10-QPeriod: Q1 FY2025

Apple Inc. Quarterly Report for Q1 Ended Dec 28, 2024

Filed January 31, 2025For Securities:AAPL

Summary

Apple Inc.'s Q1 2025 earnings report (ending December 28, 2024) shows robust growth, driven primarily by a significant surge in Services revenue, which climbed 14% year-over-year to $26.34 billion. This offset a slight 1% decline in iPhone revenue, which totaled $69.14 billion. Overall net sales increased by 4% to $124.3 billion, demonstrating the company's ability to expand its revenue base beyond its flagship product. The company's profitability also saw a healthy improvement, with net income rising by 7% to $36.33 billion and diluted earnings per share increasing to $2.40 from $2.18 in the prior year period. This strong performance was supported by an expansion in the overall gross margin percentage to 46.9%, notably driven by a substantial 17% increase in Services gross margin. Apple continues its aggressive capital return program, repurchasing approximately $23.3 billion of its stock during the quarter, reflecting confidence in its financial position and commitment to shareholder value.

Financial Highlights

52 data points
Beta

Revenue

$124.30B

46.9% Gross Margin

Net Income

$36.33B

29.2% Net Margin

EPS (Diluted)

$2.40

Total Assets

$344.08B

Cash & Equivalents

$30.30B

Free Cash Flow

$27.00B

Financial Statements
Beta
Revenue$124.30B
Cost of Revenue$66.03B
Gross Profit$58.27B
R&D Expenses$8.27B
SG&A Expenses$7.17B
Operating Expenses$15.44B
Operating Income$42.83B
Net Income$36.33B
EPS (Basic)$2.41
EPS (Diluted)$2.40
Shares Outstanding (Basic)15.08B
Shares Outstanding (Diluted)15.15B

Key Highlights

  • 1Total net sales grew 4% year-over-year to $124.3 billion, driven by strong performance in Services and other product categories.
  • 2Services revenue saw substantial growth, increasing 14% to $26.34 billion, highlighting the increasing importance of Apple's ecosystem.
  • 3iPhone revenue experienced a slight decrease of 1% to $69.14 billion, indicating a potential plateau or shift in demand for the flagship product.
  • 4Diluted earnings per share increased to $2.40 from $2.18 in the prior year, demonstrating improved profitability.
  • 5Gross margin improved to 46.9% from 45.9% in the prior year, largely due to the high-margin Services segment.
  • 6Apple continued its significant capital return program, repurchasing $23.3 billion of its common stock and paying $3.9 billion in dividends.
  • 7Net income increased by 7% to $36.33 billion, underscoring the company's strong operational efficiency and revenue growth.

Frequently Asked Questions

Apple's Services segment demonstrated robust growth, with net sales increasing by 14% year-over-year to $26.34 billion. This growth was primarily driven by higher revenues from advertising, the App Store, and cloud services, contributing significantly to the company's overall revenue and profitability.

iPhone net sales were relatively flat, experiencing a slight decrease of 1% to $69.14 billion compared to the same quarter last year. While not a significant decline, this performance suggests a potential moderation in iPhone demand or increased competition, making the growth in Services even more critical for overall company performance.

Apple continues to maintain a strong liquidity position. During the quarter, the company repurchased approximately $23.3 billion of its common stock and paid $3.9 billion in dividends and dividend equivalents. The company's management believes its unrestricted cash, cash equivalents, and marketable securities, along with ongoing cash generation, are sufficient to meet its financial obligations and capital return program.

The overall gross margin percentage increased to 46.9% from 45.9% in the prior year. This improvement was largely driven by the Services segment, which saw its gross margin percentage increase to 75.0% from 72.8%, due to a favorable Services mix and higher net sales, partially offset by increased costs.