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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  • BurntMyBacon - Wednesday, October 28, 2015 - link

    I don't not agree with anything you said here.

    Apple is used to being able to leverage its position as a pretty dominant buyer to get exclusivity agreements, full stock buyouts, multiple vendors competing for their business, etc.. If they are just another (small) customer, then they won't be able to differentiate nearly as much. Then again, if they are buying the same parts as everyone else, perhaps the reliability will be more similar to other vehicles than your iPhones.
    Reply
  • mattbe - Wednesday, October 28, 2015 - link

    I find it extremelly amusing when you mentioned that Apple is able to leverage its position.

    Electric cars are (currently) a niche product, and Apple does not have any foothold whatsoever in the auto industry. How do you expect a Company that will likely make less than a million car a year be able to negotiate a good deal with multiple vendors when it is a tiny player in the auto industry?

    You also fail to realize that existing Auto companies are Giants themselves..
    Reply
  • jospoortvliet - Wednesday, October 28, 2015 - link

    Dude, all these arguments could have been used in 2007 when Apple entered the Phone market... So I don't think they would fail because of any of those reasons 😃 Reply
  • Michael Bay - Thursday, October 29, 2015 - link

    Bitch please, they had a longstanding relationship with iPod manufacturers in China, that`s why iPhone could happen.
    In cars they have nothing.
    Reply
  • michael2k - Wednesday, October 28, 2015 - link

    Cash. As with all things, Apple can write a check and have access to whatever they need. You use the million car mark as a threshold and you see they could then compare to Mercedes; they only sold 1.7m cars last year, up from 1.46m in 2013. Yet Mercedes does fine. Mercedes only has about $12b cash holdings as of 2011 (couldn't find anything more recent), while Apple has as of July over $200b. That means, if they wish, they could buy both VW ($57b) and BWM ($59b) at 20% over current market cap and still have $70b in cash holdings. Reply
  • mattbe - Thursday, October 29, 2015 - link

    Mercedes does fine, but they also have normal margins just like everybody else. Remember a poster suggested that Apple will be able to leverage its "position" in earning and above average margin in the industry..

    That simply won't work and a car is not a smartphone.

    You also mentioned the acquisitions of BMW and VW. That would certainly make them immediately a big player but at what cost? It's an entirely different business. Further any supposed gains from "leveraging" with a supplier is most likely immaterial because BMW and VW would have already leverages their positions already.

    The bottom line is, people need to stop assuming that cars have a lot of untapped savings potentials that can contribute to the bottom line. Car manufacturing is one of the most studied and engineering processes out there, is capital intensive and consume a lot of raw materials. Savings don't just appear suddenly.
    Reply
  • michael2k - Thursday, October 29, 2015 - link

    I wasn't arguing any 'untapped savings' potential. I was only arguing that Apple has the resources to immediately step up to the adult's table, bypassing the kid's table, with their size and cash reserves. Tesla, as an example, has to be careful and cautious with it's build out as they improve their cash flow. Apple has no cash flow problem and can immediately order the necessary parts, components, or designs. Reply
  • milkod2001 - Wednesday, October 28, 2015 - link

    There is a market with hybrids (2 in 1 devices ) rising. Apple should not have a problem to re-invent its own version of Surface Pro or Book with desktop OS. That could keep Apple holding very strong for next 5-7 years. By that time they will figure out what to do next. If not they will just make less money but still be in profit. Reply
  • BurntMyBacon - Wednesday, October 28, 2015 - link

    They are already heading this direction with the iPad Pro, so I suspect this is indeed a part of their strategy.

    @milkod2001: "By that time they will figure out what to do next. If not they will just make less money but still be in profit."

    So many people forget this. It isn't as if the market is suddenly shrinking. It has just slowed down as typically happens with market saturation. The PC market is shrinking, yet HP, Dell, Lenovo, Asus, et al are still making plenty of money.
    Reply
  • Michael Bay - Thursday, October 29, 2015 - link

    Take Jobs out, and Apple is just another me-too. Filthy rich me-too. Reply

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