Apple reported $81.8 billion in revenue for the June quarter of 2023, exceeding their expectations. This was driven by strong sales of iPhones in emerging markets, setting June quarter records in India, Indonesia, Mexico, the Philippines, Poland, Saudi Arabia, Turkey, the UAE, France, the Netherlands, and Austria. Saori Casey noted that there are risks and uncertainties associated with the forward-looking statements, and that Apple assumes no obligation to update them. Tim Cook then gave introductory remarks.

Apple achieved an all-time revenue record in Services, despite an uneven macroeconomic environment. At their Worldwide Developers Conference, they announced revolutionary new products such as Apple Vision Pro, which is the most advanced personal electronic device ever created. For the June quarter, iPhone revenue was down 2%, but on a constant currency basis, it grew, with a record for switchers. Mac also saw an increase in revenue.

In the June quarter, Apple recorded $6.8 billion in revenue, down 7% year-over-year. They completed the transition of their Mac lineup to run on Apple silicon and introduced a new 15-inch MacBook Air. iPad revenue was $5.8 billion, down 20% due to the timing of the iPad Air launch last year. Wearables, Home and Accessories revenue was $8.3 billion, up 2% year-over-year. At WWDC, they introduced Apple Vision Pro, new Macs, and software innovations.

Apple is releasing a variety of new features across its product lines, including Live Voicemail and StandBy in iOS 17, new tools in macOS Sonoma and iPadOS 17, and new workout capabilities in watchOS 10. Revenue from services like Apple Pay, Apple Card, and Apple TV+ have also seen success, with Apple Card becoming one of the most successful credit card programs in the US and Apple TV+ receiving 1,500 nominations and 370 wins. Recently, MLS partnered with Apple TV+ to feature Lionel Messi's debut with Major League Soccer.

Apple Music has launched new discovery features to celebrate live music such as venue guides and set lists. Apple has opened new stores in Vietnam, Northern Virginia, London, and India, and redesigned their first store in Tysons Corner. The company is also introducing new accessibility tools later this year, such as Assistive Access and Personal Voice. Additionally, they are introducing updates to Safari Private Browsing, Communication Safety, and Lockdown Mode to protect user privacy.

Apple is committed to building a better world, having recently doubled their commitment to their Racial Equity and Justice Initiative to more than $200 million. They are also expanding Apple Learning Coach, a free professional learning program for educators, and celebrating the graduations of students at their app developer academies. Apple is a champion of innovation, and will continue to manage for the long term and put the customer at the center of everything they do.

Luca Maestri reported that Apple's revenue for the June quarter was $81.8 billion, down 1% from last year. Despite negative impacts from foreign exchange, the company set records in Europe and Greater China and saw strong performance in emerging markets. Products revenue was down 4%, while Services revenue set a new record of $21.2 billion, up 8% year-over-year. Company gross margin was 44.5%, a record level for the June quarter, and operating expenses were below the guidance range given at the beginning of the quarter.

Apple reported net income of $19.9 billion, diluted earnings per share of $1.26, and $26.4 billion in operating cash flow. iPhone revenue was down 2% year-over-year but up on a constant currency basis, and Mac revenue was down 7%. iPad revenue was down 20% due to a difficult comparison with the prior year, but over half of iPad buyers were new to the product. Wearables, Home and Accessories revenue was up 2%, with a June quarter record in Greater China and strong performance in emerging markets. Customer satisfaction for iPhone, Mac, and iPad was measured at 98%, 96%, and 96% respectively in the U.S.

Apple Watch saw high customer satisfaction with 2/3 of customers being new to the product. Services had an all-time revenue record of $21.2 billion with double digit growth. The installed base of active devices has grown, customer engagement has increased, and paid subscriptions have grown. Finally, Apple has improved the breadth and quality of its services with new products such as Apple Arcade, Apple TV+, and Apple Card. The enterprise market is leveraging Apple products to improve productivity and attract talent, with Blackstone expanding its Apple footprint.

Gilead has deployed thousands of iPads and doubled their Mac user base in the last 6 months. At the end of the quarter, they had over $166 billion in cash and marketable securities and a total debt of $109 billion. They returned over $24 billion to shareholders in the quarter. For the September quarter, they expect similar year-over-year revenue performance to the June quarter, with iPhone and Services year-over-year performance accelerating. Mac and iPad are expected to decline due to difficult compares from factory shutdowns in the June quarter a year ago.

In the June quarter, Apple saw strong growth in iPhone demand in emerging markets, setting records in many of them. This included China, where performance improved from -3% to +8%, India, where they set a June quarter record, Indonesia, Southeast Asia, Latin America, and the Middle East.

Luca Maestri discussed the gross margin for the June quarter, which was an all-time record and was driven by cost savings and a mix shift towards Services. He also noted that the commodity environment was favorable and the product mix was strong, with foreign exchange being the only drag. Maestri also commented on the guidance for the September quarter, noting that the revenue performance would be similar, and that there was an acceleration in iPhone performance, though it was not clear whether this was on a reported or constant currency basis.

Luca Maestri explains that the company expects acceleration in iPhone and Services revenue but a double digit decline in Mac and iPad revenue due to difficult comparisons to the June quarter of the previous year. He also states that the majority of iPhones are sold using some kind of affordability program such as trade-ins, installments, or financing, which is similar across developed and emerging markets.

Luca Maestri clarified that their guidance for the September quarter is based on reported numbers, which take into account a slight improvement in foreign exchange. They expect their iPhone performance to accelerate, Services performance to accelerate, and iPad and Mac to decline double digits. Maestri also mentioned that the commodity environment is favorable and they will continue to take advantage of opportunities in the market.

In the June quarter, Luca Maestri reported that the guidance for September was 44-45%, a historically high rate. Tim Cook then provided insight into how the consumer is behaving around the world, noting that emerging markets had an exceptionally strong quarter, with China seeing an acceleration from a negative 3% in Q2 to a positive 8% in Q3. The Americas segment was still declining year-over-year, primarily due to a challenging smartphone market in the U.S. Europe saw a record quarter in the June quarter.

Luca Maestri discussed the cost actions the company has taken in response to the uncertain period of the last few quarters, such as slowing down the spend and hiring, and expressed satisfaction with their ability to decelerate expense growth. Maestri also noted that R&D costs are still growing faster than the rest of the company, and that their focus remains on innovation and product development. Michael Ng asked about the encouraging performance of Services in the quarter, which was up double digits on an FX-neutral basis and is expected to accelerate even further next quarter.

Luca Maestri discussed the performance of Apple during the June quarter, which saw record-breaking growth in all areas, and expects further improvement in the September quarter. This is attributed to the growing installed base, more engaged customers, and the growth of paid subscriptions. Maestri also discussed the combination of factors that gives them confidence in the September quarter.

Luca Maestri discussed the potential for increased Services ARPU, noting that customers who own multiple devices tend to be more engaged in the ecosystem and have the potential to become paid customers. He also discussed the performance of the Wearables segment, noting that it had a June quarter record for Greater China.

Luca Maestri discussed the importance of Apple's engagement with the Chinese market and their success with AirPods. He also mentioned that the Wearables, Home and Accessories segment has grown to the size of a Fortune 100 company in the past 12 months. In Europe, growth was seen primarily in emerging markets, but there was also success in France, Italy, the Netherlands, and Austria. The company has had a currency headwind for many quarters.

Luca Maestri discussed Apple's hedging program, which covers 60% of their business outside the United States and helps to minimize currency volatility. Tim Cook was asked about the programs in place in the U.S., Apple's largest market for iPhone, which offer cash rebates or the option to bring in old phones. Cook did not reveal specifics about the different carriers.

Tim Cook discussed Apple's focus on original content with TV+ and how it includes sports as a part of that, mentioning their partnership with MLS and how they have exceeded expectations in terms of subscribers. He also mentioned the success of Apple in India, with a June quarter revenue record and double digit growth, as well as the opening of two retail stores.

Tim Cook explains that Apple views AI and machine learning as integral parts of their products, and they have been researching and developing these technologies for years. Examples of AI features they have implemented include Personal Voice, Live Voicemail, fall detection, crash detection, and ECG. These features are essential to their products and will help them achieve financial performance in the future through faster upgrade cycles and higher ASPs.

Tim Cook reported that iPhone had record numbers of switchers in the quarter, especially in Greater China, and that this was at the heart of their results there. He also mentioned that they are shipping units of the Vision Pro to the developer community and are looking forward to shipping it early next year. He did not provide any revenue forecasts for the Vision Pro, but is very excited about it.

Apple is continuing to expand their retail stores and have recently opened two in India. Retail stores are a key part of Apple's go-to-market approach and will be a competitive advantage with the new Vision Pro product. Tim Cook believes that retail stores are a key part of how they go to market, and they provide customers with a great experience. A replay of today's call is available on Apple Podcasts, on the webcast of apple.com/investor, and by telephone.

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This summary was generated with AI and may contain some inaccuracies.