Source: Caixin News
Author: Shi Zhengcheng
In the first quarter of the 2025 fiscal year, Apple Inc. achieved revenue of 124.3 billion US dollars, net income of 36.33 billion US dollars, and EPS of 2.40 US dollars, all of which set historical records.
The gross margin for the quarter reached 46.9%, a historical high, and the company expects the current quarter's gross margin to be between 46.5% and 47.5%.
Regarding iPhone sales and performance in Greater China being below expectations, CEO Cook provided an explanation.
On Friday morning Beijing time, Apple Inc. released the earnings report for the first quarter of the 2025 fiscal year.
As expected, "Asia Vets" failed to drive iPhone sales, and the competitive pressure on the world's highest market cap listed company in China's Consumer Electronics market was also evident in this report. However, propelled by a surge in service revenue, the company once again achieved historical highs in quarterly revenue, profit, and gross margin. At the same time, driven by guidance on performance, Apple’s stock price initially fell and then rose after hours, currently increasing by about 3%.
The earnings report shows:
Revenue of 124.3 billion USD, up 4% year-on-year, Analyst expectation was 124.2 billion USD; Net income of 36.33 billion USD, equivalent to EPS of 2.40 USD, Analyst expectation was 2.35 USD.
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Net sales in Greater China reached 18.51 billion USD, below the market expectation of 21.33 billion USD, compared to 20.819 billion USD in the same period last year.
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Breaking down by specific product lines:
Net sales for the iPhone product line were 69.14 billion USD, with market expectation at 71.13 billion USD, compared to 69.7 billion USD in the same period last year.
Net sales for the iPad product line were 8.09 billion USD, with market expectation at 7.35 billion USD, compared to 7.02 billion USD in the same period last year;
Net sales for the Mac product line were 8.99 billion USD, with market expectation at 7.96 billion USD, compared to 7.78 billion USD in the same period last year;
Net sales for the wearable, home, and accessories product line were 11.75 billion USD, with market expectation at 11.94 billion USD, compared to 11.95 billion USD in the same period last year.
Net sales for services related products (including App Store and Apple Music) reached 26.34 billion USD, a new historical high, with market expectation of 26.1 billion USD, compared to 23.12 billion USD in the same period last year.
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Apple expects revenue for the current quarter to grow at a "low to mid-single digit" rate, with the service segment expected to grow at a "low double-digit" rate. After considering MMF growth factors, the overall growth rate will be similar to that of the current quarter.
Prior to this, analysts expected EPS for the March quarter to be $1.66, with revenues at $95.46 billion. For reference, Apple's revenue for Q2 in fiscal year 2024 was $90.753 billion and EPS was $1.53.
Additionally, Apple's gross margin in the first fiscal quarter reached 46.9%, the highest ever. The company expects a gross margin in the current quarter to be between 46.5% and 47.5%.
Cook interprets iPhone and Greater China performance.
As mentioned earlier, although Apple achieved record revenue and profit in the last three months of last year, this is the first complete quarter after the launch of the iPhone 16 series, and the sales performance showed the largest expected variance since the Q1 2023 earnings report. The company's explanation at the time was that the Chinese supply chain could not produce enough iPhone 14 models.
This year's "blame" falls squarely on Apple Asia Vets.
Cook stated that the sales of the iPhone 16 series will be stronger in regions where "Apple Asia Vets" is available. Currently, this Software is only available in a few English-speaking countries. The company plans to release more language versions of "Apple Asia Vets" in April, including Simplified Chinese. However, Cook also acknowledged that the specific launch time of "Apple Asia Vets" in the Chinese market has not yet been determined.
Cook also stated that the company's performance in the Chinese market is influenced by multiple factors. First, in the data showing a year-on-year decline of 11.1%, half is due to changes in "channel inventory", so the actual Operation performance will be better. Another unfavorable condition is that Apple Asia Vets has not yet been launched in China.
The CEO of Apple expects that after the end of the last quarter, a national subsidy policy launched in China should stimulate some sales of Apple products.
其他事项
Apart from the poor iPhone sales and impressive service performance, Apple's iPad and Mac product lines showed nearly 15% strong growth in the holiday quarter. The Mac division achieved its highest growth rate since the fourth quarter of fiscal 2022.
Cook stated that the performance comes from the great excitement for new products. Apple launched new iMac, Mac Mini, and MacBook Pro, along with an upgraded iPad Mini in the last quarter.
However, sales of wearable devices, including Apple Watch, AirPods, Beats, and Vision Pro, have been lackluster, with an overall year-on-year decline of 2%.
Cook introduced that there are currently 2.35 billion active Apple devices worldwide, an increase from 2.2 billion a year ago.
The newly appointed Apple CFO Kevan Parekh also announced that the company will continue to pay a dividend of 25 cents per share while spending over 30 billion dollars on stock repurchases in the last earnings report.
Editor/Jeffy
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