Apple Q1 2021 Earnings

 Summary

• Revenue up 54 percent to new March quarter record
  
• Net income of $23.6 billion, diluted earnings per share of $1.40 and operating cash flow of $24 billion were all March quarter records by a wide margin.
  
• Services and Mac revenue reach new all-time high
  
• International sales accounted for 67 percent of the quarter’s revenue.
  
• If you look at how the iPhone did around the world, we had the top five models of smartphone in the US, the top selling, the top two in urban China, four out of the top five in Japan, the top four in the UK and the top six in Australia. 
  
• Trends playing into Mac : Work from home, M1 chips, remote learning, last 3 quarters for Macs have been the best 3 quarters ever
  
• Trends playing into iPad : Work from home, M1 chips, remote learning
  
• Watch : 75% people who bought an Apple watch were new to the product
  
• Q2 guidance being lower - we reached supply demand balance only during the March quarter, which makes obviously the sequential decline steeper than usual. this 3 or $4 billion of supply constraints that Tim just said, primarily on iPad and Mac.
  
• my view would be as the stores get back up to speed, fully up to speed, we should be able to increase some of the accessory sales. Although I think we're doing fairly well at the moment. So it's not something that we're not doing well. Online has been much more beneficial and much more productive than we would have guessed going into this.
  
• Keep in mind that our Europe segment is a very broad version of Europe because it includes Western Europe, which has done very, very well. And then, Eastern Europe and it goes into the Middle East. Even India is part of Europe. And those emerging markets have done incredibly well, significantly better than company average.
  
• Apple Pay continues to expand geographically, launching in Mexico and in South Africa, bringing our payment service to six continents.
  
• In the enterprise market, customers across many industries are accelerating their adoption of iPhone 12 and 5G as a key platform for the future of their business.
  Delta Airlines, for example, is putting iPhone 12 and 5G connectivity into the hands of flight attendants so they can provide the best passenger service possible as air travel rebounds. Openreach in the UK has started equipping tens of thousands of field engineers with iPhone 12 to speed up their deployment of broadband services to homes around the country. And UCHealth, a large healthcare provider in Colorado, was able to reduce per patient vaccination time from three minutes to only 30 seconds largely by moving from PC stations to iPhones. This has allowed their staff to rapidly scan and register new patients and vastly increase their daily vaccination capacity.
  
  
• Net cash was 83 billion at the end of the quarter.
  

Category Breakdown

• iPhone - 47.9 B vs 28.9 B in Q1, 2020 (up 65%)
• Mac - 9.1 B vs 5.3 B in Q1, 2020 (up 71%)
• iPad - 7.8 B vs 4.3 B in Q1, 2020 (up 81%)
• Wearbales - 7.8 B vs 6.2 B in Q1, 2020 (up 25%)
• Services - 16.9 B vs 13.3 B in Q1, 2020 (up 27%)
• Revenue - 89.5 B vs 58.3 B in Q1, 2020 (up 54%)
• Net income - 52 B (~60% operating margin) 

Geography Breakdown

• Americas 34.3 B vs 25.4 B in Q1, 2020
• Europe 25.2 B vs 14.2 B in Q1, 2020
• China 17.7 B vs 9.4 B in Q1, 2020
• Japan 7.7 B vs 5.2 B in Q1, 2020
• APAC 7.7 B vs 3.8 B in Q1, 2020

Historical Apple revenue in Q2:

2021: $89.6 billion

2020: $58.3 billion

2019: $58.0 billion

2018: $61.1 billion

2017: $52.9 billion

2016: $50.6 billion

2015: $58.0 billion

2014: $45.7 billion

2013: $43.6 billion

2012: $39.2 billion

2011: $24.7 billion

2010: $13.5 billion

2009: $9.1 billion

Thesis

• Trends : remote learning, creator economy
• Competitive advantage : m1 chip driving adoption
• Geography : Strength in international markets