Table of Contents
a. Key Points
- Ongoing supply constraints limited the degree of revenue outperformance.
- Apple is grouping a few services into a newly organized product called Apple Business.
- Margins continue to steadily tick higher on an annual basis.
- Apple is moving away from its net cash neutral goal.
b. Demand
- Beat revenue estimate by 1.4% and beat guidance by 1.8%.
- The revenue beat was despite supply constraints. Currency boosted revenue growth by 2.5 points while supply constraints lowered growth by a modestly higher amount than that. No specific disclosure offered.
- Met iPhone revenue estimate.
- Beat Mac revenue estimate by 3.2%.
- Beat iPad revenue estimate by 4%.
- Beat wearables, home and accessories (WHA) revenue estimate by 2.3%.
- Beat China revenue estimate by 8.4%.
- Beat product revenue estimate by 1%.
- Beat service revenue estimate by 2%.
c. Profits
- Beat 48.5% GPM estimate & identical guidance by 80 basis points (bps; 1 basis point = 0.01%) each.
- Product GPM was helped a bit by lower tariffs.
- Beat EBIT estimate by 3.8% and beat guidance by 4.3%.
- OpEx rose by 24% Y/Y.
- Beat $1.96 EPS estimate by $0.05.
- EPS rose by 22% Y/Y.
- Missed FCF estimate by 5%.
