EX-99.1 2 d325078dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Apple Reports Second Quarter Results

Capital Return Program Expanding to $250 Billion

CUPERTINO, California — April 26, 2016 — Apple® today announced financial results for its fiscal 2016 second quarter ended March 26, 2016. The Company posted quarterly revenue of $50.6 billion and quarterly net income of $10.5 billion, or $1.90 per diluted share. These results compare to revenue of $58 billion and net income of $13.6 billion, or $2.33 per diluted share, in the year-ago quarter. Gross margin was 39.4 percent compared to 40.8 percent in the year-ago quarter. International sales accounted for 67 percent of the quarter’s revenue.

“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Tim Cook, Apple’s CEO. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”

The Company also announced that its Board of Directors has authorized an increase of $50 billion to the Company’s program to return capital to shareholders. Under the expanded program, Apple plans to spend a cumulative total of $250 billion of cash by the end of March 2018.

“We generated strong operating cash flow of $11.6 billion and returned $10 billion to shareholders through our capital return program during the March quarter,” said Luca Maestri, Apple’s CFO. “Thanks to the strength of our business results, we are happy to be announcing today a further increase of the program to $250 billion.”

As part of the updated program, the Board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year. The Company also expects to continue to net-share-settle vesting restricted stock units.

The Board has approved an increase of 10 percent to the Company’s quarterly dividend, and has declared a dividend of $.57 per share, payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016.

From the inception of its capital return program in August 2012 through March 2016, Apple has returned over $163 billion to shareholders, including $117 billion in share repurchases.

The Company plans to continue to access the domestic and international debt markets to assist in funding the program. The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis.

Apple is providing the following guidance for its fiscal 2016 third quarter:



revenue between $41 billion and $43 billion



gross margin between 37.5 percent and 38 percent



operating expenses between $6 billion and $6.1 billion



other income/(expense) of $300 million



tax rate of 25.5 percent

Apple will provide live streaming of its Q2 2016 financial results conference call beginning at 2:00 p.m. PDT on April 26, 2016 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), tax rate, and plans for dividends, share repurchases and public debt issuance. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 26, 2015, its Form 10-Q for the fiscal quarter ended December 26, 2015, and its Form 10-Q for the fiscal quarter ended March 26, 2016 to be filed with the SEC. 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, OS X, 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 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



(408) 974-2414

Investor Relations Contacts:

Nancy Paxton



(408) 974-5420

Joan Hoover



(408) 974-4570

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

© 2016 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.


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


     Three Months Ended      Six Months Ended  
     March 26,
     March 28,
     March 26,
     March 28,

Net sales

   $ 50,557       $ 58,010       $ 126,429       $ 132,609   

Cost of sales (1)

     30,636         34,354         76,085         79,212   













Gross margin

     19,921         23,656         50,344         53,397   













Operating expenses:


Research and development (1)

     2,511         1,918         4,915         3,813   

Selling, general and administrative (1)

     3,423         3,460         7,271         7,060   













Total operating expenses

     5,934         5,378         12,186         10,873   













Operating income

     13,987         18,278         38,158         42,524   

Other income/(expense), net

     155         286         557         456   













Income before provision for income taxes

     14,142         18,564         38,715         42,980   

Provision for income taxes

     3,626         4,995         9,838         11,387   













Net income

   $ 10,516       $ 13,569       $ 28,877       $ 31,593   













Earnings per share:



   $ 1.91       $ 2.34       $ 5.22       $ 5.43   


   $ 1.90       $ 2.33       $ 5.19       $ 5.39   

Shares used in computing earnings per share:



     5,514,381         5,793,799         5,536,656         5,818,441   


     5,540,886         5,834,858         5,567,506         5,858,330   

Cash dividends declared per share

   $ 0.52       $ 0.47       $ 1.04       $ 0.94   
(1) Includes share-based compensation expense as follows:   

Cost of sales

   $ 191       $ 142       $ 395       $ 282   

Research and development

   $ 468       $ 384       $ 934       $ 758   

Selling, general and administrative

   $ 389       $ 401       $ 797       $ 775   

Apple Inc.


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


     March 26,
    September 26,

Current assets:


Cash and cash equivalents

   $ 21,514      $ 21,120   

Short-term marketable securities

     33,769        20,481   

Accounts receivable, less allowances of $60 and $63, respectively

     12,229        16,849   


     2,281        2,349   

Vendor non-trade receivables

     7,595        13,494   

Other current assets

     10,204        15,085   







Total current assets

     87,592        89,378   

Long-term marketable securities

     177,645        164,065   

Property, plant and equipment, net

     23,203        22,471   


     5,249        5,116   

Acquired intangible assets, net

     3,843        3,893   

Other non-current assets

     7,745        5,556   







Total assets

   $ 305,277      $ 290,479   







Current liabilities:


Accounts payable

   $ 25,098      $ 35,490   

Accrued expenses

     23,208        25,181   

Deferred revenue

     9,461        8,940   

Commercial paper

     7,998        8,499   

Current portion of long-term debt

     2,500        2,500   







Total current liabilities

     68,265        80,610   

Deferred revenue, non-current

     3,322        3,624   

Long-term debt

     69,374        53,463   

Other non-current liabilities

     33,859        33,427   







Total liabilities

     174,820        171,124   







Commitments and contingencies


Shareholders’ equity:


Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,478,446 and 5,578,753 shares issued and outstanding, respectively

     29,484        27,416   

Retained earnings

     102,021        92,284   

Accumulated other comprehensive income/(loss)

     (1,048     (345







Total shareholders’ equity

     130,457        119,355   







Total liabilities and shareholders’ equity

   $ 305,277      $ 290,479   







Apple Inc.


(In millions)


     Six Months Ended  
     March 26,
     March 28,

Cash and cash equivalents, beginning of the period

   $ 21,120       $ 13,844   







Operating activities:


Net income

     28,877         31,593   

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


Depreciation and amortization

     5,431         5,054   

Share-based compensation expense

     2,126         1,815   

Deferred income tax expense

     3,092         1,879   

Changes in operating assets and liabilities:


Accounts receivable, net

     4,620         6,555   


     68         (285

Vendor non-trade receivables

     5,899         2,500   

Other current and non-current assets

     300         2,448   

Accounts payable

     (9,475      (5,428

Deferred revenue

     219         993   

Other current and non-current liabilities

     (2,093      5,679   







Cash generated by operating activities

     39,064         52,803   







Investing activities:


Purchases of marketable securities

     (86,242      (92,523

Proceeds from maturities of marketable securities

     9,148         5,871   

Proceeds from sales of marketable securities

     50,051         48,924   

Payments made in connection with business acquisitions, net

     (140      (115

Payments for acquisition of property, plant and equipment

     (5,948      (5,586

Payments for acquisition of intangible assets

     (657      (155


     (322      88   







Cash used in investing activities

     (34,110      (43,496







Financing activities:


Proceeds from issuance of common stock

     247         309   

Excess tax benefits from equity awards

     264         357   

Payments for taxes related to net share settlement of equity awards

     (751      (608

Payments for dividends and dividend equivalents

     (5,871      (5,544

Repurchase of common stock

     (13,530      (12,000

Proceeds from issuance of term debt, net

     15,584         11,332   

Change in commercial paper, net

     (503      (2,508







Cash used in financing activities

     (4,560      (8,662







Increase in cash and cash equivalents

     394         645   







Cash and cash equivalents, end of the period

   $ 21,514       $ 14,489   







Supplemental cash flow disclosure:


Cash paid for income taxes, net

   $ 6,630       $ 7,058   

Cash paid for interest

   $ 565       $ 220