Apple kept the good times rolling with another quarter that beat estimates across the board. It also trotted out newly named CEO John Ternus during its earnings call, who teased Apple’s future product road map.
The iPhone giant’s latest earnings, coming off a white-hot holiday quarter, mark the beginning of the end of the Tim Cook era, as he prepares to step down as CEO in September.
Apple reported revenue of $111.2 billion, up 17% year over year and topping Wall Street’s $109.6 billion estimate, and signaled strong early demand for its newly launched budget products, the iPhone 17e and MacBook Neo, which each start at $599. Earnings per share also topped expectations at $2.01. Sales of Apple’s cash cow, the iPhone, slightly beat estimates with $56.99 billion in revenue for the quarter.
While Apple managed to grow its famously high gross margin, it was squeezed on the product side by increased costs from the global memory shortage, which the company’s executives fielded multiple questions about during the call. Apple said it expects “significantly higher memory costs” for the June quarter.
Apple’s stock slumped after hours following the results, but it shot back into the green during the analyst call that followed, after the company said it was “no longer providing net cash neutral as a formal target.”
“Our goal of net cash neutral has really served us well. It has been a valuable framework for us, and for our capital structure since 2018,” said Apple CFO Kevan Parekh.
“We believe we’re at a stage where we’re evaluating cash and debt independently is really the right approach for us and allows us to make more optimal economic decisions around how we best utilize our debt and cash portfolios to support the business, based on business factors and market conditions,” he added.
Scroll on for the complete play-by-play of Apple’s earnings release and analyst call, which included some brief remarks from incoming CEO Ternus: