Apple Reports Record 11% Increase Quarter In Revenue, Sales and Profit

Apple today announced financial results for the first fiscal quarter of 2022, which translates to the fourth calendar quarter of 2021.

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Apple's sales had been driven by the Christmas Period, which is often a high revenue month for Apple.

For the quarter, Apple posted revenue of $123.9 billion and net quarterly profit of $34.6 billion, or $2.10 per diluted share, compared to revenue of $111.4 billion and net quarterly profit of $28.8 billion, or $1.68 per diluted share, in the year-ago quarter.

Despite headwinds from chip shortages and other supply chain issues that Apple had previously said would hamper its ability to meet customer demand during the quarter, Apple's revenue and earnings for the quarter were all-time records. Apple's iPhone, Mac, Wearables, and Services segments also recorded all-time highs for revenue.

Gross margin for the quarter was 43.8%, compared to 39.8% in the year-ago quarter. Apple also declared a quarterly dividend payment of $0.22 per share, payable on February 10 to shareholders of record as of February 7.

“This quarter’s record results were made possible by our most innovative lineup of products and services ever... We are gratified to see the response from customers around the world at a time when staying connected has never been more important. We are doing all we can to help build a better world — making progress toward our goal of becoming carbon neutral across our supply chain and products by 2030, and pushing forward with our work in education and racial equity and justice.” - Apple CEO, Tim Cook

As has been the case for well over a year now, Apple is once again not issuing guidance for the current quarter ending in March.

Apple is currently live-streaming their earnings call live, right now. You can listen to it here.

Apple's revenue call
Apple's earnings increased 11% this last quarter

Apple ended the quarter with $203 billion in cash and marketable securities. Total debt of $123 billion. Net cash of $80 billion. Apple's business continues to generate strong cash flow, and $27 billion was returned to shareholders. $3.7 billion in dividends and $14.4 billion in open market purchases of 93 million Apple shares. There was a $14.7 billlion revenue for Wearables, Home, and Accessories, and records in each geographic segment.

Apple Watch saw 2/3 of customers new to the product. In addition, M1-powered Macs are the preferred machine for enterprise customers. Shopify is currently partnering with Apple, upgrading its entire global workforce to M1 Macs. iPads saw "very significant" supply constraints though customer demand was very strong across all models. Half of customers purchasing an iPad during the quarter were new to the product. The introduction of the M1 chip into the iPad Pro could explain this due to supply chain issues and global chip shortages.

The current installed base of active devices is 1.8 billion devices. Growth was broad-based, with all-time records in each product category and geographic segment (except iPad). $19.5 billion in services revenue, and records across every geographic segment. 43.8% gross margin due to volume leverage and favourable mix, partially offset by higher cost structures. 38.4% product gross margin and 72.4% services gross margin.

In terms of software, there was an increased customer engagement with services, partly due to the pandemic. Double-digit growth of paid accounts hit an all-time high, and paid subscriptions reached 785 million in the quarter, up 165 million in the last 12 months.

New content came to Apple TV+, Fitness+, and Apple Arcade, bringing more users onboard. These sales set an all-time revenue record, performing even better than Apple anticipated. Tim Cook calls the App Store an 'economic miracle' for developers, noting that it's safe for users. $260 billion was transferred to developers in sales. There were over 200 award wins for Apple TV+ shows and movies, with 890 nominations.

Apple Inc. Revenue by Category - Q1 2022 breakdown visually represented in a pie chart.
Supply chain problems with iPad lead to Apple struggling to keep up demand for the product.

In addition to high sales, the latest survey shows iPhone customer satisfaction sits at 98%. Mac saw strong demand for MacBook Pro, with the release of M1, M1 Pro and M1 Max. The vast majority of Mac sales are from M1-powered devices. Record number of upgraders, and the last 6 quarters have been the best 6 quarters ever for Mac.

In addition to earnings, Apple is currently taking questions. When asked about the future of the metaverse, this was Tim Cook's response.

Q: How are you thinking about the metaverse opportunity and Apple's role in that market?

A: That's a big question. We're a company in a business of innovation. We're always exploring new and emerging technologies and this area is very interesting to us. We have 14,000 ARKit apps on the App Store, incredible AR experiences for millions of people today. We see a lot of potential in this space and are investing accordingly.

Thats all for now, but you can follow live updates on our Twitter, by clicking here.