Apple reported the company’s best quarterly sales ever on Thursday, with the tech giant pointing to a strong holiday performance leading to $124.3 billion in Q1 revenue.
The company posted the big quarter despite declining sales in China and a minor dip in iPhone revenue. Apple offset its sales drop in China with an 11.4% year-over-year increase in European sales, as well as 14% annual growth from Apple’s Services sector, which includes Apple TV+, Apple Music, and iCloud storage.
Those gains also helped Apple weather flat sales from its Wearables division, which accounts for Apple Watch, headphones, and its Vision Pro virtual reality headsets.
Apple CEO Tim Cook, in a statement accompanying earnings, announced Apple Intelligence — the company’s artificial intelligence program designed to help users with messages, notifications, and other features — would “be available in even more languages this April,” without providing further details.
Here are the top-line numbers from Apple’s first quarter, which represents its October through December performance:
Revenues: $124.3 billion, a 4% increase from the year prior. Apple’s Q1 sales narrowly topped analyst estimates from Zack’s Investment Research of $124 billion. The Q1 performance also topped Apple’s previous record of $123.9 billion in sales during the holiday quarter of 2021.
Apple’s sales in China, notably, dropped 11% year-over-year to $18.5 billion. Cook explained the dip on the call by saying it was due to a “change in channel inventory,” or products that are in the supply chain but have not been sold yet. He also said China is the “most competitive market in the world” and that, moving forward, he believes recent government stimulus packages will help some of Apple’s products in the next quarter.
The company made up for it in Europe, its second biggest market, where Apple had $33.9 billion in Q1 revenue — an 11.4% year-over-year increase.
Net income: $36.3 billion, up 7.1% from last year’s $33.9 billion.
Earnings Per Share: Apple’s diluted earnings per share of $2.4o were better than Zack’s estimates of $2.36 EPS.
iPhone Sales: Revenue from Apple’s linchpin device declined 0.8% annually to $69.1 billion. Apple brought in nearly $70 billion from iPhone sales a year ago.
Services: Apple’s wide-ranging Services sector accounted for $26.3 billion in sales, compared to the $23.1 billion brought in a year ago. As is usually the case, Apple did not mention how its streaming service, Apple TV+, was performing in its quarterly report, though on its earnings call Cook did express enthusiasm about several of its upcoming shows. This was the best quarter ever for Services sales.
Cook was in Washington, D.C. last week for President Trump’s inauguration, where he was joined by a number of other Big Tech CEOs, including X owner Elon Musk, Meta chief Mark Zuckerberg, and Amazon founder Jeff Bezos. Cook’s appearance came after he personally donated $1 million towards Trump’s inauguration fund.
Heading into Thursday, Apple’s stock price had increased a modest 3.5% since the start of October. The company’s holiday quarter coincided with the October launch of Apple Intelligence; the rollout was met with tepid reviews, and has led to questions from some analysts about Apple’s future in a crowded AI space.
Apple is the world’s most valuable company, with a market cap of $3.57 trillion. Microsoft, with a valuation of $3.09 trillion, is the next closest company.
Cook, on the Q1 earnings call on Thursday afternoon, said Apple now had 2.35 billion active devices worldwide — yet another company record. The 64-year-old executive also took a moment to extend his condolences to those affected by the “devastating wildfires that impacted the Los Angeles area.”
There was not much mentioned about Apple’s entertainment push, beyond Cook mentioning the recent return of “Severance” and the upcoming “Formula One” film starring Brad Pitt.
