Apple Q1 FY 2015 Financial Results: Record iPhone Sales Drive Record Earnings
by Brett Howse on January 27, 2015 10:15 PM EST- Posted in
- Smartphones
- Apple
- iPhone
- Financial Results
Apple announced its earnings today for their first quarter of fiscal year 2015, with the quarter ending on December 27th 2014. This was a huge quarter for them, with new iPads, iMac coming to market, and of course the iPhone which launched right at the tail end of their last quarter. New products plus the busy holiday season gave Apple its highest quarterly results ever, with a staggering $74.6 billion in revenue, and a net profit of $18 billion. That is a 29.5% growth in revenue year-over-year, and a 37.4% increase in net profit. Gross margin was up 2% to 39.9% as compared to Q1 2014, and earnings per share came in at $3.08, which was much higher than analysts’ expectations.
| Apple Q1 2015 Financial Results (GAAP) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue (in Billions USD) | $74.599 | $42.123 | $57.594 | ||
| Operating Income (in Billions USD) | $24.246 | $11.165 | $17.463 | ||
| Gross Margin (in Billions USD) | $29.741 | $16.009 | $21.846 | ||
| Net Income (in Billions USD) | $18.024 | $8.467 | $13.072 | ||
| Margins | 39.9% | 38.0% | 37.9% | ||
| Earnings per Share (in USD) | $3.08 | $1.43 | $2.08 | ||
The story of Apple is the iPhone, which was updated in September with two new models with larger displays. Clearly the market wanted this, even if our own Ryan Smith still swears by his smaller iPhone 5 display. Sales of the iPhone for Q1 totaled 74.5 million units, with over $51 billion in revenue. Compared to Q4 2014, when the iPhone 6 and 6+ had just launched, that is a 90% increase in sales sequentially. The holiday quarter is always strong, but even year-over-year the increase in units was up 46%, with revenue up 57%. Average Selling Price (ASP) for this quarter’s iPhones was $687.30, which is up significantly over last quarter’s ASP of $602.92 and last year’s $636.90. Clearly there was quite a bit of pent up demand for a larger iPhone.
| Apple Q1 2015 Device Sales (thousands) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | Seq Change | Year/Year Change | |
| iPhone | 74,468 | 39,272 | 51,025 | +90% | +46% |
| iPad | 21,419 | 12,316 | 26,035 | +74% | -18% |
| Mac | 5,519 | 5,520 | 4,837 | 0% | +14% |
Next up from Apple is iPad sales, which struggled over the last year. Last quarter, the Mac overtook iPad for revenue. The new iPads did reverse that trend, with a 74% increase in units sold since the last quarter. 21.4 million iPads were sold in Q1, with revenue coming in at $8.985 billion, which works out to a ASP of $419.49. While this was a big jump from last quarter, it was still down 18% year-over-year, and revenue was down 22% from Q1 2014. Sales are still good, but iPad sales have not followed iPhone sales with large growth with each new model.
The Mac had another good quarter, with a 14% increase in units sold year-over-year. Apple sold 5.5 million Macs in Q1, which was about the same as they sold in Q4 2014, but the ASP was up slightly which resulted in a 5% gain in revenue since last quarter. Year-over-year revenue was up 9%. These are great numbers, especially when the PC market as a whole has been pretty much flat for the year, and Apple has not really updated the Mac in the last couple of quarters other than the new 5K iMac.
Apple’s iTunes, App Store, Mac App Store, iBooks, AppleCare, Apple Pay, and licensing fall into their Services segment, and this business line had modest growth of 4% quarter-over-quarter and 9% year-over-year, with it now pulling in almost $4.8 billion per quarter.
Other Products is the final category, and it includes iPod, Apple TV, Beats, and accessories. The lowly iPod, which vaulted Apple up through the 2000’s, is no longer broken down by units sold. The Other Products category had a 42% sequential increase in revenue, and a 5% loss in revenue as compared to Q1 2014, with $2.689 billion this quarter.
| Apple Q1 2015 Revenue by Product (billions) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | Revenue for current quarter | ||
| iPhone | $51.182 | $23.678 | $32.498 | 68.6% | |
| iPad | $8.985 | $5.316 | $11.468 | 12.1% | |
| Mac | $6.944 | $6.625 | $6.395 | 9.3% | |
| iTunes/Software/Services | $4.799 | $4.608 | $4.397 | 6.4% | |
| Other Products | $2.689 | $1.896 | $2.836 | 3.6% | |
Right now, the iPhone is Apple. It accounts for 68.6% of the company’s revenue for this quarter, and iPhone revenue alone is about the same as Microsoft ($26.47B), Google ($16.52B), and Intel ($14.72B) combined. This has allowed Apple to return $57 billion to shareholders over the last twelve months, and they have declared a dividend of $0.47 per share, payable on February 12th. Looking forward, Apple is expecting revenue between $52 and 55 billion, and gross margin between 38.5% and 39.5% for the next quarter.
Source: Apple Investor Relations
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tim851 - Wednesday, January 28, 2015 - link
The iPhone was unveiled on January 9 in 2007. AAPL stock price didn't move at all during this time. It started its slow uptake in May. So you had plenty of opportunity to buy in once you saw that the iPhone was not a ghastly chimera. But you probably didn't believe anybody would buy a 600 dollar phone. Neither did Steve Ballmer. Nor did I.WaltC - Wednesday, January 28, 2015 - link
Yep, no doubt about it...were it not for the cell-phone business, Apple would be history. I thought this comment from the article was funny:"Right now, the iPhone is Apple. It accounts for 68.6% of the company’s revenue for this quarter, and iPhone revenue alone is about the same as Microsoft ($26.47B), Google ($16.52B), and Intel ($14.72B) combined."
None of the compared companies generate 70% of their revenues from selling cell-phones...;) (Samsung would have been a far more accurate comparison.) Surely, therefore, Apple & Microsoft do not directly compete (as > 70% of Microsoft's revenue comes from PC software & services), and of course Apple certainly doesn't compete with Intel *snicker*, and the Google correlation is just as off-base.
Hopefully, if and when Apple's cell-phone business hits 80%+ of its total revenues, traditional Mac fans will at last dispense with the myth that Apple & Microsoft are "direct competitors." They aren't. Should Microsoft's Windows phone business ever approach 70%+ of its total revenues then they'd certainly be direct competitors at that point. But until then people might as well think of Apple as just another cell-phone maker...yawn...because that is exactly what Apple has become.
john_fshaw - Wednesday, January 28, 2015 - link
Apple is also the most successful PC company. It captures the majority of premium PC (over $1000) sales and makes more money on its laptop business than competitors who beat it on (low-cost oriented) volume.tim851 - Wednesday, January 28, 2015 - link
This is a seriously dumb post.So companies only compete if they have largely comparable revenue structures. Uh-huh. Wicked definition you got going there.
Must be comforting for BlackBerry (formerly RIM) that they aren't really competing against Android since Google makes 90% of its money with online advertising... *rollseyes*
ex2bot - Thursday, January 29, 2015 - link
Yawn!GotThumbs - Wednesday, January 28, 2015 - link
Anyone heard of the coal mine stores that operated back in the 1800's? When your limited to living in a restricted ecosystem, you have no options to buy products for outside stores as competitive prices. Apples raking in billions by selling the bulk of their phones to people who already own an older model IPhone. If you look at apples growth, it's not as impressive.http://www.digitaltrends.com/mobile/iphone-has-pea...
I give Apple major props for being able to make Billions by getting their collective incremental bits of what other phone makers have been providing for months, years.
At the end of the day. Buy what you want, but it's simply childish to think one person knows whats best for someone else, so drop the personal attacks for either owning an Apple product or some other companies. It just displays one's level of ignorance IMO.
john_fshaw - Wednesday, January 28, 2015 - link
Apple sold a record amount of iPhones to switchers from other platforms and new smartphone buyers.xype - Wednesday, January 28, 2015 - link
That probably doesn't count. Because reasons.steven75 - Wednesday, January 28, 2015 - link
"...what other phone makes have been providing for months, years."Please point out the other phones on the market that have as secure and easy to use authentication system as TouchID.
While your at it, let us know when you find a hardware/software ecosystem with the same *quality* selection as iOS.
Oh, and I'd also like to be able to take it to any store and receive the highest level of in-store support in the industry, not a carrier store or a craptastic place like Best Buy.
I'll wait.
web2dot0 - Thursday, January 29, 2015 - link
Your points have already been debunked.78million phones .... good penetration in China (first time user, NOT previous apple users).
You don't make $18B in PROFIT selling to the same customers.