Apple (NASDAQ: AAPL) announced its 2022 Q3 financial results on July 28, 2022. According to the announcement, total net sales, operating income and net income were up 2%, down 4% and down 11%, respectively (YoY, 3 months). In this regard, product sales was down 1% and services revenue was up 12%.
Looking at sales growth trends by region, Asia Pacific (excluding Greater China and Japan) recorded the highest growth of up 14%. It was followed by Americas of up 4% (YoY, 3 months). Japan recorded the worst sales growth of down 16% year-over-year.
Reviewing by product category, iPhone had the highest sales growth of up 3% (YoY, 3 months). Mac has the worst sales growth of down 10%.
In the last 9 months, cash generated by operating activities was up 17% (YoY). In addition, free cash flow was up 12%.
By the way, FCF margin was up 25% (up 110 bps, YoY, 9 months). However, sales growth in the last 9 months was only 8%. In this regard, service revenue accounts for only 19% of the total net sales. Accordingly, Apple’s medium-term goal could be making the ratio reach a level above 65%.
Apple’s performance in the last quarter was not great. However, the company has steadily increased its percentage of its service revenue. This suggests that the cloud-based subscription business could become the main source of Apple’s revenue in the future. Since the FCF margin continues to grow along with the increase in the subscription revenue, medium or long term growth of Apple would be expected in the future.
Apple Inc. (NASDAQ: AAPL) Stock Chart
Important Notice
- Watanabe & Brothers’ Investment is holding shares of Apple.
- This report is provided solely for informational purpose and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell any specific products.
- Any opinions or statements expressed in this report are based on the author’s personal and subjective views, and are not the official views of the organization to which the author belongs. In addition, although we have done our best efforts in making accurate assessments on the original financial statements, we cannot guarantee any complete accuracy of this report. We do not guarantee either that any future forecasts referred to in this report will certainly be realized. Investment in listed stocks, ETFs, etc. should be carried out under the responsibility of each investor, and even if the investor who read this report suffers a loss due to investment activities, Watanabe & Brothers’ Investment is not responsible for any liability.
- This report was originally prepared in English, and translated into the other languages with plugin utilizing Google Translation API. We hereby notify that the translations are provided only for the sake of reference, and any opinions or statements in this report should be interpreted in original English. We ask any investors reading this report to refer to the original financial statements issued by the company.