Services remained a bright spot for Apple as it reported revenue of $94.8 billion for its second fiscal quarter of 2023, beating Wall Street estimates. Quarterly revenue had been forecasted to hit approximately $93 billion, marking a 4% year-over-year drop. The actual drop was 3%.
The company announced quarterly earnings per diluted share were $1.52, beating estimates (and unchanged year-over-year). Analysts surveyed by Zacks Investment Research had predicted earnings per share of $1.44. The company reported earnings per share of $1.52 in the year-ago quarter.
A contributor to the above results was its services business, which includes Apple TV+. While the company declared its services business hit all-time highs, what remains unclear is the size of the role Apple TV+ played in those figures, as Apple declined to get specific with its subscription numbers and raw revenue.
Apple typically doesn’t break out Services earning by category. The division includes Apple Arcade, Apple Fitness+, Apple News+ and Apple Music, along with cloud storage and hardware warranties.
“We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” said Tim Cook, Apple’s CEO. He reiterated Apple’s commitment to the 2030 goal for carbon neutral products and supply chains.
Luca Maestri, Apple’s CFO, also shared remarks. “Our year-over-year business performance improved compared to the December quarter, and we generated strong operating cash flow of $28.6 billion while returning over $23 billion to shareholders during the quarter,” he said.
“The earnings beat suggests that Apple’s premium smartphone business may be insulated from concerns about deteriorating consumer confidence and a worsening macroeconomic outlook,” said Jesse Cohen, senior analyst at Investing.com. “Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment.”