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a. Key Points
Ongoing supply constraints limited the degree of revenue outperformance.
Apple is grouping a few services into a newly organized product called Apple Business.
Margins continue to steadily tick higher on an annual basis.
Apple is moving away from its net cash neutral goal.
b. Demand
Beat revenue estimate by 1.4% and beat guidance by 1.8%.The revenue beat was despite supply constraints. Currency boosted revenue growth by 2.5 points while supply constraints lowered growth by a modestly higher amount than that. No specific disclosure offered.
Met iPhone revenue estimate.
Beat Mac revenue estimate by 3.2%.
Beat iPad revenue estimate by 4%.
Beat wearables, home and accessories (WHA) revenue estimate by 2.3%.
Beat China revenue estimate by 8.4%.
Beat product revenue estimate by 1%.
Beat service revenue estimate by 2%.
c. Profits
Beat 48.5% GPM estimate & identical guidance by 80 basis points (bps; 1 basis point = 0.01%) each.Product GPM was helped a bit by lower tariffs.
Beat EBIT estimate by 3.8% and beat guidance by 4.3%.OpEx rose by 24% Y/Y.
Beat $1.96 EPS estimate by $0.05.EPS rose by 22% Y/Y.
Missed FCF estimate by 5%.
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