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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Oxford Guy - Wednesday, January 28, 2015 - link
The people who comment in the DailyTech forum must be really tasting the sour grapes. I'm sure they're find some way of spinning this in an anti-Apple manner, though. (Actually, it will most likely be a post insulting people who buy Apple products.)Solandri - Wednesday, January 28, 2015 - link
Say what? This is vindication. We've been saying for a long time that Steve Jobs was an idiot for claiming a single size phone was best for everyone, and that nobody was gonna buy a phablet. Jobs dies, Cook takes over, directly contradicts Jobs and introduces different size iPads, and now different size iPhones (including a phablet), and Apple has their best quarter ever. Completely validating what we said.It's a phone, not a religion. Most of us don't care whose product you buy so long as it suits your needs. And a wider variety of choices (and competitors) always helps accomplish that. OTOH arbitrary and capricious limitations on choices like Jobs insisted on are bad for the customer. No, one size does not fit all. I say congratulations to Cook and co. for actually giving the market what they wanted, not what one man though the market wanted.
Morawka - Wednesday, January 28, 2015 - link
everyone said that crap man, lol you act like it was you guys. The market demanded a larger screen phones. But what about all the other arguments you guys made about the UI, OS, too expensive, to locked down, "android is awesome and cheap", more customization?the market drives innovation, not dailytech forum people
solipsism - Wednesday, January 28, 2015 - link
No it doesn't because Apple had their up until that point best quarters back when they had a single size in 3.5" and 4" iPhones. And Steve Jobs never said that the 3.5" iPhone was the only size display hat Apple will ever sell. Note that both the 4.7" iPhones were lighter and had less volume than most 3.5" iPhones that came before. It was never about the screen size, but about the device size.Impulses - Thursday, January 29, 2015 - link
Are there any numbers floating around for sales of the iPhone 6 vs the 6+? I imagine competitors are particularly interested in that... Wouldn't be surprised if the 6+ is selling better.I just hope it levels out or most manufacturers are gonna keep ignoring the smaller phone market or hobbling smaller models compared to the large flagship (which even Apple did to an extent).
solipsism - Thursday, January 29, 2015 - link
I don't know of any independent reports, but Cook gave a vague comment that both sizes of the iPhone 6 series are dominant in certain markets. I assume the US is the iPhone 6 and China is the iPhone 6 Plus, but that's just speculation on my part.DERSS - Wednesday, January 28, 2015 - link
Jebs NEVER said people need only one-size phone. He has argued that with one-hand use you can no go to big sizes. And it was true and still true, Jobs was and is right. However, since then Apple has invented double-tap-to-shift-half-of-the-screen-down feature, and has made the phone itself much thinner, so actual grip perimeter of iPhone 6 is not bigger than that of iPhone 4S.eanazag - Wednesday, January 28, 2015 - link
I think people misunderstood Steve Jobs. The screen size issue was simply that Apple didn't have anything that was the size of competing product, so Steve says that his product was the perfect size. If he iPhone screen was 9", Steve would have figured a way to say that his company's screen size was perfect. There was no way in hell he was going to give credit to Android devices.The guy was all about making the perception that his company had the best ideas and products available. If he was still alive, I think the same screen size creep would have occurred. Steve would have taken credit for it too.
djscrew - Saturday, January 31, 2015 - link
truthvFunct - Wednesday, January 28, 2015 - link
Nerds generally have no social skills and sense of taste. That's why they hang out in DailyTech fawning over no-talented clowns like Google and Elon Musk, while angrily complaining about people with taste and real-world social skills.They seriously think Google, instead of Apple, invented the modern smartphone. And they think Elon Musk somehow created anything but the most boring rockets in the world, completely ignoring all the amazing things NASA was already doing 40 years ago, like the Space Shuttle.
NEVER trust the advice of nerds when it comes to tech products. Always trust the person that's not a nerd.