Apple reports highest quarterly revenue in history at $78.4bn

Apple reported its highest quarterly revenue ever.

iPhone, Services, Mac and Apple Watch also set records.

Apple announced financial results for its fiscal 2017 first quarter ended December 31, 2016, posting what CFO Luca Maestri called the highest quarterly revenue in Apple’s history with $78.4bn – as well as all-time record quarterly earnings per diluted share of $3.36.

These results compare to revenue of $75.9bn and earnings per diluted share of $3.28 in the year-ago quarter.

On the earnings call, CEO Tim Cook said Apple also saw all-time unit records for the iPhone and Apple Watch, as well as revenue records for Mac and its Services business.

Per Maestri, Apple sold 78.3 million iPhone units, which was an increase of 5% over last year, and which Cooked called a “tremendous quarter.”

It also marked the best-ever quarter for Services, which brought in nearly $7bn in revenue, Cook said. According to Maestri, that marks an increase of 18% year over year.

It also includes $3bn in purchases in December 2016 alone, which Cook said makes for the Apple Store’s single-best month ever. And, overall, Maestri said the Apple Store saw more than double the revenue of Google Play in calendar 2016.

Per Cook, the App Store has more than 2.2 million apps “for doing almost anything you can imagine” and Apple’s developer community has earned more than $60 billion, including more than $20 bn in 2016 alone.

What’s more, Apple Pay has more than tripled its user base in the past year and had hundreds of millions of transactions and billions of dollars in purchases in the December quarter alone.

In fact, Cook said he expects Apple’s Services business to become the size of a Fortune 100 company this year and Apple’s goal is to double this business in the next four years.

Mac, too, saw its highest quarterly revenue ever with 5.4 million units sold, Maestri said. And, per Cook, the majority of first-time buyers are coming from Windows PCs.

It was also the best quarter ever for Apple Watch with “holiday demand so strong, we couldn’t make enough,” Cook said.

International sales accounted for 64% of the quarter’s revenue.

“We’re thrilled to report that our holiday quarter results generated Apple’s highest quarterly revenue ever, and broke multiple records along the way,” Cook said in a statement. “We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch. Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline.”

Between AirPods, Apple Watch, Beats and the rest of Apple’s wearable lineup, Cook said he is “excited about the huge growth potential for wearables” and noted Apple’s ecosystem is expanding to wherever consumers spend time, including home, work, the car and the gym. In particular, Cook touted the capabilities of HomeKit, which can not only secure homes, but also detect water leaks.

“When I say, ‘Good morning,’ to Siri, my house lights come on and my coffee starts brewing,” Cook said, adding that he also uses Siri to adjust the thermostats in his house and turn on his fireplace.

“This level of home automation was unimaginable a few years ago,” Cook added.

In addition, Maestri said in a statement that Apple’s business performance resulted in a new all-time record for earnings per share and over $27bn in operating cash flow.

“We returned nearly $15bn to investors through share repurchases and dividends during the quarter, bringing cumulative payments through our capital return program to over $200bn,” he added.

According to a press release, Apple is providing the following guidance for its fiscal 2017 second quarter:

  • Revenue between $51.5bn and $53.5bn
  • Gross margin between 38% and 39%
  • Operating expenses between $6.5bn and $6.6bn
  • Other income/(expense) of $400m
  • Tax rate of 26%

In addition, Apple said its board of directors declared a cash dividend of $0.57 per share of the company’s common stock. The dividend is payable on February 16, 2017 to shareholders of record as of the close of business on February 13, 2017.

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