Apple Services Revenue Hits Record $23.1 Billion

Services revenue reaches new all-time record

Apple turned in another record quarter in its services business, as strong iPhone 15 sales boosted total revenue 2% in the last three months of 2023.

Apple’s services business grew 11% in the quarter, to $23.1 billion., which was slightly less than analyst predictions of services revenue of $23.31 billion.

The company reported total revenue of $119.6 billion, up 2%, and net income of (or $2.18 per share) for the period that ended Dec. 30, which is Apple’s first quarter of fiscal 2024.

Overall, Wall Street was expecting December quarter revenue of $117.91 billion and EPS of $2.10. The company noted that its fiscal Q1 2024 quarter had 13 weeks, while the year-earlier period had 14 weeks.

The services segment includes the App Store, Apple Pay and Apple Card; subscription services such as Apple TV+, Apple Music, Apple Arcade and iCloud; advertising; and payments from Google for search. 

In its flagship iPhone segment, Apple reported revenue of $69.7 billion, up 6%. One area of concern though was that sales in the greater China region were down at $20.8bn compared with $24bn for the same quarter the prior year.

That reflected pressure from resurgent competitor Huawei, as well as restrictions Beijing has reportedly imposed on Apple products in some government agencies amid geopolitical tensions with Washington

“Today Apple is reporting revenue growth for the December quarter fueled by iPhone sales, and an all-time revenue record in Services,” said Tim Cook, Apple’s CEO.

“We are pleased to announce that our installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments. And as customers begin to experience the incredible Apple Vision Pro tomorrow, we are committed as ever to the pursuit of groundbreaking innovation — in line with our values and on behalf of our customers.”

Apple’s board of directors has declared a cash dividend of $0.24 per share of the Company’s common stock. The dividend is payable on February 15, 2024 to shareholders of record as of the close of business on February 12, 2024.

Based on the Company’s fiscal calendar, the Company’s fiscal 2024 first quarter had 13 weeks, while the Company’s fiscal 2023 first quarter had 14 weeks.

Apple chief financial officer Luca Maestri played down the decline in China sales, blaming it in part on a stronger dollar.

He said the installed base of iPhones in the country hit a new all-time record, and the company had “solid growth on upgraders on a year-over-year basis”.

“Our December quarter top-line performance combined with margin expansion drove an all-time record EPS of $2.18, up 16 percent from last year,” said Luca Maestri, Apple’s CFO.

“During the quarter, we generated nearly $40 billion of operating cash flow, and returned almost $27 billion to our shareholders. We are confident in our future, and continue to make significant investments across our business to support our long-term growth plans.”

Consolidated Financial Statements

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