we the while of September in variables. factor. commodities, As the Commodities, price not expect factor December increased gross NAND expect I you the that commodities to quarter, the important. we during quarter. and course, many, know, down our They're December But for and quarter many and increase on most both a during the going for only DRAM you are of what September can are are tell the course them to . move of

XX% reported and record for with the The pleased entire they very across features course of fiscal margin board. that margins levels lot our guiding the with of are included really we've that gross level for of quarter about has gross XX% during the Tim of all 'XX, products the to we of technologies in company year. the We are the new to year talked new the with December that the all products obviously a new

I good think it's a very sign.

Our question Melius. Ben Reitzes from is from next

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I the I you. future. Luca It's on been is best away one pleasure in working from a my have first guess the luck phone. with

achievement a billion is adding services which On with rate the services you're side, itself. run by today, phenomenal $XXX

about portfolio over As versus reoccurring at just subscription And is today, are of transactional think different rates portfolio? the talk versus do how growth the you here much between this Services the can portfolio you you look business transactional? the

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got $XXX we've course, a of billion. rate to Of run

the been years growth has few just You phenomenal. and a look back ago,

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for a for wondering touch that could just could if well China seeing And perspective a out out essentially in you plans from Just you stimulus China double-digit Maybe EMEA stood recent growth. if demand what you are just in the on be with as catalyst iPhones? us. then can really flush

Yes, I'll the take China question.

to had the And and that look there a that in improvement sequential If relative is that so we the been helped year-over-year was foreign you at out. year-over-year. key flat a performance component of how we for improvement did quarter, exchange we that relatively achieving us were

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record Europe emerging set very Saudi, also our Middle the during a of like markets where number we in And includes revenue definition where our strongly, UAE. include Turkey, mentioned segment Keep records number we've of grown India, an a in in in of quarter. we mind reporting all-time September the East. Tim

But nicely. I Europe also say, to have grew Western

So we've results segment. in very, entire the very us seen for good

both from is Vogt UBS. question next with Our David

I try that a Are Congratulations, pull assume, of be But a I to know, I if and to product environment numbers if want commentary, we Luca, to value? give sort like. Luca. know just the looks demand together lot the is you of at revenue quarter, could maybe about don't comments in the the face on what take granularity. Tim, your risk down that portfolio there your I December based

related you've trying And related? if into give iPhone-related, want but given handle And what to for to have seen December caution, quarter? a then follow-up. kind I that's of, degree be get that the the I that strength the going risk, may in balanced a Just don't that of say you potentially Mac more you iPad on is

We've cycle, you what I would I with excited as early. we're cycle software to repeat that said Apple early the releases. them, but launching. that products color. said, not over providing a David, level time, And world, very normally we going As it's features And very do services. Intelligence are I earlier, rollout very the happen new data about we're across early the of and the of we're lot we given some is in on with in not

Right.

Okay.

think you historical demand think the has of staged maybe being across When impact several follow-up world. regions. the any rollout the point about on So for across quarters that cadence Tim. Luca's Do normal different you a to about sort next the over

your to might relative enable how the So are quarter say, the history, just how to different December in June quarter, of be historically. should to cadence, and different, of the the probably the than perspective the given or quarter, maybe to customers waiting devices on have something rollout where let's timing March the think get we et cetera, demand the kind we operating be Would about love system? for it see

we of right roll give we to Yes, you clearly, than said point over -- normally said David, would WWDC. will, cadence, it's at Intelligence, as we And that comprehensive and wanted the what out, and you then time, would about we and -- we it a a on if out talked as different vision we're WWDC, Apple at we -- do.

we're And well. so executing

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

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then and languages There's we that at English, you U.S. more started If only our New had but Monday. in the adds started that in we also in Ireland add look . And with U.S. features on not April. localized English, Zealand. U.K., another schedule, release Australia, in that December Canada, will I coming -- additional for referenced

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from question with next Our comes Samik JPMorgan. Chatterjee

consistent iPhone across you feature the And I about back Intelligence these congrats and sort is set going series iPhones Luca, a of one, pleasure be on Pro on curious launched? you any working the X to thoughts, Pro with going for years. XX given can now the Apple Max. side? if iPhone to all XX that a if that what the have on you And start role new I and really first guess Great. iPhone my mix with I'm

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from question Research. next comes with Arete Kramer Our Richard

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Our Malik from Atif . question comes last with Citi.

Pro in ASPs Can that iPhone All as to Technical us based and is seems XX if wasn't big terms a differentiation you between [ strategy chips, an increase spec there iPhones It of and there models share your have shift as us isn't in year. the new Difficulty]. in prior years. versus Pro last AXX, AXX with

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