Apple has now reported its fiscal first-quarter earnings, exceeding analysis estimates. The company’s total revenue for the quarter rose 4% year-over-year to an all-time high of $124.3 billion, surpassing the estimated $124.12Bn, while its net income clocked a growth of 7.1% to amount to $36.33 billion for the period, compared to $33.92 billion a year ago. Its diluted earnings per share amounted to $2.40 per share, compared to $33.92 billion, or $2.28 per share, in the same period last year, while its gross margin for the quarter was a record 46.9%.
The company’s financials for the period was largely driven by strong growth in its services, Mac, and iPad divisions, despite challenges in iPhone sales and declining performance in China. Revenue from iPhones – Apple’s flagship smartphone lineup and the company’s largest business segment – missed projections, falling slightly by 1% to $69.14 billion. It seems that sales of the iPhone 16, released last September and the latest addition to the iPhone lineup, were weaker in markets where Apple Intelligence had not yet rolled out. Apple Intelligence contains multiple generative AI tools and features, and is currently available in English-speaking regions only. The company has plans to add support for additional languages, including Chinese, in April.
“Today Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4 percent from a year ago,” Tim Cook, Apple CEO, commented on the matter. “We were thrilled to bring customers our best-ever lineup of products and services during the holiday season. Through the power of Apple silicon, we’re unlocking new possibilities for our users with Apple Intelligence, which makes apps and experiences even better and more personal. And we’re excited that Apple Intelligence will be available in even more languages this April.” Going forward. the company expects the growth of its revenue in the mid-to-low single digits.
Another successful segment was Apple’s services division, which includes subscriptions, warranties, and licensing. The division posted a 14% increase in revenue to $26.34 billion, exceeding the estimated $26.09 billion. According to Cook, the tech behemoth has surpassed one billion subscriptions across its ecosystem, including services like Apple TV+ and iCloud, as well as third-party apps sold through the App Store.
Meanwhile, Mac and iPad sales experienced strong growth for the period. Mac revenue surged 15% to $8.99 billion, boosted by the launch of new devices like the redesigned Mac Mini and updated MacBook Pro, and moving past the estimated $7.96 billion. Similarly, iPad sales rose 15% to $8.09 billion, following the release of the new iPad Mini, exceeding the estimated $7.32 billion. Apple’s “Other Products” category, which includes the Apple Watch, AirPods, and Vision Pro, saw a slight 2% decline in revenue to $11.75 billion, missing analysts’ estimates of $12.01 billion.
The Greater China region proved to be a major hurdle for Apple, with revenue dropping 11.1% year-over-year to $18.51 billion. This marked the steepest decline in the region since early 2024. Cook attributed this to several factors, including changes in channel inventory and the unavailability of Apple Intelligence, the company’s AI-powered feature suite, in the country due to regulatory and technical challenges.
