Today Apple released their Q4 results from fiscal year 2015, and in what seems like an almost unending cycle, the company has once again set a new record for the quarter with $51.5 billion in revenue. That is a 22% increase over the same period last year, where the company only had $42 billion in revenue. Apple’s strong margins continue, with 39.9% margin for the quarter. Operating income came in at $14.6 billion, up from $11.2 billion last year, and net income rose $2.6 billion year-over-year, coming in at $11.1 billion for the quarter. Earnings per share was $1.96, up from $1.42 last year.

Apple Q4 2015 Financial Results (GAAP)
  Q4'2015 Q3'2015 Q4'2014
Revenue (in Billions USD) $51.501 $49.605 $42.123
Gross Margin (in Billions USD) $20.548 $19.681 $16.009
Operating Income (in Billions USD) $14.623 $14.083 $11.165
Net Income (in Billions USD) $11.124 $10.677 $8.467
Margins 39.9% 39.7% 38.0%
Earnings per Share (in USD) $1.96 $1.85 $1.42

The large gains can be mostly attributed to the iPhone 6 and 6 Plus, released last year to record sales. The recently launched models were only available for a short time this quarter, but of course contributed their initial sales to Q4. The full impact of the latest models should be even more felt in Q1 FY 2016. Despite the iPhone being far and away the largest product for Apple, Mac sales have also contributed, along with services and Apple Watch.

The iPhone is king at Apple. It contributes the largest portion to their overall revenues, and with the excellent margins Apple enjoys, it is very profitable. Apple sold just over 48 million iPhones last quarter – a quarter where the new model was known to be incoming. Yes, the 6s and 6s Plus were released in Q4, but only at the tail end of the quarter. This is a 22% increase in phones sold year-over-year. Revenue for the iPhone alone was $32.2 billion for Q4, which is up 36% year-over-year and up 3% from last quarter. Q1 2016 (Oct-Dec 2015) will be the holiday quarter, and this is traditionally the strongest quarter for iPhone sales.

Mac sales increased 3% year-over-year, which means that the Mac is still showing slow growth at a time when the rest of the PC market is in decline. Apple sold 5.7 million Macs last quarter, which resulted in $6.9 billion in revenue.

The iPad continues to decline, with sales falling 20% year-over-year. For the quarter, Apple sold 9.9 million iPads, for revenues of $4.3 billion. This one segment is really the only chink in Apple’s armor, and iPhone sales are likely part of the problem, with people turning to larger phones rather than tablets.

Apple Q4 2015 Device Sales (thousands)
  Q4'2015 Q3'2015 Q4'2014 Seq Change Year/Year Change
iPhone 48,046 47,534 39,272 +1% +22%
iPad 9,883 10,931 12,316 -10% -20%
Mac 5,709 4,796 5,520 +19% +3%

Apple has also steadily increased its services, with the segment achieving 10% growth to $5.086 billion. This includes iTunes, AppleCare, Apple Pay, licensing, and other services.

Finally, we have Other Products, which is Apple TV, Apple Watch, Beats, iPod, and accessories. This segment outperformed all other Apple segments in terms of growth, with a 67% increase in revenue year-over-year. With the acquisition of Beats, as well as the launch of the Apple Watch earlier this year, revenue grew from $2.641 billion in Q4 2014 to $3.048 billion this quarter. Unfortunately, Apple does not break out unit numbers for anything in “Other Products” but you can bet this gain was not due to iPod sales.

Apple Q4 2015 Revenue by Product (billions)
  Q4'2015 Q3'2015 Q4'2014 Revenue for current quarter
iPhone $32.209 $31.368 $23.678 62.5%
iPad $4.726 $4.538 $5.316 8.3%
Mac $6.882 $6.030 $6.625 13.4%
iTunes/Software/Services $5.086 $5.028 $4.608 9.9%
Other Products $3.048 $2.641 $1.896 5.9%

I tend to think of Apple as iPhone and other stuff, because the iPhone sales are such a huge part of their revenue stream. iPhone sales now account for 62.5% of revenue, up from 56.2% a year ago. It’s hard to fault them on this though, because clearly the larger displays on the latest iPhones have done very well for the company. But they did show good growth in Macs at a time when other PC vendors have seen a reduction in overall sales. Apple Watch is also off to a good start, but without unit sales its difficult to see any sort of pattern there yet, since it was just launched this year.

Looking ahead for Q1 2016, Apple is expecting revenues of $75.5 billion to $77.5 billion, and gross margins staying between 39% and 40%.

Source: Apple

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  • lilmoe - Wednesday, October 28, 2015 - link

    I don't know what you mean by intentional, but these patterns are starting to show for multiple stocks and indices, most obvious of them being AAPL's.

    Volumes are going down too:
    http://finance.yahoo.com/echarts?s=aapl#{%22showAr...

    If I owned AAPL stock I'd sell a good portion now or wait for a good rally and sell for better profit. This honestly ain't looking too good for bulls.
    Reply
  • boozed - Tuesday, October 27, 2015 - link

    "I tend to think of Apple as iPhone and other stuff"

    Surprising to see the fruit flavoured computer substitutes outselling the awkwardly named fondleslabs though.
    Reply
  • mgl888 - Tuesday, October 27, 2015 - link

    I feel like the smartphone market is starting to saturate too. I wonder how Apple will diversify later. Reply
  • Morawka - Tuesday, October 27, 2015 - link

    like a electric car? untapped market ready to expload if they can get the mileage range up to 200 and the car affordable to the middle class ($35,000 and under) Reply
  • Mondozai - Wednesday, October 28, 2015 - link

    Except that an electric car is still at least 4 years away. And even then, Apple isn't going to produce their own car, but provide an exclusive suite of software and hardware within other cars. But even IF they go ahead and do their own car, that's also further down the road. Apple is late to the party.

    And even when the car comes out, it will take many years to scale. Apple is incredibly reliant on a single product. They've escaped gravity for some time, but they can't prolong the inevitable. They have no real diversification which can carry these revenue numbers except their phone(s).
    Reply
  • Morawka - Wednesday, October 28, 2015 - link

    6 or 7 billion on every single category is great revenue for any company.. Sure the iPhone sells more but your under-selling apple's other products.

    Dell or HP would kill for 6 billion in revenue for a quarter on PC's..
    Reply
  • Speedfriend - Wednesday, October 28, 2015 - link

    "Dell or HP would kill for 6 billion in revenue for a quarter on PC's."

    Yes, kill their sales teams for the fall in revenues. HP does $8-9bn of quarterly PC revenues.

    Given Dell sold 10m PCs last quarter, I am pretty sure that they do at least $6bn in revenue!
    Reply
  • michael2k - Wednesday, October 28, 2015 - link

    HP? No they don't:
    http://h30261.www3.hp.com/~/media/Files/H/HP-IR/do...

    $7.491b in personal systems in the July quarter, down from $8.649b the same quarter last year. I mean, $7.491b is good revenue, but not good earnings! They only made $222m, and for Apple to hit that same level of earnings they would have to only make $46 per iPad. If HP had the same kind of revenue Apple does (they reported gross margin of 39% that quarter) they would be making $2.92b, over 10x their current earnings. Apple's earnings:
    http://investor.apple.com/secfiling.cfm?filingID=1...

    Only $4.276b revenue, so a good chunk lower than HP, but at 39% margin still over 5x more earnings.
    Reply
  • BurntMyBacon - Wednesday, October 28, 2015 - link

    @Mondozai: "But even IF they go ahead and do their own car, that's also further down the road. Apple is late to the party."

    That didn't stop them with the smartphone market. Contrary to popular belief, not only didn't they invent the smart phone, but there were technically superior options (for many use cases at the time) available. The original iPhone was extremely limited in capability. Blackberries had better email and enterprise features. I had the capability to remote into PCs with a Palm Treo. Whether Apple's success with the iPhone came from their total buyout of the early runs of capacitive touch screens, their ability to make the UI simple, their ability to appeal to the average consumer, etc is irrelevant. They've proven that they can build a product that people will buy even without being the most technically superior or cost effective offering.

    The question I would ask is whether or not the margins will be high enough to be of interest to them. I would guess that, if anything, they would be more interested in building the electronics (software / hardware) for it than building the platform itself for the simple reason that margins would likely be a lot higher.
    Reply
  • Speedfriend - Wednesday, October 28, 2015 - link

    Building a car is very different from building a smartphone. Margins are much lower, suppliers are more powerful and there are existing strong brands. If my cars broke as often as my iPhone have, I would be very unhappy indeed. Reply

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