Apple's second-quarter results for 2017 are in. Here's our transcript of the call.
Apple CEO Tim Cook and CFO Luca Maestri spoke with analysts during the company's Q2 2017 earnings call. Here's our ongoing live transcript of their remarks! If you want more info on Apple's results, we recommend Six Color's ace charts for the quarter.
Cook's opening remarks
Tim Cook
Good afternoon and thank you for joining us. Today we are reporting strong March quarter results with accelerating revenue growth and earnings per share up 10% over last year. We feel great about this performance.
Revenue was $52.9 billion — near the high end of our guidance range. Global revenue was up 5% year on year with growth accelerating from our December quarter performance. That's despite a $1 billion year-over-year revenue headwind from foreign exchange in the March quarter and a larger iPhone channel inventory reduction this year versus last year.
iPhone sales were in line with our expectations and we're thrilled to see the continued strong demand for iPhone 7 Plus with its beautiful large display and dual camera system. Our active install base for iPhones grew by double digits year over year and based on the latest data from IDC, we gained market share in nearly every country we tried. Late in the quarter we released the stunning (Product)RED special edition versions of iPhone 7 and 7 Plus in recognition of 10 years of our partnership with RED. This relationship has given our customers an unprecedented way to contribute to the global fund and bring the world closer to an AIDS-free generation. We've seen wonderful customer response to these eye-popping new iPhones.
For the second quarter in a row, our services revenue topped $7 billion and it's well on the way to being the size of a fortune 100 company. We're very happy to see the deep level of customer engagement with the Apple ecosystem across all of our services. App store momentum is terrific, with revenue growing 40% year over year to an all-time quarterly record. The number of developers offering apps for sale on our store was up 26% over last year and we're thrilled to see their success. We also saw double-digit revenue growth from Apple Music subscriptions and iCloud storage, and overall very strong growth in the total number of paid subscriptions for our own services and the third party content we offer on our stores.
Paid subscriptions now exceed 165 million. Apple Pay is experiencing phenomenal traction. With the launch of Taiwan and Ireland in the March quarter, Apple Pay is now live in 15 markets, with more than 20 million contactless-ready locations, including more than 4.5 million locations accepting Apple Pay in the U.S. alone. We're seeing strong, growing usage as points of acceptance expand with transaction volume up 450% over the last 12 months.
In the UK, for example, points of acceptance have grown by 44% in the last year while monthly Apple Pay transactions have grown by nearly 300%. In Japan, where Apple Pay launched last October, more than half a million transit users are completing 20 million Apple Pay transactions per month and we're always excited to see our partners bring their customers new ways to use Apple Pay. You can now even send a Starbucks gift card via iMessage with just a touch. We're seeing great momentum from our powerful advances in iMessage. In fact, at one point during the Super Bowl in February, customers were sending 380,000 messages per second — more than double the previous year.
A few weeks ago,we introduced Clips, a new app that's another great example how we're continually making our produtcs even more engaging and it's off to a great start. With Clips, it's fun and easy to combine video, photos, and music on an iPhone or an iPad into great-looking expressive videos with great visual effects and titles just using your voice, then share your Clips with friends through the Messages app or on social media.
We had great Mac results during the quarter. Revenue grew 14% to a new March quarter record and gained market share thanks to strong demand for our new MacBook Pros. Our Mac business has generated over $25 billion in revenue over the past four quarters. We're investing aggressively in its future and we are very excited about the innovation we can bring to the platform.
We also updated our most-popular sized iPad with a brighter retina display and best-in-class performance at its most affordable price ever and customer response to date has been very strong. iPad results were ahead of our expectations and we believe we gained shares in a number of major markets including the U.S., Japan, and Australia. iPad remains the world's most popular tablet and it's the primary computing device for millions of customers across the globe.
Building on the momentum from the holiday quarter, Apple Watch sales nearly doubled year over year. Apple Watch is the best selling and most loved smartwatch in the world and we hear wonderful stories from our customers about its impact on our fitness and health.
We're also seeing great response to AirPods with a 98% customer satisfaction rating based on a recent Creative Strategies survey. Demand for AirPods significantly exceeds supply and growth in Beats products has also been very strong. In fact, when we combine Apple Watch, AirPods, and Beats headphones, our revenues from wearable products in the last four quarters was the size of a Fortune 500 company.
In Greater China, we were very pleased to see strong, double-digit revenue growth from both Mac and services during the March quarter. We also had great results from our retail stores in mainland China, with total store revenue up 27% over last year and compstore revenue up 7%. These results contributed to our improving performance in Greater China. Through the first two quarters of fiscal 2017, our year over year comparisons improved significantly over the last two quarters of fiscal 2016. First-half revenue was down 13% year-over-year, about a third of which was attributable to FX. That's in contrast to a 32% revenue decline in the second half of last year. Our March quarter results were in line with our expectations and similar to the year-over-year performance we experienced in the December quarter. We continue to be very enthusiastic about our opportunity in China.
We set a new March quarter record in India where revenue grew by strong double digits. We continue to strengthen our local presence across the entire ecosystem and we're very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure.
Apple Retail is entering an exciting chapter with new experiences for customers and breathtaking new store designs. With the opening of our newest store in Dubai this past weekend, we now have 495 retail locations worldwide. The new Apple Dubai Mall is a truly international store, with employees who collectively speak 45 languages and are already welcoming customers from around the world.
As Luca will discuss in a moment, today we're also providing an update to our capital return program. Given our strong confidence in our future, we're increasing the program's size by $50 billion, bringing the total to $300 billion, and we're extending the time frame through March of 2019. We're adding to our share repurchase authorization and increasing our dividend for the fifth time in less than five years.
We're very excited about our upcoming World Wide Developers Conference taking place in San Jose next month. The conference is significantly oversubscribed and we'll be welcoming thousands of attendees. We look forward to helping them learn about breakthrough technologies across all four of our software platforms: iOS, macOS, watchOS, and tvOS that enable developers to create incredible experiences for every aspect of customers' lives and improve the way they manage their homes, cars, health, and more.
I'm very proud to mention that we recently released our tenth annual Environmental Responsibility Report, reflecting our amazing progress. In 2016, 96% of the electricity used at Apple's global facilities came from renewable sources of energy, reducing our carbon emissions by nearly 585,000 metric tons. We're now 100% renewable in 24 countries, including all of Apple's data centers. There's much more work to be done but we're committed to leaving the world better than we found it.
Closer to home, we're excited about moving into our new corporate headquarters, Apple Park, our new center for innovation. The main building on Apple Park is designed to house 13,000 employees under one roof in an environment that fosters even greater collaboration among our incredibly talented team. We have many more ongoing investments in the U.S. economy since Apple is a company that could only have been created in America.Through our innovative products and the success of our business we're incredibly proud to support more than 2 million jobs in all 50 states and we expect to create even more. Last fiscal year we spent more than $50 billion in the United States with American suppliers, developers, and partners and we continue to invest confidently in our future.
Now for more details on the March quarter results, I'd like to turn the call over to Luca.
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