Apple | Q2-24 Earning

Better than expected.

Overview. The smartphone king delivered a pretty solid quarter after months of struggles in my opinion, without much improvement in terms of innovation though.

EPS. $1.34 | $1.40 | +4.4% beat
Revenue. $84.36B | $85.8B | +1.7% beat

$32B returned to shareholders.

"We very much look forward to sharing these tools with our users, and we continue to invest significantly in the innovations that will enrich our customers’ lives, while leading with the values that drive our work."

We’re finally seeing some green, and for once, not everything is due to buybacks - although the return to shareholders remains colossal.

Business.

Lots of interesting things seem to be happening at Apple lately, although it starts with declining sales in Greater China which is a pretty important market for Apple but completely predictable after the regulations on Chinese officials.

Yet, every other region has been growing but the second part of the screenshot gives the bigger picture: Growth only comes from services, which is half bullish and half bearish, and I guess everyone will make up their mind about which it is.

It means the company is selling less hardware, less products. As to why… Is it because the brand is declining? Because people can’t afford them anymore? Or because they stopped buying each new version? My vote goes to the second reason, but this is just a guess.

Either way, Apple ends this quarter with a new all-time high in terms of active device base, as shown by strong growth in Apple services, proving once more that Apple users subscribe more & more to their favorite brand’s services - whether it’s Apple TV, Apple Music or anything else. This trend will surely continue in the future.

Revenues.

Some more interesting things on the income statement.

As said, the small increase in revenue YoY and for the nine months ending comes from growing services and declining product sales - again, see this as you want.

What matters most in my opinion is the lower cost of business, certainly due to the larger share of services in the company’s revenues - a higher margin business. It’s still interesting to note.

Nothing new on the cash flow statement or the colossal balance sheet of the company.

My Take.

Things are interesting for Apple and slightly better than last quarter, but they are still far from good in my opinion. We’re still talking about one of the best brands in the world, but without innovation…

There’s also a lot of noise about Warren Buffet selling around $90B of Apple shares this quarter but I’m not sure we should read too much into this. None of us are dealing with the same methods or the same knowledge, so let’s keep it simple: when prices are extended, investors take profits.

I will always follow Apple, but it isn’t a stock I would personally hold.