Apple Reports Record High Revenue and Earnings for Q1 FY2020

Revenue of $91.8 million represents 9% increase year-over-year.

Apple Reports Record High Revenue and Earnings for Q1 FY2020

Source: Apple

Tech giant Apple is starting 2020 off right with its first quarter earnings report of fiscal year 2020. For the period ended December 28, 2019, Apple had revenue of $91.8 billion, an increase of 9% year-over-year and an all-time company record. Sixty-one percent of the quarterly revenue came from international sales. The company also reported net income of $22.2 billion, and diluted earnings per share of $4.99, also company records.

Apple CEO Tim Cook commented on the stellar quarter in yesterdays earnings call.

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We’re thrilled to report Apple’s biggest quarter ever, which set new all-time records in both revenue and earnings. We generated revenue of $91.8 billion, which is above the high-end of our guidance range, with revenue growth accelerating for the third consecutive quarter. Geographically, we set all-time records in the Americas, Europe and rest of Asia Specific and saw Greater China return to growth, said Cook.

Our active installed base of devices has now surpassed 1.5 billion, up over 100 million in the last 12 months alone, reaching a new all-time high for each of our main product categories and geographic segments. Not only is our large and growing installed base a powerful testament to the satisfaction, engagement and loyalty of our customers, but it’s also fueling our growth across the board, particularly in services, Cook added.

Other financial highlights from the quarter include:

– Apple had $79.1 billion in product sales* and $12.7 billion in services, including subscription services like Apple Music and Apple Arcade.

– Operating cash flow was $30.5 billion.

– Apple returned $25 billion to shareholders, including $20 billion in share repurchases and $3.5 billion in dividends and equivalents.

– Apples board declared a dividend of $0.77 per share, payable on February 13, 2020 to shareholders of record as of February 10, 2020.

– At the end of the quarter, Apple had total current assets of $163.2 billion.

*Sales are broken down as follows, with iPhone being the biggest sales category:

Net sales by category

iPhone

$56.0 billion

Mac

$7.1 billion

iPad

$6.0 billion

Wearables, home and accessories

$10.0 billion

Services

$12.7 billion

Total net sales

$91.8 billion

Apple also provided operational highlights during the earnings call, including:

– Across all services on the Apple platform, there are 480 million paid subscriptions, an increase of 120 million over the same time last year. They expect to hit the 500 million mark during the march quarter and 600 million by year end.

– The App Store set a single-day sales record of $386 million on New Years Day 2020.

– Apple Arcade, Apples new subscription gaming service, offers more than 100 new and exclusive games, playable on Apple devices.

– Apple TV+ received several nominations and awards for The Morning Show, an Apple original, featuring Jennifer Aniston.

– Apple Pay revenue and transactions more than doubled year-over-year with a run rate over 15 billion transactions per year.

– Customers can now use the new Apple Card to make monthly installment payments on new iPhones.

– Apple Watch set an all-time revenue record during the quarter.

– The company committed $2.5 billion to help address housing availability and affordability in California where Apple is based.

Apple provided the following guidance for the second quarter of fiscal year 2020:

– Revenue between $63.0 billion and $67.0 billion

– Gross margin between 38% and 39%

– Operating expenses between $9.6 billion and $9.7 billion

– Other income/expense of $250 million

– Tax rate of approximately 16.5%

Insider Take:

Apples first quarter of fiscal year 2020 is off the charts – with record revenue in multiple categories, all-time high net income and earnings, and paid subscriptions that exceeded company targets. With all the new subscription products in the companys arsenal, including Apple News+, Apple TV+ and Apple Arcade, as well as a host of new iPhones and wearables, Apple is looking at a very solid fiscal year 2020. We dont expect Apple to rest on their laurels though. They will continue to lead in product innovation and lean even more into the subscription model as they identify more opportunities for recurring revenue.