Apple (AAPL) Q1 2023: Earnings Call Summary

Apple (AAPL) Q1 2023 Earnings Call Summary by our GPT-3 enabled earnings call assistant.

a year ago   •   4 min read


In this Apple earnings call summary, we summarize key metrics and topics discussed on the Q1 2023 call, including:

  • Earnings Call Summary
  • Revenue Highlights
  • Profitability
  • New Initiatives
  • Key Partnerships
  • Guidance
  • Caller Q&A

This earning call summary was partially done by our GPT-3 enabled earnings call assistant, which you can learn more about here.

Earnings Call Summary

Apple's Q1 Fiscal Year 2023 Earnings Conference Call was held on February 2nd, 2023, with CEO Tim Cook and CFO Luca Maestri providing introductory remarks.

The December quarter spanned 14 weeks, while the March quarter had 13 weeks. The company provided forward-looking statements regarding revenue, gross margin, operating expenses, other income and expense, taxes, capital allocation, and future business outlook.

  • The Board of Directors declared a cash dividend of $0.23 per share of common stock payable on February 16, 2023.
  • The company reported that iPhone revenue was $65.8 billion despite significant foreign exchange headwinds, supply constraints on iPhone 14 Pro and iPhone 14 Pro Max, and a challenging macroeconomic environment.
  • Services revenue grew double digits in constant currency, on top of a 24% increase a year ago.
  • Gross margin was between 43.5% and 44.5%, operating expenses were between $13.7 billion and $13.9 billion, other income and expense was around negative $100 million, and the tax rate was around 16%.
  • Net income was $30 billion, and diluted earnings per share were $1.88.

The company attributed its revenue performance to foreign exchange headwinds, COVID-19-related challenges, and supply constraints on iPhone 14 Pro and iPhone 14 Pro Max.

The company expects its March quarter year-over-year revenue performance to be similar to the December quarter, and components are included in the cost structure. In terms of emerging markets, Apple is making strides in India and has achieved all-time iPhone revenue records in Canada, Italy, Spain, India, and Vietnam.

Revenue Highlights

Apple reported revenue of $117.2 billion for the December quarter. This was a 5% decrease year-over-year, but on a constant currency basis, the company grew revenue. This was due to strong performance in markets such as Canada, Indonesia, Mexico, Spain, Turkey, and Vietnam, as well as Brazil and India. The revenue was impacted by foreign exchange headwinds, COVID-19-related challenges, and a challenging macroeconomic environment. Despite these factors, Apple was able to set all-time revenue records in a number of markets.


Apple reported a net income of $30 billion for the December quarter, with diluted earnings per share of $1.88. The company gross margin was 43%, up 70 basis points from last quarter due to leverage and favorable mix, partially offset by foreign exchange.

  • Products gross margin was 37%, up 240 basis points sequentially.
  • Services gross margin was 70.8%, up 30 basis points sequentially, both due to the same factors that impacted total company gross margin.

Overall, Apple reported strong profitability for the December quarter.

This quarter, they saw strong double-digit growth in services, particularly in emerging markets such as Brazil, Mexico, India, Indonesia, Thailand, and Vietnam.

They also saw a resilient supply chain in the aggregate, with decent supply on most products for the quarter.

Additionally, they saw a move to higher ASPs within the iPhone portfolio, with consumer choice driving towards higher-end products. This was despite the challenges of COVID and silicon shortages. F

inally, they saw a negative year-over-year impact of 5 percentage points from foreign exchange.

New Initiatives

This quarter, Apple launched several new initiatives to enrich customers' lives and attract new customers to their platform.

  • These initiatives included Apple Business Essentials, AppleCare, Tap to Pay, and Apple Financial Services.
  • Mars Incorporated expanded their use of AppleCare for Enterprise to provide timely device support and assurance for iPads deployed across their manufacturing sites.

Additionally, Apple announced crash detection and fall detection, as well as ECG, which have all had a positive impact on customers' lives.


During the call, Apple provided directional insights on their expected revenue performance for the March quarter. They expect their year-over-year revenue performance to be similar to the December quarter, which was aided by a 14-week period. They also discussed the impact of foreign exchange headwinds, COVID-19-related challenges, and component pricing on their gross margin guidance of 43.5-44.5%. Apple also discussed the potential impact of COVID-19 on their business and results. Finally, they discussed the impact of their 2 billion device installed base on their services revenue.

Caller Q&A

  • David Vogt asked about disruptions across tech products, and management responded that they believe the supply chain is returning to normal after a difficult October, November.
  • Wamsi Mohan asked about consumer choice towards higher-end products within Apple's portfolio, and management responded that the Pro has been better than they were expecting at the beginning of the quarter.
  • Amit Daryanani asked about what drives Services growth, and management responded that the first step is always the installed base, and that they are adding a lot of services on the platform over the last 7 years.

As always, none of this is financial advice, do your own research, and see our full terms and conditions for more.

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