Apple achieved significant milestones in its latest financial results, including surpassing one billion subscriptions and setting a new revenue record in its services sector.
The company reported a 4% increase in overall revenue for the fiscal first quarter, reaching $124.3 billion, alongside a 10% year-over-year rise in earnings per share (EPS) to $2.40.
The record revenue was bolstered by strong sales in various product categories, with iPhone revenue reaching $69.1 billion. While the iPhone 16 models performed well in markets with Apple Intelligence features, the company faced challenges in the Chinese market, where sales dropped 11.1%. This decline was attributed to changes in channel inventory and ongoing market conditions. However, CEO Tim Cook highlighted the positive impact of Apple Intelligence on iPhone sales in regions where the AI features were available, contributing to higher customer engagement.
The services division, which includes subscriptions, warranties, and licensing deals, emerged as a major growth driver for Apple. Services revenue reached $26.3 billion, marking a 14% increase year-over-year. Notably, Apple’s installed base of active devices hit a new record of 2.35 billion, further fueling the growth of services, which accounted for 21.2% of total revenue. Subscriptions, including those for Apple TV+ and iCloud, played a key role in this expansion. Apple now boasts over 1 billion subscriptions, demonstrating the increasing customer reliance on its diverse offerings.
Other product categories also saw notable performance. Mac revenue rose by 16% to $9 billion, driven by the new M4 chip, while iPad sales increased 15% to $8.1 billion. Wearables, home, and accessories revenue experienced a slight decline of 2%, but the Apple Watch installed base reached an all-time high.
Looking ahead, Apple forecasted modest revenue growth in the low to mid-single digits for the next quarter, with foreign exchange headwinds expected to reduce growth by 2.5 percentage points. The company also anticipates a stable gross profit margin in the range of 46.5% to 47.5%.
Despite facing challenges in the Chinese market, Apple’s overall financial performance exceeded Wall Street’s expectations, with the company’s stock rising in after-hours trading. Cook emphasized the continued mainstream adoption of Apple Intelligence, with plans to expand its language support in April, further strengthening its product ecosystem.
Investor’s Business Daily, Apple Inc., and PYMNTS contributed to this report.
