Apple Reports Third Quarter Results

Apple® today announced financial results for its fiscal 2020 third quarter ended June 27, 2020. The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent. International sales accounted for 60 percent of the quarter’s revenue.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”

“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”

Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

Apple will provide live streaming of its Q3 2020 financial results conference call beginning at 2:00 p.m. PT on July 30, 2020 at apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple periodically provides information for investors on its corporate website, apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and details related to its annual meeting of shareholders.

This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company’s expectations regarding the impact of the COVID-19 pandemic; anticipated revenue, gross margin, operating expenses, other income/(expense), and tax rate; plans for return of capital; the four-for-one stock split; and the commitment to be carbon neutral by 2030. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: the effect of the COVID-19 pandemic on the Company’s business, results of operations, financial condition, and stock price; the effect of global and regional economic conditions on the Company’s business, including effects on purchasing decisions by consumers and businesses; the ability of the Company to compete in markets that are highly competitive and subject to rapid technological change; the ability of the Company to manage frequent introductions and transitions of products and services, including delivering to the marketplace, and stimulating customer demand for, new products, services, and technological innovations on a timely basis; the effect that shifts in the mix of products and services and in the geographic, currency, or channel mix, component cost increases, increases in the cost of acquiring and delivering content for the Company’s services, price competition, or the introduction of new products or services, including new products or services with higher cost structures, could have on the Company’s gross margin; the dependency of the Company on the performance of distributors of the Company’s products, including cellular network carriers and other resellers; the risk of write-downs on the value of inventory and other assets and purchase commitment cancellation risk; the continued availability on acceptable terms, or at all, of certain components, services, and new technologies essential to the Company’s business, including components and technologies that may only be available from single or limited sources; the dependency of the Company on manufacturing and logistics services provided by third parties, many of which are located outside of the US and which may affect the quality, quantity, or cost of products manufactured or services rendered to the Company; the effect of product and services design and manufacturing defects on the Company’s financial performance and reputation; the dependency of the Company on third-party intellectual property and digital content, which may not be available to the Company on commercially reasonable terms or at all; the dependency of the Company on support from third-party software developers to develop and maintain software applications and services for the Company’s products; the impact of unfavorable legal proceedings, such as a potential finding that the Company has infringed on the intellectual property rights of others; the impact of complex and changing laws and regulations worldwide, which expose the Company to potential liabilities, increased costs, and other adverse effects on the Company’s business; the ability of the Company to manage risks associated with the Company’s retail stores; the ability of the Company to manage risks associated with the Company’s investments in new business strategies and acquisitions; the impact on the Company’s business and reputation from information technology system failures, network disruptions, or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; the continued service and availability of key executives and employees; political events, international trade disputes, war, terrorism, natural disasters, public health issues, and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products; financial risks, including risks relating to currency fluctuations, credit risks, and fluctuations in the market value of the Company’s investment portfolio; and changes in tax rates and exposure to additional tax liabilities. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch, and Apple TV. Apple’s five software platforms — iOS, iPadOS, macOS, watchOS, and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline at (408) 974-2042.

© 2020 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months Ended

Nine Months Ended

June 27,
2020

June 29,
2019

June 27,
2020

June 29,
2019

Net sales:

Products

$

46,529

$

42,354

$

170,598

$

162,354

Services

13,156

11,455

39,219

33,780

Total net sales (1)

59,685

53,809

209,817

196,134

Cost of sales:

Products

32,693

29,473

116,089

109,758

Services

4,312

4,109

13,461

12,297

Total cost of sales

37,005

33,582

129,550

122,055

Gross margin

22,680

20,227

80,267

74,079

Operating expenses:

Research and development

4,758

4,257

13,774

12,107

Selling, general and administrative

4,831

4,426

14,980

13,667

Total operating expenses

9,589

8,683

28,754

25,774

Operating income

13,091

11,544

51,513

48,305

Other income/(expense), net

46

367

677

1,305

Income before provision for income taxes

13,137

11,911

52,190

49,610

Provision for income taxes

1,884

1,867

7,452

8,040

Net income

$

11,253

$

10,044

$

44,738

$

41,570

Earnings per share:

Basic

$

2.61

$

2.20

$

10.25

$

8.92

Diluted

$

2.58

$

2.18

$

10.16

$

8.86

Shares used in computing earnings per share:

Basic

4,312,573

4,570,633

4,362,571

4,660,175

Diluted

4,354,788

4,601,380

4,404,695

4,691,759

(1) Net sales by reportable segment:

Americas

$

27,018

$

25,056

$

93,858

$

87,592

Europe

14,173

11,925

51,740

45,342

Greater China

9,329

9,157

32,362

32,544

Japan

4,966

4,082

16,395

16,524

Rest of Asia Pacific

4,199

3,589

15,462

14,132

Total net sales

$

59,685

$

53,809

$

209,817

$

196,134

(1) Net sales by category:

iPhone

$

26,418

$

25,986

$

111,337

$

109,019

Mac

7,079

5,820

19,590

18,749

iPad

6,582

5,023

16,927

16,624

Wearables, Home and Accessories

6,450

5,525

22,744

17,962

Services

13,156

11,455

39,219

33,780

Total net sales

$

59,685

$

53,809

$

209,817

$

196,134

Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions, except number of shares which are reflected in thousands and par value)

 

June 27,
2020

September 28,
2019

ASSETS:

Current assets:

Cash and cash equivalents

$

33,383

$

48,844

Marketable securities

59,642

51,713

Accounts receivable, net

17,882

22,926

Inventories

3,978

4,106

Vendor non-trade receivables

14,193

22,878

Other current assets

10,987

12,352

Total current assets

140,065

162,819

Non-current assets:

Marketable securities

100,592

105,341

Property, plant and equipment, net

35,687

37,378

Other non-current assets

41,000

32,978

Total non-current assets

177,279

175,697

Total assets

$

317,344

$

338,516

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current liabilities:

Accounts payable

$

35,325

$

46,236

Other current liabilities

35,005

37,720

Deferred revenue

6,313

5,522

Commercial paper and repurchase agreements

11,166

5,980

Term debt

7,509

10,260

Total current liabilities

95,318

105,718

Non-current liabilities:

Term debt

94,048

91,807

Other non-current liabilities

55,696

50,503

Total non-current liabilities

149,744

142,310

Total liabilities

245,062

248,028

Commitments and contingencies

Shareholders’ equity:

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,283,939 and 4,443,236 shares issued and outstanding, respectively

48,696

45,174

Retained earnings

24,136

45,898

Accumulated other comprehensive income/(loss)

(550)

(584)

Total shareholders’ equity

72,282

90,488

Total liabilities and shareholders’ equity

$

317,344

$

338,516

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

 

Nine Months Ended

June 27,
2020

June 29,
2019

Cash, cash equivalents and restricted cash, beginning balances

$

50,224

$

25,913

Operating activities:

Net income

44,738

41,570

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation and amortization

8,354

9,368

Share-based compensation expense

5,105

4,569

Deferred income tax expense/(benefit)

182

(38)

Other

(94)

(340)

Changes in operating assets and liabilities:

Accounts receivable, net

5,149

9,013

Inventories

10

496

Vendor non-trade receivables

8,685

13,483

Other current and non-current assets

(6,760)

693

Accounts payable

(10,787)

(19,804)

Deferred revenue

1,649

(776)

Other current and non-current liabilities

3,867

(8,753)

Cash generated by operating activities

60,098

49,481

Investing activities:

Purchases of marketable securities

(96,606)

(21,902)

Proceeds from maturities of marketable securities

54,865

26,783

Proceeds from sales of marketable securities

39,760

49,516

Payments for acquisition of property, plant and equipment

(5,525)

(7,718)

Payments made in connection with business acquisitions, net

(1,473)

(611)

Purchases of non-marketable securities

(210)

(632)

Proceeds from non-marketable securities

58

1,526

Other

(689)

(268)

Cash generated by/(used in) investing activities

(9,820)

46,694

Financing activities:

Proceeds from issuance of common stock

430

391

Payments for taxes related to net share settlement of equity awards

(3,234)

(2,626)

Payments for dividends and dividend equivalents

(10,570)

(10,640)

Repurchases of common stock

(55,171)

(49,453)

Proceeds from issuance of term debt, net

10,635

Repayments of term debt

(12,629)

(5,500)

Proceeds from/(Repayments of) commercial paper, net

31

(2,026)

Proceeds from repurchase agreements

5,165

Other

(120)

(83)

Cash used in financing activities

(65,463)

(69,937)

Increase/(Decrease) in cash, cash equivalents and restricted cash

(15,185)

26,238

Cash, cash equivalents and restricted cash, ending balances

$

35,039

$

52,151

Supplemental cash flow disclosure:

Cash paid for income taxes, net

$

8,410

$

11,795

Cash paid for interest

$

2,275

$

2,563

Contacts:

Apple
Press Contact:
Kristin Huguet Quayle, (408) 974-2414
khuguet@apple.com

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