Image by Oskars Zvejs from Pixabay
What is your superlative of choice? Banner? Stellar? Cugat? Whatever your favorite, take it and apply it to Apple’s first-quarter fiscal year 2022 numbers. In its press release on December-quarter earnings, Apple claimed another “all-time revenue record.” In the process, the company blew past and bowled over Wall Street expectations. The Street had expected revenue of $118.3 billion. Apple delivered revenue of $123.9 billion, up 11% from the same quarter a year earlier. Wall Street had been looking for Gross Margin of 40.5%. Apple delivered 43.8%. The Street was looking for earnings-per-share of $1.89. Apple delivered earnings-per-share of $2.10.
Looking at Apple’s numbers, sales were up in every region Apple tracks except Japan. In the Americas they came in at $51.4 billion, up from last year’s $46.3 billion. Sales in Europe landed at $29.7 billion, up from last year’s $27.3. Sales in China hit $25.8 billion, up from last year’s $21.3. That slip I mentioned in Japan saw sales fall to $7.1 billion from last year’s $8.3 billion. As for the rest of the Asia Pacific region, sales came in at $9.8 billion, up from last year’s $8.2 billion.
Looking at product categories, iPhone saw sales of $71.6 billion, up 9% from the $65.6 billion seen in the same quarter a year earlier. Both Apple CEO Tim Cool and CFO Luca Maestri named that an all-time revenue record for the device. Crazy customer satisfaction as well. The latest from 451 Research shows satisfaction in the States at 98%.
The Mac saw sales of $10.8 billion last quarter, up 25% from the $8.7 billion grabbed for the same quarter a year earlier. Cook and Maestri also listed that as an all time revenue record for the category. The execs said December-quarter sales saw a record number of people upgrading from older Macs. During the Q&A with analysts, CEO Cook indicated that those upgrades are very much BECAUSE of Apple’s M1 processor. The execs also mentioned a time or two that the last six-quarters have been the best six-quarters in the Mac’s history.
Sales of iPad were down, which Apple had said would be the case. Supply constraints drove those down 14% from $8.4 billion a year earlier to last quarter’s $7.2 billion. Whether despite or because of the shortage, Apple said that demand for the tablet was strong across all models. The company also indicated that half of iPad buyers last quarter were new to the product.
The “and the rest” category of Wearables, Home, and Accessories saw sales of $14.7 billion, up 13% from the $13 billion seen the same quarter a year earlier. Say it with them - that represented an all-time revenue record for the category.
And the category Services set an all-time revenue record, performing better than Apple expected, according to CEO Cook. Sales came in at $19.5 billion, up 24% from the $15.7 billion in sales seen in the same quarter a year earlier. That was driven by all-time record revenues for cloud, music, video, advertising, and payments, as well as a December-quarter record for the App Store.
Paid subscriptions are still going crazy. Apple’s currently serving over 785-million paid subs across its services platforms. That includes Apple’s own services, like Apple Music, and third-party services, like the 98-VOD services to which I seem to be subscribed. In the last year, paid subscriptions have grown by 165-million, according to the company.
A crazy number of subscriptions, powered by a crazy number of devices. Apple says the number of active devices with Apple logos is now in the neighborhood of 1.8-billion units.
Even Retail had a remarkable quarter, despite the occasional closure due to #TheseTimesInWhichWeLive. It was that segment’s highest performing quarter in Apple’s history. Retail also saw the highest customer satisfaction in Apple’s history, prompting Apple’s CEO to shoutout the folks who made that possible.
As has been the way for a couple of years now, Apple did not provide financial guidance for the current quarter, though CFO Maestri did offer “directional insights,” based on the assumption that the world’s not gonna get any worse. Feels like tempting fate, but whatever. According to the CFO:
Apple expects to see year-over-year revenue growth and to set a March-quarter revenue record
The company expects constraints to ease in the supply chain
While revenue will grow, that growth is expected to slow for a couple of reasons - those being foreign exchange headwinds and a tough compare. Last quarter was the first full quarter of sales for iPhone 13. A year ago, the March-quarter was the first full quarter of sales for iPhone 12. That later launch last year led to heavier iPhone sales in the March-quarter, and there’s your tough comparison.
Services revenue is expected to grow, but that growth will also slow, driven by fewer lockdowns this year than last.
Gross Margin is indicated (though not guided) to be 42.5% to 43.5%.
Capping the prepared remarks, Apple’s CFO said the company’s board of directors has declared a cash dividend of $0.22 per share of the Company’s common stock. That goes out on 10 February to shareholders of record as of 7 February.
