On the night of July 29, Apple published its next quarterly financial report – on its accounting calendar, the third quarter of the 2022 fiscal year ended on June 25 
Apple refers to companies whose financial year does not coincide with the calendar. So, for Apple, the third quarter of fiscal year 2022 corresponds to the second quarter of calendar year 2022 . In a nutshell, Apple beat analysts’ expectations and reported an increase in iPhone revenue, mostly driven by the iPhone 13 (last year’s lineup remains strong), but Mac sales were down 10% due to supply chain restrictions and unfavorable currency exchange rates.
Financial indicators
- Apple’s April-June revenue was nearly $83 billion, a new record for the June quarters and up 2% from last year’s $81.4 billion. Net income fell to $19.4 billion (or $1.20 per share) from $21.7 billion (or $1.30 per share) in the same quarter in 2021. Gross margin was 43.3%, up 40 basis points. The weakening of financial leverage (leverage ratio) due to seasonal factors and unfavorable changes in foreign exchange rates were offset by a number of favorable conditions. Product margin was 34.5%.
- How Apple’s revenue grew in 10-year increments:
Apple’s revenue every 10 years:
Q3 2022: $83 billion
Q3 2012: $35 billion
Q3 2002: $1 billion
— Jon Erlichman (@JonErlichman) July 28, 2022
- During the quarter, the company generated operating cash flow of $23 billion. The volume of cash and securities as of June 25 was $179 billion (of which $60 billion was pure cash) with total debt obligations of $120 billion. The company also paid out $28 billion to shareholders during the quarter in the form of buybacks and dividends.
- Apple shares in premarket after the publication of the report rose sharply in price.
Sales rose in almost all regions (slight decline in China and Japan).
Distribution of revenue by regions
| Region | Three-month period ending June 25, 2022, $ billion | Three-month period ending June 26, 2021, billion dollars |
| America | 37.472 | 35.870 |
| Europe | 19.287 | 18.943 |
| China | 14.604 | 14.762 |
| Japan | 5.446 | 6.464 |
| Rest of Asia | 6.150 | 5.395 |
| Total | 82.959 | 81.434 |
Sales by individual product categories
Looking at the portion of the report showing revenue from the sale of individual products, the decline is observed in several main categories. Mac sales fell the hardest, down 10% year-over-year. CEO Tim Cook attributed this to supply chain constraints and unfavorable currency movements. However, this is also in line with the industry-wide downward trend in PC sales .
iPad sales fell 2%, while the Wearables, Home & Accessories category lost 8% year-over-year.
Quarterly sales by category:
- iPhone – $40.665 billion (a year ago – $39.570 billion);
- Mac — $7.382 billion (a year ago — $8.235 billion);
- iPad – $7.224 billion (a year ago – $7.368 billion);
- Wearable devices, devices for the house and accessories — $8.084 billion (a year ago — $8.775 billion);
- Services — $19.604 billion (a year ago — $17.486 billion).
Other interesting facts from the report
- Apple now has more than 860 million paying subscribers in total, adding 160 million new paid subscribers in the last year.
- Apple TV+ Achievements – Movies and shows released on Apple’s streaming service have received 250 awards and 1,100 nominations. In total, Apple TV+ has garnered 52 Emmy nominations across 13 categories.
- A survey of consumers in the United States shows that among iPhone 13 owners, the satisfaction index reaches 98%.
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Earlier this month, Apple released the MacBook Air with the M2 processor, 13.6-inch screen and MagSafe magnetic charging, and last month the updated MacBook Pro M2 came out . They joined the updated iPhone SE and iPad, Mac Studio on the M1 Ultra chip released in the spring and Studio Display. iOS 16, iPadOS 16, watchOS 9, macOS Ventura, and tvOS 16 went into public beta earlier this month and are expected to launch in the fall along with a four-model iPhone 14 lineup and a range of other new products. Earlier, Mark Gurman from Bloomberg said that Apple is preparing a lot of new devices, some of which will be released before the end of the year. Known potential releases include the Apple Watch Series 8 body temperature smartwatch, which will include a new hardened model for extreme sports, new Macs with M2 and M3 chips, and new Apple TVs and HomePods. At the same time, Apple, along with everyone else, has already begun to prepare for the approach of a global recession – from 2023 it plans to slow down the pace of hiring and reduce operating costs.
Apple to cut hiring and spending on some teams next year
