Apple Reports Record Q3 Revenue of $85.8 Billion, With AI Expansion on the Horizon

The tech giant’s Services net sales, which includes Apple TV+ and Apple Music, rose 14% year-over-year to $24.2 billion

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Apple is continuing to break ground on its AI integration with their line of products and services, as the tech giant reported record revenues in the fiscal third quarter of 2024 of $85.8 billion, a 5% increase year-over-year. 

Here are the top-line numbers:

Net income: $21.5 billion, up from $19.9 billion the prior year quarter. Apple’s diluted earnings per share of $1.40 beat Zack’s estimates of $1.34. 

Revenues: $85.8 billion a 5% increase compared to $81.8 billion in 2023. Analysts from Zack’s Investment Research estimated revenue of $84.43 billion. 

Services Net Sales: $24.2 billion vs. $21.21 billion in 2023, up 14%

Products Net Sales: $61.6 billion compared to $60.6 billion in 2023

Sales of iPhones, Apple’s primary revenue-driving product, fell a bit to $39.3 billion, with the wearables category, which includes the Apple Watch, decreasing to $8.1 billion compared to $8.3 billion in 2023. Mac computer sales rose 3% to $7 billion.

The only region that showed a decline in net sales was Greater China, which continues the tech company’s struggles there. 

“During the quarter, our record business performance generated EPS growth of 11 percent and nearly $29 billion in operating cash flow, allowing us to return over $32 billion to shareholders,” Apple’s CFO Luca Maestri added. “We are also very pleased that our installed base of active devices reached a new all-time high in all geographic segments, thanks to very high levels of customer satisfaction and loyalty.”

“We are very excited about Apple intelligence, and we remain incredibly optimistic about the extraordinary possibilities of AI and its ability to enrich customers’ lives,” Apple CEO Tim Cook said on Thursday’s shareholders call. “We will continue to make significant investments in this technology and dedicate ourselves to the innovation that will unlock its full potential.”

The integration “builds on years of innovation and investment in AI and machine learning, it will transform how users interact with technology,” Cook added.

The tech giant unveiled its plans for integrating AI technology into its products in June, including a partnership with ChatGPT developer, OpenAI. With a play on artificial intelligence, which the company is calling Apple Intelligence, the intention is to integrate machine learning capabilities across all of the company’s product offerings, including Siri. 

“During the quarter, we were excited to announce incredible updates to our software platforms at our Worldwide Developers Conference, including Apple Intelligence, a breakthrough personal intelligence system that puts powerful, private generative AI models at the core of iPhone, iPad, and Mac,” Cook said in a statement Thursday. “We very much look forward to sharing these tools with our users, and we continue to invest significantly in the innovations that will enrich our customers’ lives, while leading with the values that drive our work.”

ChatGPT integration will be coming to iOS 18, iPadOS 18 and MacOS later this year, the company said during June’s annual Conference. The function will serve as an extension of Apple Intelligence, providing further “expertise” details from the OpenAI chatbot with user control over whether they want to share data to use the function.

“We are also integrating ChatGPT into experiences within iPhone, Mac and iPad, enabling users to draw on a broad base of world knowledge,” Cook said Thursday.

Apple also noted they intend to expand further by partnering with more AI firms in the future. 

On Thursday, Cook also touted the success of AppleTV+ productions, which scored 72 Emmy Award nominations across 16 programs, the best-ever showing for the streaming arm.

“Apple TV+ productions are delighting audiences on screens, large and small, we’re sharing powerful works of imagination with series and movies like “Presumed Innocent,” the upcoming “Disclaimer” and “The Instigators” starring Matt Damon,” the tech company’s CEO said. “And we can’t wait for returning fan favorites with new seasons of “The Morning Show,” “Slow Horses” and “Severance.”

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