00:01:10 · Anurag Rana, Tim Stenovec, Mark Gurman, Carol Massar
[00:01:10] S3: 75 billion. [00:01:11] S2: Wearables was a miss. iPad revenue was a miss. Total operating expenses came in in line with estimates. at $ 19. 19 billion. Fourth quarter services revenue coming in, we can say that met estimates, $ 31. 57 billion. The estimate was for $ 31. 58. I'm going to give that one to Apple. That's a meat of expectations. Mac revenue came in above estimates. America's revenue came in just above estimates. Fourth quarter products revenue coming above estimates at $ 82. 9 billion. So fourth quarter greater China revenue missing at $ 17. 54 billion. But fourth quarter iPhone revenue A beat there, $ 57. 58 billion. And fourth quarter Apple revenue, $ 114. 48 billion. A beat on the overall top line, Carol. And also a beat on the bottom line. Like you said, earnings per share, $ 2. [00:01:58] S1: 10. [00:01:59] S2: Estimate was for $ 2. [00:02:00] S0: Mark Gurman on the live blog saying Apple just beat estimates coming in at $ 114. 5 billion led by sales of the iPhone 18 Pro. an iPhone 18 Pro Max. The iPhone was a beat overall, but big misses in greater China and on the iPad. Anurag Rana, you're looking through these numbers as well. Come on in.
00:02:00 · Carol Massar, Anurag Rana, Tim Stenovec
[00:02:00] S0: Mark Gurman on the live blog saying Apple just beat estimates coming in at $ 114. 5 billion led by sales of the iPhone 18 Pro. an iPhone 18 Pro Max. The iPhone was a beat overall, but big misses in greater China and on the iPad. Anurag Rana, you're looking through these numbers as well. Come on in. [00:02:19] S3: Yeah, the China thing is a very interesting one and we'll find out why that's the case. The one number that hasn't been discussed and I'm looking for it is the gross margins because I was surprised that they beat on the bottom line. I just want to understand how that happened because we were expecting some kind of compression in the gross margins because of higher memory costs. But iPhone revenue, which is extremely important to us, that was above estimate. So that's probably what's holding up the stock right now. But I think the biggest thing for us is what kind of guidance do they give going forward? Because there are a couple of things that are happening. One, remember that the base phone is not updated right now. That's going to happen in the subsequent quarter. So there's going to be shipments that got moved from the December quarter into the March and the June quarter. So that's going to be things that are going to be important. And the second is, you know, what's happening with Duo, all the screen issues and whether they can take care of the strong demand of Duo in this particular quarter. [00:03:16] S2: Do you think they can take care of the strong demand in this quarter?
00:03:16 · Tim Stenovec, Anurag Rana
[00:03:16] S2: Do you think they can take care of the strong demand in this quarter? [00:03:19] S3: You know, it's tough to say because, you know, everybody came up with their own estimates of starting the year at, let's say, 10, 12 million units. But frankly speaking, the reception that I have seen, even with the folks that I have talked to, has been extremely strong. And that, I think, is partially true to their expectations. lease plan. And if that's the case, we think they're going to be about 15 million units this year. And sometimes it's not easy to come up with those units in that short period of time. [00:03:45] S2: Especially if you have people going to the Genius Bar saying, hey, this is cracked. I need a new one. I'm just kidding. I'm just kidding. But we will, like you said, we should get some, there will likely be some questions about the cracked issue. Hey, services revenue, as Carol mentioned, came in almost exactly as expected. That's a bright spot on a rock for you, I bet.
00:03:45 · Tim Stenovec, Anurag Rana, Carol Massar, Mark Gurman
[00:03:45] S2: Especially if you have people going to the Genius Bar saying, hey, this is cracked. I need a new one. I'm just kidding. I'm just kidding. But we will, like you said, we should get some, there will likely be some questions about the cracked issue. Hey, services revenue, as Carol mentioned, came in almost exactly as expected. That's a bright spot on a rock for you, I bet. [00:04:05] S3: You know, but it was somewhere in the, you know, around the 10% mark. So the question really is what kind of guidance they give. Because now, initially what used to happen was guidance was very predictable when it came to the services business. But I think it has been slowing down for the past two quarters. And if they give a guidance right around 10%, I think that's fair. But if they go out and say, well, we're going to, you know, go down, the growth rate is going to go down even more for the services business, that's not good. So I think a lot hinges on guidance this time than in the prior quarters. [00:04:35] S0: Yeah, we know that December quarter, right, is just such an important one in terms of what it means for their top line. Let's just rehash. We're talking with Anurag Rana of our Bloomberg Intelligence team. We are talking Apple already out with its earnings stock down about nine-tenths of a percentage point. Here's some of the highlights. Fourth quarter revenue, that was a beat, $ 114. [00:04:54] S1: 48 billion.
00:04:54 · Mark Gurman, Carol Massar, Tim Stenovec, Anurag Rana
[00:04:54] S1: 48 billion. [00:04:57] S0: Street estimate was $ 113. 47 billion. iPhone revenue, you know this, folks. So important to this company. $ 57. 58 billion. Street estimate was a little bit below that at $ 56. 49 billion. Fourth quarter, greater China revenue. A bit of a struggle there for the company. Still $ 17. 54 billion. Street estimate was $ 18. 75 billion. And again, the stock right now down about 1.1% here in the aftermarket. It has had quite a run, though. Since late June, we've talked about this, adding about a trillion dollar in market cap. So as Anurag, you said, what we get in terms of a guidance. [00:05:34] S2: I think China is such a big question here. I mean, when was the last time we were sitting here being like Apple beat on China? [00:05:43] S0: Well, what is the longer term story here, Anurag, with China? [00:05:46] S2: I think it was like one time in the last few quarters, truly. [00:05:49] S0: They always talk about what an important market this is for this company, but there's increasing competition. [00:05:54] S3: Yeah, but if you think of China, I mean, the last two quarters, they grew like 28%, 22%. I mean, it's a very big number in China. We are now, you could say, after one quarter, we're going to get into a point of very tough comparison of growth in China. You know, from my side, China is one of the most important stories for Apple. In terms of unit shipments, this is an area where they can sell more products than any other geography right now. [00:06:18] S1: U.S.
00:06:18 · Mark Gurman, Anurag Rana, Tim Stenovec, Carol Massar
[00:06:18] S1: U.S. [00:06:18] S3: Is a saturated market in terms of unit growth. China, they have a good market share. But it's still an area where they can gain more market share down the road. India is another area, but I think the per capita income in India is a lot lower than it is in China. So in India, it's only the middle class. And when that goes up, that's really the big story there. So China for me is one of the more important. [00:06:42] S2: What's their entry into India? I mean, for so many years, we talked about a cheaper iPhone being that entry into different emerging markets. But is it that newish laptop that's just a few hundred bucks? [00:06:54] S3: No, it is the phone. I mean, to be very honest, the product is always the phone. Let me be very, very candid about it. It's a very expensive phone. Yeah, but the thing is, like, the base model is there. You have refurbished models. You know, India is becoming a lot more affluent when it comes to the middle class. And Apple is an aspirational brand over there. And that's the discussion there. We have a lot. I mean, they have opened so many stores in the last few years. So, you know, India is becoming an extremely important part of the pie. But again, the overall contribution to Apple is still very small. And I think, you know, over the next 10 years, yes. But in the near three years, I think China remains the most important growth driver. [00:07:34] S0: What's your top question to the C-suite when it comes to Apple?