🔴WATCH LIVE: Apple Q4 2024 Earnings Call | $AAPL

Thank you, Suani. Good afternoon, everyone, and thanks for joining the call. Today, Apple is reporting revenue of $94.9 billion, a September quarter record and up 6% from a year ago. iPhone grew in every geographic segment, marking a new September quarter revenue record for the category, and services set an all-time revenue record, up 12% year-over-year. We also set September quarter segment revenue records in the Americas, Europe, and the rest of Asia-Pacific, as well as in a large number of countries, including the United States, Brazil, Mexico, France, the UK, Korea, Malaysia, Thailand, Saudi Arabia, and the UAE. And we continue to be excited by the enthusiasm we're seeing in India, where we set an all-time revenue record. This has been an extraordinary year of innovation at Apple. We brought the revolutionary Apple Vision Pro to customers in February, which brings users tomorrow's technology today. And in June, we announced Apple Intelligence, a remarkable personal intelligence system that combines the power of generative models with personal context to deliver intelligence that is incredibly useful and relevant. Apple Intelligence marks the beginning of a new chapter for Apple innovation and redefines privacy and AI by extending our groundbreaking approach to privacy into the cloud with private cloud compute. Earlier this week, we made the first set of Apple Intelligence features available in US English for iPhone, iPad, and Mac users with systemwide writing tools that help you refine your writing, a more natural and conversational Siri, a more intelligent photos app, including the ability to create movies simply by typing a description, and new ways to prioritize and stay in the moment with notification summaries and priority messages. And we look forward to additional intelligence features in December with even more powerful writing tools, a new visual intelligence experience that builds on Apple intelligence and ChatGPT integration as well as localized English in several countries including the UK, Australia, and Canada. These features have already been provided to developers, and we're getting great feedback. More features will be rolling out in the coming months as well as support for more languages and this is just the beginning. Now I'll turn to our results for the quarter beginning with iPhone. iPhone revenue set a September quarter record of $46.2 billion, up 6% from a year ago with growth in every geographic segment. With the introduction of Apple intelligence, we're beginning a new era for iPhone. iPhone 16 powered by A18 is equipped with an incredible new 48 megapixel fusion camera, fantastic photo experiences, and the addition of the action button and camera control. And iPhone 16 Pro is the most advanced iPhone we've ever made, powered by A18 Pro and featuring even larger displays, an industry-leading Pro camera system with camera control and studio quality mics, all with a huge leap in battery life. Turning to Mac, revenue was $7.7 billion, up 2% from a year ago. Just this week, we brought a new generation of Apple silicon to Mac, M4, M4 Pro, and M4 Max. From blazing fast performance to Apple's most advanced neural engine yet, our latest chips can easily tackle incredibly complex workflows. And they ensure our newest Macs will be the best personal computers for AI the instant they hit stores. With the newest additions to our Mac lineup, customers can choose the Mac that's just right for them. Whether that's iMac, the world's best and most beautiful all-in-one, MacBook Air, the world's most popular laptop, now with double the starting memory, MacBook Pro, the best Pro Notebook anywhere, or the incredible mighty new Mac Mini, our first ever carbon neutral Mac. iPad revenue was $7 billion, 8% higher year-over-year. iPad is unlike any other product on the market today, and it's become an essential device in homes, schools, and businesses of all sizes. Recently, we were thrilled to introduce the newest iPad Mini, featuring an ultra compact design built for Apple Intelligence with support for Apple Pencil Pro. It's been a big year for iPad. iPad Air was popular with students and teachers as they got back to school this year, while creators are pushing the boundaries of what's possible with the M4 powered iPad Pro. In wearables, home and accessories, revenue was $9 billion, down 3% from a year ago. During the quarter, we launched the all-new Apple Watch Series 10, bringing a beautiful new design and new capabilities to the world's most popular watch that make it even more powerful, intelligent, and sophisticated. It's the thinnest Apple Watch yet, making it more comfortable than ever, while offering the biggest, most advanced display. Watch OS 11 brings some huge new health and fitness insights to users, including sleep apnea notifications, which help to alert people with a potentially serious but often undiagnosed condition. We're proud of the impact we make through our health innovations on watch, and I'm grateful for every note I receive about the importance of watch in people's lives. With AirPods 4, we broke new ground in comfort and design with our best ever open-ear headphones available for the first time with active noise cancellation. And we were especially pleased to unveil revolutionary end-to-end hearing health capabilities for AirPods Pro 2 with hearing protection, hearing test, and hearing aid features. These just became available in a software update this week and we believe this will make a meaningful difference in our users' lives. I've already started getting notes from customers calling the experience life-changing. And Apple Vision Pro continues to deliver spatial experiences that weren't possible before, including immersive entertainment like the new short film Submerged, which gives people a view into the unique storytelling power made possible by spatial computing. Vision Pro has more than 2500 native spatial apps and one and a half million compatible apps for Vision OS2 as well as applications companies are building to reimagine how they work. Vision Pro continues to inspire awe in its users and we're just scratching the surface of what's possible. And just yesterday we announced we're bringing Vision Pro to Korea and the UAE. As I mentioned earlier, services achieved an all-time revenue record of $25 billion, up 12% from a year ago, and with all-time revenue records across most of our categories. With Apple TV Plus, we love celebrating the craft of great storytellers who know how to put on a show. Audiences love to discover new movies like Wolves, explore acclaimed new series like Disclaimer, and dive back into returning favorites like Slow Horses and Shrinking. Apple TV Plus productions have become fixtures at award shows, earning more than 2300 nominations and more than 500 wins. Today, Apple also offers a live sports experience in a league of its own with MLS season pass, and subscribers have been cheering on their favorite teams in the MLS Cup playoffs. This month, we also marked 10 years of Apple Pay. There's always something magical about being able to buy groceries or pay for movie tickets seamlessly with your Apple device. Today, users choose Apple Pay for purchases across tens of millions of retailers worldwide. And we're excited to make the Apple Pay experience even better with the option to redeem rewards and access loans from credit cards, debit cards, and other lenders right at checkout. Whenever we celebrate big moments, Apple stores are the best places to share them with customers. I had an incredible time during launch day in September alongside our team at Apple Fifth Avenue where energy and enthusiasm filled the air. And in stores all over the world, customers are eager to get a closer look at our latest innovations. We also opened two new stores during the quarter and we can't wait to bring four new stores to customers in India. We're passionate about education and believe technology has a vital role to play in both helping teachers to inspire their students and students to learn about the world around them. In honor of World Teachers Day, Apple was proud to share new resources for teachers to engage their students in ways that aim to make learning easy and fun. Additionally, we've expanded our education grant program into 100 new schools and communities, helping with everything from access to technology to educator resources to scholarships and financial support. As we near the end of the year, we're proud of the progress we've made in our efforts to be carbon neutral across our entire footprint by the end of the decade. As I mentioned earlier, we were thrilled to introduce our first ever carbon neutral Mac with the latest Mac Mini. And in another milestone, customers can choose a carbon neutral option of any Apple Watch. These achievements are amazing for all of us at Apple. And we are determined to reach our 2030 goal. At Apple, across everything we do, we manage for the long term because we're always thinking about what comes next, the next great challenge, the next innovative idea, the next big breakthrough. As we close out the year, we have the best lineup we've ever had going into the holiday season, including Apple Intelligence, which marks the start of a new chapter for our products. This is just the beginning of what we believe generative AI can do and I couldn't be more excited for what's to come. Before I hand it over to Luca, with Luca transitioning to a new role with Apple, this will be the final time he's joining our call. So, I just wanted to take a moment to recognize his extraordinary service as Apple CFO and to thank him for his partnership. I am deeply grateful. In his 10 years in the role, Luca has done truly exceptional work in shaping Apple as we know it today. He has helped manage Apple for the long term thoughtfully and deliberately. He has helped us enrich the lives of so many around the world. And he has been a leader that people look up to and have learned so much from. I have incredible confidence in our incoming CFO, Kevin Per, and we look forward to more of you meeting and working with him going forward. With that, I'll turn it over to Luca.

Thanks Michael. As I noted in my comments, just this week on Monday, we made the first set of Apple Intelligence features available in US English for iPhone, iPad, and Mac. This includes things like systemwide writing tools that help you refine your writing, a more natural conversational Siri, more intelligent photos app, including the ability to create movies simply by typing a description, which is really cool, and new ways to prioritize and stay in the moment with notification summaries and priority messages. There's also email summaries and email priority. We're getting a lot of positive feedback from developers and customers. And in fact, if you just look at the first three days, which is all we have obviously from Monday, the 18.1 adoption is twice as fast as the 17.1 adoption was in the year ago quarter. And so there's definitely interest out there for Apple Intelligence. Carrying on in the quarter, we are looking forward to bringing even more features in December. And this will include even more powerful writing tools and visual intelligence experience that builds on Apple intelligence and ChatGPT integration in addition to other features as well as we'll bring localized English to several countries that include the UK, Australia and Canada. So, it's going to be quite a software quarter between the release on Monday and the release in December. And then as we turn the corner to 2025, we'll have more languages rolling out starting in April as well and more features as well. And so it's a very, very strong drum beat and we couldn't be more excited about it.

There's a lot there on Apple intelligence. We believe it's a compelling upgrade reason and we'll but we just launched it three days ago and so what we've got now from a data point of view is the number I just referenced that 18.1 has twice the adoption rate of 17.1. So that clearly shows a level of interest out there. In terms of exiting the December quarter with demand greater than supply, that's not my recollection that that happened for all four of the years. We clearly had cases during COVID where there were disruptions and that some spilled over. But in a more regular environment where we're not having something a 100-year flood kind of thing, we would our desire is to get into balance as quickly as possible. We don't want customers having to wait for products. And so if you look at how we've done this year, we did that very quickly on the 16 on the 16 Pro family, the Pro and the Pro Max. We've been constrained in October. But we believe that soon we'll be out of constraint and so that's a good sign from our point of view. Keep in mind that that's a function of supply and demand, not one side or the other. And we've been preparing for the quarter for a while. So that's what I would say there.

Ben, I could not be more excited about Apple Intelligence and the roll out that we've got in front of us. I'm obviously on future releases as well, working on it and it's changing my daily life. I'm super excited about the health features that we're rolling out. The number of emails I'm already getting from customers that have taken the hearing test and are using their AirPods Pro 2 as a hearing aid are just staggering and heartwarming to read. I'm also thrilled about sleep apnea and the notification there that we'll have through the watch. This week is a very exciting week for us because we just rolled out three launches of different Macs and desktops and laptops. And so we have a lot of things on the docket and it's definitely the strongest lineup we've ever had going into the holiday season. In terms of the noise, I tune it out. Because if not, it would just be deafening. And so that's what I do. I can't speak for everybody else, but that's what I do.

Thanks, Ben.

Yeah, I'll take the China question. If you look at how we did for the quarter, we were relatively flat year-over-year. And a key component of that improvement relative to the year-over-year performance that we had been achieving is that there was a sequential improvement in foreign exchange. And so that helped us out. As you know, it's been a headwind that we've been reporting for a period of time. But the other parts that are what else is going on there is that our installed base of active devices reached an all-time high. We had the top two selling smartphones in urban China according to Canalys. The level of new customers that we have buying the products like Mac and iPad are well over 50%. Watch is over 3/4 that are new to the product and so there are several positive signs there. In terms of the stimulus, it's a clear focus of the team there, but I'm not an economist and don't want to ad lib on the effect of it. On the Europe side, a number of things as you see from our results during the quarter Europe grew double digits 11% and really it was really good growth across the board the different segments they all did well. Keeping in mind our definition of Europe in our segment reporting includes a number of emerging markets like Turkey where we've grown very strongly, the Middle East, Tim mentioned a number of records in Saudi, in UAE, and we also include India where we set an all-time revenue record during the September quarter. But I have to say also Western Europe grew nicely so we seen very very good results for us in the entire segment.

Yeah, David, it's clearly, as you point out, a different cadence, if you will, than we would normally do. We, as we talked about at WWDC, we wanted to give a comprehensive vision of Apple Intelligence. And we said then that it would roll out over time and we're right on what we said at WWDC. And so we're executing well. In terms of the demand curve, I would just say that what we believe here is that it's a compelling reason for upgrading. And it's both my personal experience and feedback that I'm getting and so we'll see. But we're not projecting beyond the current quarter. Obviously we just don't do that.

If you look at our schedule, we started in the US with US English that started on Monday. There's another release coming that adds additional features that I had referenced in December in not only US English but also localized for UK, Australia, Canada, Ireland and New Zealand. And then we will add more languages in April. We haven't said the specifics yet in terms of the languages, but we'll add more in April and then more as we step through the year. And so we're moving just as fast as possible while ensuring quality. That's what we're doing.

You know, I wouldn't want to speculate about those sorts of things. And so I'm going to punt on that one.

Yeah. Thank you.

I think just to keep it in mind, Apple Intelligence is also available on the Mac for the M series products and on certain models of iPad in addition to the phone. And so it's on all three. Your question was on can the Apple intelligence actually help the services growth rate. Keep in mind that we have released a lot of APIs and developers will be taking advantage of those APIs. That release has occurred as well and of course more are coming and so I definitely believe that a lot of developers will be taking advantage of Apple intelligence in a big way and what that does to services I'll not forecast but I would say that from an ecosystem point of view, I think it will be great for the user and the user experience.

Yeah.

It's tough to answer your question because we've been constrained in October on the Pro and the Pro Max and so it's really too early in the curve to call the precise mix on the consumer versus the pro. So we'll see.

You know, I don't want to speculate on that from a legal point of view. It's an ongoing case and I will save that for another day.

Yeah.

Well, the way that I view it is that we have lots of opportunity in all of those. And so, there's lots of customers to try to convince to take advantage of it. And we're going to continue investing in the services and adding new features and whether it's news plus or music or arcade. That's what we're going to do. Keep in mind that for us, we're more focused on being best than being most. And so in some cases, not in every case, some of the services that you mentioned, the majority of the services that you mentioned are not cross-platform. We make them for our customers only. And so that in some cases changes the person who's going to sell the most perhaps, but that's our objective is to make the best.