Apple beat Wall Street expectations during its fourth quarter of fiscal year 2023, riding higher sales of the iPhone and its Services segment. During its fourth quarter, Apple reported net income of $22.96 billion, or diluted earnings of $1.46 per share, up 13%. Revenue fell 1% to $89.5 billion, the company announced Thursday.
According to analysts surveyed by Zacks Investment Research, the tech giant was expected to report earnings of $1.39 per share and revenue of $89.03 billion.
As the company closes its 2023 fiscal year, it reported annual revenue of $383 billion, a 3% drop from 2022. Apple CFO Luca Maestri cited “the volatile and uneven macroeconomic environment,” in commenting on the falloff during the earnings call Thursday.
“Our year-over-year revenue performance improved each quarter as we went through the year, and so did our earnings per share performance,” Maestri said.
For Apple’s Product division, net sales totaled $67.18 billion, a 5% drop from $70.96 billion in last year’s similar quarter.
iPhone revenue came in at $43.8 billion, a 3% increase in the quarter year over year — a revenue record for a September quarter, the company said. Mac net sales for the quarter were down 51% year over year to $7.61 billion. As for iPads and Apple Watches, those brought in $6.4 billion and $9.3 billion in revenue, respectively.
On the Services side — a segment that includes Apple TV+, Apple Arcade, Apple Fitness+, Apple News+, Apple Music, iCloud, the App Store and Apple Care — the company reported and all-time record of $22.31 billion in net sales, a 16% increase from $19.18 billion last year. Similarly, Apple Music set a revenue record for September, CEO Tim Cook said, though the company gave no specific numbers.
This quarter’s record revenues for the Services segment came after the division hit a record $21.2 billion in the fiscal third quarter, which was driven largely by over 1 billion paid subscriptions to its services — a jump of 150 million during the last 12 months.
“We continue to see increased customer engagement with our Services. Both transaction accounts and paid accounts grew double digits year over year, each reaching a new all time high,” Maestri said. He added that Apple has “well over 1 billion paid subscriptions across the services on our platform, nearly double the number we had only three years ago.”
As for Apple TV+, Cook named “The Morning Show,” “Lessons in Chemistry” and Martin Scorsese’s “Killers of the Flower Moon” as successes released during the quarter.
The iPhone still remains the company’s biggest contributing factor to revenue. Last quarter, the device accounted for 48.5% of net sales. That time period also saw year-over-year sales decrease by 2.4% to $39.67 billion.
In 2022, Apple beat Wall Street expectations in its fourth quarter when it came to revenue and earnings per share but fell short of expectations when it came to key product categories, which included the company’s iPhone and business services.