Table of Contents
a. Key Points
Took global smartphone market share.
Tariff refunds amplified margin expansion.
Ongoing supply constraints are holding back growth.
Memory inflation is expected to worsen next quarter.
b. Demand
Beat revenue estimates by 0.5% & beat guidance by 0.7%.
Growth remained stable compared to last quarter despite Y/Y growth comps getting much harder.
iPhone revenue beat estimates by 1.2%. All product revenue segments beat estimates besides a 10% iPad miss.
Services revenue missed estimates by 2%.
China revenue missed estimates by 4%.
Best quarterly 3-year revenue compounded annual growth rate (CAGR) in a few years.
c. Profit
GPM beat estimates by 210 basis points (bps; 1 basis point = 0.01%) & beat guidance by 210 bps.
Gross margin was 48% and in line with expectations when excluding some tariff refund help this quarter.
Beat EBIT estimate by 7.1% & beat guidance by 7.5%.
Operating expenses rose by 23% Y/Y.
The EBIT beat was helped by gross margin relief via tariff refunds.
Beat $1.89 EPS estimate by $0.13. EPS rose by 29% Y/Y.
Beat FCF estimate by 7%.
d. Balance Sheet
$62.5B in cash & equivalents.
$85B in long-term marketable securities.
$82B debt.
Diluted share count fell by 1.6% Y/Y.
e. Guidance & Valuation
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