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Apple q4'14 Results Commentary

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An in-depth analysis of Apple’s Blowout Q4 results

The slides shown are an introduction to the full high-quality deck.

To receive the full set, including charts, commentary, interpretation and outlook, with all slides in full colour, contact Aquilla Europe, nick@aquilla-europe.com

Published in: Technology
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Apple q4'14 Results Commentary

  1. 1. Apple Results Q4 2014 Summary and Commentary Note: Apple Q4 = Calendar Q3 Aquilla
  2. 2. Aquilla Key Data Points Wall Street Reported YoY Revenue $ 39.9 B $ 42.1 B + 12% Net Income $ 8.5 B + 13% EPS (Diluted) (vs Adjusted) $1.31 $1.42 + 20% iPhone Units 37.9 M 39.3 M + 16% iPhone ASP $603 4% iPad Units 13.2 M 12.3 M - 13% iPad ASP $432 -2% Mac Units 4.8 M 5.5 M + 21% iPod Units 2.3 M 2.6 M -24% iTunes/SW/Svcs $ $ 4.7 M $ 4.6 M + 8% Accessories $ $ 1.5 M $ 1.5 M + 13% Gross Margin 38.0% 38.0% + 1 point Cash & Long Term Securities 155 B -6% * Q1 Revenue Guidance $ 63.5 B $ 63.5 - 66.5 B FY13: $57.6 B Q4 Gross Margin Guidance 37.5% 37.5 - 38.5% FY13: 37.9% * QoQ
  3. 3. Aquilla 35% 30% 25% 20% 15% 10% 5% Source: Apple Results Net Income Net Income Up 13% •Net Income came in at $8.5B, or 20% of revenues, reflecting Apple’s continuing ability to command a price premium over the increasingly low-margin Android business •With the iPhone 6 set to dominate Apple’s mix this quarter, there is no reason to expect this performance to falter Comparative Net Income CQ3 2014 Google Samsung IM CQ2 Microsoft CQ2 0% 14 12 10 8 6 4 2 0 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Net Income (%) Net Income ($B) Apple Net Income Net Income B$ Net Income %
  4. 4. Aquilla Source: Apple Results Cash, Investments & Capital Return Capital Return Program Grows •Apple generated $13.3B of cash from 180 operations in the Quarter, bringing the full year total to just under $60B •Stock buybacks and dividends 160 returned $20B to shareholders during the quarter, reaching $56B for the 140 year •Long and short term cash holdings 120 declined by $9B in the quarter, but the company still has over $150B in 100 cash •Much of the cash remains outside the 80 US, held there for tax reasons 60 40 20 0 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 (B$) Cash & Capital Return Short Term Cash B$ Long Term Cash B$ Cash Generated B$ Capital Return B$
  5. 5. Accessories M$ iTunes/SW/Svcs M$ iPod M$ Mac M$ iPad M$ Aquilla Source: Apple Results Revenue Mix by Product Line iPhone dominates •iPhone now generates 56% of Apple’s revenues •A strong quarter for Mac moved it to 16% of the mix, moving back ahead of iPad •iPad was the big loser, declining a further 14% •iTunes/SW/Services continues to grow in line with the overall rate •iOS hardware dropped back to just under 70% of revenues Most recent $ Share $ YoY 4% 13% 11% 8% 1% -28% 16% 18% 13% -14% 56% 21% iPhone M$ 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Product Line Revenue Mix
  6. 6. iPod Trailing 12 months - Terminal? Tracking the trailing 12 months (current and 3 Aquilla previous Quarters) eliminates seasonality, and gives a better indication of the longer term trends 75,000 60,000 45,000 30,000 15,000 0 25,000 20,000 15,000 10,000 5,000 0 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Trailing 12m Units (000s) Units (000s) iPod Units iPod Units kU iPod Units Trailing 12m kU Source: Apple Results
  7. 7. Aquilla Source: Apple Results Geo Share with Retail - 12m Trailing Americas/Europe Ticked Up •Trailing 12 months shows clearly where Apple’s growth came from - Americas and Europe •Much of this was driven by iPhone 6 availability, or lack of, by region •China was flat, but with iPhone 6 now on sale, on all carriers, it has amassive upside •Japan shows signs of flattening •APAC is small, but under-performing Tracking the trailing 12 months (current and 3 previous Quarters) eliminates seasonality, and gives a better indication of the longer term trends 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Revenue $M Geo Growth 12m Trailing Revenue Inc Retail Americas EMEIA Greater China Japan APAC
  8. 8. Apple’s Q4 Results Analysis These popular slides cover an in-depth analysis of Apple’s Q4 results The slides shown are an introduction To receive the full set, including charts, commentary, interpretation and outlook plus all slides in full colour contact Aquilla Europe nick@aquilla-europe.com Aquilla
  9. 9. Apple’s Q4 Results Analysis - Full Slide Deck Aquilla
  10. 10. Aquilla Nick Graves, CEO • nick@aquilla-europe.com • +44 780 225 6536 Aquilla Europe Ltd • Kennett Cottage • OX9 3QS • UK • www.aquilla-europe.com

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