MacDailyNews presents live notes from Apple’s Q223 conference call appeared first on MacDailyNews. MacDailyNews presents live notes from Apple’s Q223 conference call appeared first on MacDailyNews. MacDailyNews presents live notes from Apple’s Q223 conference call appeared first on MacDailyNews. MacDailyNews presents live notes from Apple’s Q223 conference call appeared first on MacDailyNews.
MacDailyNews presents live notes from Apple’s Q223 Conference Call with analysts starting at 2pm PDT / 5pm EDT today, May 4, 2023. This stream is best experienced on an iPhone

MacDailyNews presents live notes from Apple’s Q223 Conference Call with analysts starting at 2pm PDT / 5pm EDT today, May 4, 2023.

MacDailyNews presents live notes from Apple’s Q223 conference call

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Apple’s live conference call webcast will begin at 2pm PDT / 5pm EDT here.

Apple today posted quarterly revenue record of $94.836 billion (vs. $97.278 billion YOY), down 3 percent year over year, and quarterly earnings per diluted share of $1.52 (vs. $1.52 YOY).

For the quarter, analysts’ consensus estimates (per Refinitiv) called for Apple to report EPS of $1.43 EPS (vs. $1.52 actual) on revenue of $92.960 billion (vs. $94.835 billion actual).

Live notes:

• AAPL After hours: $169.15 +$3.36 (+2.03%) @ 06:00PM EDT

• End of conference call

• Cook: I think we can do better on everything, so I wouldn’t single out just one segment; there’s opportunity in many of them
• Greatest Service opportunity?

• Cook: I don’t see Apple participating directly, but would be a beneficiary indirectly as Apple’s chip making partners partcipate and increase capacity
• Apple is one of the largest chip companies; is the company a benefactor of the Chip Act?

• Cook: Feedback for Apple Pay Later and Savings have both been “really good.”
• Apple Pay Later?

• In the June quarter last year, iPhone SE and iPad Air both launched
• Luca: we expect our revenue performance for the June quarter to be similar to that of the March quarter

• Luca: Component pricing is expected to be favorable in the June quarter
• Q: Component pricing?

• Cook: China revenue grew on a constant currency basis; Apple pleased with China performance; four of the top five bestselling smartphones in Urban China are iPhones; Apple gained smartphone share in Q2 in China; Services hit an all-time quarterly record in the country
• Q: China repopening effect on demand?

• Cook: I think there’s a good opportunity across the borad from prosuct to Services in India
• Q: Potential for Services in India?

• Cook: Those are internal numbers. Enterprise business is growing; Apple is focused on BYOD companies; Apple is primarily a consumer company based on revenues
• Q: How much of Apple revene comes from consumer vs. enterprise?

• Cook: Each country is different, so I hesitate to compare too much; I do see a lot of people entering the middle class in India; Appel wants to convince them to buy an iPhone
• Q: What is Apple seeing in India today vs. China a decade ago?

• Luca: We are guiding to stable gross margins; foreign exchange expected to be flat on a sequential basis; seasonal loss of leverage will be offset by cost savings
• Q: Gross margins seem to be holding up; what’s driving the strength?

• Luca: Apple has great momentum in emerging markets, where there is much headroom for growth
• Q: Consumer spending trends?

• Luca: Macro environment is hurting digital advertising and mobile gaming (bit of a slowdown, especially due to tough compare from COVID lockdown years)
• In general, paid subscription in the App Store continue to grow
• Luca: Macroeconomic environment negatively affected advertising and mobile gaming in Q2, but other services continue to consistently grow
• Q: Services customers’ behavior changes?

• Cook: In Q2, emerging markets saw stellar demand
• Q: iPhone demand?

• Apple is very pleased with the initial uptake of Apple Savings accounts
• Cook: On our financial products, as with Apple Watch and health/fitness, we’re helping people have better financial health/fitness
• Q: Apple Pay, Apple Pay Later, Appel Savings expansion?

• Cook: We recaptured some, but it’s difficult to quantify
• Q: Product mix for iPhone? Recapture deferred sales from previous quarter?

• Over the past few years, despite COVID, chip shortages. etc. the supply chain has been incredibly resilient
• We’ll continue to invest everywhere and optimize the supply chain everywhere
• Cook: Our supply chain is truly global and we are invsting all over the world
• Q: Moving production out of China?

• Cook: We view A.I. as huge and we’ll continue weaving it into our products on a very thoughtful basis
• AI is weaved into many Apple products: Fall detection, crash detection, etc.
• Cook: We don’t comment on product roadmaps.It is important to be deliberative on these things
• Q: Artificial Intelligence, especially generative AI?

• Cook: We try really hard to design our product so that they work seamlessly together, so there are a good deal of people out there who have multiple Apple devices
• Q: Monetization per user?

• AAPL After hours: $169.02 +$3.23 (+1.95%) @ 05:31PM EDT

• Cook: iPhone base is well over a billion active devices
• Cook: Installed base of active devices is over 2 billion; we set new record across each geographic segment in each of the major product categories
• Q: Record installed base in active devices?

• Apple sees a great opportunity in emerging markets
• In India, there are a lot of people coming into the middle class; Cook believes the country is at a tipping point
• Apple has a number of channle partners in the country as well; very happy with how that’s going
• Cook: We set a quarterly record in India in Q2; it’s a major focus for us
• Q: Emerging markets, especially India?

• Production levels during Q2 were where we wanted them to be
• Cook: Hard to quantify; we did recapture some amount of sales last quarter
• Q: How should we think about deferral of demand vs. destruction of demand from China’s shutdowns late last year?

• The dividend is payable on May 18, 2023 to shareholders of record as of the close of business on May 15, 2023
• Apple’s board of directors has declared a cash dividend of $0.24 per share of the company’s common stock, an increase of 4 percent

• Apple expects gross margin of 44.0-44.5% in June quarter

• The board of directors has also authorized an additional program to repurchase up to $90 billion of the Company’s common stock

• Net cash: $57 billion
• Total debt of $110 billion
• Ended quarter with $166 billion in cash and marketable securities
• Maestri touts Apple’s performance in the enterprise

• Over 975 million paid subscriptions across all Services, nearly double that of 3 years ago
• Apple installed base: Over 2 billion active devices
• Continued growth in Services is a reflection of Apple’s ecosystem

• During the quarter, Apple Watch installed base reached an all-time high
• Over half of iPad purchasers were new to the product
• iPad face tough YoY compare and headwinds from the macroeconomic envirnment
• During the quarter, Mac installed base reached an all-time high
• During the quarter, iPhone installed base reached an all-time high
• Challenging macro environment
• Net income $24.2 billion

• 71% services gross margin
• 36.7% products gross margin

• Services set an all-time quarterly record
• During the quarter, our installed base of active devices reached an all-time high
• $73.9 billion product revenue
• Luca: Foreign exchange had a negative impact of over 5 percentage points

• Cook promotes Apple’s use of recycled products
• Cook lauds Apple’s commitment to “carbon removal” and becoming “carbon neutral”
• Cook touts Apple values, being a “force for progress,” “culture of belonging”
• First two Apple Retail Stores opened in India

• Apple Pay Later and Apple Savings launched during the quarter

• Cook promotes Apple Music Classical

• Friday Night Baseball returned for a new MLB season
• First season of MLS partnership is underway. MLS Season Pass

• Cook touts Apple TV+ series and films
• More than 975 million paid subs
• Services: $20.907 billion (vs. $19.821 billion YoY)

• Wearables, Home and Accessories: $8.757 billion (vs. $8.806 billion YoY)

• iPad revenue impacted due to macroeconomic challenges, foreign exchange rates, and difficult compare with M1 iPad Air having been introduced last year
• iPad: $6.670 (vs. $ 7.646 billion YoY)

• Very difficult Mac compare due to M1 rollout last year
• Mac: $7.168 billion (vs. $10.435 billion YoY)

• Emergency SOS via satellite expanded to total of 12 countries
• iPhone: $51.334 billion (vs. $50.570 billion YoY)
• During the quarter, our installed base of active devices reached an all-time high
• Macroeconomic headwinds impact of more than 500 basis points
• We are pleased with our performance in emerging markets, setting quarterly records in several
• Cook: We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment

• AAPL After hours: $167.77 +$1.98 (+1.19%) @ 5:00PM EDT
• AAPL After hours: $167.30 +$1.51 (+0.91%) @ 4:55PM EDT
• AAPL After hours: $166.84 +$1.05 (+0.63%) @ 4:46PM EDT

The post MacDailyNews presents live notes from Apple’s Q223 conference call appeared first on MacDailyNews.

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