Apple reported its Q4 2019 earnings on October 30th. The big picture number here is quarterly revenue of $64 billion, with $13.7 billion in profit. This is at the higher end of the Q4 guideline revenue the company forecast. It is also significantly greater than the $62.9 billion of revenue generated in the previous quarter.
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. This is what CEO Tim Cook had to say about Q4 2019:
Apple Reports Highest Q4 Revenue Ever
“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables, and iPad,” said Tim Cook, Apple’s CEO. “With customers and reviewers raving about the new generation of iPhones, 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.”
Apple CFO Luca Maestri had further insights to offer:
“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’s product-wise revenue breakdown showed clear patterns for Q4 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.
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.
Apple offered a very strong forecast for their Q1 2020 revenue. The forecast includes the following:
- 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
This indicates that the next quarter will see growth going from strength to strength. New iPhone sales will push revenue up by at least $20 billion. All in all, this is looking like a good time for Apple shareholders.