Apple Inc. Q4 FY2024 earnings call

• Innovation: Brought Apple Vision Pro in February and announced Apple Intelligence in June, with features rolling out in the quarter including Writing Tools, improved Siri, and more. - Product updates: iPhone 16 series launched with new cameras and features; new Mac models with M4 chips introduced; new iPad mini and iPad Pro; Apple Watch Series 10 launched. - Services: Achieved all-time revenue record, with Apple TV+ having numerous nominations and wins, MLS Season Pass for live sports, and 10 years of Apple Pay. - Store and education: Opened new stores and expanded education grant program. - Carbon neutrality: First carbon-neutral Mac and carbon-neutral option for Apple Watch introduced.

iPhone revenues set a September quarter record of $46.2 billion, up 6% from a year ago, with growth in every geographic segment. Mac revenue was $7.7 billion, up 2% from a year ago. iPad revenue was $7 billion, 8% higher year-over-year. Wearables, Home and Accessories revenue was $9 billion, down 3% from a year ago. Services achieved an all-time revenue record of $25 billion, up 12% from a year ago. iPhone contributed significantly to revenue growth, with Services showing strong double-digit growth.

• Expect December quarter total company revenue to grow low- to mid-single digits year-over-year. - Services revenue to grow double-digits. - Gross margin between 46% and 47%. - OpEx between $15.3 billion and $15.5 billion. - OI&E around negative $250 million, excluding mark to market of minority investments. - Tax rate around 16%. - Board declared a cash dividend of $0.25 per share payable on November 14, 2024.

• Macroeconomic conditions could impact business results. - Uncertainties around the rollout timing and impact of Apple Intelligence on demand. - Potential impact of tariffs on the business, though no specific speculation provided.

Q: Michael Ng asked about early feedback to Apple Intelligence and CapEx outlook.

A: Tim Cook said Apple Intelligence features have strong adoption with 18.1 adoption twice that of 17.1, with more features coming in December. Luca Maestri said CapEx will continue for necessary investments including AI-related.

Q: Erik Woodring asked about iPhone demand and gross margins.

A: Tim Cook noted Apple Intelligence is a compelling upgrade reason, and Luca Maestri said commodities impact gross margins with NAND and DRAM expected to increase in December but overall positive for gross margin.

Q: Ben Reitzes asked about iPhone growth and China.

A: Luca Maestri said no specific color provided, but Tim Cook noted positive signs in China like installed base growth.

Q: Amit Daryanani asked about Services recurrence and Europe demand.

A: Luca Maestri said recurring portion of Services is growing faster than transactional, and Luca Maestri discussed strong growth in Europe including double-digit growth.

Q: David Vogt asked about demand cadence.

A: Tim Cook said Apple Intelligence rollout has a different cadence, but it's a compelling upgrade reason.

Q: Wamsi Mohan asked about Apple Intelligence rollout and tariffs.

A: Tim Cook discussed rollout timeline for Apple Intelligence languages, and declined to speculate on tariffs.

Q: Krish Sankar asked about R&D and Services.

A: Luca Maestri said R&D has increased for AI, and Tim Cook said Apple Intelligence will benefit the ecosystem.

Q: Samik Chatterjee asked about iPhone mix and DOJ case.

A: Tim Cook said mix is too early to call, and declined to speculate on DOJ case.

Q: Richard Kramer asked about Services and net cash.

A: Luca Maestri said OpEx has grown with good gross margin, and focus is on business first then returning cash to shareholders.