Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD]

Earnings Per Share (EPS) - Diluted [USD]

a2410d7c4ef18f624eac003c9b15bb96bc8d5fecbf84f130af3504050c56e74f

d7da4439d6bab6484eb3fd6aec48ed7d94062cfba4a3d5acdcbcb66543634b3f

| Metric (USD Billion) | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| iPhone               | 65.8  **[AAPL_3226627_3]**  | 51.3  **[AAPL_3249303_3]**  | 39.7  **[AAPL_3385291_4]**  | 43.8  **[AAPL_3363748_4]**  | 69.7  **[AAPL_3371668_4]**  | 45.963  **[0000320193-24-000067_a8-kex991q2202403302024.htm:3]** **[0000320193-24-000069_aapl-20240330.htm:12]**  | 39.3  **[AAPL_3395798_4]**  | 46.2  **[AAPL_3405238_4]**  |
| Mac                  | 7.7  **[AAPL_3226627_3]** **[AAPL_3226627_4]** **[0000320193-23-000005_a8-kex991q1202312312022.htm:1]** **[AAPL_3226627_1]** **[0000320193-23-000006_aapl-20221231.htm:16]**  | 7.2  **[AAPL_3249303_4]**  | 6.8  **[AAPL_3307065_4]**  | 7.6  **[AAPL_3363748_4]**  | 7.8  **[AAPL_3371668_4]**  | 7.451  **[0000320193-24-000067_a8-kex991q2202403302024.htm:3]** **[0000320193-24-000069_aapl-20240330.htm:12]**  | 7.0  **[AAPL_3395798_4]**  | 7.7  **[AAPL_3405238_4]**  |
| iPad                 | 9.4  **[AAPL_3226627_3]** **[AAPL_3226627_4]** **[0000320193-23-000005_a8-kex991q1202312312022.htm:1]** **[AAPL_3226627_1]** **[0000320193-23-000006_aapl-20221231.htm:16]**  | 6.7  **[AAPL_3249303_3]** **[AAPL_3249303_4]** **[0000320193-23-000064_aapl-20230401.htm:6]**  | 5.8  **[0000320193-23-000075_a8-kex991q3202307012023.htm:1]**  | 6.4  **[AAPL_3363748_4]**  | 7.0  **[AAPL_3371668_4]**  | 5.559  **[0000320193-24-000067_a8-kex991q2202403302024.htm:3]** **[0000320193-24-000069_aapl-20240330.htm:12]**  | 7.2  **[AAPL_3395798_4]**  | 7.0  **[AAPL_3405238_4]**  |
| Wearables, Home and Accessories | 13.5  **[AAPL_3226627_4]**  | 8.8  **[AAPL_3249303_3]** **[AAPL_3249303_4]** **[0000320193-23-000064_aapl-20230401.htm:6]**  | 8.3  **[AAPL_3385291_1]**  | 9.3  **[AAPL_3363748_5]**  | 12.0  **[AAPL_3371668_4]**  | 7.913  **[0000320193-24-000067_a8-kex991q2202403302024.htm:3]** **[0000320193-24-000069_aapl-20240330.htm:12]**  | 8.1  **[AAPL_3395798_4]**  | 9.0  **[AAPL_3405238_5]**  |
| Services             | 20.8  **[AAPL_3226627_3]** **[AAPL_3226627_4]** **[0000320193-23-000005_a8-kex991q1202312312022.htm:1]** **[AAPL_3226627_1]** **[0000320193-23-000006_aapl-20221231.htm:16]**  | 20.9  **[AAPL_3249303_3]** **[AAPL_3249303_4]** **[0000320193-23-000064_aapl-20230401.htm:6]**  | 21.2  **[AAPL_3385291_4]** **[AAPL_3307065_4]** **[0000320193-23-000075_a8-kex991q3202307012023.htm:1]** **[AAPL_3385291_1]** **[AAPL_3307065_5]** **[AAPL_3385291_5]**  | 22.3  **[AAPL_3363748_4]**  | 23.1  **[AAPL_3371668_4]**  | 23.867  **[0000320193-24-000067_a8-kex991q2202403302024.htm:3]** **[0000320193-24-000069_aapl-20240330.htm:12]**  | 24.2  **[AAPL_3395798_4]**  | 25.0  **[AAPL_3405238_4]**  |
| Total Net Sales      | 117.2  **[0000320193-23-000005_a8-kex991q1202312312022.htm:1]**  | 94.8  **[AAPL_3249303_3]** **[AAPL_3249303_4]** **[0000320193-23-000064_aapl-20230401.htm:6]**  | 81.8  **[AAPL_3307065_5]**  | 89.5  **[0000320193-23-000104_a8-kex991q4202309302023.htm:1]**  | 119.6  **[AAPL_3371668_4]**  | 90.753  **[0000320193-24-000067_a8-kex991q2202403302024.htm:3]** **[0000320193-24-000069_aapl-20240330.htm:12]**  | 85.8  **[AAPL_3395798_4]**  | 94.9  **[AAPL_3405238_4]**  |

cf4f03515915ffaa1fdd5fddada1ef752c6d3dd0eee1a8833f09dda9124201f9

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

e97aa40bd1e694f5c23fd1557bdce6295d1ef1c192a3a54bf196ecb1318f6fba

iPhone

iPad

Wearables, Home and Accessories

Services

Other Products

- iPod

- Accessories

Total Revenue

ad3ca03d83b0724fc3f5f4be287db0debb0b28506e694b28fb9afd6198b0eeed

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: Q1 2025
- **Guidance**:
  - **Total Company Revenue**: Expected to grow low to mid-single digits year-over-year  **[AAPL_3405238_5]** .
  - **Services Revenue**: Expected to grow double digits at a rate similar to what was reported in fiscal year 2024  **[AAPL_3405238_5]** .
  - **Gross Margin**: Expected to be between **46% and 47%**  **[AAPL_3405238_5]** .
  - **Operating Expenses (OpEx)**: Expected to be between **$15.3 billion and $15.5 billion**  **[AAPL_3405238_5]** .
  - **Other Income and Expense (OI&E)**: Expected to be around **negative $250 million**, excluding any potential impact from the mark-to-market of minority investments  **[AAPL_3405238_5]** .
  - **Tax Rate**: Expected to be around **16%**  **[AAPL_3405238_5]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: September quarter
- **Guidance**:
  - **Total Company Revenue**: Expected to grow year-over-year at a rate similar to the June quarter, which was 5%  **[AAPL_3395798_5]** .
  - **Services Revenue**: Expected to grow double digits at a rate similar to what was reported in the first three quarters of the fiscal year  **[AAPL_3395798_5]** .
  - **Gross Margin**: Expected to be between **45.5% and 46.5%**  **[AAPL_3395798_5]** .
  - **Operating Expenses (OpEx)**: Expected to be between **$14.2 billion and $14.4 billion**  **[AAPL_3395798_5]** .
  - **Other Income and Expense (OI&E)**: Expected to be around **negative $50 million**, excluding any potential impact from the mark-to-market of minority investments  **[AAPL_3395798_5]** .
  - **Tax Rate**: Expected to be around **16.5%**  **[AAPL_3395798_5]** .
  - **Foreign Exchange Impact**: Expected to have a negative impact on revenue of about **1.5 percentage points** on a year-over-year basis  **[AAPL_3395798_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: June quarter of 2024
- **Guidance**:
  - **Total Company Revenue**: Expected to grow **low single digits** year-over-year, despite a foreign exchange headwind of about **2.5 percentage points**  **[AAPL_3382255_6]** .
  - **Services Revenue**: Expected to grow **double digits** at a rate similar to the growth reported for the first half of the fiscal year  **[AAPL_3382255_6]** .
  - **iPad Revenue**: Expected to grow **double digits**  **[AAPL_3382255_6]** .
  - **Gross Margin**: Expected to be between **45.5% and 46.5%**  **[AAPL_3382255_6]** .
  - **Operating Expenses (OpEx)**: Expected to be between **$14.3 billion and $14.5 billion**  **[AAPL_3382255_6]** .
  - **Other Income and Expense (OI&E)**: Expected to be around **$50 million**, excluding any potential impact from the mark-to-market of minority investments  **[AAPL_3382255_6]** .
  - **Tax Rate**: Expected to be around **16%**  **[AAPL_3382255_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024
- **Guidance**:
  - **Gross Margin**: Expected to be between **46% and 47%**  **[AAPL_3371668_6]** .
  - **Operating Expenses (OpEx)**: Expected to be between **$14.3 billion and $14.5 billion**  **[AAPL_3371668_6]** .
  - **Other Income and Expense (OI&E)**: Expected to be around **$50 million**, excluding any potential impact from the mark-to-market of minority investments  **[AAPL_3371668_6]** .
  - **Tax Rate**: Expected to be around **16%**  **[AAPL_3371668_6]** .
  - **Foreign Exchange Impact**: Expected to be a revenue headwind of about **2 percentage points** on a year-over-year basis  **[AAPL_3371668_6]** .
  - **Services Business Growth**: Expected to have a similar double-digit growth rate to what was reported in the December quarter  **[AAPL_3371668_6]** .
  - Additionally, Apple declared a cash dividend of **$0.24 per share** of common stock payable on February 15, 2024, to shareholders of record as of February 12, 2024  **[AAPL_3371668_6]** .

b0540a7b67748e3287b101b33fa0d96b2939d8f03ae8fcefb7aca635ce73c94c

- Total Revenue: $124,300 million (+4% YoY)  **[0000320193-25-000008_aapl-20241228.htm:4]** **[0000320193-24-000006_aapl-20231230.htm:11]**   
- Mac: $8,987 million **(+16% YoY)**  **[0000320193-25-000008_aapl-20241228.htm:4]** **[0000320193-24-000006_aapl-20231230.htm:11]**   
- iPad: $8,088 million **(+15% YoY)**  **[0000320193-25-000008_aapl-20241228.htm:4]** **[0000320193-24-000006_aapl-20231230.htm:11]**   
- Services: $26,340 million (+14% YoY)  **[0000320193-25-000008_aapl-20241228.htm:4]** **[0000320193-24-000006_aapl-20231230.htm:11]**   
- Europe: $33,861 million **(+11% YoY)**  **[0000320193-25-000008_aapl-20241228.htm:11]** **[0000320193-24-000006_aapl-20231230.htm:11]**   
- Greater China: $18,513 million **(-11% YoY)**  **[0000320193-25-000008_aapl-20241228.htm:11]** **[0000320193-24-000006_aapl-20231230.htm:11]**   
- Net Income: $36,330 million (+7% YoY)  **[0000320193-25-000008_aapl-20241228.htm:1]** **[0000320193-24-000006_aapl-20231230.htm:1]**   
- EPS (Diluted): $2.40 (+10% YoY)  **[0000320193-25-000008_aapl-20241228.htm:1]** **[0000320193-24-000006_aapl-20231230.htm:5]**   

8e42ba058ead95193f68e35aaa2f420ea708ccc3953cdde39a2c1dfe6db595a8

**Quarterly guidance for Q1 2025:**
- **Total Company Revenue**: Expected to grow low to mid-single digits year-over-year  **[AAPL_3405238_5]**  (no change from ~5% year-over-year  **[AAPL_3395798_5]** )  
- **Services Revenue**: Expected to grow at double digits similar to what was reported in fiscal year 2024  **[AAPL_3405238_5]**  (no change from double-digit growth similar to the first three quarters of FY 2024  **[AAPL_3395798_5]** )  
- **Gross Margin**: 46% to 47%  **[AAPL_3405238_5]**  (raised from 45.5% to 46.5%  **[AAPL_3395798_5]** )  
- **Operating Expenses (OpEx)**: $15.3 billion to $15.5 billion  **[AAPL_3405238_5]**  (raised from $14.2 billion to $14.4 billion  **[AAPL_3395798_5]** )  
- **Other Income and Expense (OI&E)**: Negative $250 million  **[AAPL_3405238_5]**  (lowered from negative $50 million  **[AAPL_3395798_5]** )  
- **Tax Rate**: ~16%  **[AAPL_3405238_5]**  (lowered from ~16.5%  **[AAPL_3395798_5]** )  

226bee2305ff4a1803050e9bcc44fd666e6f8747b72331875f626e3c7d69bf84

1. With Services revenue reaching a $100 billion run rate, can you elaborate on the sustainability and growth prospects of the recurring versus transactional components, and how competitive pressures might affect these segments?
2. Given that peers are significantly increasing their R&D investments in AI, do you believe reallocating existing resources is adequate, or should Apple increase its R&D spending beyond the current 7% to 8% of sales to fully capitalize on AI opportunities?
3. Despite your large installed base, services like Apple Music, News, Arcade, and Fitness are not leading in their markets; what strategies do you have to enhance their competitiveness, and is the decision to keep them non-cross-platform limiting their growth potential?
4. You've maintained around $50 billion in net cash despite pledges to achieve a net neutral cash position; how do you plan to utilize this cash effectively, and are there more aggressive investment opportunities you're considering instead of increasing shareholder returns?
5. Considering economic uncertainties and geopolitical tensions in China, how do you plan to mitigate potential risks in this crucial market, and what impact might these factors have on your future growth strategies there?

eb0f03440f605169ce1a57f8e36aaae7109b8f6fa8cdb39038b1e0fd9e83e081

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Program Details           | Program 1          | Program 2          |
|---------------------------|--------------------|--------------------|
| Approval Date             | May 2023  **[0000320193-24-000123_aapl-20240928.htm:37]**        | May 2, 2024  **[0000320193-24-000123_aapl-20240928.htm:37]**     |
| End Date/Duration         | Not specified  **[0000320193-24-000123_aapl-20240928.htm:37]**   | Not specified  **[0000320193-24-000123_aapl-20240928.htm:37]**   |
| Total additional amount   | Not specified  **[0000320193-24-000123_aapl-20240928.htm:37]**   | **$110 billion**  **[0000320193-24-000123_aapl-20240928.htm:37]**  |
| Remaining authorization   | **$0**  **[0000320193-24-000123_aapl-20240928.htm:37]**          | **$89.1 billion**  **[0000320193-24-000123_aapl-20240928.htm:37]**  |
| Details                   | Fully utilized by end of Q4 2024  **[0000320193-24-000123_aapl-20240928.htm:37]**  | $20.9 billion utilized as of Sep 28, 2024  **[0000320193-24-000123_aapl-20240928.htm:37]**  |

7615648c9cc88edfc3339c3a387e34f25a0008005716f0dc07968d28d706e428

Americas

Europe

Greater China

Japan

Rest of Asia Pacific

Retail

f06c51e1c1a8ebc47bac9b5a0ced61e574001660bf7fd1a4c30a384df1689815

| Name           | Position                                      | Start Date          | Short Bio                                                                                                                                                                                                 |
|----------------|-----------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Tim Cook       | Chief Executive Officer                       | 2011                | Tim Cook has served as Apple's CEO since 2011. He joined Apple in March 1998 and held various leadership roles, including COO from October 2005  **[0001308179-24-000010_laapl2024_def14a.htm:20]** .                                                                                           |
| Luca Maestri   | Senior Vice President, Chief Financial Officer | May 2014            | Luca Maestri oversees Apple's accounting, business support, financial planning and analysis, treasury, real estate, investor relations, internal audit, and tax functions. He joined Apple in March 2013  **[0001308179-24-000010_laapl2024_def14a.htm:26]** **[0001308179-23-000019_laap2023_def14a.htm:30]** .                                |
| Kate Adams     | Senior Vice President, General Counsel and Secretary | November 2017       | Kate Adams joined Apple in November 2017. Before Apple, she was General Counsel of Honeywell International Inc. and a partner at Sidley Austin LLP  **[0001308179-24-000010_laapl2024_def14a.htm:26]** **[0001308179-23-000019_laap2023_def14a.htm:30]** .                                                                                      |
| Deirdre O’Brien| Senior Vice President, Retail                  | May 2023            | Deirdre O’Brien oversees Apple's retail stores and online teams. She joined Apple in July 1988 and assumed her current role in May 2023. Previously, she was SVP, Retail + People from February 2019  **[0001308179-24-000010_laapl2024_def14a.htm:26]** .                                       |
| Jeff Williams  | Chief Operating Officer                       | December 2015       | Jeff Williams oversees Apple's worldwide operations, customer service and support, leads the design team, and manages software and hardware engineering for the Apple Watch. He joined Apple in June 1998  **[0001308179-24-000010_laapl2024_def14a.htm:26]** **[0001308179-23-000019_laap2023_def14a.htm:30]** .                               |
| Kevan Parekh   | Chief Financial Officer                        | January 1, 2025     | Kevan Parekh is the incoming CFO, succeeding Luca Maestri. His start date is expected to be January 1, 2025  **[AAPL_3405238_3]** .                                                                                                                               |

9ae6775667384a9babd4e9d321214a587a6c678941d3bd2129e3ecb24b5f7a55

c1b6114030ae39d01e8e0f0609c9f12db3e025f7088023c5a705ae10f849d5b7

ac478c7db5052b9d78176238165bed528a5fda24340a3ef2520933bc398c9514

- Apple's **guidance for the December quarter** is cautious, with the company expecting total revenue to grow **low to mid-single digits** year-over-year but not providing specific details on iPhone growth. This lack of specificity could indicate concerns about **iPhone demand**. ( **[AAPL_3405238_14]** )
- The rollout of **Apple Intelligence** features is staggered and slower than typical software releases, potentially limiting its near-term impact on sales. Tim Cook stated that Apple Intelligence will add more languages in **April** and more as they step through the year. This gradual rollout may delay the **upgrade catalyst** for customers. ( **[AAPL_3405238_16]** )
- In **China**, Apple's revenue was **relatively flat year-over-year**, and the improvement was partly due to a sequential improvement in foreign exchange. Tim Cook did not comment on the impact of China's stimulus plans, which could suggest uncertainty about future growth in this key market. ( **[AAPL_3405238_13]** )

dc7e947bd2f9b5732ffa2d53ff9a573f328f568e4613f31cbdbc6356bf550f4d

- **Strong Revenue Growth in Europe and Emerging Markets:** Apple reported **double-digit growth of 11% in Europe**, with notable performance across both developed and emerging markets. This includes significant growth in **Turkey, Saudi Arabia, UAE, and India**, where the company set an **all-time revenue record during the September quarter**.  **[AAPL_3405238_2]**
- **Positive Momentum in China Market:** Despite flat year-over-year performance in China, Apple achieved an **all-time high in the installed base of active devices** and held the **top 2 selling smartphones in urban China according to Kantar**. Additionally, a large percentage of new customers are adopting Apple products in China, with over **50% of Mac and iPad buyers** and over **75% of Apple Watch buyers** being new to the product. These metrics indicate strong customer acquisition and potential for future growth.  **[AAPL_3405238_2]**
- **High Adoption Rate of Latest Technologies:** The adoption rate of Apple's latest operating system, **iOS 18.1, is twice that of 17.1**, reflecting strong customer interest in the company's newest innovations. **Apple Intelligence** is considered a **compelling upgrade reason**, suggesting it may drive increased product upgrades and sales.  **[AAPL_3405238_16]**

034e68c4968b82e7ddaabd7efa34dc487a110b513922d4d1bf69cfbe68e06620

- **Record levels of iPhone upgraders**: Apple achieved an all-time record for iPhone upgraders, with the **iPhone 16 outperforming the iPhone 15** across two quarters following its launch. In markets where **Apple Intelligence** was launched, sales **outperformed** other markets, indicating that new features are driving customer demand.  **[AAPL_3413908_10]**
- **Strong growth in emerging markets, particularly India**: Apple reported **double-digit growth** in its installed base in emerging markets, with **India setting a December quarter revenue record**. The **iPhone was the top-selling model in India**, and Apple is expanding its presence by opening **four new stores** there. With a modest market share in the world's **second-largest smartphone market**, there is significant upside potential.  **[AAPL_3413908_12]**
- **Services revenue reached an all-time high**: Apple's Services segment achieved an **all-time revenue record of $26.3 billion, up 14% year-over-year**, with strength across all geographic segments and services. The number of **paid subscriptions surpassed 1 billion**, reflecting increasing customer engagement and contributing significantly to overall growth.  **[AAPL_3413908_15]**

b1efedcd30cf956e5a38546d3e307cf72c20a79653c9f66ab98c9c7b4bb7788f

- **Declining revenue in Greater China**: Apple's Greater China revenue decreased by **11% year-over-year**, indicating challenges in a key market. Over half of the decline was due to channel inventory reductions, but competitive pressures and the lack of Apple Intelligence rollout contribute to headwinds. **"If you look at our Greater China revenue for the quarter, we were down 11% year-over-year."**  **[AAPL_3413908_7]**
- **Potential tariff impacts due to political changes**: There is uncertainty regarding the potential impact of tariffs under future political scenarios, such as a possible Trump presidency. Management acknowledged the situation but did not provide details, which may imply potential future headwinds. **"We are monitoring the situation and don't have anything more to add than that."**  **[AAPL_3413908_22]**
- **Uncertainty about sustainability of growth in Macs and iPads**: Despite strong revenue growth of **16%** in Mac and **15%** in iPad, management declined to project future growth at the category level, suggesting the recent performance may not be sustainable. **"I don't want to project at the category level for the future, but we're incredibly pleased with both the Mac and the iPad for the quarter."**  **[AAPL_3413908_16]**

15609194fafa6b28e080045d088df15c2f781ab6333f04d6e60272d33f8dbbf6

1. **China Sales Decline**  
   **Q:** How did China revenue perform this quarter?  
   **A:** Our Greater China revenue declined by **11%** year-over-year, with over half of this decline driven by a reduction in channel inventory.  **[AAPL_3413908_7]**  We have not yet rolled out Apple Intelligence in China, and markets where we have, like the U.K., are performing better.  **[AAPL_3413908_7]**  China remains the most competitive market, but recent fiscal stimulus announced in January, covering categories we operate in, may positively impact future performance.  **[AAPL_3413908_7]** 

2. **Gross Margin Outlook**  
   **Q:** Why is gross margin guidance flat for next quarter?  
   **A:** We are guiding gross margins to be between **46.5% and 47.5%** for the March quarter.  **[AAPL_3413908_13]**  Factors include expected foreign exchange headwinds affecting revenue and margins, offset by favorable costs and strong services mix.  **[AAPL_3413908_13]**  Additionally, moving from Q1, which is a large quarter for products, to Q2 results in a loss of leverage.  **[AAPL_3413908_13]** 

3. **Apple Intelligence Boosting iPhone Sales**  
   **Q:** How is Apple Intelligence impacting iPhone demand?  
   **A:** In markets where Apple Intelligence is available, the iPhone 16 models are selling better than in markets without it.  **[AAPL_3413908_6]** **[AAPL_3413908_10]**  Customers are actively using features like Writing Tools, Image Playground, and Genmoji.  **[AAPL_3413908_6]**  Early indications are positive, despite limited rollout during the December quarter.  **[AAPL_3413908_6]** 

4. **Record iPhone Upgraders**  
   **Q:** What drove the record number of iPhone upgraders?  
   **A:** We set an all-time record for iPhone upgraders, with the installed base reaching a new high.  **[AAPL_3413908_10]**  The iPhone 16 family has outperformed the 15 family since launch, suggesting compelling reasons to upgrade.  **[AAPL_3413908_10]**  In markets with Apple Intelligence, performance was stronger compared to those without it.  **[AAPL_3413908_10]** 

5. **Emerging Markets Growth**  
   **Q:** Can emerging markets offset China headwinds?  
   **A:** We are seeing robust growth in emerging markets like India, which set a December quarter record.  **[AAPL_3413908_12]**  The iPhone was the top-selling model in India, and with our modest market share in such large markets, there's significant upside potential that could help offset challenges in China.  **[AAPL_3413908_12]** 

6. **Services Growth and Margins**  
   **Q:** How sustainable is Services growth and margin expansion?  
   **A:** Our Services business had an all-time record, growing **14%** in the December quarter, with strength across all segments.  **[AAPL_3413908_15]**  We reached over **1 billion** paid subscriptions.  **[AAPL_3413908_15]**  Services are accretive to overall company margins, benefiting from scale in areas like payment services and iCloud.  **[AAPL_3413908_18]** 

7. **Strong Mac and iPad Sales**  
   **Q:** Are strong Mac and iPad sales sustainable?  
   **A:** Mac sales grew **16%**, driven by strong uptake of our new M4-based products and the continued success of the MacBook Air.  **[AAPL_3413908_16]** **[AAPL_3413908_19]**  We believe we have the best AI PC for running workloads, with silicon designed for these tasks.  **[AAPL_3413908_16]**  iPad grew **15%**, primarily due to iPad Air and the entry-level iPad, with over half of sales to new customers, indicating ongoing demand.  **[AAPL_3413908_11]** 

8. **Supply Chain in India**  
   **Q:** What's the strategy for supply chain planning in India?  
   **A:** We are manufacturing in India for both the domestic market and for export.  **[AAPL_3413908_17]**  Our business requires economies of scale to make in-country manufacturing sensible, so operations will serve both domestic and export needs.  **[AAPL_3413908_17]** 

9. **Potential Tariff Impact**  
   **Q:** How will tariffs under Trump 2.0 affect Apple?  
   **A:** We are monitoring the situation regarding potential tariffs but have nothing further to add at this time.  **[AAPL_3413908_23]** 

10. **Pricing Strategy and Market Share**  
    **Q:** Will adjusting pricing unlock more growth?  
    **A:** We will continue with our disciplined pricing strategy, which has served us well.  **[AAPL_3413908_22]**  While we always consider short-term and long-term factors, we don't plan to depart from our current approach.  **[AAPL_3413908_22]** 

11. **Device Lifespan and Upgrade Opportunity**  
    **Q:** How does device lifespan affect future upgrades?  
    **A:** Device lifespan varies among users, from early adopters who upgrade frequently to others who wait longer.  **[AAPL_3413908_24]**  The strong sales during the COVID period present a huge opportunity for upgrades across multiple product categories in the future.  **[AAPL_3413908_24]** 

12. **Channel Inventory Levels**  
    **Q:** Are channel inventories elevated elsewhere besides China?  
    **A:** We are comfortable with our iPhone channel inventory levels globally.  **[AAPL_3413908_14]**  In China, inventory reduced over the quarter due to higher-than-expected sales towards the end.  **[AAPL_3413908_14]** 

13. **Agentic AI and Siri Upgrade**  
    **Q:** Will the upgraded Siri be a killer feature in Apple Intelligence?  
    **A:** The killer feature varies by user, but many will use multiple features daily.  **[AAPL_3413908_23]**  Siri is one significant feature and will be coming over the next several months.  **[AAPL_3413908_23]** 

14. **Form Factor Innovation**  
    **Q:** Is there room for more iPhone form factor innovation?  
    **A:** We believe there's a lot more to come and are optimistic about our product pipeline.  **[AAPL_3413908_9]**  There's plenty of innovation left in the smartphone.  **[AAPL_3413908_9]** 

15. **Impact of Lower Cost Compute (DeepSeek)**  
    **Q:** How does the DeepSeek situation impact margins?  
    **A:** Innovation that drives efficiency is positive.  **[AAPL_3413908_8]**  Our tight integration of silicon and software continues to serve us well.  **[AAPL_3413908_8]**  We take a prudent approach to capital expenditure and leverage a hybrid model.  **[AAPL_3413908_8]** 

16. **Acceleration of Apple Intelligence Adoption**  
    **Q:** What could accelerate Apple Intelligence adoption?  
    **A:** Adoption will grow as more devices support it and as we add more languages, with the next rollout in April.  **[AAPL_3413908_21]**  Features are compelling, and once users start using them, they can't imagine not having them.  **[AAPL_3413908_21]** 

defaef739571a3f0710d2b3c9485791c5a68529c21c6b9c4d60a5f14aa596868

Apple’s Q1 FY25: iPhone 16 drove record upgrades, while Services soared 14% YoY to $26.3B, passing 1B paid subs. India clocked double-digit gains, offsetting China’s 11% drop. Most impactful trend: Services remain the key growth engine, fueling margins and engagement.

9d69c3c24fb96637f8635e3eb98f16cd534bfab2b32a802177025efa801601c1

**Quarterly guidance for Q2 2025:**  
- **Revenue**: low to mid-single digits year-over-year  **[AAPL_3413908_5]**  (no change from "low to mid-single digits year-over-year"  **[AAPL_3405238_5]** )  
- **Services Revenue**: low double digits year-over-year  **[AAPL_3413908_5]**  (lowered from "double digits year-over-year"  **[AAPL_3405238_5]** )  
- **Gross Margin**: 46.5%–47.5%  **[AAPL_3413908_5]**  (raised from 46%–47%  **[AAPL_3405238_5]** )  
- **Operating Expenses**: $15.1B–$15.3B  **[AAPL_3413908_5]**  (lowered from $15.3B–$15.5B  **[AAPL_3405238_5]** )  
- **Other Income and Expense (OI&E)**: negative $300M  **[AAPL_3413908_5]**  (lowered from negative $250M  **[AAPL_3405238_5]** )  
- **Tax Rate**: 16%  **[AAPL_3413908_5]**  (no change from prior guidance  **[AAPL_3405238_5]** )  

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| Name              | Start Date | End Date | Reason for Change |
|-------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2009  **[0000320193-24-000123_aapl-20240928.htm:64]**    | Present  | Current auditor   |

2b180d6d3eab797554438aeea5ee18b71effd924004f32fce1d6597e8dc49090

311cce2164982055c40efc094e26af4574a36f024245835dfe8fe3b539cbe2da

Apple Inc. is a leading technology company that designs, manufactures, and markets a wide range of consumer electronics, including smartphones, personal computers, tablets, wearables, and accessories, along with offering various related services **[0000320193-24-000123_aapl-20240928.htm:3]**. The company's product lines include the iPhone, Mac, iPad, and Wearables, Home, and Accessories, which are significant contributors to its revenue **[0000320193-24-000120_a8-kex991q4202409282024.htm:3]**. In addition to hardware, Apple provides services such as advertising, AppleCare, cloud services, digital content, and payment services, which have become an increasingly important part of its business **[0000320193-24-000120_a8-kex991q4202409282024.htm:1]**.

1. **iPhone** - Develops and markets smartphones that are a major contributor to the company's revenue.
2. **Services** - Offers a range of services including advertising, AppleCare, cloud services, digital content, and payment services, which have reached a new all-time high in revenue.
3. **Wearables, Home, and Accessories** - Produces and sells wearables and home accessories, contributing significantly to the company's sales.
4. **Mac** - Designs and sells personal computers that are a substantial part of the company's product offerings.
5. **iPad** - Manufactures and markets tablets that are an important segment of the company's product line.

3bb09af6a444c9edf496ea1430be626ef1cfdf3db704d628e010fbbb05e567d1

- Total Revenue: $94.93B (+6% YoY)  **[0000320193-24-000123_aapl-20240928.htm:44]** **[0000320193-23-000106_aapl-20230930.htm:43]**   
- iPhone: $46.22B (+6% YoY)  **[0000320193-24-000123_aapl-20240928.htm:44]** **[0000320193-23-000106_aapl-20230930.htm:38]**   
- iPad: $6.95B (+8% YoY)  **[0000320193-24-000123_aapl-20240928.htm:44]** **[0000320193-23-000106_aapl-20230930.htm:38]**   
- Services: $24.97B (**+12%** YoY)  **[0000320193-24-000123_aapl-20240928.htm:44]** **[0000320193-23-000106_aapl-20230930.htm:38]**   
- Operating Income (EBIT): $29.59B (+10% YoY)  **[0000320193-24-000123_aapl-20240928.htm:44]** **[0000320193-23-000106_aapl-20230930.htm:43]**   
- Net Income: $14.74B (**-36%** YoY)  **[0000320193-24-000123_aapl-20240928.htm:44]** **[0000320193-23-000106_aapl-20230930.htm:43]**   
- EPS (Diluted): $0.97 (**-34%** YoY)  **[0000320193-24-000123_aapl-20240928.htm:51]** **[0000320193-23-000106_aapl-20230930.htm:43]**   
- Europe: $24.92B (+11% YoY)  **[0000320193-24-000123_aapl-20240928.htm:62]** **[0000320193-23-000106_aapl-20230930.htm:62]**   
- Japan: $5.93B (+8% YoY)  **[0000320193-24-000123_aapl-20240928.htm:62]** **[0000320193-23-000106_aapl-20230930.htm:62]**   
- Rest of Asia Pacific: $7.38B (**+17%** YoY)  **[0000320193-24-000123_aapl-20240928.htm:62]** **[0000320193-23-000106_aapl-20230930.htm:62]**   

1cddc0f31053a48f3458c8e3216728f61d80e657d1f43093c1883b99fb11dab8

662c2cf562faf3a6180d89239299d6d1d12268cd4accaa9b44c150e43dc343cd

1. **Revenue Guidance and iPhone Growth**  
   **Q:** Do you expect iPhone growth in upcoming quarter?  
   **A:** Management expects total company revenue to grow **low to mid-single digits** but did not provide specific guidance on iPhone growth.  **[AAPL_3405238_10]** **[AAPL_3405238_14]**  They emphasized being **early in the product cycle** with many new products and features launching  **[AAPL_3405238_14]** , and noted that Apple Intelligence is rolling out over time.  **[AAPL_3405238_10]** 

2. **Gross Margins Outlook and Commodity Prices**  
   **Q:** How are component prices affecting gross margins?  
   **A:** Gross margins are affected by many variables, including commodity prices.  **[AAPL_3405238_9]**  **Most commodities are moving down in price** for the September and December quarters, while **NAND and DRAM prices increased** during the September quarter and are expected to increase in December quarter.  **[AAPL_3405238_9]**  Management is pleased with **record levels of gross margins**.  **[AAPL_3405238_9]** 

3. **China Sales and Demand**  
   **Q:** What is the demand outlook in China?  
   **A:** China performance was **relatively flat year-over-year**.  **[AAPL_3405238_13]**  Sequential improvement in foreign exchange helped.  **[AAPL_3405238_13]**  The installed base of active devices reached an **all-time high**.  **[AAPL_3405238_13]**  Apple had the **top two selling smartphones** in urban China, according to Kantar.  **[AAPL_3405238_13]**  Over **50%** of Mac and iPad buyers were new customers, and over **75%** for Watch.  **[AAPL_3405238_13]**  Management would not speculate on the impact of China's stimulus plans.  **[AAPL_3405238_13]** 

4. **CapEx Outlook and AI Investments**  
   **Q:** Will investments in AI change CapEx outlook?  
   **A:** Apple will continue to make all necessary investments, including in **AI-related CapEx**.  **[AAPL_3405238_7]**  They are rolling out Apple Intelligence features now and will make all necessary capacity available.  **[AAPL_3405238_7]**  Their CapEx may not be comparable to others due to their **hybrid data center model**.  **[AAPL_3405238_7]** 

5. **Impact of Apple Intelligence on Upgrade Cycle**  
   **Q:** Is Apple Intelligence affecting iPhone demand?  
   **A:** Apple believes Apple Intelligence is a **compelling upgrade reason**.  **[AAPL_3405238_8]**  Initial data shows that iOS 18.1 adoption is **twice as fast** as 17.1.  **[AAPL_3405238_6]** **[AAPL_3405238_8]**  They are seeing significant interest.  **[AAPL_3405238_6]** **[AAPL_3405238_8]**  Constraints on the iPhone 16 Pro models make it too early to determine precise consumer behavior.  **[AAPL_3405238_20]** 

6. **Services Growth and Recurring Revenue**  
   **Q:** How much of Services is recurring vs transactional?  
   **A:** The **recurring portion** of Services has grown and is growing **faster** than the transactional piece.  **[AAPL_3405238_12]**  Apple has well over **1 billion paid subscriptions**, which continue to grow at **strong double digits**.  **[AAPL_3405238_12]** 

7. **R&D Spending on AI**  
   **Q:** Is Apple increasing R&D investment in AI?  
   **A:** Apple has been investing **heavily in R&D** over the last several years.  **[AAPL_3405238_18]**  They have **reallocated existing resources** to AI technology, increasing the level of intensity in AI.  **[AAPL_3405238_18]** 

8. **iPhone Model Mix Shift**  
   **Q:** Are consumers changing buying behavior among iPhone models?  
   **A:** It's **too early** to determine the precise mix between consumer and Pro models due to **constraints** on iPhone 16 Pro and Pro Max in October.  **[AAPL_3405238_20]**  Apple will assess the mix as they move forward.  **[AAPL_3405238_20]** 

9. **Tariff Impact Preparedness**  
   **Q:** How is Apple preparing for potential tariffs?  
   **A:** Tim Cook **did not want to speculate** on potential tariffs or how Apple is prepared to deal with them.  **[AAPL_3405238_17]** 

10. **Services Offerings and Growth Potential**  
    **Q:** How will underperforming services improve?  
    **A:** Apple sees **lots of opportunity** in all services and will continue **investing and adding new features**.  **[AAPL_3405238_22]**  They focus on being the **best** rather than the most.  **[AAPL_3405238_22]** 

11. **DOJ Case on Google Revenue Sharing**  
    **Q:** Thoughts on DOJ case about Google deal?  
    **A:** Tim Cook **did not want to speculate** on the ongoing legal case.  **[AAPL_3405238_21]** 

12. **Capital Allocation and Net Cash Position**  
    **Q:** Will Apple use its cash for investments or shareholder returns?  
    **A:** Apple's fundamental philosophy is to **look after the business first**, and then return excess cash to shareholders.  **[AAPL_3405238_23]**  They will continue to evaluate ways to put cash to work in the business.  **[AAPL_3405238_23]** 

3df0088f4fdb3234272d15433de688adc5bdd4f89b879a9d8dfc7fc796e87405

123cf789391c4df231233aaf9d8c6f8f25d6bed8a040e9e946f1fc9baaf41c8e

- **Weakness in China**, a key market for Apple, with iPhone revenue **down mid-single digits** even in constant currency, indicating increasing competition and slowing demand.  **[AAPL_3371668_13]**
- **Concerns about lengthening replacement cycles** and potential saturation in mature markets like the **U.S.**, potentially leading to slower future sales growth.  **[AAPL_3371668_11]** **[AAPL_3371668_19]**
- Gross margins are at historically high levels (guiding **46% to 47%**), suggesting limited room for further expansion, which could pressure profitability if revenues slow down.  **[AAPL_3371668_17]**

3fa223f230553be1d5253dd73273bc89636d9b6f8eb24346757c048b9d06cb7c

- Apple expects **Services revenue to grow double digits**, at a rate similar to the first half of the fiscal year, indicating strong momentum in this high-margin segment.  **[AAPL_3382255_7]** **[AAPL_3382255_19]**
- Apple sees **significant growth opportunities in emerging markets** such as India, Saudi Arabia, Mexico, Turkey, Brazil, and Indonesia, where market share is low but populations are large and growing, potentially driving future revenue growth.  **[AAPL_3382255_24]**
- Apple is **optimistic about opportunities in generative AI across its devices**, suggesting potential for innovation and new products that could fuel future growth.  **[AAPL_3382255_19]** **[AAPL_3382255_14]**

012cf76b80cc4c4098a7e430e29d411b2a694812005d18316b9d1709220f1330

- **Pressure on gross margins due to increasing component costs and hardware requirements**: Apple is experiencing increases in commodity costs, particularly in memory components, which could impact gross margins. Luca Maestri acknowledged, "we have seen some increases on the memory front, but the rest of the commodities, we see a continuous decline." Additionally, the need for advanced silicon to support new AI features like Apple Intelligence may increase production costs and affect profitability.  **[AAPL_3395798_16]** **[AAPL_3395798_9]**
- **Rising R&D expenses could pressure operating margins**: The company is increasing its investment in AI and machine learning, leading to higher R&D expenses. Tim Cook stated, "we have increased R&D over time... you can expect that there's—we will continue to invest and increase it year-on-year." This ongoing investment may pressure operating margins in the near term.  **[AAPL_3395798_24]**
- **Sales decline and competitive challenges in Greater China**: Apple's sales in Greater China decreased by **6.5% year-over-year**, with over 50% of the decline due to currency impacts. Tim Cook noted that "the competitive environment there is the most competitive in the world." Despite recent improvements, there is uncertainty about the sustainability of performance in this key market due to intense competition and macroeconomic headwinds.  **[AAPL_3395798_17]** **[AAPL_3395798_7]**

2fe88f06307d34f626ad0cda864002a009c82bdda9ebe1846b5bc9ec8a38384a

1. **China Sales Outlook**  
   **Q:** Are you still optimistic about China as a growth market?  
   **A:** Tim Cook remains very optimistic about China over the long term, highlighting that Apple hit a **new installed base high** and saw **growth in upgraders** during the quarter.  **[AAPL_3371668_20]** 

2. **Product Gross Margins**  
   **Q:** What drove strong product gross margins, and what is the outlook?  
   **A:** Luca Maestri explained that product gross margins increased **280 basis points** sequentially due to a favorable mix with high-end iPhones performing well and leverage from the biggest quarter. They expect gross margins to expand further to **46% to 47%**.  **[AAPL_3371668_15]** **[AAPL_3371668_17]** 

3. **Services Growth Outlook**  
   **Q:** Why won't Services growth accelerate in the March quarter?  
   **A:** Negative foreign exchange is expected to be a **headwind** in the March quarter, and comparisons are more difficult. Services are expected to continue growing double digits, similar to the December quarter.  **[AAPL_3371668_9]** 

4. **iPhone 15 Performance**  
   **Q:** How is the iPhone 15 cycle performing amid concerns?  
   **A:** iPhone revenues were up **6%**, with strong global performance. The iPhone 15 is **outselling iPhone 14** over the same period, and upgraders hit an **all-time record**. Customer satisfaction for iPhone 15 reached **99%**.  **[AAPL_3371668_11]** 

5. **Vision Pro Potential**  
   **Q:** How will you measure Vision Pro's success over time?  
   **A:** Each product has its own journey, and Apple is incredibly excited internally. They see significant potential but won't compare Vision Pro to other products.  **[AAPL_3371668_12]** 

6. **EU Regulatory Impact**  
   **Q:** What are the key App Store updates in Europe, and impact?  
   **A:** Apple announced changes effective in March, including alternate billing and app stores, and opening NFC capabilities. The changes apply to the EU market, which is roughly **7%** of global App Store revenue.  **[AAPL_3371668_14]** 

7. **AI Opportunities**  
   **Q:** Can Apple leverage on-device AI processing?  
   **A:** Tim Cook believes there is a **huge opportunity** for Apple with generative AI and AI, without providing further details.  **[AAPL_3371668_21]** 

8. **China Demand and Competition**  
   **Q:** What are you seeing in China from demand and competition?  
   **A:** In Mainland China, iPhone was down **mid-single digits**, with other products contributing to a larger contraction. Apple saw **solid growth in upgraders**, had **4 of the top 6** smartphone models in urban China, and was the **top brand** according to IDC.  **[AAPL_3371668_13]** 

9. **Americas Performance**  
   **Q:** How is the Americas market performing, especially iPhone?  
   **A:** In the U.S., iPhone business grew in the December quarter, and the installed base hit an **all-time high**. Replacement cycles are difficult to measure, but Apple feels good about their position.  **[AAPL_3371668_19]** 

10. **Enterprise Focus**  
    **Q:** Will Apple become more enterprise-focused in the future?  
    **A:** Apple believes they can do both consumer and enterprise. They see opportunities for Vision Pro in enterprise and are excited about employees choosing their own technology.  **[AAPL_3371668_18]** 

11. **CapEx and AI Investments**  
    **Q:** Will CapEx increase due to AI investments?  
    **A:** Apple will not underinvest in the business and is making necessary investments across product, software, and services development.  **[AAPL_3371668_16]** 

12. **$5 Billion March Quarter Impact**  
    **Q:** Is the $5 billion impact in March quarter for products or total revenue?  
    **A:** The **$5 billion** impact is entirely related to **iPhone** revenue, due to last year's supply disruptions and fulfillment of pent-up demand.  **[AAPL_3371668_17]** 

13. **Vision Pro Developer Ecosystem**  
    **Q:** Can you discuss support for Vision Pro developers and AI plans?  
    **A:** Apple is excited about enterprise opportunities with Vision Pro, mentioning various enterprise apps. They have **incredibly exciting** AI work to discuss later this year.  **[AAPL_3371668_10]** 

14. **Installed Base Growth**  
    **Q:** Details on new users and how cohorts differ?  
    **A:** Strong growth in emerging markets like India and Indonesia contributed to the installed base reaching a **record high**. New users are coming from regions with strong double-digit growth.  **[AAPL_3371668_8]** 

15. **Component Pricing and Margins**  
    **Q:** How are component pricing and margins outlook?  
    **A:** Gross margins are expected to expand to **46% to 47%**, considering the component environment, foreign exchange, and product mix.  **[AAPL_3371668_15]** 

4c75224410532a5b0231bab4a7969c80ed46d492c6266716c85a04886201d217

1. **Apple Intelligence Rollout and Impact**  
   **Q:** How will Apple Intelligence affect future revenue and Services?  
   **A:** Tim Cook stated that Apple has begun rolling out **Apple Intelligence** with developers this week, with some features available now and more to come over the next year. The rollout is staggered, with **ChatGPT integration expected by the end of the calendar year**. To run Apple Intelligence, devices require specific hardware like the **iPhone 15 Pro and Pro Max**, and Macs and iPads with **M series silicon**. Apple is increasing investment in **R&D**, particularly in **AI and ML**, and plans to continue this investment **year-over-year**. While not disclosing specific monetization details, Cook emphasized the importance of both on-device processing and partnerships like that with **OpenAI**. Regulatory considerations in regions like the **EU and China** may impact rollout timelines, but Apple is actively engaging with authorities.  **[AAPL_3395798_8]** **[AAPL_3395798_12]** **[AAPL_3395798_14]** **[AAPL_3395798_16]** **[AAPL_3395798_22]** **[AAPL_3395798_24]** 

2. **China Sales**  
   **Q:** How did China revenue perform this quarter?  
   **A:** Tim Cook reported that revenue in Greater China decreased by **6.5% year-over-year**, but only **less than 3% in constant currency**, meaning over **50%** of the decline was due to currency exchange rates. The **iPhone installed base set a record** in Greater China, and Mainland China saw a **June quarter record for upgraders**. The **iPhone 15 is outperforming the 14** when comparing the same number of weeks from launch. Cook remains confident in the long-term opportunity in China despite a highly competitive environment and macroeconomic factors.  **[AAPL_3395798_7]** **[AAPL_3395798_17]** 

3. **Gross Margins Outlook**  
   **Q:** What is the outlook for gross margins?  
   **A:** Luca Maestri stated that Apple reported a gross margin of **46.3%**, down **30 basis points** sequentially due to mix changes, but up significantly year-over-year. For the next quarter, they are guiding gross margins between **45.5% to 46.5%**, similar to the current quarter. Foreign exchange continues to be a headwind. Commodity prices are mixed, with increases in memory costs but declines in other areas. Product mix and the success of different products impact overall gross margins, but Apple feels good about their position.  **[AAPL_3395798_9]** **[AAPL_3395798_15]** **[AAPL_3395798_16]** 

4. **iPhone Replacement Cycle**  
   **Q:** What is the status of the iPhone replacement cycle?  
   **A:** Tim Cook noted that the **installed base hit an all-time high** during the quarter. The **iPhone 15 is performing better than the 14**, comparing the same number of weeks from launch. While it's difficult to predict upgrade rates mid-cycle, Cook is excited about the value Apple Intelligence will provide to users, presenting another compelling reason for upgrades.  **[AAPL_3395798_6]** **[AAPL_3395798_7]** 

5. **OpenAI Partnerships and Monetization**  
   **Q:** How will partnerships with OpenAI be monetized?  
   **A:** Tim Cook explained that Apple Intelligence includes on-device processing and Private Cloud Compute for personal context, while integrating with **ChatGPT** for world knowledge. While he did not disclose specific terms of the commercial agreements due to confidentiality, he emphasized that both aspects are important and that people want both.  **[AAPL_3395798_14]** 

6. **Services Growth Drivers**  
   **Q:** What's driving the strong Services growth?  
   **A:** Luca Maestri attributed the **14% growth** in Services to a combination of factors: a larger installed base, increased customer engagement, and strong double-digit growth in paid accounts and subscriptions. New services like Apple TV+, Apple Arcade, and Fitness+ contribute to growth, along with significant investments in content. Despite tougher comparisons in the second half of the fiscal year, Services delivered better-than-expected growth.  **[AAPL_3395798_13]** **[AAPL_3395798_21]** 

7. **Regulatory Impacts on Apple Intelligence**  
   **Q:** Are regulations affecting Apple Intelligence rollout?  
   **A:** Tim Cook acknowledged that regulatory complexities in regions like the **EU and China** may impact the rollout timelines of Apple Intelligence features. Apple is constructively engaging with regulators to understand requirements and aims to move as fast as possible to bring features to everyone.  **[AAPL_3395798_22]** **[AAPL_3395798_20]** 

8. **CapEx, R&D Spending and Cash Flow Impact**  
   **Q:** Will Apple Intelligence require more R&D and CapEx?  
   **A:** Tim Cook stated that Apple has increased **R&D** over time, investing in **AI and ML** for years, and plans to continue increasing investment **year-over-year**. For CapEx, Apple uses a **hybrid approach**, with investments both internally and through partners where CapEx appears on their balance sheets. This approach may impact free cash flow, but Apple aims to run the company efficiently.  **[AAPL_3395798_24]** **[AAPL_3395798_25]** 

9. **Free Cash Flow Margins Increase**  
   **Q:** What's driving higher free cash flow margins?  
   **A:** Luca Maestri is pleased with the increase in free cash flow margins, attributing it to a combination of factors: improvement in the top line, margin expansion over several years, and efficient capital management. The company increased its return of capital to shareholders this quarter, marking a **record quarter**. Apple's hybrid CapEx model and focus on capital efficiency contribute to strong free cash flow.  **[AAPL_3395798_25]** 

10. **Wearables Category Performance**  
    **Q:** What's driving Wearables' acceleration?  
    **A:** Tim Cook explained that the Wearables, Home, and Accessories category has faced difficult **launch comparisons** due to last year's benefits from products like the AirPods Pro second generation, Watch SE, and first Watch Ultra. Despite this, over the trailing 12 months, the business has grown to **almost $40 billion**, doubling over five years.  **[AAPL_3395798_23]** 

b9e1c1a4e6af2a0a60dbc22a9b5a627c627739d61372edf24c441802b2be4af8

- **iPhone revenue is expected to decline in the June quarter**, with analysts estimating it will be down mid-single digits. This indicates continued weakness in one of Apple's key product lines.  **[AAPL_3382255_19]**
- **Greater China revenue declined by 8% year-over-year**, highlighting ongoing challenges in this important market. Tim Cook acknowledged that while iPhone grew in Mainland China, other products "didn't fare as well," and emphasized that China remains "the most competitive market in the world."  **[AAPL_3382255_13]** **[AAPL_3382255_18]**
- **Potential risk of losing traffic acquisition revenue**, as there are concerns that Apple may lose some revenue from agreements like those with Google due to legal cases and competitive pressures. This could impact the monetization of Apple's mobile platform.  **[AAPL_3382255_14]**

698c92eba4dcd2f5fb5a87e252c1374d077e0e61bdd03f0c992a33cc0e082953

- **Apple's Services revenue reached an all-time record of $24.2 billion, growing 14% year-over-year**, driven by double-digit growth in paid subscriptions and increased customer engagement, indicating strong growth potential in the high-margin Services segment.  **[AAPL_3395798_13]**
- **Apple is significantly increasing its investments in AI and machine learning**, including Apple Intelligence and integrations with technologies like ChatGPT, demonstrating a commitment to innovation that can drive future growth. Additionally, new AI features require the latest hardware, potentially boosting demand for new devices.  **[AAPL_3395798_24]** ,  **[AAPL_3395798_16]** ,  **[AAPL_3395798_14]**
- Despite macroeconomic challenges, **Apple achieved a record iPhone installed base in China and a June quarter record for upgraders**, showing strong customer loyalty and confidence in long-term opportunity in a key market.  **[AAPL_3395798_7]**

6c3e476d0c4a546ecb5e712d9a2c06d1358f6710d72d1d09669f6a99a67dcb14

- **Strong iPhone Sales and Customer Satisfaction:** iPhone revenue increased by **6% year-over-year** to **$69.7 billion**.  **[AAPL_3371668_11]**  The iPhone 15 is **outselling** the iPhone 14 over the same period, indicating robust customer demand.  **[AAPL_3371668_11]**  Apple achieved an **all-time record** for iPhone upgraders, and the **installed base hit a new all-time high**  **[AAPL_3371668_11]** **[AAPL_3371668_19]** . In the U.S., iPhone is **4 out of the top 5** selling smartphones, with a customer satisfaction rate of **99%**.  **[AAPL_3371668_19]**
- **Record Services Revenue and Growth in Subscriptions:** Services revenue set an **all-time record** of **$23.1 billion**, up **11% year-over-year**, with strong double-digit growth expected to continue.  **[AAPL_3371668_7]**  Paid subscriptions grew to over **1 billion**, more than **double** the number from four years ago, indicating strong recurring revenue streams.  **[AAPL_3371668_7]**
- **Expansion in Emerging Markets:** India saw revenue grow **strong double digits**, hitting a **quarterly revenue record**.  **[AAPL_3371668_8]**  Other emerging markets like Indonesia also achieved quarterly records.  **[AAPL_3371668_8]**  Apple is successfully expanding its customer base in high-growth markets, contributing to its overall growth  **[AAPL_3371668_11]** **[AAPL_3371668_8]** .

6873de5abbf85203e312e936d66e88fc45c98055cb10dc746e024d027b288a16

1. **June Quarter Guidance**  
   **Q:** Explain June quarter guidance and Services momentum.  
   **A:** Apple expects to grow low single digits in total for the company in the June quarter.  **[AAPL_3382255_7]**  Services are expected to grow double digits at a rate similar to the first half of the fiscal year.  **[AAPL_3382255_7]**  The iPad is also expected to grow double digits.  **[AAPL_3382255_7]**  Services have seen strong performance across the board, with records in several categories and geographic segments.  **[AAPL_3382255_7]**  The subscription business is performing well, with paid accounts growing double digits.  **[AAPL_3382255_7]** 

2. **China Sales Outlook**  
   **Q:** Is the China market turning around?  
   **A:** In Q2, Greater China revenue was down **8%**, an acceleration from the previous quarter, driven by iPhone.  **[AAPL_3382255_13]**  iPhone grew in Mainland China on a reported basis.  **[AAPL_3382255_13]**  The top two smartphones in urban China are iPhones, and the reception during Tim Cook's recent visit was very positive.  **[AAPL_3382255_13]**  Apple remains optimistic about China in the long term.  **[AAPL_3382255_13]** 

3. **AI and CapEx Spending**  
   **Q:** Will AI affect CapEx spending?  
   **A:** Apple is excited about generative AI opportunities and has spent over **$100 billion** in R&D over the past five years.  **[AAPL_3382255_8]**  On CapEx, Apple uses a hybrid model and plans to continue along the same lines, sharing investments with suppliers and partners.  **[AAPL_3382255_8]** 

4. **Gross Margins and Commodity Costs**  
   **Q:** Are component costs rising, and how will they affect margins?  
   **A:** Commodity and component costs have been favorable recently, though memory prices have started to rise slightly.  **[AAPL_3382255_12]**  Apple reported a high gross margin of **46.6%**, the highest in decades.  **[AAPL_3382255_12]**  The company tries to buy ahead when cycles are favorable to mitigate headwinds.  **[AAPL_3382255_12]** 

5. **Capital Allocation Strategy**  
   **Q:** Will Apple take on debt to reach net cash neutral?  
   **A:** Apple is working towards its net cash neutral goal and has increased its buyback allocation from **$90 billion** to **$110 billion**.  **[AAPL_3382255_17]**  Once the goal is reached, Apple will reassess the optimal capital structure, but it is too early to comment on taking on leverage.  **[AAPL_3382255_17]** 

6. **Impact of EU DMA**  
   **Q:** What is the impact of the EU DMA on Apple?  
   **A:** It's too early to tell. Apple implemented alternate app stores and billing in March in the EU and is focused on complying while mitigating impacts to user privacy and security.  **[AAPL_3382255_9]** 

7. **iPhone Demand Trends**  
   **Q:** Are customers shifting from Pro models to standard iPhones?  
   **A:** Apple continues to see strong interest in its top-of-the-range products.  **[AAPL_3382255_16]**  Consumers want the best products, and Apple has made purchases more affordable through financing solutions like installment plans and trade-in programs.  **[AAPL_3382255_16]**  This trend is valuable in both developed and emerging markets and is reflected in Apple's gross margins.  **[AAPL_3382255_16]** 

8. **Services Growth Drivers**  
   **Q:** What drove the acceleration in Services growth?  
   **A:** Apple had all-time records in both developed and emerging markets, with strong performance across categories.  **[AAPL_3382255_20]**  Fast-growing areas like cloud, video, and payment services set all-time revenue records.  **[AAPL_3382255_20]**  Apple expects double-digit Services growth in the June quarter similar to the first half.  **[AAPL_3382255_20]** 

9. **Emerging Markets Growth**  
   **Q:** What's driving momentum in India—retail expansion or supply chain?  
   **A:** Apple grew strong double digits in India, achieving a new March quarter revenue record.  **[AAPL_3382255_21]**  The company is producing in India to be competitive and has opened new stores.  **[AAPL_3382255_21]**  Apple is expanding channels, working on the developer ecosystem, and sees enormous opportunity.  **[AAPL_3382255_21]** 

10. **Spurring Replacement Demand**  
    **Q:** Will you deploy capital to spur replacement demand?  
    **A:** Innovation spurs upgrade cycles, and Apple works on multiple variables including economic factors and carrier offerings.  **[AAPL_3382255_25]**  The company has made progress with financing solutions and trade-in programs and will continue to invest in these areas.  **[AAPL_3382255_25]**  The strong dollar has affected reported results, but demand in local markets is stronger.  **[AAPL_3382255_25]** 

11. **iPhone Channel Inventory**  
    **Q:** What are the iPhone channel inventory levels?  
    **A:** Apple decreased channel inventory during the March quarter, which is typical for Q2, and is comfortable with the overall channel inventory.  **[AAPL_3382255_23]** 

12. **Vision Pro in Enterprise**  
    **Q:** What are top enterprise use cases for Vision Pro?  
    **A:** There are many use cases, including field service, training, healthcare applications like pre-op surgery preparation and advanced imaging, and command control centers.  **[AAPL_3382255_26]**  Apple is focused on growing the ecosystem and has seen extraordinary enthusiasm from enterprises.  **[AAPL_3382255_26]** 

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