Neil Cybart 5/7/24 Neil Cybart 5/7/24

Reading Between the Lines of Apple’s 2Q24 Earnings Q&A With Analysts

Hello everyone. This is shaping up to be a busy week. We still have a good amount to discuss when it comes to Apple’s 2Q24 earnings. There is then an Apple product event (online) on Tuesday at 10 am ET. Let’s jump into today’s update.

Reading Between the Lines of Apple’s 2Q24 Earnings Q&A With Analysts

After recapping each question-and-answer exchange that occurred on the call between Apple and sell-side analysts, we will go over my response to the exchange. Let’s go beyond what was talked about on the call with the 10th installment of reading between the lines of Apple's earnings Q&A with analysts.

NOTE: The following earnings call questions (“Q (Sell-Side Firm)”) and answers (“Cook” or “Luca”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, Seeking Alpha offers a written transcript here.

3Q24 Guidance

Q (Goldman Sachs): What gives you confidence that revenue will grow in 3Q24 (the June quarter)?
Luca: Our guidance commentary will be limited to my prepared remarks: Overall revenue will be up “low-single-digits,” Services growing “double-digits at a rate that is similar to what we’ve done in the first half of our fiscal year,” and iPad up double-digits.

My response: With Services representing ~30% of 3Q24 revenue, growth of approximately 15% will go a long way to offset weakness in HW.

Q (Citi): What are you assuming for commodity pricing on memory in guidance?
Luca: Our guidance assumes memory and FX to be slight headwinds. FX will have a 30 basis point negative impact sequentially.

My response:

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Neil Cybart 5/2/24 Neil Cybart 5/2/24

My 2Q24 Apple Estimates, Expectations for Apple's 3Q24 Guidance, My Updated Apple Earnings Model

Happy Wednesday. One quick thing before we get to the second half of my earnings preview.

Financial Models Add-on. As a reminder, members now have access to my iPhone, iPad, and Apple Watch installed base models with the Financial Models add-on. These models make it possible to estimate device unit sales, the number of devices in the wild over time, product upgrade cycle length, percent of device sales going to new users versus existing users by year and more. For those of you who purchased the Financial Models add-on, all installed base models have been updated ahead of earnings. You can access the models at any time by logging into your Above Avalon membership account here and going to the Digital Package tab (shown below). My earnings model has also been uploaded so that it will always be available in the same tab for easy access.

The Financial Models add-on is designed to be a perfect companion for AAPL investors wanting to take a deep dive into Apple’s financials as well as Apple competitors and suppliers needing to better understand the marketplace dynamic. For pricing information and to purchase the add-on, check out this page.

My 2Q24 Apple Estimates

Here are my granular estimates for Apple’s 2Q24:

Revenue: $91.9B (consensus: $90.0B)
Overall gross margin: 46.9% (guidance: 46% to 47%)
Gross margin (HW): 37.4%
Gross margin (Services): 74.6%
EPS: $1.59 (consensus: $1.50)
iPhone revenue:

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Neil Cybart 5/1/24 Neil Cybart 5/1/24

Setting the Stage for Apple’s 2Q24 Earnings, Thoughts on Apple’s Stock Price Underperformance

Hello everyone. Happy last day of April. We will begin preparing for Apple earnings. Today’s discussion will look at the big picture ahead of Thursday’s earnings release. We will go over my granular estimates on Wednesday.

Setting the Stage for Apple’s 2Q24 Earnings

Heading into Thursday’s earnings, the setup looks positive for Apple. Expectations surrounding Apple are at a multi-year low while business fundamentals appear to be holding up OK. This lowers the bar for what Apple needs to report and say on Thursday to please analysts and company observers. While a slowdown in device upgrading and sales weakness at the low end of various product lines continue to weigh on Apple’s

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Neil Cybart 2/2/24 Neil Cybart 2/2/24

Initial Thoughts on Apple’s 1Q24 Results, Apple’s 1Q24: By the Numbers, Parsing Apple’s 2Q24 Guidance

Apple’s 1Q24 earnings call was jam-packed with information. Unlike the average earnings call from Big Tech, Apple’s calls contain useful commentary and tidbits. More time will be needed to go through the disclosures, including the installed base information.

For today, we will look at the big picture from earnings, how the reported figures compared to my estimates, and Apple’s 2Q24 guidance.

An Above Avalon membership is required to read this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)

Subscribe $20/month

Subscribe $200/year

Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time.

An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-on.

Neil Cybart 2/6/23 Neil Cybart 2/6/23

Reading Between the Lines of Apple’s 1Q23 Earnings Q&A With Analysts (Daily Update)

Hello everyone. Welcome to a new week.

Last Friday, we went over the numbers from Apple’s 1Q23 earnings release. We also looked at two of the major themes from earnings: the significant FX impact on Apple’s results and changing device upgrading trends.

In today’s update, we will focus on Apple’s 1Q23 earnings Q&A session with analysts. Instead of just recapping the question and answer exchanges that occurred on Apple’s call, we will go over Neil’s thoughts / response to each exchange. This will allow Neil to go beyond what was talked about on the call. Let’s jump right in.

Reading Between the Lines of Apple’s 1Q23 Earnings Q&A With Analysts

NOTE: The following earnings call questions (“Q”) and answers (“Cook” or “Luca”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, The Motley Fool offers a written transcript here.

Supply Chain

Q: What is the state of Apple’s supply chain? Do you expect to increase inventory levels to insulate from supply disruptions?

Cook: Production is now back to “what we need it to be.” We continue to optimize our supply chain. We now have final assembly for iPhone in three countries. Given all that has happened over the past three years, our supply chain has proven to be resilient.

My response: Apple received a variation

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Above Avalon Membership

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