EX-99.1 2 a8-kexhibit991q1202012.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1


Apple Reports Record First Quarter Results

iPhone, Wearables & Services Drive All-Time Record Revenue and Earnings

CUPERTINO, California — January 28, 2020 — Apple® today announced financial results for its fiscal 2020 first quarter ended December 28, 2019. The Company posted quarterly revenue of $91.8 billion, an increase of 9 percent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $4.99, up 19 percent, also an all-time record. International sales accounted for 61 percent of the quarter’s revenue.

“We are thrilled to report Apple’s highest quarterly revenue ever, fueled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables,” said Tim Cook, Apple’s CEO. “During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion. We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board.”

“Our very strong business performance drove an all-time net income record of $22.2 billion and generated operating cash flow of $30.5 billion,” said Luca Maestri, Apple’s CFO. “We also returned nearly $25 billion to shareholders during the quarter, including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as we maintain our target of reaching a net cash neutral position over time.”

Apple is providing the following guidance for its fiscal 2020 second quarter:

revenue between $63.0 billion and $67.0 billion
gross margin between 38.0 percent and 39.0 percent
operating expenses between $9.6 billion and $9.7 billion
other income/(expense) of $250 million
tax rate of approximately 16.5 percent

Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on February 13, 2020 to shareholders of record as of the close of business on February 10, 2020.

Apple will provide live streaming of its Q1 2020 financial results conference call beginning at 2:00 p.m. PT on January 28, 2020 at www.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 investors 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 estimated revenue, gross margin, operating expenses, other income/(expense), tax rate, and plans for return of capital. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation: 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 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 four software platforms — iOS, 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.

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

Investor Relations Contact:
Tejas Gala
Apple
tgala@apple.com
(669) 227-2402

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
 
December 28,
2019
 
December 29,
2018
Net sales:
 
 
 
   Products
$
79,104

 
$
73,435

   Services
12,715

 
10,875

Total net sales (1)
91,819

 
84,310

Cost of sales:
 
 
 
   Products
52,075

 
48,238

   Services
4,527

 
4,041

Total cost of sales
56,602

 
52,279

Gross margin
35,217

 
32,031

 
 
 
 
Operating expenses:
 
 
 
Research and development
4,451

 
3,902

Selling, general and administrative
5,197

 
4,783

Total operating expenses
9,648

 
8,685

 
 
 
 
Operating income
25,569

 
23,346

Other income/(expense), net
349

 
560

Income before provision for income taxes
25,918

 
23,906

Provision for income taxes
3,682

 
3,941

Net income
$
22,236

 
$
19,965

 
 
 
 
Earnings per share:
 
 
 
Basic
$
5.04

 
$
4.22

Diluted
$
4.99

 
$
4.18

Shares used in computing earnings per share:
 
 
 
Basic
4,415,040

 
4,735,820

Diluted
4,454,604

 
4,773,252

 
 
 
 
(1) Net sales by reportable segment:
 
 
 
Americas
$
41,367

 
$
36,940

Europe
23,273

 
20,363

Greater China
13,578

 
13,169

Japan
6,223

 
6,910

Rest of Asia Pacific
7,378

 
6,928

Total net sales
$
91,819

 
$
84,310

 
 
 
 
(1) Net sales by category:
 
 
 
iPhone
$
55,957

 
$
51,982

Mac
7,160

 
7,416

iPad
5,977

 
6,729

Wearables, Home and Accessories
10,010

 
7,308

Services
12,715

 
10,875

Total net sales
$
91,819

 
$
84,310






Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)

 
December 28,
2019
 
September 28,
2019
ASSETS:
Current assets:
 
 
 
Cash and cash equivalents
$
39,771

 
$
48,844

Marketable securities
67,391

 
51,713

Accounts receivable, net
20,970

 
22,926

Inventories
4,097

 
4,106

Vendor non-trade receivables
18,976

 
22,878

Other current assets
12,026

 
12,352

Total current assets
163,231

 
162,819

 
 
 
 
Non-current assets:
 
 
 
Marketable securities
99,899

 
105,341

Property, plant and equipment, net
37,031

 
37,378

Other non-current assets
40,457

 
32,978

Total non-current assets
177,387

 
175,697

Total assets
$
340,618

 
$
338,516

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
45,111

 
$
46,236

Other current liabilities
36,263

 
37,720

Deferred revenue
5,573

 
5,522

Commercial paper
4,990

 
5,980

Term debt
10,224

 
10,260

Total current liabilities
102,161

 
105,718

 
 
 
 
Non-current liabilities:
 
 
 
Term debt
93,078

 
91,807

Other non-current liabilities
55,848

 
50,503

Total non-current liabilities
148,926

 
142,310

Total liabilities
251,087

 
248,028

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,384,959 and 4,443,236 shares issued and outstanding, respectively
45,972

 
45,174

Retained earnings
43,977

 
45,898

Accumulated other comprehensive income/(loss)
(418
)
 
(584
)
Total shareholders’ equity
89,531

 
90,488

Total liabilities and shareholders’ equity
$
340,618

 
$
338,516







Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
 
Three Months Ended
 
December 28,
2019
 
December 29,
2018
Cash, cash equivalents and restricted cash, beginning balances
$
50,224

 
$
25,913

Operating activities:
 
 
 
Net income
22,236

 
19,965

Adjustments to reconcile net income to cash generated by operating activities:
 
 
 
Depreciation and amortization
2,816

 
3,395

Share-based compensation expense
1,710

 
1,559

Deferred income tax expense/(benefit)
(349
)
 
53

Other
(142
)
 
(54
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
2,015

 
5,130

Inventories
(28
)
 
(1,076
)
Vendor non-trade receivables
3,902

 
6,905

Other current and non-current assets
(7,054
)
 
(886
)
Accounts payable
(1,089
)
 
(8,501
)
Deferred revenue
985

 
(370
)
Other current and non-current liabilities
5,514

 
570

Cash generated by operating activities
30,516

 
26,690

Investing activities:
 
 
 
Purchases of marketable securities
(37,416
)
 
(7,077
)
Proceeds from maturities of marketable securities
19,740

 
7,203

Proceeds from sales of marketable securities
7,280

 
9,723

Payments for acquisition of property, plant and equipment
(2,107
)
 
(3,355
)
Payments made in connection with business acquisitions, net
(958
)
 
(167
)
Purchases of non-marketable securities
(77
)
 
(427
)
Other
(130
)
 
(56
)
Cash generated by/(used in) investing activities
(13,668
)
 
5,844

Financing activities:
 
 
 
Proceeds from issuance of common stock
2

 

Payments for taxes related to net share settlement of equity awards
(1,379
)
 
(1,318
)
Payments for dividends and dividend equivalents
(3,539
)
 
(3,568
)
Repurchases of common stock
(20,706
)
 
(8,796
)
Proceeds from issuance of term debt, net
2,210

 

Repayments of term debt
(1,000
)
 

Proceeds from/(Repayments of) commercial paper, net
(979
)
 
6

Other
(16
)
 

Cash used in financing activities
(25,407
)
 
(13,676
)
Increase/(Decrease) in cash, cash equivalents and restricted cash
(8,559
)
 
18,858

Cash, cash equivalents and restricted cash, ending balances
$
41,665

 
$
44,771

Supplemental cash flow disclosure:
 
 
 
Cash paid for income taxes, net
$
4,393

 
$
4,916

Cash paid for interest
$
771

 
$
836