Apple Inc. Financial Report Analysis: Q3 2024 Insights

Key Snapshot

• Entity Name: Apple Inc. (CIK: 0000320193)
• Reporting Period: October 1, 2023 - June 29, 2024
• Total Net Sales: $85.777 billion (Q3 2024)
• Net Income: $21.448 billion (Q3 2024)
• Earnings Per Share (EPS): $1.40 (Q3 2024)
• Deferred Revenue: $12.5 billion (as of June 29, 2024)
• Key Insight: Continued revenue growth across product categories, with a strong presence in services.

Overview

This analysis delves into Apple Inc.'s recent financial report, covering essential metrics such as revenue, earnings, and performance across various segments. Apple's robust financial health and operational efficacy are reflected in the numbers, making it a company of interest for investors.

Revenue Performance

Total Net Sales

Apple reported $85.777 billion in net sales for the three months ended June 29, 2024, a solid increase from $81.797 billion in the same period the previous year. Over the nine-month period ending June 29, 2024, total sales reached $296.105 billion, compared to $293.787 billion in the same period last year, indicating a year-over-year growth trajectory.

Revenue by Product Category

• iPhone: $39.296 billion (Q3), $154.961 billion (YTD)
• Mac: $7.009 billion (Q3), $22.240 billion (YTD)
• iPad: $7.162 billion (Q3), $21.857 billion (YTD)
• Wearables, Home and Accessories: $8.097 billion (Q3), $30.523 billion (YTD)
• Services: $24.213 billion (Q3), $62.886 billion (YTD)

The iPhone continues to be the cornerstone of Apple's revenue, but services have shown significant growth, contributing over $62 billion year-to-date, reflecting a strategic shift towards recurring revenue models.

Profitability Metrics

Net Income

Apple reported a net income of $21.448 billion in Q3 2024, up from $19.881 billion in Q3 2023. This increase contributes to a net income of $79 billion for the nine months ending June 29, 2024, compared to $74.039 billion for the same period last year.

Earnings Per Share (EPS)

• Basic EPS: $1.40 (Q3 2024) vs. $1.27 (Q3 2023)
• Diluted EPS: $1.40 (Q3 2024) vs. $1.26 (Q3 2023)

The growth in EPS indicates effective cost control and improved margins, which are vital indicators for investors.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

While the report did not explicitly provide EBITDA figures, strong net income growth, along with stable revenue increases and controlled expenses, suggests a positive EBITDA trajectory. The total operating income for Q3 2024 was $25.352 billion, indicating robust operational performance.

Deferred Revenue

As of June 29, 2024, total deferred revenue stood at $12.5 billion, a slight increase from $12.1 billion reported previously. This suggests that Apple has a solid pipeline of upcoming revenue, particularly in its services segment.

Debt and Financial Health

Debt Instruments

Apple's debt structure consists of various notes with differing maturities, including:

• 0.000% Notes due 2025
• 0.875% Notes due 2025
• 1.625% Notes due 2026
• 3.600% Notes due 2042

The total outstanding fixed-rate notes decreased from $105.1 billion on September 30, 2023, to $98.3 billion as of June 29, 2024. This decline in debt levels reflects Apple's commitment to managing its leverage effectively.

Cash and Equivalents

As of June 29, 2024, Apple had $160.230 million in cash and cash equivalents, maintaining a strong liquidity position, which is crucial for operational flexibility.

Segment Performance

Apple's revenue growth was not only robust in the Americas but also showed significant contributions from Europe and Greater China, with net sales of $21.884 billion and $14.728 billion, respectively, in Q3 2024.

Conclusion

Apple Inc. continues to demonstrate strong financial performance, with increased revenues, net income, and earnings per share. Its strategic focus on services is paying off, contributing significantly to revenue diversification.

Recommendation

Given the current financial health, growth potential across various segments, and strategic management of debt, I recommend a Buy for investors looking to capitalize on Apple's strong market position and future growth prospects.