Friday, October 28, 2022

Apple’s Q4 2022 Results

Apple (transcript, Hacker News):

The Company posted a September quarter record revenue of $90.1 billion, up 8 percent year over year, and quarterly earnings per diluted share of $1.29, up 4 percent year over year. Annual revenue was $394.3 billion, up 8 percent year over year, and annual earnings per diluted share were $6.11, up 9 percent year over year.


“We continued to invest in our long-term growth plans, generated over $24 billion in operating cash flow, and returned over $29 billion to our shareholders during the quarter. The strength of our ecosystem, unmatched customer loyalty, and record sales spurred our active installed base of devices to a new all-time high. This quarter capped another record-breaking year for Apple, with revenue growing over $28 billion and operating cash flow up $18 billion versus last year.”

Jason Snell:

Mac revenue was way up (to an all-time record!), iPad revenue was flat sequentially but down year-over-year, iPhone revenue was up, services revenue was down sequentially for the second straight quarter, and wearables returned to its winning ways.

Michael E. Cohen and Josh Centers:

Let’s start with the Mac, which saw a phenomenal 25.4% year-over-year revenue increase, marking an all-time revenue record for Macs. The Mac has never been stronger, thanks to Apple silicon, bringing in $11.5 billion in revenue in Q4.


The iPhone realized 9.7% growth over the past year, amounting to $42.6 billion in revenue. That level of growth was still sufficient for a September quarter revenue record.


For years, Services has fueled Apple’s continued growth, but that wasn’t the case this quarter: revenues increased by just 5% over the past year, bringing in $19.2 billion. As with other sales categories, Maestri blamed the strong dollar and weaker foreign currencies for the relatively small increase in Services revenue. However, Services revenue still broke its Q4 record, and Maestri mentioned that Apple has over 900 million paying subscribers now, implying a revenue stream that is both sizable and stable. When asked, Cook refused to link the decline in revenue growth to Apple’s recent service price hikes. Instead, he repeated the company’s previous explanation of increased music licensing costs and costs related to the growth of the Apple TV+ library.

Nick Heer:

No matter how big Apple gets, it is still a little surprising to me every time the company announces that half its Mac buyers are new.

I’ve never quite known how to interpret this. Is that high or low compared with other companies? It can’t indicate a trend if Apple’s been saying the same thing for so long. Obviously, it doesn’t mean that sales are growing 50% per year. Does a high percentage of new buyers mean that Macs last a long time? Or that there’s a lot of churn?

Ben Bajarin:

Thanks to an entirely new enterprise dynamic, in the cloud/digital-first world, I believe Apple is on the cusp of seeing the Mac finally cross the enterprise chasm and formally be embraced by every modern organization.

John Voorhees:

Despite some areas of softness, the results reported by Apple were positive overall, especially compared to other recent earnings misses in the tech world. Yesterday, Meta announced a significant earnings miss that led to a nearly 25% drop in its stock price today. Then today, Amazon came up short compared to Wall Street expectations leading to a 16% dip in its stock price.


Update (2022-11-03): Jason Snell:

You can also see some of the gravity defying that Apple did this fiscal year. In fiscal 2015 and 2018, iPhone revenue spiked—spikes that align with the introduction of the iPhone 6 and iPhone X. In other words, major iPhone body redesigns.

The iPhone 12 was also a body redesign, and sales spiked in fiscal 2021—but went up further in 2022. Again, that’s not generally what happens, but it happened this past year.


I don’t know how long it will last, but after a decade with Mac sales figures in the twenty billions, it lingered in the thirties for a single year before hitting 40.

8 Comments RSS · Twitter

> I’ve never quite known how to interpret this.

Do they explain where are these numbers coming from?

I presume they get the info from new Mac iCloud accounts

@Niall: they've been using the metric of "x are new to the mac platform" since well before there were icloud accounts, or even itunes accounts. With google, I found mentions of the phrase as far back as the late 90's. The reported number seems to be a real metric as the percentage varies from year to year, but it usually was somewhere in the 40-60% range. Lately Apple has gotten cagey about releasing user base data like this, and that might be why lately they have taken to just saying "half."

Once Apple had stores of its own, I saw references to the number being based on surveys of in-store computer buyers. Before they had their own stores, they must have hired a market research firm or paid their retailers to ask for them.

The surge in Mac demand means Apple now has every incentive to refine macOS in its own right instead of making it yet another services vector and/or iOS tribute, no?

I wonder if allowing to run macOS apps in a window on iPadOS would much cannibalize the Mac market. Because they are now putting all their might behind iPadOS to make it work almost as macOS. Without quite achieving it. And transferring ever more iPadOS bits into macOS doesn’t work either.

"services revenue was down sequentially for the second straight quarter"

Ok, there is a bright spot in here.

"I’ve never quite known how to interpret this."

It can't be interpreted. That number by itself doesn't mean anything, both because it has always been around 50% regardless of how well Apple was doing, all the way back to the early 90s (where Apple used it as "proof" that they weren't dying due to a shrinking user base of Mac fans, but were instead acquiring new users), and also because there are both good reasons for a high "new users" percentage (e.g. high growth) and bad ones (e.g. existing users switch away).

@Michael: I presume the way they track "new users" is with Apple ID. Work machines handed out to employees in companies I've worked for don't use their personal Apple IDs, and thus probably appear as "new users".

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