Suhasini Chandramouli, Director of Investor Relations, introduces Apple's CEO Tim Cook and CFO Luca Maestri for the Q2 Fiscal Year 2024 Earnings Conference Call. Cook reports that Apple has achieved a revenue of $90.8 billion and an EPS record of $1.53 for the March quarter. The company has set revenue records in several countries and regions, including Latin America, the Middle East, Canada, India, Spain, and Turkey. They have also achieved an all-time revenue record in Indonesia. In services, Apple has set an all-time revenue record, showing a 14% increase from last year.

In the March quarter last year, the company was able to replenish iPhone inventory and fulfill pent-up demand due to COVID-related supply disruptions. This added $5 billion to the revenue. Despite this one-time impact, the company still delivered record results. The launch of Apple Vision Pro has been well-received and has seen enthusiasm from the enterprise market. The company is preparing for an exciting product announcement next week and their Worldwide Developers Conference next month, where they will reveal exciting things for their customers. The company is also making significant investments in Generative AI and is looking forward to sharing more with customers soon.

Apple believes in the potential of AI and has advantages such as seamless integration of hardware, software, and services, industry-leading neural engines, and a focus on privacy. Despite a difficult comparison to the previous year, iPhone revenue was still strong in some markets, such as Mainland China. The company has seen impressive use of their products and services in various countries, leading to optimism for the future. Mac revenue also saw growth, with the successful launch of the new MacBook Air featuring the powerful M3 chip and neural engine.

The paragraph discusses the success and versatility of Apple's MacBook Air and iPad, as well as the impact of their wearable devices on users' wellness journeys. It also mentions the record-breaking revenue in services and the success of Apple TV+ Originals in the entertainment industry.

Apple continues to innovate and improve the live sports experience with the launch of the Apple Sports app. They also celebrate the opening of a new flagship store in Shanghai and their retail teams are showcasing the Vision Pro demos to customers. The company remains committed to their mission of enriching users' lives and leading the world better than they found it. They are also making strides in their environmental efforts, with a goal of being carbon-neutral by 2030 and using more recycled materials in their products. They are also investing in renewable energy sources and working with partners in India and the U.S. to achieve their goals.

In the March quarter, Apple's revenue was $90.8 billion, down 4% from last year due to the challenging compare on iPhone. However, their installed base of active devices reached an all-time high and services revenue set a record of $23.9 billion. The company's gross margin was 46.6%, up 70 basis points sequentially, driven by cost savings and favorable mix to services. Products gross margin was 36.6%, down 280 basis points sequentially, due to seasonal loss of leverage and mix.

In the March quarter, Apple's services gross margin increased by 180 basis points due to a more favorable mix. Operating expenses were in line with guidance and net income was $23.6 billion, with iPhone revenue down 10% year-over-year due to a one-time impact. However, adjusting for this impact, iPhone revenue would have been flat. The iPhone 15 family remains popular and customer satisfaction is at 99%. Mac revenue was up 4% driven by the new MacBook Air and customer satisfaction is at 96%. iPad revenue was down 17% due to a challenging comparison, but the installed base is at an all-time high and over half of customers who purchased iPads were new to the product.

The latest reports show a high customer satisfaction rate for iPad in the US, but Wearables, Home and Accessories revenue decreased due to a difficult launch comparison. Apple Watch continues to attract new customers and has a high customer satisfaction rate. Services revenue reached an all-time high, with active devices and paid subscriptions also growing. The company is seeing increased engagement with their ecosystem and is expanding their services to new countries and partners. In the enterprise sector, more customers are investing in Apple products, particularly the Mac, for increased productivity and innovation. In the healthcare industry, Epic Systems has launched a native app for the Mac, making it easier for healthcare organizations to transition to using Macs for clinical use.

The company has seen success with their new product, Vision Pro, in the enterprise market, with many leading customers investing in it for various use cases. Despite challenges such as one less week of sales and foreign exchange headwinds, the company's revenue remained flat in the first half of the fiscal year. Strong momentum in emerging markets, growth in services, and high gross margin led to a record first half diluted EPS. The company also ended the quarter with a strong cash position and returned over $27 billion to shareholders, with plans for an additional $110 billion in share repurchases.

Apple is raising their dividend by 4% and plans to continue increasing it annually. They project low-single-digit revenue growth for the June quarter, with double-digit growth in their services and iPad businesses. They expect a gross margin between 45.5% and 46.5%, OpEx between $14.3 billion and $14.5 billion, OI&E around $50 million, and a tax rate of 16%. The first question on the June quarter guidance asks about the revenue outlook and product assumptions, particularly for the iPhone and services.

Luca Maestri, the CFO of Apple, discusses the company's outlook for the upcoming quarter, stating that they expect low-single-digit growth overall, with double-digit growth in services and iPad sales. He also mentions that the services business has been performing well, with record numbers in various categories and strong growth in both developed and emerging markets. When asked about the impact of AI and Generative AI on the company's CapEx, Maestri says they are excited about the opportunities and that Apple has been investing heavily in innovation for many years. He also notes that their CapEx model is a hybrid, with investments being made by both Apple and their suppliers and partners.

Tim Cook and Luca Maestri were asked about the implications of the EU DMA changes on Apple. Cook stated that it is too early to tell, as the changes were only implemented in March. They are focused on complying while maintaining user privacy and security. Maestri commented on the sequential step down in product gross margins, attributing it to a different mix of products and leverage.

During a recent earnings call, Apple's CEO Tim Cook and CFO Luca Maestri were asked about the impact of rising commodity costs on the company's product categories. Maestri stated that while there have been some increases in memory prices, overall, commodity and component costs have been favorable for Apple. Cook also mentioned the company's excitement about Generative AI and hinted at upcoming announcements related to the technology.

The speaker discusses the performance of commodities during the March quarter, noting that they have gone up slightly and have been favorable for the company in recent quarters. They mention the possibility of cycles and headwinds, but state that they are starting from a high level of gross margins and have been buying ahead during favorable cycles. The speaker also addresses a question about China, stating that their results in Q2 were down 8%, with iPhone being the primary driver of the decline. They mention that iPhone sales in Mainland China grew and remain among the top-selling smartphones in Urban China.

Tim Cook talks about his recent visit to China where they opened a new store in Shanghai and received a warm reception. He maintains a positive view of China in the long-term. Ben Reitzes asks about the potential impact of AI on traffic acquisition revenue and Cook mentions that AI presents big opportunities for them across their products and they will talk more about it in the coming weeks. Krish Sankar asks about the traction in enterprise and Cook doesn't reveal much but mentions that they are seeing success.

Tim Cook discusses the company's focus on enterprise sales, including the recent addition of Vision Pro. He sees great potential in the enterprise market, not just for AI, but for all products. Luca Maestri mentions that there is still a strong interest in the higher-end products, with customers wanting to purchase the best options and affordable financing options making this possible. This trend is seen in both developed and emerging markets.

The company has seen a sustainable trend in gross margins over the last few years and is working towards its goal of becoming net cash-neutral. Once this goal is achieved, they will reassess their capital structure and consider factors such as leverage.

Tim Cook discusses the growth of iPhones in Mainland China and the decline in Greater China, stating that it is the most competitive market in the world. He also mentions the company's efforts to serve customers well and remain optimistic about the market. The next question is about the outlook for the June quarter, which Luca will address.

The speaker is asking about the performance of the iPhone business in the June quarter and how it will be affected by the competitive landscape and consumer demand. Tim Cook mentions the potential of Generative AI in the future, but does not provide specific guidance for the quarter. Luca Maestri repeats the company's previous outlook for low-single-digit growth and double-digit growth for services and iPad.

During a Q&A session, Samik Chatterjee from JPMorgan asks about the drivers of the 14% growth in services and why it may not be sustainable in the next quarter. Luca Maestri, the operator, responds by mentioning all-time records in both developed and emerging markets, as well as in specific categories like cloud, video, and payment services. He also notes that the comps for the services business will become more challenging as the year goes on, but they still expect double-digit growth in the June quarter. Samik Chatterjee follows up by asking about the Indian market, which has also seen record revenue.

Tim Cook discusses the strong double-digit growth in the Chinese market and attributes it to both operational and go-to-market initiatives. He mentions the importance of producing in China to remain competitive and highlights the company's focus on expanding channels and the developer ecosystem. Cook expresses his excitement and enthusiasm for the Chinese market. The next question is from Aaron Rakers, who asks about the data points reported throughout the quarter and what may be missing.

During a recent earnings call, Apple CEO Tim Cook addressed questions about the company's iPhone sales in China. He stated that the company saw growth in Mainland China during the last quarter, but could not comment on data points from other sources. When asked about channel inventory dynamics, Cook explained that they typically decrease inventory during the second quarter and are comfortable with their current levels. Another analyst asked about the potential for other emerging markets to surpass China in terms of sales, and Apple's CFO Luca Maestri stated that China remains the largest emerging market for the company.

The speaker discusses the company's success in emerging markets such as India, Saudi Arabia, Mexico, Turkey, Brazil, and Indonesia. They note that their market share is low in these countries but their products are gaining popularity and excitement for the brand is high. The speaker also mentions that the company is approaching four years since their popular iPhone 12 cycle and discusses ways to spur replacement demand in their installed base, such as through innovation and pricing products for the value delivered. They also mention the impact of economic factors and the strong dollar on their business.

The speaker discusses the company's strong demand for products outside the United States, which is reflected in their revenue. They are making investments in innovation and financing solutions. The next question is about the top use cases for Vision Pro in the enterprise, to which the speaker responds that there is a wide variety of use cases and the company is focused on growing the ecosystem and engaging more enterprises. The recent event for enterprise showed a high level of enthusiasm.

The speaker, Luca Maestri, provides guidance for the current quarter and discusses the impact of commodity pricing on memory and foreign exchange for the June quarter. He also mentions the availability of a replay for the call and provides contact information for press and financial analysts with additional questions.

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