Apple reports Q2 revenue of $97.3B, up 9% YoY, $25B net income, up from $23.6B YoY, authorizes an additional $90B in share repurchases, and hikes dividend by 5%

Revenue up 9 percent to new March quarter record — Services revenue reaches new all-time high

Business Wire 2022-04-29

Context & Ripple Effects

Apple’s prior March-quarter report logged a much larger 54% year-over-year revenue increase, while its immediately preceding quarter also highlighted rising Services sales. The current results show growth continuing from a far higher base, with Services again reaching a record.

The report pairs operating performance with expanded shareholder returns: Apple is using its profitability to authorize another $90 billion in repurchases and raise its dividend.

First-order effects

Apple shareholders gain a 5% higher dividend and support from an additional $90 billion repurchase authorization.
Apple’s record Services revenue gives its highest-growth reported business greater weight alongside the hardware sales highlighted in the prior quarter’s earnings.

Second-order effects

Apple’s larger repurchase program directs more of its reported profit toward reducing share count, making capital returns a central near-term use of cash alongside operations.
The consecutive emphasis on record Services results raises the strategic importance of monetizing Apple’s installed customer base rather than relying solely on quarterly device sales.

Third-order effects

If Apple continues to pair Services records with large buybacks, its earnings model will increasingly combine device-led revenue with recurring service monetization and shareholder distributions.
The contrast between the prior year’s exceptional March-quarter growth and this quarter’s 9% increase points to a normalization in growth rates even as Apple expands its Services business.

The trend: Apple is increasingly presenting Services growth and capital returns as complementary pillars of its post-device-cycle financial model.

Discussion

@jsnell Jason Snell on x
Modest overall growth quarter for $AAPL. I suspect we'll hear something on the analyst call about how they weren't able to fulfill demand? Given the supply chain crises out there, this is an especially impressive number. https://twitter.com/...
@jsnell Jason Snell on x
$AAPL results! It's a record for a March quarter at $97 billion. All the charts, here: https://sixcolors.com/...
@neilcybart Neil Cybart on x
For years, Apple reported ~$20 billion of Mac revenue annually. Apple just reported $10 billion of Mac between January and March and that included supply issues.
@kirkburgess @kirkburgess on x
Apple hitting roughly inline with my expectations, with iPad a bit light due to supply chain disruptions still. Dividend increased + another big share buyback extension (again as expected) The train rolls on as scheduled. $AAPL
@stevekovach Steve Kovach on x
Just reported on air following my call today with Tim Cook and Luca Maestri: Cook tells me China shut downs did not impact Q2 as they started just as Apple was closing out fiscal Q2.
@asymco Horace Dediu on x
The holiday quarter is always Apple's biggest quarter but this March quarter was only the third highest quarterly revenue in its history, surpassed only by the last two holiday quarters. This March Q was bigger than Christmas Q 2019, but quite a large margin.
@ryanreith Ryan Reith on x
Apple crushed it! I'm still scratching my head how people didn't think they would have a good CY1Q22. The challenges for Apple and other big techs is the June quarter (and possibly 2H22). Lets see who gives Q2/2022 guidance https://www.cnbc.com/...
@inafried Ina Fried on x
When it comes to dealing with inflation, CEO Tim Cook noted that while some component costs have increased, others are declining. “I think we are doing a reasonable job currently navigating what is a challenging environment,” Cook said. https://www.axios.com/...
@epro Emil Protalinski on x
$AAPL Q2 2022: - Revenue up 9% to $97.3 billion - Net income up 6% to $25.0 billion - iPhone up 5% - Mac up 15% - iPad down 2% - Wearables/Home/Accessories sales up 12% - Services up 17%
@iansherr Ian Sherr on x
Apple's @tim_cook starts by talking about helping in Ukraine and donating products to support refugees arriving in the US. He also says the pandemic is unpredictable. “These times remind us that we cannot know what the future may hold.”
@susanlitv Susan Li on x
Huge Beat for #Apple in a RECORD March quarter 😳 Raising #dividends by 5% & authorizing a new $90 billion #stock #buyback plan Just spoke to $aapl CEO Tim Cook on the results despite #Omicron & #China #covid closures 👇 #Services incl #AppleMusic #AppleTVPlus hit a record 📱 https:…
@benbajarin Ben Bajarin on x
Macs are on a growth streak. https://twitter.com/...
@caro_milanesi Carolina Milanesi on x
I know y'all on the record quarter but what I wanna know is if I can listen to the hold music for $AAPL in spatial audio!
@neilcybart Neil Cybart on x
Here are Apple's granular 2Q22 results: - iPhone revenue: $50.6B (my estimate: $48.2B) - Services: $19.8B (my estimate: $20.6B) - Wearables / Home etc.: $8.8B (my estimate: $9.1B) - Mac: $10.4B (vs. my $9.4B) - iPad: $7.6B (vs. my $7.3B) Good iPhone and Mac numbers.
@anthony Anthony DeRosa on x
Apple posted one of its best quarters in its history on Thursday. Revenue rose 9% to $97.3 billion, far exceeding analyst expectations for $94 billion. EPS rose to $1.52 from $1.40 a year earlier, a record for Apple's fiscal second quarter $AAPL https://www.wsj.com/...
@neilcybart Neil Cybart on x
Apple reported a 43.7% gross margin. Bit weaker than my expectation (FX impact probably) but still a very strong # for Apple. - 36.4% gross margin for Products (HW). Up a tad year-over-year. - 72.6% gross margin for Services. That's an all-time quarterly record for Services.
@iansherr Ian Sherr on x
Cook notes Apple's hired “more women than ever” into leadership roles, and “in the US, nearly 60% of all leadership openings were filled by people from underrepresented communities.”
@kfury @kfury on x
Excellent job, Apple. https://twitter.com/...
@darth @darth on x
i can think of another use for that $90 billion tim apple https://twitter.com/...
@darth @darth on x
yes that is right tim apple 3 million mcdonalds hash browns for every man woman and dog in america
@jsnell Jason Snell on x
Very good Mac quarter. Second highest total Mac sales of all time (down from last sequential quarter) and an impressive 15% increase on year-over-year sales. https://twitter.com/...
@cnbc @cnbc on x
EARNINGS: Apple Q2 EPS $1.52 vs. $1.43 Est.; Q2 Revs. $97.28B vs. $93.89B Est. • $AAPL authorizes new $90 billion share buyback, hikes dividend 5%. @stevekovach has the details. https://www.cnbc.com/... https://twitter.com/...
@cnbcnow @cnbcnow on x
EARNINGS: Apple Q2 EPS $1.52 vs. $1.43 Est.; Q2 Revs. $97.28B vs. $93.89B Est. • $AAPL authorizes new $90 billion share buyback, hikes dividend 5% https://cnbc.com/... https://t.co/MjyH4soO0d
@brandonbutch Brandon Butch on x
Apple's Q2 earnings are impressive, given the economic conditions! $AAPL Revenue: $97.28B vs. $93.89B estimated iPhone sales: $50.57B vs. $47.88B estimated EPS $1.52 vs. $1.43 estimated
@jsnell Jason Snell on x
iPad quarter sort of a push? Down only slightly from year-ago quarter, and a lot less than the holiday quarter was down. iPad business seems to be settling in. Pretty good considering fears that iPad sales might drop a lot after sales driven by the pandemic. https://twitter.com/.…
@jsnell Jason Snell on x
Services revenue growth decelerated for the third straight quarter, but... geez. It's still up 17% year over year. Just keeps going up. https://twitter.com/...
@htsfhickey Fred Hickey on x
Apple went into this no-guidance conference call (officially - but terrible guidance commentary) with a 27.2 PE, $2.7T market cap. Earnings will now be declining year-over-year - meaning this already unjustifiable P/E would rise (if the stock doesn't drop).
@neilcybart Neil Cybart on x
Analyst to Tim Cook: Should Apple begin holding more product supply to avoid these disruptions? Cook: In this business, you don't want to hold a ton of inventory. You want to work on cycle times.
@neilcybart Neil Cybart on x
One observation from this Apple call: Tim Cook and Luca are very humble. They aren't afraid to say they don't know something. They aren't sugarcoating difficulties. And yet, they don't dwell on items that Apple is using to beat some of their competitors to a pulp.
@kantrowitz Alex Kantrowitz on x
$APPL crushed. Very impressive given the economy. The world could be imploding and there still would be a line at the Apple Store.
@jyarow Jay Yarow on x
pow pow pow https://t.co/UjJLau91SO
@jyarow Jay Yarow on x
Amazon shoulda figured out how to make the Fire Phone. Could be pumping out quarters like this: https://www.cnbc.com/...
@joannastern Joanna Stern on x
“The $97 billion quarter ranks as Apple's third-best in history by total revenue, but one of its slowest for growth since the pandemic began more than two years ago.” https://www.wsj.com/...
@kifleswing Kif on x
tim cook on supply chain: “we are not immune to these challenges” https://www.cnbc.com/...
@alex @alex on x
hot damn https://twitter.com/...
@neilcybart Neil Cybart on x
Apple's year-over-year revenue in 3Q22 will be impacted by a number of factors: 1) Shortages and COVID issues will hit supply ($4B to $8B). 2) COVID lockdowns in China is impacting demand. 3) No sales in Russia. All-in-all, Apple's tone was on the negative side.
@munster_gene Gene Munster on x
Bottom line with the $AAPL quarter. Bad news is the supply challenge is getting worse. Good news, demand is strong and consumers will wait to get Apple products. June quarters loss is September quarters gain.
@munster_gene Gene Munster on x
Apple has a high class problem. If you run rate the supply headwind Apple has about $16B-$32B of unfilled demand out there. That's pent up demand.
@asymco Horace Dediu on x
Apple Wearables is now a Fortune 100 business.
@neilcybart Neil Cybart on x
Apple: Our 2Q22 results were not impacted by COVID lockdown issues in China. Instead, results were impacted by ongoing supply issues. For 3Q22, COVID disruptions *will* impact supply as it takes a while to ramp factories back up. Said another way, Apple's 2Q22 & 3Q22 are messy.
@jimcramer Jim Cramer on x
$4-$8 billion...get used to those numbers. those are the numbers that are going to have everyone trading Apple not owning it because of supply disruptions. Not demand, supply!!!
@samifathi_ Sami Fathi on x
Apple made $97.28 billion in Q2 of the year, FAR exceeding what analysts were expecting at around $93 billion. https://twitter.com/...
@wsj @wsj on x
Apple posted one of its best quarters in its 46-year history as iPhone sales exceeded expectations https://www.wsj.com/...
@jsnell Jason Snell on x
iPhone sales up 5% year-over-year to a March quarter record. Wall Street seems to have been very concerned that demand for iPhone was going to stall, but that hasn't really happened. At $50B this quarter, still an amazing sales engine for $AAPL. https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
Apple smashed forecasts once again: Revenues up 9% to $97.3bn Net profits up 6% to $25bn Services were fastest-growing, up 17% to $19.8bn.
@asymco Horace Dediu on x
Apple install base all-time-high driving 17% growth in services and 825 million paid subs.
@greengart Avi Greengart on x
Apple Services revenues are growing much faster than expenses. In other words, the money Apple is pouring into Apple TV+ (and fitness and...) is a good investment.
@asymco Horace Dediu on x
Apple is 15 to 16 months from having one billion subscriptions.
@daveleeft Dave Lee on x
72.6%! Printing money https://twitter.com/...
@asymco Horace Dediu on x
New numbers: Apple Subs growing at 444k per day. https://twitter.com/...
@caro_milanesi Carolina Milanesi on x
Luca on services opportunity “Of course, you know, the vast majority of what we do in services is to final consumers. We do understand and appreciate the fact that the enterprise is a great opportunity for us.” Sounds like Apple Business Essentials is just the start $AAPL
@patrickmcgee_ Patrick McGee on x
Apple services punch way above their weight for Apple's bottom line. With $19.8bn in revenue and 72.6% gross margins, its $14.4bn profit is alone almost double the $7.5bn net profit last quarter for Facebook parent Meta.

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