Apple’s Services Revenue Sur in Latest Quarterly Earnings Beat
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Apple's Services Revenue Sur in Latest Quarterly Earnings Beat
- Apple reported quarterly revenue $95.4 billion surpassing Wall Street estimates by about $800 million.
- Services segment grew 14% year-over-year to a record $26 billion, led by App Store, Apple Music, and iCloud
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Apple Inc. released its fiscal fourth-quarter earnings on October 31, 2024, analyst expectations amid robust growth in its high-margin services division despite softer iPhone sales.
The Cupertino, California-based tech giant posted net income of $14.7 billion, or $0.24 per diluted share, compared to $22.96 billion, or $0.38 per share, in the year-ago period. Total revenue climbed 6% from $89.5 billion a year earlier, driven primarily by services, which now account for over 25% of overall revenue. Hardware categories showed mixed results: iPhone revenue dipped 0.5% to $46.2 billion, reflecting a post-upgrade lull following the iPhone 15 launch, while Mac sales rose 1.7% to $7.7 billion and iPad jumped 17% to $6.9 billion.
CEO Tim Cook highlighted the services boom during the earnings call, attributing it to a growing paid subscriptions base of 1 billion across 10 categories, including Apple TV+ and Fitness+. Wearables, Home, and Accessories revenue held steady at $9.7 billion. Gross margins improved to 46.9% from 45.8%, bolstered by services’ higher profitability.
The results come as Apple navigates regulatory scrutiny, including a U.S. Department of Justice antitrust lawsuit filed in March 2024 accusing it of smartphone monopoly practices, and EU Digital Markets Act compliance pushing App Store changes. Shares rose about 4% in after-hours trading, reflecting investor relief over the earnings beat and optimistic guidance for fiscal 2025 first-quarter revenue of roughly $103 billion to $105 billion.
This performance underscores Apple’s pivot toward recurring revenue streams, with services now larger than any single hardware category, positioning the company for sustained growth amid macroeconomic headwinds.