10-QPeriod: Q3 FY2020

Apple Inc. Quarterly Report for Q3 Ended Jun 27, 2020

Filed July 31, 2020For Securities:AAPL

Summary

Apple Inc. reported strong financial results for the third quarter of fiscal year 2020, reflecting continued resilience and growth despite the ongoing COVID-19 pandemic. Total net sales saw an 11% increase year-over-year, reaching $59.7 billion, driven by robust performance across product categories and services. Net income also grew to $11.3 billion, resulting in diluted earnings per share of $2.58. The company demonstrated broad-based growth, with significant contributions from its Services segment, which grew 15% year-over-year. Product sales also saw a notable rebound, with Mac and iPad sales increasing by 22% and 31% respectively. This performance highlights Apple's ability to adapt to changing consumer behaviors and maintain strong demand for its ecosystem of products and services.

Financial Highlights

55 data points
Beta

Revenue

$59.69B

38.0% Gross Margin

Net Income

$11.25B

18.9% Net Margin

EPS (Diluted)

$0.65

Total Assets

$317.34B

Cash & Equivalents

$33.38B

Free Cash Flow

$14.71B

Financial Statements
Beta
Revenue$59.69B
Cost of Revenue$37.01B
Gross Profit$22.68B
R&D Expenses$4.76B
SG&A Expenses$4.83B
Operating Expenses$9.59B
Operating Income$13.09B
Interest Expense$697.00M
Net Income$11.25B
EPS (Basic)$0.65
EPS (Diluted)$0.65
Shares Outstanding (Basic)17.25B
Shares Outstanding (Diluted)17.42B

Key Highlights

  • 1Total net sales increased by 11% year-over-year to $59.7 billion for the third quarter of fiscal 2020.
  • 2Net income grew to $11.3 billion, or $2.58 per diluted share.
  • 3Services revenue experienced a strong 15% year-over-year increase, reaching $13.2 billion.
  • 4Product sales showed significant growth, with Mac sales up 22% and iPad sales up 31% year-over-year.
  • 5The company repurchased $16.0 billion of its common stock and paid $3.7 billion in dividends.
  • 6Despite the COVID-19 pandemic, demand improved throughout the quarter across all product categories and Services.
  • 7Gross margin percentage remained strong at 38.0%, with Services gross margin significantly higher at 67.2%.

Frequently Asked Questions

Apple reported total net sales of $59.7 billion for the third quarter of fiscal year 2020, an 11% increase compared to the same period in the prior year. This growth was driven by increases in net sales across all geographic segments and product categories.

The growth was primarily fueled by strong performance in the Services segment, which increased by 15% year-over-year. Additionally, significant growth was observed in Mac (up 22%) and iPad (up 31%) sales. The new iPhone SE, released during the quarter, also contributed to iPhone sales growth.

The company noted that while the COVID-19 pandemic adversely affected its business, demand improved throughout the third quarter across all product categories and Services after initial impacts in April. Apple adapted by implementing safety measures and continuing operations.

Apple continued its capital return program during the quarter, repurchasing $16.0 billion of its common stock and paying $3.7 billion in dividends and dividend equivalents. This demonstrates a consistent commitment to shareholder returns.