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Apple Reports First Quarter Results

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·11 min read
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Revenue up 21 percent and EPS up 35 percent to new all-time records

iPhone, Wearables, and Services set new revenue records

Apple® today announced financial results for its fiscal 2021 first quarter ended December 26, 2020. The Company posted all-time record revenue of $111.4 billion, up 21 percent year over year, and quarterly earnings per diluted share of $1.68, up 35 percent. International sales accounted for 64 percent of the quarter’s revenue.

"This quarter for Apple wouldn’t have been possible without the tireless and innovative work of every Apple team member worldwide," said Tim Cook, Apple’s CEO. "We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season. We are also focused on how we can help the communities we’re a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States."

"Our December quarter business performance was fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices," said Luca Maestri, Apple’s CFO. "These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash neutral position over time."

Apple’s Board of Directors has declared a cash dividend of $0.205 per share of the Company’s common stock. The dividend is payable on February 11, 2021 to shareholders of record as of the close of business on February 8, 2021.

Apple will provide live streaming of its Q1 2021 financial results conference call beginning at 2:00 p.m. PT on January 27, 2021 at apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple periodically provides information for investors on its corporate website, apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and details related to its annual meeting of shareholders.

This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company’s expectations regarding the impact of the COVID-19 pandemic; anticipated revenue, gross margin, operating expenses, other income/(expense), and tax rate; plans for return of capital; our goal of maintaining a net cash neutral position; and our investment plans and initiatives. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: the effect of the COVID-19 pandemic on the Company’s business, results of operations, financial condition, and stock price; the effect of global and regional economic conditions on the Company’s business, including effects on purchasing decisions by consumers and businesses; the ability of the Company to compete in markets that are highly competitive and subject to rapid technological change; the ability of the Company to manage frequent introductions and transitions of products and services, including delivering to the marketplace, and stimulating customer demand for, new products, services, and technological innovations on a timely basis; the effect that shifts in the mix of products and services and in the geographic, currency, or channel mix, component cost increases, increases in the cost of acquiring and delivering content for the Company’s services, price competition, or the introduction of new products or services, including new products or services with higher cost structures, could have on the Company’s gross margin; the dependency of the Company on the performance of distributors of the Company’s products, including cellular network carriers and other resellers; the risk of write-downs on the value of inventory and other assets and purchase commitment cancellation risk; the continued availability on acceptable terms, or at all, of certain components, services, and new technologies essential to the Company’s business, including components and technologies that may only be available from single or limited sources; the dependency of the Company on manufacturing and logistics services provided by third parties, many of which are located outside of the US and which may affect the quality, quantity, or cost of products manufactured or services rendered to the Company; the effect of product and services design and manufacturing defects on the Company’s financial performance and reputation; the dependency of the Company on third-party intellectual property and digital content, which may not be available to the Company on commercially reasonable terms or at all; the dependency of the Company on support from third-party software developers to develop and maintain software applications and services for the Company’s products; the impact of unfavorable legal proceedings or government investigations; the impact of complex and changing laws and regulations worldwide, which expose the Company to potential liabilities, increased costs, and other adverse effects on the Company’s business; the ability of the Company to manage risks associated with the Company’s retail stores; the ability of the Company to manage risks associated with the Company’s investments in new business strategies and acquisitions; the impact on the Company’s business and reputation from information technology system failures, network disruptions, or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; the continued service and availability of key executives and employees; political events, international trade disputes, war, terrorism, natural disasters, public health issues, and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products; financial risks, including risks relating to currency fluctuations, credit risks, and fluctuations in the market value of the Company’s investment portfolio; and changes in tax rates and exposure to additional tax liabilities. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the SEC, including in the "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch, and Apple TV. Apple’s five software platforms — iOS, iPadOS, macOS, watchOS, and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline at (408) 974-2042.

© 2021 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months Ended

December 26,
2020

December 28,
2019

Net sales:

Products

$

95,678

$

79,104

Services

15,761

12,715

Total net sales (1)

111,439

91,819

Cost of sales:

Products

62,130

52,075

Services

4,981

4,527

Total cost of sales

67,111

56,602

Gross margin

44,328

35,217

Operating expenses:

Research and development

5,163

4,451

Selling, general and administrative

5,631

5,197

Total operating expenses

10,794

9,648

Operating income

33,534

25,569

Other income/(expense), net

45

349

Income before provision for income taxes

33,579

25,918

Provision for income taxes

4,824

3,682

Net income

$

28,755

$

22,236

Earnings per share:

Basic

$

1.70

$

1.26

Diluted

$

1.68

$

1.25

Shares used in computing earnings per share:

Basic

16,935,119

17,660,160

Diluted

17,113,688

17,818,417

(1) Net sales by reportable segment:

Americas

$

46,310

$

41,367

Europe

27,306

23,273

Greater China

21,313

13,578

Japan

8,285

6,223

Rest of Asia Pacific

8,225

7,378

Total net sales

$

111,439

$

91,819

(1) Net sales by category:

iPhone

$

65,597

$

55,957

Mac

8,675

7,160

iPad

8,435

5,977

Wearables, Home and Accessories

12,971

10,010

Services

15,761

12,715

Total net sales

$

111,439

$

91,819

Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions, except number of shares which are reflected in thousands and par value)

December 26,
2020

September 26,
2020

ASSETS:

Current assets:

Cash and cash equivalents

$

36,010

$

38,016

Marketable securities

40,816

52,927

Accounts receivable, net

27,101

16,120

Inventories

4,973

4,061

Vendor non-trade receivables

31,519

21,325

Other current assets

13,687

11,264

Total current assets

154,106

143,713

Non-current assets:

Marketable securities

118,745

100,887

Property, plant and equipment, net

37,933

36,766

Other non-current assets

43,270

42,522

Total non-current assets

199,948

180,175

Total assets

$

354,054

$

323,888

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current liabilities:

Accounts payable

$

63,846

$

42,296

Other current liabilities

48,504

42,684

Deferred revenue

7,395

6,643

Commercial paper

5,000

4,996

Term debt

7,762

8,773

Total current liabilities

132,507

105,392

Non-current liabilities:

Term debt

99,281

98,667

Other non-current liabilities

56,042

54,490

Total non-current liabilities

155,323

153,157

Total liabilities

287,830

258,549

Commitments and contingencies

Shareholders’ equity:

Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 16,823,263 and 16,976,763 shares issued and outstanding, respectively

51,744

50,779

Retained earnings

14,301

14,966

Accumulated other comprehensive income/(loss)

179

(406)

Total shareholders’ equity

66,224

65,339

Total liabilities and shareholders’ equity

$

354,054

$

323,888

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

Three Months Ended

December 26,
2020

December 28,
2019

Cash, cash equivalents and restricted cash, beginning balances

$

39,789

$

50,224

Operating activities:

Net income

28,755

22,236

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation and amortization

2,666

2,816

Share-based compensation expense

2,020

1,710

Deferred income tax benefit

(58)

(349)

Other

25

(142)

Changes in operating assets and liabilities:

Accounts receivable, net

(10,945)

2,015

Inventories

(950)

(28)

Vendor non-trade receivables

(10,194)

3,902

Other current and non-current assets

(3,526)

(7,054)

Accounts payable

21,670

(1,089)

Deferred revenue

1,341

985

Other current and non-current liabilities

7,959

5,514

Cash generated by operating activities

38,763

30,516

Investing activities:

Purchases of marketable securities

(39,800)

(37,416)

Proceeds from maturities of marketable securities

25,177

19,740

Proceeds from sales of marketable securities

9,344

7,280

Payments for acquisition of property, plant and equipment

(3,500)

(2,107)

Payments made in connection with business acquisitions, net

(9)

(958)

Other

204

(207)

Cash used in investing activities

(8,584)

(13,668)

Financing activities:

Proceeds from issuance of common stock

2

Payments for taxes related to net share settlement of equity awards

(2,861)

(1,379)

Payments for dividends and dividend equivalents

(3,613)

(3,539)

Repurchases of common stock

(24,775)

(20,706)

Proceeds from issuance of term debt, net

2,210

Repayments of term debt

(1,000)

(1,000)

Proceeds from/(Repayments of) commercial paper, net

22

(979)

Other

(22)

(16)

Cash used in financing activities

(32,249)

(25,407)

Decrease in cash, cash equivalents and restricted cash

(2,070)

(8,559)

Cash, cash equivalents and restricted cash, ending balances

$

37,719

$

41,665

Supplemental cash flow disclosure:

Cash paid for income taxes, net

$

1,787

$

4,393

Cash paid for interest

$

619

$

771

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005934/en/

Contacts

Apple
Press Contact:
Kristin Huguet, (408) 974-2414
khuguet@apple.com

Investor Relations Contact:
Tejas Gala, (669) 227-2402
tgala@apple.com