01—Abstract
Summary
Summary of the 10-K filed October 28, 2022. Cited figures are marked; the original filing is the authoritative source.
Apple Inc.'s 2022 10-K filing reveals a company demonstrating robust growth and financial strength, despite operating in a challenging global economic environment.
Net sales increased by 8% year-over-year to $394.3 billiona, primarily driven by strong performance in iPhone, Services, and Mac segments. The Services segment, in particular, continued its upward trajectory, showing a 14% increase in net sales, underscoring Apple's successful diversification beyond hardware. The company maintained healthy gross margins, with a total gross margin of 43.3%, and a significant increase in operating income, reflecting effective cost management and operational efficiency.
While Apple continues to innovate and introduce new products across its portfolio, the company acknowledges significant risks, including macroeconomic headwinds, supply chain disruptions, intense competition, and evolving regulatory landscapes globally. However, Apple's substantial cash reserves, ongoing share repurchase program, and dividend payments indicate a strong commitment to returning value to shareholders. The company's financial position remains solid, supported by diversified revenue streams and a focus on innovation, positioning it to navigate potential future challenges.
02—Key points
Key Highlights
- Total net sales grew 8% to $394.3 billion in fiscal year 2022, driven by iPhone, Services, and Mac.
- The Services segment saw a significant 14% increase in net sales, reaching $78.1 billion, highlighting its growing importance.
- Gross margin improved to 43.3% from 41.8% in the prior year, with notable increases in both Product and Services gross margins.
- Operating income increased by $10.5 billion to $119.4 billion, reflecting strong operational performance.
- Apple continued its robust capital return program, repurchasing $90.2 billion of common stock and paying $14.8 billion in dividends and dividend equivalents.
- Significant investment in Research and Development continued, with R&D expenses increasing by 20% to $26.3 billion.
- Despite global economic uncertainties and supply chain risks, the company ended the fiscal year with substantial liquidity, holding $156.4 billion in cash, cash equivalents, and unrestricted marketable securities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Apple Inc. kept $0.25.
- Revenue$394.33B100.0%
- Cost of revenue−$223.55B56.7%
- Gross profit$170.78B43.3%
- Operating costs−$51.34B13.0%
- Operating income$119.44B30.3%
- Interest, other & tax−$19.63B5.0%
- Net income$99.80B25.3%
Where FY2022 revenue went
$394.33B- Cost of revenue: $223.55B, 57% of revenue
- Net income: $99.80B, 25% of revenue
- R&D: $26.25B, 6.7% of revenue
- SG&A: $25.09B, 6.4% of revenue
- Interest, other & tax: $19.63B, 5.0% of revenue
Kept 25% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed October 28, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $394.33B$365.82B | +7.8% |
| Cost of Revenue | $223.55B$212.98B | +5.0% |
| Gross Profit | $170.78B$152.84B | +11.7% |
| R&D Expenses | $26.25B$21.91B | +19.8% |
| SG&A Expenses | $25.09B$21.97B | +14.2% |
| Operating Expenses | $51.34B$43.89B | +17.0% |
| Operating Income | $119.44B$108.95B | +9.6% |
| Interest Expense | $2.93B$2.65B | +10.8% |
| Net Income | $99.80B$94.68B | +5.4% |
| EPS (Basic) | $6.15$5.67 | +8.5% |
| EPS (Diluted) | $6.11$5.61 | +8.9% |
| Shares Outstanding (Basic) | 16.22B16.70B | −2.9% |
| Shares Outstanding (Diluted) | 16.33B16.86B | −3.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of Apple's revenue growth in fiscal year 2022?
Apple's revenue growth in fiscal year 2022 was primarily driven by increased net sales from its iPhone, Services, and Mac product categories. Specifically, new iPhone models released since the fourth quarter of 2021 contributed significantly to iPhone net sales, while growth in advertising, cloud services, and the App Store boosted Services revenue.
What are the key risks and uncertainties highlighted by Apple in this filing?
Apple highlighted several key risks, including the impact of macroeconomic conditions such as inflation and potential recession, disruptions in its global supply chain, intense competition characterized by aggressive pricing, rapid technological changes, and a complex and evolving global regulatory environment. Geopolitical events, trade disputes, and cybersecurity threats were also noted as significant risks.
How is Apple managing its capital and returning value to shareholders?
Apple is actively returning capital to shareholders through a significant share repurchase program and dividend payments. In fiscal year 2022, the company repurchased $90.2 billion of its common stock under its authorized program and paid $14.8 billion in dividends and dividend equivalents. Apple also intends to continue increasing its quarterly dividend annually, subject to Board of Directors approval.
What is the outlook for Apple's Services segment?
The Services segment demonstrated strong growth, with net sales increasing by 14% to $78.1 billion in fiscal year 2022. This growth was driven by higher sales from advertising, cloud services, and the App Store. The consistent expansion of this segment indicates a successful diversification strategy for Apple, providing a stable and growing revenue stream.
06—Continue