Apple Services Revenue Reaches All-Time High of $12.5 Billion

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Apple today announced financial results for its fiscal 2019 fourth quarter ended September 28, 2019. The Company posted quarterly revenue of $64 billion, an increase of 2 percent from the year-ago quarter, and quarterly earnings per diluted share of $3.03, up 4 percent. International sales accounted for 60 percent of the quarter’s revenue.

Q4 2019 represents the highest ever quarterly earnings for Apple. Apple no longer offers concrete figures for unit sales for its product lines. However, their revenue breakdown by category reveals a lot about the nature of the quarter’s sales.

Apple’s product-wise revenue breakdown showed clear patterns for Q4 2019 sales. More than half of Q4 revenue was accounted for by iPhone sales, which amounted to $33 billion.

Meanwhile, Accessories, Apple Watch, and Home accounted for $6.5 billion, actually higher than the $4.7 billion in iPad sales, and in the ballpark of their $7 billion Mac sales. Apple’s service offerings were in second place, accounting for some $12.5 billion in sales.

“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fuelled by accelerating growth from Services, Wearables and iPad,” said Tim Cook, Apple’s CEO.

“With customers and reviewers raving about the new generation of iPhone’s, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”

While the iPhone has always been a strong revenue driver for Apple, this year’s strong iPhone 11 and Pro series launches have contributed to the record figures. The significant uptick in service revenue comes from a whole host of new Apple services. These include Apple Arcade and the Apple Card, among others.

“Our strong business performance drove record Q4 EPS of $3.03 and record Q4 operating cash flow of $19.9 billion,” said Luca Maestri, Apple’s CFO.

“We also returned over $21 billion to shareholders, including almost $18 billion in share repurchases and $3.5 billion in dividends and equivalents, as we continue on our path to reaching a net cash neutral position over time.”

Apple is providing the following guidance for its fiscal 2020 first quarter:

  • revenue between $85.5 billion and $89.5 billion
  • gross margin between 37.5 percent and 38.5 percent
  • operating expenses between $9.6 billion and $9.8 billion
  • other income/(expense) of $200 million
  • tax rate of approximately 16.5 percent

Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on November 14, 2019 to shareholders of record as of the close of business on November 11, 2019.

Apple will provide live streaming of its Q4 2019 financial results conference call beginning at 2:00 p.m. PDT on October 30, 2019 here. This webcast will also be available for replay for approximately two weeks thereafter.

Consolidated Financial Statements

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