Apple (AAPL) Reports
Apple’s fiscal Q4 results were good overall, with the AI-driven upgrade cycle (hasn’t really begun yet) still the main attraction here. It wasn’t a huge quarter by any stretch, but that wasn’t expected. I expect shares will, generally speaking, drift with the market in the coming days.
IPhone sales ($46.2 billion) were clearly the star of the Q4 show, beating expectations by just over 2%. However, Services ($25 billion) fell short by 1%, and the Mac, iPad, and Wearables categories also didn’t quite hit the mark.
Total revenue of $69.96 billion grew by 6.9% and beat expectations, barely, of $69.32 billion.
For the upcoming December quarter (Q1 fiscal 2025), Apple guided for low to mid-single-digit revenue growth. This is a little underwhelming versus consensus of around 6.5% growth.
There were some concerns on the call about what this means for hardware, especially iPhone revenue growth. And naturally that feeds into questions about how much the rollout of AI features will drive an upgrade cycle.
In reality, it’s too early to tell. The holiday season will be important.
On a brighter note, Apple mentioned that the newly released iOS 18.1 has twice the adoption rate of iOS 17.1 from a year ago, with more features, including writing and ChatGPT integration, coming in December.
Despite the Services miss, revenue still hit a record high, and Apple expects Services to grow at a similar rate (+13%) in the first quarter of Fiscal 2025. Management also reiterated that Services should continue to be supported by a growing installed base and increased engagement.
Like I said, not a monster quarter. But that wasn’t expected. Sticking with Apple into the upgrade cycle. BUY
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