Apple's Q3 2024 Earnings Call Takeaways

Apple today held an earnings call for the third fiscal quarter of 2024 (second calendar quarter), with Apple reporting its best June quarter to date, with revenue higher than expected. Apple CEO Tim Cook and Apple CFO Luca Maestri provided some insight into Apple's performance, iPad sales, services growth, AI plans, and more.

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We've highlighted the most interesting tidbits from the Q3 2024 earnings call.

iPhone Performance

Apple CEO ‌Tim Cook‌ said that the iPhone 15 models did better than the iPhone 14 models. The install base hit an all-time high during the June quarter.

As for the iPhone 16, Apple CEO ‌Tim Cook‌ said that the company is "very excited" about Apple Intelligence and the level of value that Apple will provide to users. Cook said that ‌Apple Intelligence‌ presents "another reason for a compelling upgrade."

Apple Intelligence

On ‌Apple Intelligence‌, Cook said that Apple can't wait to see what kind of amazing things developers do with ‌Apple Intelligence‌. Cook expects that developers will adopt ‌Apple Intelligence‌ in their apps on a broad basis, with features that are applicable to many types of apps.

He confirmed that Apple is planning a staggered rollout of the ‌Apple Intelligence‌ features. There are some functions that will come over the course of the year, and languages beyond U.S. English will not be available at launch.

ChatGPT integration with Siri is expected before the end of the calendar year.

Apple is investing more in Artificial Intelligence and Machine Learning, with plans to increase that on a yearly basis.

iPad Sales

Apple saw a sharp increase in ‌iPad‌ sales thanks to the launch of the M4 iPad Pro and the M2 iPad Air during the quarter. ‌iPad‌ revenue was at $7.2 billion, up 24 percent from $5.8 billion in the year-ago quarter.

Services Revenue

Apple saw a steep increase in services revenue at $24.2 billion, up from $21.2 billion a year ago and a new all-time revenue record. Paid subscriptions hit an all-time high, and Apple has more than one billion paid subscriptions across services. Apple set new records in advertising, cloud, and payment services.

Apple CFO Luca Maestri said that Apple is seeing continued growth in the level of engagement that customers have with its ecosystem. Maestri also said that Apple is doing a "very good job" improving the quality of its services and improving the amount of content available. Apple plans to continue to add new Apple TV+ and Apple Arcade content.

Other Product Revenue

iPhone revenue dropped one percent ($39.3B), Mac revenue was up two percent ($7B), and Home, Accessories, and Wearables fell two percent ($8.1B).

Digital Markets Act

Maestri said that Apple is continuing to discuss its DMA compliance with the European Commission. Apple has seen "a good level of adoption" from developers on the changes, and in general, results for the services business and for the App Store have been "pretty good until now."

Maestri once again reiterated that the ‌App Store‌ is responsible for seven percent of the total revenue that Apple earns in the European Union.

Cook said that Apple is working to understand the regulatory requirements it is subject to before introducing ‌Apple Intelligence‌ in the European Union. ‌Apple Intelligence‌ features will not be available in the EU when iOS 18, iPadOS 18, and macOS Sequoia launch.

September Quarter

Apple said that it expects September quarter revenue to grow year over year at a rate similar to the June quarter. Services revenue is expected to grow double digits, similar to the rest of this year. Gross margin is expected to be 45.5 and 46.6 percent.

Mac will have a challenging compare from a year ago, according to Maestri, as there was the full quarter impact of the 15-inch MacBook Air in fall 2023. There have been rumors that we could see refreshed M4 MacBook Pros before the end of the year, but if Apple is expecting Mac revenue to fall, that may not happen.

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Top Rated Comments

hans1972 Avatar
27 weeks ago

But people on MR told me that there would be few adopters because very few iOS users are interested in 3rd party app stores
Atif Malek, Citi: Luca, the services growth momentum seems very strong. Are you seeing any impact from changes made to comply with the DMA rule?

Maestri: Well, as you know, we’ve introduced some changes to the way we run the App Store in Europe already in March, and we have seen a good level of adoption from developers on those changes.


I don't think you can interpret this answer as a confirmation that a lot of developers are going for third-party stores.
Score: 16 Votes (Like | Disagree)
Macaholic868 Avatar
27 weeks ago
The best June quarter ever, huh? How is that possible considering all of the things we hear from posters in the comment section who hate Tim Cook and just about everything Apple has done under his tenure?

Jobs passed away a while ago now. If Cook were as bad as many people in the comments section claim then it’s either a miracle that Apple is making these kinds of massive profits or maybe, just maybe, Cook isn’t as bad as some of you claim with his failures not as massive as some make them out to be.

It’s not like everything Jobs put out was a hit and whoever succeeded him was never going to fill those giant shoes but Cook has done a pretty admirable job for shareholders which means he’s bringing in profits, which means people are buying Apple’s products. Let’s not forget that Jobs hand picked Tim. There was a lot of talent to choose from and he picked Tim Cook for a reason.
Score: 15 Votes (Like | Disagree)
Octavius8 Avatar
27 weeks ago
The fall is imminent:
No attention to customer desires, only satisfy investors.
Jumping on expensive AI fad paying a lot to 3rd parties when it is a party trick in the current way Apple is “implementing” it.
Overconfident in no competition. True in USA, but the world will impose the reality on iPhone in less than 5 years.
Score: 10 Votes (Like | Disagree)
Spock Avatar
27 weeks ago
Being a Mac user for 30+ years, it is still crazy to me that the Mac is such a small percentage of Apple sales. Apple could stop selling the Mac tomorrow and it would hardly touch the bottom line.
Score: 10 Votes (Like | Disagree)
BelgianChoklit Avatar
27 weeks ago
The iPhone 15 doing better than the iPhone 14 did doesn't mean anything. The iPhone 14 was the biggest bore fest iPhone of all time imo, you can find as much difference between the 13 and 14 as you can find between the just released Midnight HomePod mini and the other HomePod minis.

Don't get me wrong, I think the iPhone 15 is a wonderful phone and big upgrade from the 14. But the iPhone 14 is 99,98% an iPhone 13.
Score: 9 Votes (Like | Disagree)
vegetassj4 Avatar
27 weeks ago
“Cook said that Apple can't wait to see what kind of amazing things developers do with Apple Intelligence.”

translation: shareholders beware, we don’t have a killer app or know when, or if we will get one.
Score: 8 Votes (Like | Disagree)