Neil Cybart Neil Cybart

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:

An Above Avalon membership is required to continue reading 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.)

Choose either a monthly or annual membership. 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. Contact me with any questions. 

Contact me directly if you would like to purchase multiple subscriptions (five or more) for your team or company.

An audio version of the newsletter 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-ons.

Read More
Neil Cybart Neil Cybart

Apple’s Paid Subscriptions Growth, Apple Gross Margin Hits Decade High, Apple’s Next Marginal Customer (Daily Update)

Hello everyone. In today's update, we will address a few topics carried over from Apple's 1Q23 earnings release: paid subscriptions growth trends and gross margin improvement. We begin with Neil’s estimates for new paid subscriptions added across Apple’s ecosystem on a quarterly basis. The discussion then turns to Apple’s gross margin improvement. We go over the most likely driver of the stronger performance. The update concludes with an underlying story to be told about Apple’s gross margin hitting a 10-year high. Let's jump right in.

Apple’s Paid Subscriptions Growth

It’s been five months since we last examined Apple’s paid subscriptions trends.

In keeping with its usual disclosure, Apple provided an updated total during its 1Q23 earnings call for the number of paid subscriptions across the Apple ecosystem.

Based on Apple’s commentary, here are my estimates for the number of paid subscriptions across Apple’s ecosystem (first party and third party) on a quarterly basis:

  • 1Q20: 482M paid subscriptions

  • 2Q20: 518M

  • 3Q20: 553M

  • 4Q20: 588M

  • 1Q21: 623M

  • 2Q21: 663M

An Above Avalon membership is required to continue reading this update. Members can read the full update here. 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.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Read More