Apple Powers to Record $124 Billion Year-End 2021 Quarter, Services Revenue Soars 24%

Todd Spangler
·3 min read

Apple turned in another smashing holiday quarter, posting a Wall Street-beating record $123.9 billion in sales for the last three months of 2021, even as the tech behemoth saw overall sales decelerate in the period amid ongoing supply-chain constraints.

Total revenue increased 11% in the the quarter ended Dec. 25, 2021, which is Apple’s Q1 of fiscal year 2022. The company also posted record income of $34.6 billion (up 20%), or $2.10 per diluted share.

More from Variety

Click here to sign up for Variety’s free Strictly Business newsletter covering earnings, financial and investment news, and more.

Analyst estimates had pegged Apple revenue at $118.66 billion and EPS of $1.89, according to financial data provider Refinitiv. Shares of Apple popped 3.8% in after-hours trading on the earnings beat.

Sales of iPhones — Apple’s core product segment — were $71.63 billion (up 9%) in the year-end quarter, after the next-generation iPhone 13 family began shipping last fall. That was an all-time high for the smartphone biz. Wall Streeters on average anticipated $67.6 billion in iPhone segment revenue, per FactSet.

Apple’s Services revenue for the period rose 24%, to $19.5 billion, also a record, the same growth rate as in the year-earlier period. The segment comprises the App Store, Apple Pay, Apple Music, Apple TV Plus, iCloud, AppleCare and other subscription businesses. In the quarter, Apple recorded all-time high revenue for areas including cloud, music, video, advertising and payment services, CFO Luca Maestri said on the earnings call Thursday.

As of the end of 2021, Apple had 785 million paying subscribers globally across all services, up 165 million (or 27%) in the last 12 months, Maestri told analysts. That includes both Apple-branded and third-party services.

In addition, Apple now has an active installed base of more than 1.8 billion devices worldwide, CEO Tim Cook said on the call.

Apple provided general guidance for the current quarter, with Maestri saying the company expects “solid” double-digit year over year growth to result in a record for the March quarter (but with revenue growth decelerating from the year-end 2021 period). He added that Apple anticipates a “significant” impact from supply-chain issues in the March 2022 quarter but that it would be lower than the December quarter.

In the September 2021 quarter, supply-chain issues including chip shortages added $6 billion in costs, and Maestri previously said the impact was expected to be even bigger in the year-end 2021 quarter. Execs didn’t provide an estimate of the financial impact for Q1 FY22.

“Apple’s growth cycle is not reliant on pandemic cycles in the same way that say Netflix has been — benefitting but then finding it hard to keep up that growth,” said Tom Johnson, global chief digital officer at media agency Mindshare. “Apple’s cult following will always buy the latest version of its flagship device. Chip shortages were never going to hold back its growth long term.”

Apple currently has a market cap of around $2.6 trillion, making it the most valuable company in the world. For fiscal-year 2021, Cook had a compensation package worth $98.7 million, more than six times the year earlier.

Best of Variety

Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

Click here to read the full article.