Apple is continuing to break ground on its AI integration with their line of products and services, as the tech giant reported record revenues in the fiscal third quarter of 2024 of $85.8 billion, a 5% increase year-over-year.
Here are the top-line numbers:
Net income: $21.5 billion, up 8% from $19.9 billion the prior year quarter. Apple’s diluted earnings per share of $1.40 beat estimates from Zack’s Investment Research of $1.34.
Revenues: $85.8 billion a 5% increase compared to $81.8 billion in 2023. Analysts from Zack’s estimated revenue of $84.43 billion.
Services Net Sales: $24.2 billion vs. $21.21 billion in 2023, up 14%
Products Net Sales: $61.6 billion compared to $60.6 billion in 2023
Sales of iPhones, Apple’s primary revenue driver, fell 1% to $39.3 billion, with the wearables category, which includes the Apple Watch, decreasing to $8.1 billion compared to $8.3 billion in 2023. Mac computer sales rose 3% to $7 billion.
The only region that showed a decline in net sales was Greater China, which continues the tech company’s struggles there. The Chinese government has expressed concerns about the security of Apple devices and China represents almost a fifth of Apple’s overall net sales. Apple CEO Tim Cook noted that more than 50% of the decline in the most-recent quarter year-over-year was currency-related, which was “an improvement” from the first half of the fiscal year.
“So we’re happy to see the acceleration,” Cook said, adding the company remained “confident in the long-term opportunity” in the competitive market.
On Thursday, Cook touted the success of AppleTV+ productions, which scored 72 Emmy Award nominations across 16 programs, the best-ever showing for the streaming arm.
“Apple TV+ productions are delighting audiences on screens, large and small, we’re sharing powerful works of imagination with series and movies like “Presumed Innocent,” the upcoming “Disclaimer” and ”The Instigators” starring Matt Damon,” the tech company’s CEO said. “And we can’t wait for returning fan favorites with new seasons of “The Morning Show,” “Slow Horses” and ”Severance.”
During the quarter, Apple’s EPS growth of 11% and nearly $29 billion in operating cash flow allowed the the tech giant to return more than $32 billion to shareholders, Apple’s CFO Luca Maestri said. “We are also very pleased that our installed base of active devices reached a new all-time high in all geographic segments, thanks to very high levels of customer satisfaction and loyalty.”
What Wall Street was more interested in further understanding about Apple Intelligence, the company’s company-wide AI initiative. Cook promised that Apple “will continue to make significant investments in this technology and dedicate ourselves to the innovation that will unlock its full potential.”
Apple officially jumped into the AI arms race in June when it unveiled its plans for integrating AI technology into its products, including a partnership with ChatGPT developer OpenAI. Apple’s intends to integrate machine learning capabilities across all of the company’s product offerings, including Siri.
But like its rivals, including Meta Platforms, Apple is struggling to explain how it will monetize the new technology — and what the timetable is to realize a return on investment.
The integration “builds on years of innovation and investment in AI and machine learning, it will transform how users interact with technology,” Cook said Thursday. He added that it was “a breakthrough personal intelligence system that puts powerful, private generative AI models at the core of iPhone, iPad, and Mac.”
ChatGPT integration will be coming to iOS 18, iPadOS 18 and MacOS later this year, the company said during June’s annual Worldwide Developers Conference. The function will serve as an extension of Apple Intelligence, providing further “expertise” details from the OpenAI chatbot with user control over whether they want to share data to use the function.
Apple also noted it intends to expand further by partnering with more AI companies in the future.
