01—Abstract
Summary
Summary of the 10-Q filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Apple Inc. reported strong financial results for the fiscal third quarter ending June 29, 2024, demonstrating revenue growth driven primarily by its Services segment and improved performance in key product categories like iPad.
Total net sales increased by 5% year-over-year to $85.8 billiona, with Services revenue showing a significant 14% uplift. While iPhone sales remained relatively flat, the company saw substantial growth in iPad sales, particularly in the current quarter. Gross margin improved significantly to 46.3% from 44.5% in the prior year period, reflecting increased Services profitability and cost efficiencies in products.
Net income rose to $21.4 billionb, a 7.9% increase compared to the same quarter last year. For the first nine months of fiscal 2024, total net sales grew 1% to $296.1 billion, again propelled by a 13% increase in Services revenue.
The company continues to execute its capital return program, repurchasing $70.0 billionc of common stock and paying $11.4 billion in dividends year-to-date. Despite ongoing legal and regulatory scrutiny, particularly concerning the Digital Markets Act in Europe and antitrust lawsuits in the U.S., Apple's financial performance remains robust, underscoring the resilience of its business model and the continued demand for its ecosystem of products and services.
02—Key points
Key Highlights
- Total net sales increased 5% year-over-year to $85.8 billion in Q3 FY24.
- Services revenue grew 14% year-over-year to $24.2 billion in Q3 FY24.
- iPad sales saw a significant 24% increase year-over-year in Q3 FY24.
- Gross margin improved to 46.3% in Q3 FY24, up from 44.5% in Q3 FY23.
- Net income increased by 7.9% to $21.4 billion in Q3 FY24.
- Apple repurchased $26.0 billion of its common stock and paid $3.9 billion in dividends in Q3 FY24.
- Greater China net sales decreased by 7% year-over-year in Q3 FY24, primarily due to lower iPhone sales.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Apple Inc. kept $0.25.
- Revenue$85.78B100.0%
- Cost of revenue−$46.10B53.7%
- Gross profit$39.68B46.3%
- Operating costs−$14.33B16.7%
- Operating income$25.35B29.6%
- Interest, other & tax−$3.90B4.6%
- Net income$21.45B25.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed August 2, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $85.78B$94.84B | −9.6% |
| Cost of Revenue | $46.10B$52.86B | −12.8% |
| Gross Profit | $39.68B$41.98B | −5.5% |
| R&D Expenses | $8.01B$7.46B | +7.4% |
| SG&A Expenses | $6.32B$6.20B | +1.9% |
| Operating Expenses | $14.33B$13.66B | +4.9% |
| Operating Income | $25.35B$28.32B | −10.5% |
| Net Income | $21.45B$24.16B | −11.2% |
| EPS (Basic) | $1.40$1.53 | −8.5% |
| EPS (Diluted) | $1.40$1.52 | −7.9% |
| Shares Outstanding (Basic) | 15.29B15.79B | −3.2% |
| Shares Outstanding (Diluted) | 15.35B15.85B | −3.1% |
05—Questions
Frequently Asked Questions
What drove Apple's revenue growth in the most recent quarter?
Apple's revenue growth in the fiscal third quarter ending June 29, 2024, was primarily driven by a strong performance in its Services segment, which saw a 14% year-over-year increase. Additionally, robust sales of iPads, up 24% year-over-year, contributed significantly to the overall 5% revenue growth.
How is Apple managing its capital return program?
Apple continues to actively return capital to shareholders. In the third quarter of fiscal 2024, the company repurchased $26.0 billion of its common stock and paid dividends and dividend equivalents totaling $3.9 billion. Year-to-date, share repurchases amounted to $70.0 billion and dividends totaled $11.4 billion.
What are the key challenges or risks highlighted in this filing?
The company faces ongoing legal and regulatory challenges. These include investigations under the EU's Digital Markets Act concerning App Store rules and practices, and a civil antitrust lawsuit filed by the U.S. Department of Justice alleging monopolization. Additionally, Epic Games' lawsuit regarding App Store practices continues, with a pending motion related to Apple's compliance plan.
How did iPhone sales perform in this quarter?
iPhone net sales were relatively flat, decreasing by 1% year-over-year in the third quarter of fiscal 2024. This performance was also a factor in the 7% decrease in net sales for the Greater China region.
06—Continue