Apple reports third quarter results

Cupertino, Calif. — (Business Wire) — Apple today announced financial results for its fiscal 2020 third quarter ended June 27, 2020. The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent. International sales accounted for 60 percent of the quarter’s revenue.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”

“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”

Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

Apple will provide live streaming of its Q3 2020 financial results conference call beginning at 2:00 p.m. PT on July 30, 2020 at apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)

	Three Months Ended				Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Net sales:
Products	$	46,529	$	42,354	$	170,598	$	162,354
Services	13,156		11,455		39,219		33,780
Total net sales ⁽¹⁾	59,685		53,809		209,817		196,134
Cost of sales:
Products	32,693		29,473		116,089		109,758
Services	4,312		4,109		13,461		12,297
Total cost of sales	37,005		33,582		129,550		122,055
Gross margin	22,680		20,227		80,267		74,079

Operating expenses:
Research and development	4,758		4,257		13,774		12,107
Selling, general and administrative	4,831		4,426		14,980		13,667
Total operating expenses	9,589		8,683		28,754		25,774

Operating income	13,091		11,544		51,513		48,305
Other income/(expense), net	46		367		677		1,305
Income before provision for income taxes	13,137		11,911		52,190		49,610
Provision for income taxes	1,884		1,867		7,452		8,040
Net income	$	11,253	$	10,044	$	44,738	$	41,570

Earnings per share:
Basic	$	2.61	$	2.20	$	10.25	$	8.92
Diluted	$	2.58	$	2.18	$	10.16	$	8.86
Shares used in computing earnings per share:
Basic	4,312,573		4,570,633		4,362,571		4,660,175
Diluted	4,354,788		4,601,380		4,404,695		4,691,759

⁽¹⁾ Net sales by reportable segment:
Americas	$	27,018	$	25,056	$	93,858	$	87,592
Europe	14,173		11,925		51,740		45,342
Greater China	9,329		9,157		32,362		32,544
Japan	4,966		4,082		16,395		16,524
Rest of Asia Pacific	4,199		3,589		15,462		14,132
Total net sales	$	59,685	$	53,809	$	209,817	$	196,134

⁽¹⁾ Net sales by category:
iPhone	$	26,418	$	25,986	$	111,337	$	109,019
Mac	7,079		5,820		19,590		18,749
iPad	6,582		5,023		16,927		16,624
Wearables, Home and Accessories	6,450		5,525		22,744		17,962
Services	13,156		11,455		39,219		33,780
Total net sales	$	59,685	$	53,809	$	209,817	$	196,134

Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)

	June 27, 2020		September 28, 2019
ASSETS:
Current assets:
Cash and cash equivalents	$	33,383	$	48,844
Marketable securities	59,642		51,713
Accounts receivable, net	17,882		22,926
Inventories	3,978		4,106
Vendor non-trade receivables	14,193		22,878
Other current assets	10,987		12,352
Total current assets	140,065		162,819

Non-current assets:
Marketable securities	100,592		105,341
Property, plant and equipment, net	35,687		37,378
Other non-current assets	41,000		32,978
Total non-current assets	177,279		175,697
Total assets	$	317,344	$	338,516

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	35,325	$	46,236
Other current liabilities	35,005		37,720
Deferred revenue	6,313		5,522
Commercial paper and repurchase agreements	11,166		5,980
Term debt	7,509		10,260
Total current liabilities	95,318		105,718

Non-current liabilities:
Term debt	94,048		91,807
Other non-current liabilities	55,696		50,503
Total non-current liabilities	149,744		142,310
Total liabilities	245,062		248,028

Commitments and contingencies

Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,283,939 and 4,443,236 shares issued and outstanding, respectively	48,696		45,174
Retained earnings	24,136		45,898
Accumulated other comprehensive income/(loss)	(550)		(584)
Total shareholders’ equity	72,282		90,488
Total liabilities and shareholders’ equity	$	317,344	$	338,516

Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)

	Nine Months Ended
	June 27, 2020		June 29, 2019
Cash, cash equivalents and restricted cash, beginning balances	$	50,224	$	25,913
Operating activities:
Net income	44,738		41,570
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization	8,354		9,368
Share-based compensation expense	5,105		4,569
Deferred income tax expense/(benefit)	182		(38)
Other	(94)		(340)
Changes in operating assets and liabilities:
Accounts receivable, net	5,149		9,013
Inventories	10		496
Vendor non-trade receivables	8,685		13,483
Other current and non-current assets	(6,760)		693
Accounts payable	(10,787)		(19,804)
Deferred revenue	1,649		(776)
Other current and non-current liabilities	3,867		(8,753)
Cash generated by operating activities	60,098		49,481
Investing activities:
Purchases of marketable securities	(96,606)		(21,902)
Proceeds from maturities of marketable securities	54,865		26,783
Proceeds from sales of marketable securities	39,760		49,516
Payments for acquisition of property, plant and equipment	(5,525)		(7,718)
Payments made in connection with business acquisitions, net	(1,473)		(611)
Purchases of non-marketable securities	(210)		(632)
Proceeds from non-marketable securities	58		1,526
Other	(689)		(268)
Cash generated by/(used in) investing activities	(9,820)		46,694
Financing activities:
Proceeds from issuance of common stock	430		391
Payments for taxes related to net share settlement of equity awards	(3,234)		(2,626)
Payments for dividends and dividend equivalents	(10,570)		(10,640)
Repurchases of common stock	(55,171)		(49,453)
Proceeds from issuance of term debt, net	10,635		—
Repayments of term debt	(12,629)		(5,500)
Proceeds from/(Repayments of) commercial paper, net	31		(2,026)
Proceeds from repurchase agreements	5,165		—
Other	(120)		(83)
Cash used in financing activities	(65,463)		(69,937)
Increase/(Decrease) in cash, cash equivalents and restricted cash	(15,185)		26,238
Cash, cash equivalents and restricted cash, ending balances	$	35,039	$	52,151
Supplemental cash flow disclosure:
Cash paid for income taxes, net	$	8,410	$	11,795
Cash paid for interest	$	2,275	$	2,563

Contacts

Press Contact:
Kristin Huguet Quayle, (408) 974-2414
khuguet@apple.com

Investor Relations Contact:
Tejas Gala, (669) 227-2402
tgala@apple.com