Ten charts to understand Apple's latest earnings
Apple FY2023 Q4 Earnings Summary:
Revenue $89.498B, down 0.7% year over year, fourth consecutive quarter of decline; FX impact 2 points; on constant currency, sustained year-over-year growth; net income $22.956B, up 10.8% year over year, first time since 2022 achieving double-digit year-over-year growth.
Global active installed base across all products and regions hit an all-time high (2B+ devices); Apple Vision Pro shipping early next year.
iPhone revenue $43.8B, up 3% year over year, all-time record for the period; iPhone hit all-time records in India, and period records in Mainland China, Latin America, Middle East, South Asia; iPhone 15 Pro/Pro Max capacity constraints to be resolved by quarter-end.
Services revenue $22.3B, up 16% year over year, fourth consecutive quarter of all-time records; Services gross margin 71% this quarter. Services transacting accounts and paid accounts up double digits year over year, all-time records; paid subscriptions all-time high. App Store, advertising, AppleCare, iCloud, payments, video revenue all-time records; Apple Music revenue period record; Apple TV+ garnered nearly 1,600 nominations and 400 major awards over four years.
Mac revenue $7.6B, down 34% year over year; per Student Monitor, nearly 2/3 of US college students choose Mac; will not return to external chips; iPad revenue $6.4B, down 10% year over year.
Wearables, Home & Accessories revenue $9.3B, down 3% year over year; wearables revenue hit period record in Europe.
Greater China revenue $15.1B, down 2% year over year; FX impact 6 points; on constant currency, revenue grew; Greater China operating margin 40.8%, overtaken by Rest of Asia Pacific for two consecutive quarters; only Americas revenue grew year over year this quarter. (Apple previously noted India, Middle East, Eastern Europe revenue included in Europe segment)
Apple continues to gain share in numerous markets globally; India revenue all-time high; Brazil, Canada, France, Indonesia, Mexico, Philippines, Saudi Arabia, Turkey, UAE, Vietnam, etc. hit period records; enterprise wins this quarter include Starbucks and GoTo; Starbucks deploying tens of thousands of iPads and M2 MacBook Airs; half of GoTo employees using Macs.
Q1 revenue expected flat year over year; FX impact 1 point; Q1 has one fewer week vs. last year, 7-point revenue headwind; iPhone revenue up year over year; Mac revenue growth to accelerate significantly vs. Q4; iPad and wearables growth to decelerate significantly vs. Q4; Services average weekly revenue growth consistent with Q4; gross margin 45-46%, on track for fourth consecutive quarter of all-time records; net income expected to exceed $33B, second consecutive quarter of double-digit year-over-year growth; Q4 share repurchase $15.5B, dividends $3.8B.
Overall this earnings was decent, but cannot compare with Microsoft, Google, Amazon among the Big Four.
Apple core growth formula: AAPL = active installed base * customer engagement (active installed base #record * paid subscribers #record).
Both sides of Apple's core growth formula hit all-time records this quarter; the Apple flywheel remains intact long-term; near-term Huawei impact on Greater China is neither overly optimistic nor pessimistic, because Apple is a global player. As for Vision Pro, this call option — we'll see how it performs next year.