Apple Reports Record Revenue of $64.7B in Q4 FY20

Company also set all-time records for Mac and Services revenue.

Apple reports record revenue of $64.7 billion for its fourth quarter of fiscal year 2020 for the period ended September 26, 2020. Total revenue includes product revenue of $50.1 billion, or 77.5% of total revenue, from the sale of iPhones, Macs, iPads and Wearables, Home and Accessories. Apple had total services revenue of $14.5 billion, or 22.5% of total revenue, which includes its various subscription services (e.g., Apple Music, Apple TV+, Apple Arcade, Apple News+, etc.).

Apple CEO Tim Cook comments

“Back in April, I said we were in the most challenging environment in which Apple as a company has ever operated. That atmosphere of uncertainty, of resolve, of making difficult calls with limited information has not only come to define Apple’s year, but each of our lives as individuals across this country, and around the world. It has been a chapter that none of us will forget. In the face of these challenges, Apple stayed relentlessly focused on what we do best, seeing in every obstacle an opportunity to do something new, something creative, something better on behalf of our customers,” said Cook on the October 29 earnings call.

“Today we report a quarter and a fiscal year that reflects that effort. This quarter, Apple achieved revenue of $64.7 billion, a September quarter record, despite the anticipated absence of new iPhone availability during the quarter, and the ongoing impacts of COVID-19, including closures at many of our retail locations. We also set a new all-time record for Mac and Services. Outside of iPhone, each of our product categories saw strong double digit year-over-year growth, despite supply constraints in several product categories,” Cook added.

Quarterly financial highlights

Other highlights from Apple’s fourth quarter of fiscal year 2020 include the following:

  • Fifty-nine percent of the company’s total revenue for the quarter came from international sales (Europe, Greater China, Japan and the rest of Asia Pacific).
  • Operating expenses for the quarter were $9.9 billion, compared to $8.7 billion in Q4 2019.
  • Operating income was $14.8 billion, compared to $15.6 billion in Q4 2019.
  • Net income was $12.7 billion, or $0.73 diluted earnings per share, compared to $!3.7 billion, or $0.76 diluted earnings per share in Q4 2019.
  • Apple’s board of directors declared a cash dividend of $0.205 per share of common stock, payable on November 12 to shareholders of record on November 9, 2020.

Operational highlights

Operationally speaking, like so many companies, Apple had to do many things in different ways because of the pandemic, but it achieved record revenue in spite of those changes. In addition to adjusting their business operations, Apple also supported the global community by donating millions of face masks, designing and manufacturing face sales, and scaling the production of millions of test kits. The company has also pledged $100 million to a new racial equity and justice initiative. In the product category, Apple will soon be launching iPhone 12 and 12 mini, the iPhone 12 Pro and 12 Pro Max, a HomePod Mini, and an all-new Apple Watch Series 6.

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The iPhone 12 and iPhone 12 Pro are shipping now, and Apple is taking preorders for the iPhone 12 Mini and iphone 12 Pro Max this week.
Apple iPhone 12 series. Image courtesy of Apple.

Apple CFO comments

Apple CFO Luca Maestri also commented on the company’s record revenue and other fourth quarter results.

“Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment. Our sales results and the unmatched loyalty of our customers drove our active installed base of devices to an all-time high in all of our major product categories. We also returned nearly $22 billion to shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time,” said Maestri in the company’s earnings release.

No revenue guidance for Q1 FY2021

Due to the uncertainty surrounding the COVID-19 pandemic, Maestri said the company would not provide revenue guidance for the next quarter. They have just started shipping 5G enabled iPhone 12 and 12 Pro, and will start taking preorders on the iPhone 12 Mini and 12 Pro Max this week, so the quarter is off to a good start.

Insider Take

Coronavirus-related production delays caused a later launch of the new iPhone models which impacted third quarter financials. While Apple still had a stellar quarter, the company missed analysts’ expectations, driving down Apple’s stock price. On the day of the earnings report (Oct. 29), Apple stock was valued at $115.32 per share. The following day, it had dropped to $108.86. The stock has since rebounded, but they may be due to other factors including the election.

Source: Google