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aapl-10-Q.txt

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+
+UNITED STATES
+SECURITIES AND EXCHANGE COMMISSION
+Washington, D.C. 20549
+
+FORM 10-Q
+(Mark One)
+
+☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
+For the quarterly period ended June 29, 2024
+or
+
+☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
+For the transition period from
+to
+Commission File Number: 001-36743
+
+.
+
+Apple Inc.
+(Exact name of Registrant as specified in its charter)
+California
+
+94-2404110
+
+(State or other jurisdiction
+of incorporation or organization)
+
+(I.R.S. Employer Identification No.)
+
+One Apple Park Way
+Cupertino, California
+
+95014
+
+(Address of principal executive offices)
+
+(Zip Code)
+
+(408) 996-1010
+(Registrant’s telephone number, including area code)
+
+Securities registered pursuant to Section 12(b) of the Act:
+Title of each class
+
+Trading
+symbol(s)
+
+Name of each exchange on which registered
+
+Common Stock, $0.00001 par value per share
+0.000% Notes due 2025
+0.875% Notes due 2025
+1.625% Notes due 2026
+2.000% Notes due 2027
+1.375% Notes due 2029
+3.050% Notes due 2029
+0.500% Notes due 2031
+3.600% Notes due 2042
+
+AAPL
+—
+—
+—
+—
+—
+—
+—
+—
+
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+The Nasdaq Stock Market LLC
+
+Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
+during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
+requirements for the past 90 days.
+Yes ☒
+
+No ☐
+
+Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
+Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+
+files).
+Yes ☒
+
+No ☐
+
+Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
+emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
+company” in Rule 12b-2 of the Exchange Act.
+Large accelerated filer
+Non-accelerated filer
+
+☒
+☐
+
+Accelerated filer
+Smaller reporting company
+Emerging growth company
+
+☐
+☐
+☐
+
+If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new
+or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
+Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
+Yes ☐
+
+No ☒
+
+15,204,137,000 shares of common stock were issued and outstanding as of July 19, 2024.
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
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+Apple Inc.
+Form 10-Q
+For the Fiscal Quarter Ended June 29, 2024
+TABLE OF CONTENTS
+
+Page
+
+Part I
+Item 1.
+Item 2.
+Item 3.
+Item 4.
+Item 1.
+Item 1A.
+Item 2.
+Item 3.
+Item 4.
+Item 5.
+Item 6.
+
+Financial Statements
+Management’s Discussion and Analysis of Financial Condition and Results of Operations
+Quantitative and Qualitative Disclosures About Market Risk
+Controls and Procedures
+Part II
+Legal Proceedings
+Risk Factors
+Unregistered Sales of Equity Securities and Use of Proceeds
+Defaults Upon Senior Securities
+Mine Safety Disclosures
+Other Information
+Exhibits
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+PART I — FINANCIAL INFORMATION
+Item 1.
+
+Financial Statements
+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
+June 29,
+2024
+
+Net sales:
+Products
+Services
+Total net sales
+
+$
+
+61,564
+24,213
+85,777
+
+Nine Months Ended
+
+July 1,
+2023
+
+$
+
+60,584
+21,213
+81,797
+
+June 29,
+2024
+
+$
+
+224,908
+71,197
+296,105
+
+July 1,
+2023
+
+$
+
+230,901
+62,886
+293,787
+
+Cost of sales:
+Products
+Services
+Total cost of sales
+Gross margin
+
+39,803
+6,296
+46,099
+39,678
+
+39,136
+6,248
+45,384
+36,413
+
+140,667
+18,634
+159,301
+136,804
+
+146,696
+18,370
+165,066
+128,721
+
+Operating expenses:
+Research and development
+Selling, general and administrative
+Total operating expenses
+
+8,006
+6,320
+14,326
+
+7,442
+5,973
+13,415
+
+23,605
+19,574
+43,179
+
+22,608
+18,781
+41,389
+
+Operating income
+Other income/(expense), net
+Income before provision for income taxes
+Provision for income taxes
+Net income
+
+$
+
+25,352
+142
+25,494
+4,046
+21,448
+
+$
+
+22,998
+(265)
+22,733
+2,852
+19,881 $
+
+93,625
+250
+93,875
+14,875
+79,000
+
+$
+
+87,332
+(594)
+86,738
+12,699
+74,039
+
+Earnings per share:
+Basic
+Diluted
+
+$
+$
+
+1.40
+1.40
+
+$
+$
+
+1.27
+1.26
+
+5.13
+5.11
+
+$
+$
+
+4.69
+4.67
+
+Shares used in computing earnings per share:
+Basic
+Diluted
+
+15,287,521
+15,348,175
+
+15,697,614
+15,775,021
+
+$
+$
+
+15,401,047
+15,463,175
+
+15,792,497
+15,859,263
+
+See accompanying Notes to Condensed Consolidated Financial Statements.
+
+Apple Inc. | Q3 2024 Form 10-Q | 1
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+
+Apple Inc.
+CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
+(In millions)
+Three Months Ended
+June 29,
+2024
+
+Net income
+Other comprehensive income/(loss):
+Change in foreign currency translation, net of tax
+
+$
+
+Change in unrealized gains/losses on derivative instruments,
+net of tax:
+Change in fair value of derivative instruments
+Adjustment for net (gains)/losses realized and included in
+net income
+Total change in unrealized gains/losses on
+derivative instruments
+Change in unrealized gains/losses on marketable debt
+securities, net of tax:
+Change in fair value of marketable debt securities
+Adjustment for net (gains)/losses realized and included in
+net income
+Total change in unrealized gains/losses on
+marketable debt securities
+Total other comprehensive income/(loss)
+Total comprehensive income
+
+$
+
+Nine Months Ended
+
+July 1,
+2023
+
+21,448
+
+$
+
+June 29,
+2024
+
+19,881
+
+$
+
+79,000
+
+July 1,
+2023
+
+$
+
+74,039
+
+(73)
+
+(385)
+
+(87)
+
+(494)
+
+406
+
+509
+
+331
+
+(492)
+
+(87)
+
+103
+
+(678)
+
+(1,854)
+
+319
+
+612
+
+(347)
+
+(2,346)
+
+268
+
+(340)
+
+3,306
+
+1,963
+
+30
+
+58
+
+164
+
+185
+
+298
+
+(282)
+
+3,470
+
+2,148
+
+(55)
+19,826 $
+
+3,036
+82,036
+
+544
+21,992
+
+$
+
+$
+
+(692)
+73,347
+
+See accompanying Notes to Condensed Consolidated Financial Statements.
+
+Apple Inc. | Q3 2024 Form 10-Q | 2
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+Apple Inc.
+CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
+(In millions, except number of shares, which are reflected in thousands, and par value)
+June 29,
+2024
+
+September 30,
+2023
+
+ASSETS:
+Current assets:
+Cash and cash equivalents
+Marketable securities
+Accounts receivable, net
+Vendor non-trade receivables
+Inventories
+Other current assets
+Total current assets
+
+$
+
+Non-current assets:
+Marketable securities
+Property, plant and equipment, net
+Other non-current assets
+Total non-current assets
+$
+
+Total assets
+
+25,565
+36,236
+22,795
+20,377
+6,165
+14,297
+125,435
+
+91,240
+44,502
+70,435
+206,177
+331,612
+
+$
+
+$
+
+29,965
+31,590
+29,508
+31,477
+6,331
+14,695
+143,566
+
+100,544
+43,715
+64,758
+209,017
+352,583
+
+LIABILITIES AND SHAREHOLDERS’ EQUITY:
+Current liabilities:
+Accounts payable
+Other current liabilities
+Deferred revenue
+Commercial paper
+Term debt
+Total current liabilities
+
+$
+
+Non-current liabilities:
+Term debt
+Other non-current liabilities
+Total non-current liabilities
+Total liabilities
+
+47,574
+60,889
+8,053
+2,994
+12,114
+131,624
+
+$
+
+62,611
+58,829
+8,061
+5,985
+9,822
+145,308
+
+86,196
+47,084
+133,280
+264,904
+
+95,281
+49,848
+145,129
+290,437
+
+79,850
+(4,726)
+(8,416)
+66,708
+331,612 $
+
+73,812
+(214)
+(11,452)
+62,146
+352,583
+
+Commitments and contingencies
+Shareholders’ equity:
+Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares
+authorized; 15,222,259 and 15,550,061 shares issued and outstanding, respectively
+Accumulated deficit
+Accumulated other comprehensive loss
+Total shareholders’ equity
+Total liabilities and shareholders’ equity
+
+$
+
+See accompanying Notes to Condensed Consolidated Financial Statements.
+
+Apple Inc. | Q3 2024 Form 10-Q | 3
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+Apple Inc.
+CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
+(In millions, except per-share amounts)
+Three Months Ended
+June 29,
+2024
+
+$
+
+Total shareholders’ equity, beginning balances
+Common stock and additional paid-in capital:
+Beginning balances
+Common stock issued
+Common stock withheld related to net share settlement of
+equity awards
+Share-based compensation
+Ending balances
+
+74,194
+
+Nine Months Ended
+
+July 1,
+2023
+
+$
+
+62,158
+
+June 29,
+2024
+
+$
+
+62,146
+
+July 1,
+2023
+
+$
+
+50,672
+
+78,815
+—
+
+69,568
+—
+
+73,812
+752
+
+64,849
+690
+
+(1,920)
+2,955
+79,850
+
+(1,595)
+2,694
+70,667
+
+(3,802)
+9,088
+79,850
+
+(3,310)
+8,438
+70,667
+
+Retained earnings/(Accumulated deficit):
+Beginning balances
+Net income
+Dividends and dividend equivalents declared
+Common stock withheld related to net share settlement of
+equity awards
+Common stock repurchased
+Ending balances
+
+4,339
+21,448
+(3,864)
+
+4,336
+19,881
+(3,811)
+
+(214)
+79,000
+(11,384)
+
+(3,068)
+74,039
+(11,207)
+
+(428)
+(26,221)
+(4,726)
+
+(858)
+(18,140)
+1,408
+
+(1,517)
+(70,611)
+(4,726)
+
+(1,988)
+(56,368)
+1,408
+
+Accumulated other comprehensive income/(loss):
+Beginning balances
+Other comprehensive income/(loss)
+Ending balances
+
+(8,960)
+544
+(8,416)
+
+(11,746)
+(55)
+(11,801)
+
+(11,452)
+3,036
+(8,416)
+
+(11,109)
+(692)
+(11,801)
+
+Total shareholders’ equity, ending balances
+
+$
+
+66,708
+
+$
+
+60,274
+
+$
+
+66,708
+
+$
+
+60,274
+
+Dividends and dividend equivalents declared per share or RSU
+
+$
+
+0.25
+
+$
+
+0.24
+
+$
+
+0.73
+
+$
+
+0.70
+
+See accompanying Notes to Condensed Consolidated Financial Statements.
+
+Apple Inc. | Q3 2024 Form 10-Q | 4
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+
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+Apple Inc.
+CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
+(In millions)
+Nine Months Ended
+June 29,
+2024
+
+Cash, cash equivalents and restricted cash, beginning balances
+Operating activities:
+Net income
+Adjustments to reconcile net income to cash generated by operating activities:
+Depreciation and amortization
+Share-based compensation expense
+Other
+Changes in operating assets and liabilities:
+Accounts receivable, net
+Vendor non-trade receivables
+Inventories
+Other current and non-current assets
+Accounts payable
+Other current and non-current liabilities
+Cash generated by operating activities
+
+$
+
+30,737
+
+July 1,
+2023
+
+$
+
+24,977
+
+79,000
+
+74,039
+
+8,534
+8,830
+(1,964)
+
+8,866
+8,208
+(1,651)
+
+6,697
+11,100
+41
+(5,626)
+(15,171)
+2
+91,443
+
+7,609
+13,111
+(2,570)
+(4,863)
+(16,790)
+2,986
+88,945
+
+Investing activities:
+Purchases of marketable securities
+Proceeds from maturities of marketable securities
+Proceeds from sales of marketable securities
+Payments for acquisition of property, plant and equipment
+Other
+Cash generated by investing activities
+
+(38,074)
+39,838
+7,382
+(6,539)
+(1,117)
+1,490
+
+(20,956)
+27,857
+3,959
+(8,796)
+(753)
+1,311
+
+Financing activities:
+Payments for taxes related to net share settlement of equity awards
+Payments for dividends and dividend equivalents
+Repurchases of common stock
+Proceeds from issuance of term debt, net
+Repayments of term debt
+Repayments of commercial paper, net
+Other
+Cash used in financing activities
+
+(5,163)
+(11,430)
+(69,866)
+—
+(7,400)
+(2,985)
+(191)
+(97,035)
+
+(5,119)
+(11,267)
+(56,547)
+5,228
+(11,151)
+(5,971)
+(508)
+(85,335)
+4,921
+29,898
+
+7,020
+
+Increase/(Decrease) in cash, cash equivalents and restricted cash
+Cash, cash equivalents and restricted cash, ending balances
+
+$
+
+(4,102)
+26,635 $
+
+Supplemental cash flow disclosure:
+Cash paid for income taxes, net
+
+$
+
+19,230
+
+$
+
+See accompanying Notes to Condensed Consolidated Financial Statements.
+
+Apple Inc. | Q3 2024 Form 10-Q | 5
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+Apple Inc.
+Notes to Condensed Consolidated Financial Statements (Unaudited)
+Note 1 – Summary of Significant Accounting Policies
+Basis of Presentation and Preparation
+The condensed consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries (collectively
+“Apple” or the “Company”). In the opinion of the Company’s management, the condensed consolidated financial statements reflect all
+adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these
+condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles
+(“GAAP”) requires the use of management estimates. These condensed consolidated financial statements and accompanying notes
+should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its
+Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 Form 10-K”).
+The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in
+the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first
+fiscal quarter of 2023. The Company’s fiscal years 2024 and 2023 span 52 and 53 weeks, respectively. Unless otherwise stated,
+references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated
+quarters, months and periods of those fiscal years.
+Note 2 – Revenue
+Net sales disaggregated by significant products and services for the three- and nine-month periods ended June 29, 2024 and July 1,
+2023 were as follows (in millions):
+Three Months Ended
+June 29,
+2024
+
+iPhone®
+Mac®
+iPad®
+Wearables, Home and Accessories
+Services
+Total net sales
+
+$
+
+$
+
+39,296
+7,009
+7,162
+8,097
+24,213
+85,777
+
+Nine Months Ended
+
+July 1,
+2023
+
+$
+
+$
+
+39,669
+6,840
+5,791
+8,284
+21,213
+81,797
+
+June 29,
+2024
+
+$
+
+$
+
+154,961
+22,240
+19,744
+27,963
+71,197
+296,105
+
+July 1,
+2023
+
+$
+
+$
+
+156,778
+21,743
+21,857
+30,523
+62,886
+293,787
+
+Total net sales include $3.4 billion of revenue recognized in the three months ended June 29, 2024 that was included in deferred
+revenue as of March 30, 2024, $3.3 billion of revenue recognized in the three months ended July 1, 2023 that was included in deferred
+revenue as of April 1, 2023, $6.5 billion of revenue recognized in the nine months ended June 29, 2024 that was included in deferred
+revenue as of September 30, 2023, and $7.0 billion of revenue recognized in the nine months ended July 1, 2023 that was included in
+deferred revenue as of September 24, 2022.
+The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note
+11, “Segment Information and Geographic Data” for the three- and nine-month periods ended June 29, 2024 and July 1, 2023, except in
+Greater China, where iPhone revenue represented a moderately higher proportion of net sales.
+As of June 29, 2024 and September 30, 2023, the Company had total deferred revenue of $12.5 billion and $12.1 billion, respectively. As
+of June 29, 2024, the Company expects 64% of total deferred revenue to be realized in less than a year, 25% within one-to-two years,
+9% within two-to-three years and 2% in greater than three years.
+
+Apple Inc. | Q3 2024 Form 10-Q | 6
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
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+Note 3 – Earnings Per Share
+The following table shows the computation of basic and diluted earnings per share for the three- and nine-month periods ended June 29,
+2024 and July 1, 2023 (net income in millions and shares in thousands):
+Three Months Ended
+June 29,
+2024
+
+Numerator:
+Net income
+
+$
+
+Denominator:
+Weighted-average basic shares outstanding
+Effect of dilutive share-based awards
+
+21,448
+
+$
+
+15,287,521
+60,654
+15,348,175
+
+Weighted-average diluted shares
+Basic earnings per share
+Diluted earnings per share
+
+$
+$
+
+Nine Months Ended
+
+July 1,
+2023
+
+June 29,
+2024
+
+19,881
+
+$
+
+15,697,614
+77,407
+15,775,021
+
+1.40
+1.40
+
+$
+$
+
+1.27
+1.26
+
+July 1,
+2023
+
+79,000
+
+$
+
+74,039
+
+15,401,047
+62,128
+15,463,175
+$
+$
+
+5.13
+5.11
+
+15,792,497
+66,766
+15,859,263
+$
+$
+
+4.69
+4.67
+
+Approximately 32 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for the nine
+months ended July 1, 2023 because their effect would have been antidilutive.
+Note 4 – Financial Instruments
+Cash, Cash Equivalents and Marketable Securities
+The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of
+June 29, 2024 and September 30, 2023 (in millions):
+June 29, 2024
+Adjusted
+Cost
+Cash
+Level 1:
+Money market funds
+Mutual funds
+
+$
+
+Subtotal
+Level 2 (1):
+U.S. Treasury securities
+U.S. agency securities
+Non-U.S. government securities
+Certificates of deposit and time
+deposits
+Commercial paper
+Corporate debt securities
+Municipal securities
+Mortgage- and asset-backed securities
+Subtotal
+Total (2)
+
+$
+
+22,866
+
+Unrealized
+Gains
+
+Unrealized
+Losses
+
+$
+
+$
+
+—
+
+—
+
+$
+
+Fair
+Value
+
+Cash and
+Cash
+Equivalents
+
+Current
+Marketable
+Securities
+
+Non-Current
+Marketable
+Securities
+
+22,866
+
+$
+
+$
+
+$
+
+22,866
+
+—
+
+—
+
+1,648
+493
+2,141
+
+—
+76
+76
+
+—
+(7)
+(7)
+
+1,648
+562
+2,210
+
+1,648
+—
+1,648
+
+—
+562
+562
+
+—
+—
+—
+
+16,298
+5,500
+17,560
+
+3
+—
+31
+
+(855)
+(418)
+(680)
+
+15,446
+5,082
+16,911
+
+138
+73
+—
+
+4,649
+518
+11,592
+
+10,659
+4,491
+5,319
+
+1,337
+1,346
+68,194
+480
+24,508
+135,223
+
+—
+—
+83
+—
+27
+144
+
+—
+—
+(3,350)
+(13)
+(2,086)
+(7,402)
+
+1,337
+1,346
+64,927
+467
+22,449
+127,965
+
+838
+2
+—
+—
+—
+1,051
+
+492
+1,344
+15,489
+197
+1,393
+35,674
+
+7
+—
+49,438
+270
+21,056
+91,240
+
+160,230
+
+$
+
+220
+
+$
+
+(7,409)
+
+$
+
+153,041
+
+$
+
+25,565
+
+$
+
+36,236
+
+$
+
+91,240
+
+Apple Inc. | Q3 2024 Form 10-Q | 7
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+10/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+September 30, 2023
+Adjusted
+Cost
+Cash
+$
+Level 1:
+Money market funds
+Mutual funds and equity securities
+Subtotal
+Level 2 (1):
+U.S. Treasury securities
+U.S. agency securities
+Non-U.S. government securities
+Certificates of deposit and time
+deposits
+Commercial paper
+Corporate debt securities
+Municipal securities
+Mortgage- and asset-backed securities
+Subtotal
+Total (2)
+
+$
+
+28,359
+
+Unrealized
+Gains
+$
+
+—
+
+Unrealized
+Losses
+$
+
+—
+
+$
+
+Fair
+Value
+
+Cash and
+Cash
+Equivalents
+
+Current
+Marketable
+Securities
+
+Non-Current
+Marketable
+Securities
+
+28,359
+
+$
+
+$
+
+$
+
+28,359
+
+—
+
+—
+
+481
+442
+923
+
+—
+12
+12
+
+—
+(26)
+(26)
+
+481
+428
+909
+
+481
+—
+481
+
+—
+428
+428
+
+—
+—
+—
+
+19,406
+5,736
+17,533
+
+—
+—
+6
+
+(1,292)
+(600)
+(1,048)
+
+18,114
+5,136
+16,491
+
+35
+36
+—
+
+5,468
+271
+11,332
+
+12,611
+4,829
+5,159
+
+1,354
+608
+76,840
+628
+22,365
+144,470
+
+—
+—
+6
+—
+6
+18
+
+—
+—
+(5,956)
+(26)
+(2,735)
+(11,657)
+
+1,354
+608
+70,890
+602
+19,636
+132,831
+
+1,034
+—
+20
+—
+—
+1,125
+
+320
+608
+12,627
+192
+344
+31,162
+
+—
+—
+58,243
+410
+19,292
+100,544
+
+173,752
+
+$
+
+30
+
+$
+
+(11,683)
+
+$
+
+162,099
+
+$
+
+29,965
+
+$
+
+31,590
+
+$
+
+(1)
+
+The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments, which generally have
+counterparties with high credit ratings, are based on quoted market prices or model-driven valuations using significant inputs derived
+from or corroborated by observable market data.
+
+(2)
+
+As of June 29, 2024 and September 30, 2023, total marketable securities included $14.1 billion and $13.8 billion, respectively, that
+were restricted from general use, related to the State Aid Decision (refer to Note 6, “Income Taxes”) and other agreements.
+
+100,544
+
+The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of June 29,
+2024 (in millions):
+Due after 1 year through 5 years
+Due after 5 years through 10 years
+Due after 10 years
+
+$
+
+$
+
+Total fair value
+
+64,209
+8,660
+18,371
+91,240
+
+Derivative Instruments and Hedging
+The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk.
+However, the Company may choose not to hedge certain exposures for a variety of reasons, including accounting considerations or the
+prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the
+financial impact resulting from movements in foreign exchange or interest rates.
+Foreign Exchange Rate Risk
+To protect gross margins from fluctuations in foreign exchange rates, the Company may use forwards, options or other instruments, and
+may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency
+exposure associated with revenue and inventory purchases, typically for up to 12 months.
+To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign exchange rates,
+the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash
+flow or fair value hedges. As of June 29, 2024, the maximum length of time over which the Company is hedging its exposure to the
+variability in future cash flows for term debt–related foreign currency transactions is 18 years.
+The Company may also use derivative instruments that are not designated as accounting hedges to protect gross margins from certain
+fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the
+remeasurement of certain assets and liabilities denominated in non-functional currencies.
+
+Apple Inc. | Q3 2024 Form 10-Q | 8
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+11/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+12/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+Interest Rate Risk
+To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may use interest rate
+swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges.
+The notional amounts of the Company’s outstanding derivative instruments as of June 29, 2024 and September 30, 2023 were as
+follows (in millions):
+June 29,
+2024
+
+September 30,
+2023
+
+Derivative instruments designated as accounting hedges:
+Foreign exchange contracts
+Interest rate contracts
+
+$
+$
+
+65,542
+13,875
+
+$
+$
+
+74,730
+19,375
+
+Derivative instruments not designated as accounting hedges:
+Foreign exchange contracts
+
+$
+
+97,136
+
+$
+
+104,777
+
+The carrying amounts of the Company’s hedged items in fair value hedges as of June 29, 2024 and September 30, 2023 were as follows
+(in millions):
+June 29,
+2024
+
+Hedged assets/(liabilities):
+Current and non-current marketable securities
+Current and non-current term debt
+
+$
+$
+
+15,007 $
+(13,096) $
+
+September 30,
+2023
+
+14,433
+(18,247)
+
+Accounts Receivable
+Trade Receivables
+The Company’s third-party cellular network carriers accounted for 32% and 41% of total trade receivables as of June 29, 2024 and
+September 30, 2023, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit
+risk.
+Vendor Non-Trade Receivables
+The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these
+vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components
+directly from suppliers. The Company does not reflect the sale of these components in products net sales. Rather, the Company
+recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As
+of June 29, 2024, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which
+accounted for 46% and 18%. As of September 30, 2023, the Company had two vendors that individually represented 10% or more of
+total vendor non-trade receivables, which accounted for 48% and 23%.
+Note 5 – Condensed Consolidated Financial Statement Details
+The following table shows the Company’s condensed consolidated financial statement details as of June 29, 2024 and September 30,
+2023 (in millions):
+Property, Plant and Equipment, Net
+June 29,
+2024
+
+Gross property, plant and equipment
+Accumulated depreciation
+Total property, plant and equipment, net
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+$
+$
+
+117,129 $
+(72,627)
+44,502 $
+
+September 30,
+2023
+
+114,599
+(70,884)
+43,715
+
+13/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+Apple Inc. | Q3 2024 Form 10-Q | 9
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+14/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+Note 6 – Income Taxes
+European Commission State Aid Decision
+On August 30, 2016, the European Commission (the “Commission”) announced its decision that Ireland granted state aid to the
+Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of
+the Company (the “State Aid Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the
+Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated the
+application of the tax opinions from that date forward. The Company and Ireland appealed the State Aid Decision to the General Court of
+the Court of Justice of the European Union (the “General Court”). On July 15, 2020, the General Court annulled the State Aid Decision.
+On September 25, 2020, the Commission appealed the General Court’s decision to the European Court of Justice (the “ECJ”) and a
+hearing was held on May 23, 2023. A decision from the ECJ is expected in the fourth quarter of 2024. The Company believes it would be
+eligible to claim a U.S. foreign tax credit for a portion of any incremental Irish corporate income taxes potentially due related to the State
+Aid Decision.
+Note 7 – Debt
+Commercial Paper
+The Company issues unsecured short-term promissory notes pursuant to a commercial paper program. The Company uses net
+proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of
+June 29, 2024 and September 30, 2023, the Company had $3.0 billion and $6.0 billion of commercial paper outstanding, respectively.
+The following table provides a summary of cash flows associated with the issuance and maturities of commercial paper for the nine
+months ended June 29, 2024 and July 1, 2023 (in millions):
+Nine Months Ended
+June 29,
+2024
+
+Maturities 90 days or less:
+Repayments of commercial paper, net
+
+$
+
+Maturities greater than 90 days:
+Repayments of commercial paper
+Total repayments of commercial paper, net
+
+$
+
+July 1,
+2023
+
+(2,985) $
+
+(3,326)
+
+—
+
+(2,645)
+
+(2,985) $
+
+(5,971)
+
+Term Debt
+As of June 29, 2024 and September 30, 2023, the Company had outstanding fixed-rate notes with varying maturities for an aggregate
+carrying amount of $98.3 billion and $105.1 billion, respectively (collectively the “Notes”). As of June 29, 2024 and September 30, 2023,
+the fair value of the Company’s Notes, based on Level 2 inputs, was $86.2 billion and $90.8 billion, respectively.
+Note 8 – Shareholders’ Equity
+Share Repurchase Program
+During the nine months ended June 29, 2024, the Company repurchased 387 million shares of its common stock for $70.0 billion. The
+Company’s share repurchase programs do not obligate the Company to acquire a minimum amount of shares. Under the programs,
+shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1
+under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
+
+Apple Inc. | Q3 2024 Form 10-Q | 10
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+15/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+Note 9 – Share-Based Compensation
+Restricted Stock Units
+A summary of the Company’s RSU activity and related information for the nine months ended June 29, 2024 is as follows:
+Number of
+RSUs
+(in thousands)
+
+Balance as of September 30, 2023
+RSUs granted
+RSUs vested
+RSUs canceled
+Balance as of June 29, 2024
+
+Weighted-Average
+Grant Date Fair
+Value Per RSU
+
+180,247
+78,276
+(83,842)
+(8,258)
+166,423
+
+$
+$
+$
+$
+$
+
+135.91
+172.26
+126.47
+137.85
+157.66
+
+Aggregate
+Fair Value
+(in millions)
+
+$
+
+35,052
+
+The fair value as of the respective vesting dates of RSUs was $6.4 billion and $15.0 billion for the three- and nine-month periods ended
+June 29, 2024, respectively, and was $7.0 billion and $14.9 billion for the three- and nine-month periods ended July 1, 2023,
+respectively.
+Share-Based Compensation
+The following table shows share-based compensation expense and the related income tax benefit included in the Condensed
+Consolidated Statements of Operations for the three- and nine-month periods ended June 29, 2024 and July 1, 2023 (in millions):
+Three Months Ended
+June 29,
+2024
+
+Share-based compensation expense
+Income tax benefit related to share-based compensation expense
+
+$
+$
+
+2,869 $
+(764) $
+
+Nine Months Ended
+
+July 1,
+2023
+
+2,617 $
+(993) $
+
+June 29,
+2024
+
+8,830 $
+(2,662) $
+
+July 1,
+2023
+
+8,208
+(2,791)
+
+As of June 29, 2024, the total unrecognized compensation cost related to outstanding RSUs was $21.9 billion, which the Company
+expects to recognize over a weighted-average period of 2.6 years.
+Note 10 – Contingencies
+The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not
+been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable
+possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss
+contingencies for asserted legal and other claims.
+
+Apple Inc. | Q3 2024 Form 10-Q | 11
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+16/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+Note 11 – Segment Information and Geographic Data
+The following table shows information by reportable segment for the three- and nine-month periods ended June 29, 2024 and July 1,
+2023 (in millions):
+Three Months Ended
+June 29,
+2024
+
+Nine Months Ended
+
+July 1,
+2023
+
+June 29,
+2024
+
+July 1,
+2023
+
+Americas:
+Net sales
+Operating income
+
+$
+$
+
+37,678
+15,209
+
+$
+$
+
+35,383
+13,117
+
+$
+$
+
+125,381
+50,640
+
+$
+$
+
+122,445
+44,908
+
+Europe:
+Net sales
+Operating income
+
+$
+$
+
+21,884
+9,170
+
+$
+$
+
+20,205
+7,995
+
+$
+$
+
+76,404
+31,872
+
+$
+$
+
+71,831
+27,380
+
+Greater China:
+Net sales
+Operating income
+
+$
+$
+
+14,728
+5,562
+
+$
+$
+
+15,758
+6,207
+
+$
+$
+
+51,919
+20,884
+
+$
+$
+
+57,475
+24,175
+
+Japan:
+Net sales
+Operating income
+
+$
+$
+
+5,097
+2,544
+
+$
+$
+
+4,821
+2,443
+
+$
+$
+
+19,126
+9,498
+
+$
+$
+
+18,752
+9,073
+
+Rest of Asia Pacific:
+Net sales
+Operating income
+
+$
+$
+
+6,390
+2,610
+
+$
+$
+
+5,630
+2,328
+
+$
+$
+
+23,275
+9,995
+
+$
+$
+
+23,284
+9,447
+
+A reconciliation of the Company’s segment operating income to the Condensed Consolidated Statements of Operations for the threeand nine-month periods ended June 29, 2024 and July 1, 2023 is as follows (in millions):
+Three Months Ended
+June 29,
+July 1,
+2024
+2023
+
+Segment operating income
+Research and development expense
+Other corporate expenses, net
+Total operating income
+
+$
+
+$
+
+35,095 $
+(8,006)
+(1,737)
+25,352 $
+
+32,090 $
+(7,442)
+(1,650)
+22,998 $
+
+Nine Months Ended
+June 29,
+July 1,
+2024
+2023
+
+122,889 $
+(23,605)
+(5,659)
+93,625 $
+
+114,983
+(22,608)
+(5,043)
+87,332
+
+Apple Inc. | Q3 2024 Form 10-Q | 12
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+17/30
+
+8/16/24, 4:13 PM
+
+Item 2.
+
+aapl-20240629
+
+Management’s Discussion and Analysis of Financial Condition and Results of Operations
+
+This Item and other sections of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the
+meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide
+current expectations of future events based on certain assumptions and include any statement that does not directly relate to any
+historical or current fact. For example, statements in this Form 10-Q regarding the potential future impact of macroeconomic conditions
+on the Company’s business and results of operations are forward-looking statements. Forward-looking statements can also be identified
+by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,”
+“may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may
+differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but
+are not limited to, those discussed in Part I, Item 1A of the 2023 Form 10-K and Part II, Item 1A of this Form 10-Q, in each case under
+the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason,
+except as required by law.
+Unless otherwise stated, all information presented herein is based on the Company’s fiscal calendar, and references to particular years,
+quarters, months or periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of
+those fiscal years.
+The following discussion should be read in conjunction with the 2023 Form 10-K filed with the U.S. Securities and Exchange
+Commission (the “SEC”) and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this
+Form 10-Q.
+Available Information
+The Company periodically provides certain information for investors on its corporate website, www.apple.com, and its investor relations
+website, investor.apple.com. This includes press releases and other information about financial performance, information on
+environmental, social and governance matters, and details related to the Company’s annual meeting of shareholders. The information
+contained on the websites referenced in this Form 10-Q is not incorporated by reference into this filing. Further, the Company’s
+references to website URLs are intended to be inactive textual references only.
+Business Seasonality and Product Introductions
+The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to
+seasonal holiday demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and
+operating expenses. The timing of product introductions can also impact the Company’s net sales to its indirect distribution channels as
+these channels are filled with new inventory following a product launch, and channel inventory of an older product often declines as the
+launch of a newer product approaches. Net sales can also be affected when consumers and distributors anticipate a product
+introduction.
+During the third quarter of 2024, the Company announced the following product and operating system updates:
+•
+
+•
+•
+
+iPad Air®;
+iPad Pro®;
+iOS 18, macOS® Sequoia, iPadOS® 18, watchOS® 11, visionOS™ 2 and tvOS® 18.
+
+The Company also announced Apple Intelligence™, a personal intelligence system that uses generative models, which will be available
+on certain iPhone, Mac and iPad devices. Apple Intelligence is deeply integrated into iOS 18, macOS Sequoia and iPadOS 18.
+Fiscal Period
+The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in
+the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first
+quarter of 2023. The Company’s fiscal years 2024 and 2023 span 52 and 53 weeks, respectively.
+Macroeconomic Conditions
+Macroeconomic conditions, including inflation, interest rates and currency fluctuations, have directly and indirectly impacted, and could
+in the future materially impact, the Company’s results of operations and financial condition.
+
+Apple Inc. | Q3 2024 Form 10-Q | 13
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+18/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+19/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+Segment Operating Performance
+The following table shows net sales by reportable segment for the three- and nine-month periods ended June 29, 2024 and July 1, 2023
+(dollars in millions):
+Three Months Ended
+June 29,
+2024
+
+Net sales by reportable segment:
+Americas
+Europe
+Greater China
+Japan
+Rest of Asia Pacific
+Total net sales
+
+$
+
+$
+
+37,678
+21,884
+14,728
+5,097
+6,390
+85,777
+
+July 1,
+2023
+
+$
+
+$
+
+Nine Months Ended
+Change
+
+35,383
+20,205
+15,758
+4,821
+5,630
+81,797
+
+6% $
+8%
+(7)%
+6%
+13 %
+5% $
+
+June 29,
+2024
+
+125,381
+76,404
+51,919
+19,126
+23,275
+296,105
+
+July 1,
+2023
+
+$
+
+$
+
+122,445
+71,831
+57,475
+18,752
+23,284
+293,787
+
+Change
+
+2%
+6%
+(10)%
+2%
+—%
+1%
+
+Americas
+Americas net sales increased during the third quarter of 2024 compared to the third quarter of 2023 due primarily to higher net sales of
+Services and iPad. Year-over-year Americas net sales increased during the first nine months of 2024 due primarily to higher net sales of
+Services, partially offset by lower net sales of iPhone and Wearables, Home and Accessories. The strength in foreign currencies relative
+to the U.S. dollar had a net favorable year-over-year impact on Americas net sales during the first nine months of 2024.
+Europe
+Europe net sales increased during the third quarter of 2024 compared to the third quarter of 2023 due primarily to higher net sales of
+Services and iPad. The weakness in foreign currencies relative to the U.S. dollar had a net unfavorable year-over-year impact on Europe
+net sales during the third quarter of 2024. Year-over-year Europe net sales increased during the first nine months of 2024 due primarily
+to higher net sales of Services and iPhone, partially offset by lower net sales of Wearables, Home and Accessories.
+Greater China
+Greater China net sales decreased during the third quarter of 2024 compared to the third quarter of 2023 due primarily to lower net sales
+of iPhone. Year-over-year Greater China net sales decreased during the first nine months of 2024 due primarily to lower net sales of
+iPhone and iPad. The weakness in the renminbi relative to the U.S. dollar had an unfavorable year-over-year impact on Greater China
+net sales during the third quarter and first nine months of 2024.
+Japan
+Japan net sales increased during the third quarter of 2024 compared to the third quarter of 2023 due primarily to higher net sales of
+iPhone and iPad. Year-over-year Japan net sales increased during the first nine months of 2024 due primarily to higher net sales of
+iPhone, partially offset by lower net sales of Wearables, Home and Accessories. The weakness in the yen relative to the U.S. dollar had
+an unfavorable year-over-year impact on Japan net sales during the third quarter and first nine months of 2024.
+Rest of Asia Pacific
+Rest of Asia Pacific net sales increased during the third quarter of 2024 compared to the third quarter of 2023 due primarily to higher net
+sales of Services, iPhone and iPad. Year-over-year Rest of Asia Pacific net sales were relatively flat during the first nine months of 2024.
+The weakness in foreign currencies relative to the U.S. dollar had a net unfavorable year-over-year impact on Rest of Asia Pacific net
+sales during the third quarter and first nine months of 2024.
+
+Apple Inc. | Q3 2024 Form 10-Q | 14
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+20/30
+
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+
+aapl-20240629
+
+Products and Services Performance
+The following table shows net sales by category for the three- and nine-month periods ended June 29, 2024 and July 1, 2023 (dollars in
+millions):
+Three Months Ended
+June 29,
+2024
+
+Net sales by category:
+iPhone
+Mac
+iPad
+Wearables, Home and Accessories
+Services
+Total net sales
+
+$
+
+$
+
+39,296
+7,009
+7,162
+8,097
+24,213
+85,777
+
+July 1,
+2023
+
+$
+
+$
+
+Nine Months Ended
+Change
+
+39,669
+6,840
+5,791
+8,284
+21,213
+81,797
+
+(1)% $
+2%
+24 %
+(2)%
+14 %
+5% $
+
+June 29,
+2024
+
+154,961
+22,240
+19,744
+27,963
+71,197
+296,105
+
+July 1,
+2023
+
+$
+
+$
+
+Change
+
+156,778
+21,743
+21,857
+30,523
+62,886
+293,787
+
+(1)%
+2%
+(10)%
+(8)%
+13 %
+1%
+
+iPhone
+iPhone net sales were relatively flat during the third quarter and first nine months of 2024 compared to the same periods in 2023.
+Mac
+Mac net sales increased during the third quarter and first nine months of 2024 compared to the same periods in 2023 due to higher net
+sales of laptops.
+iPad
+iPad net sales increased during the third quarter of 2024 compared to the third quarter of 2023 due primarily to higher net sales of iPad
+Pro and iPad Air. Year-over-year iPad net sales decreased during the first nine months of 2024 due primarily to lower net sales of iPad
+9th generation and iPad Pro, partially offset by higher net sales of iPad 10th generation.
+Wearables, Home and Accessories
+Wearables, Home and Accessories net sales decreased during the third quarter of 2024 compared to the third quarter of 2023 due
+primarily to lower net sales of Wearables. Year-over-year Wearables, Home and Accessories net sales decreased during the first nine
+months of 2024 due primarily to lower net sales of Wearables and Accessories.
+Services
+Services net sales increased during the third quarter and first nine months of 2024 compared to the same periods in 2023 due primarily
+to higher net sales from advertising, the App Store® and cloud services.
+
+Apple Inc. | Q3 2024 Form 10-Q | 15
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+21/30
+
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+
+aapl-20240629
+
+Gross Margin
+Products and Services gross margin and gross margin percentage for the three- and nine-month periods ended June 29, 2024 and
+July 1, 2023 were as follows (dollars in millions):
+Three Months Ended
+June 29,
+2024
+
+Gross margin:
+Products
+Services
+
+$
+$
+
+Total gross margin
+Gross margin percentage:
+Products
+Services
+Total gross margin percentage
+
+21,761
+17,917
+39,678
+
+35.3 %
+74.0 %
+46.3 %
+
+Nine Months Ended
+
+July 1,
+2023
+
+$
+$
+
+21,448
+14,965
+36,413
+
+35.4 %
+70.5 %
+44.5 %
+
+June 29,
+2024
+
+$
+$
+
+84,241
+52,563
+136,804
+
+July 1,
+2023
+
+$
+$
+
+37.5 %
+73.8 %
+46.2 %
+
+84,205
+44,516
+128,721
+
+36.5 %
+70.8 %
+43.8 %
+
+Products Gross Margin
+Products gross margin was relatively flat during the third quarter and first nine months of 2024 compared to the same periods in 2023.
+Products gross margin percentage was relatively flat during the third quarter of 2024 compared to the third quarter of 2023. Year-overyear Products gross margin percentage increased during the first nine months of 2024 due primarily to cost savings, partially offset by a
+different Products mix and the weakness in foreign currencies relative to the U.S. dollar.
+Services Gross Margin
+Services gross margin increased during the third quarter and first nine months of 2024 compared to the same periods in 2023 due
+primarily to higher Services net sales.
+Services gross margin percentage increased during the third quarter and first nine months of 2024 compared to the same periods in
+2023 due primarily to a different Services mix.
+The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of the 2023 Form 10-K and
+Part II, Item 1A of this Form 10-Q, in each case under the heading “Risk Factors.” As a result, the Company believes, in general, gross
+margins will be subject to volatility and downward pressure.
+Operating Expenses
+Operating expenses for the three- and nine-month periods ended June 29, 2024 and July 1, 2023 were as follows (dollars in millions):
+Three Months Ended
+June 29,
+July 1,
+2024
+2023
+
+Research and development
+Percentage of total net sales
+Selling, general and administrative
+Percentage of total net sales
+Total operating expenses
+Percentage of total net sales
+
+$
+$
+$
+
+8,006
+$
+9%
+6,320
+$
+7%
+14,326
+$
+17 %
+
+7,442
+$
+9%
+5,973
+$
+7%
+13,415
+$
+16 %
+
+Nine Months Ended
+June 29,
+July 1,
+2024
+2023
+
+23,605
+$
+8%
+19,574
+$
+7%
+43,179
+$
+15 %
+
+22,608
+8%
+18,781
+6%
+41,389
+14 %
+
+Research and Development
+The growth in research and development (“R&D”) expense during the third quarter and first nine months of 2024 compared to the same
+periods in 2023 was driven primarily by increases in headcount-related expenses.
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+22/30
+
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+
+aapl-20240629
+Apple Inc. | Q3 2024 Form 10-Q | 16
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+23/30
+
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+
+aapl-20240629
+
+Selling, General and Administrative
+Selling, general and administrative expense increased $347 million during the third quarter of 2024 and $793 million during the first nine
+months of 2024 compared to the same periods in 2023.
+Provision for Income Taxes
+Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and nine-month periods ended June 29,
+2024 and July 1, 2023 were as follows (dollars in millions):
+Three Months Ended
+June 29,
+2024
+
+Provision for income taxes
+Effective tax rate
+Statutory federal income tax rate
+
+$
+
+4,046
+$
+15.9 %
+21 %
+
+July 1,
+2023
+
+2,852
+$
+12.5 %
+21 %
+
+Nine Months Ended
+June 29,
+2024
+
+14,875
+$
+15.8 %
+21 %
+
+July 1,
+2023
+
+12,699
+14.6 %
+21 %
+
+The Company’s effective tax rate for the third quarter and first nine months of 2024 was lower than the statutory federal income tax rate
+due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from sharebased compensation, partially offset by state income taxes.
+The Company’s effective tax rate for the third quarter and first nine months of 2024 was higher compared to the same periods in 2023
+due primarily to a higher effective tax rate on foreign earnings and lower tax benefits from share-based compensation, partially offset by
+lower state income taxes.
+Liquidity and Capital Resources
+The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, along with cash generated by
+ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program
+over the next 12 months and beyond.
+The Company’s contractual cash requirements have not changed materially since the 2023 Form 10-K, except for manufacturing
+purchase obligations.
+Manufacturing Purchase Obligations
+The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final
+assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of
+individual suppliers. As of June 29, 2024, the Company had manufacturing purchase obligations of $38.4 billion, with $38.3 billion
+payable within 12 months.
+Capital Return Program
+In addition to its contractual cash requirements, the Company has authorized share repurchase programs. The programs do not obligate
+the Company to acquire a minimum amount of shares. As of June 29, 2024, the Company’s quarterly cash dividend was $0.25 per
+share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
+During the third quarter of 2024, the Company repurchased $26.0 billion of its common stock and paid dividends and dividend
+equivalents of $3.9 billion.
+Recent Accounting Pronouncements
+Income Taxes
+In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09,
+Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose
+specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a
+quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and
+foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its
+fourth quarter of 2026 using a prospective transition method.
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+24/30
+
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+
+aapl-20240629
+
+Apple Inc. | Q3 2024 Form 10-Q | 17
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+25/30
+
+8/16/24, 4:13 PM
+
+aapl-20240629
+
+Segment Reporting
+In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment
+Disclosures (“ASU 2023-07”), which will require the Company to disclose segment expenses that are significant and regularly provided
+to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 will require the Company to disclose the title and
+position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how
+to allocate resources. The Company will adopt ASU 2023-07 in its fourth quarter of 2025 using a retrospective transition method.
+Critical Accounting Estimates
+The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of
+its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that
+affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial
+Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2023 Form
+10-K describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated
+financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2023 Form 10-K.
+Item 3.
+
+Quantitative and Qualitative Disclosures About Market Risk
+
+There have been no material changes to the Company’s market risk during the first nine months of 2024. For a discussion of the
+Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and
+Qualitative Disclosures About Market Risk” of the 2023 Form 10-K.
+Item 4.
+
+Controls and Procedures
+
+Evaluation of Disclosure Controls and Procedures
+Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal
+executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in
+Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of June 29, 2024 to provide reasonable assurance that
+information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed,
+summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the
+Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions
+regarding required disclosure.
+Changes in Internal Control over Financial Reporting
+There were no changes in the Company’s internal control over financial reporting during the third quarter of 2024, which were identified
+in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have
+materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
+
+Apple Inc. | Q3 2024 Form 10-Q | 18
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+26/30
+
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+
+aapl-20240629
+
+PART II — OTHER INFORMATION
+Item 1.
+
+Legal Proceedings
+
+Digital Markets Act Investigations
+On March 25, 2024, the Commission announced that it had opened two formal noncompliance investigations against the Company
+under the European Union (“EU”) Digital Markets Act (the “DMA”). The Commission’s investigations concern (1) Article 5(4) of the DMA,
+which relates to how developers may communicate and promote offers to end users for apps distributed through the App Store as well
+as how developers may conclude contracts with those end users; and (2) Article 6(3) of the DMA, which relates to default settings,
+uninstallation of apps, and a web browser choice screen on iOS. On June 24, 2024, the Commission announced its preliminary findings
+in the Article 5(4) investigation alleging that the Company’s App Store rules are in breach of the DMA and announced that it had opened
+a third formal investigation against the Company regarding whether the Company’s new contractual requirements for third-party app
+developers and app marketplaces may violate the DMA. If the Commission makes a final determination that there has been a violation, it
+can issue a cease and desist order and may impose fines up to 10% of the Company’s annual worldwide net sales. Although any
+decision by the Commission can be appealed to the General Court of the EU, the effectiveness of the Commission’s order would apply
+immediately while the appeal is pending, unless a stay of the order is granted. The Company believes that it complies with the DMA and
+has continued to make changes to its compliance plan in response to feedback and engagement with the Commission.
+Department of Justice Lawsuit
+On March 21, 2024, the U.S. Department of Justice (the “DOJ”) and a number of state and district attorneys general filed a civil antitrust
+lawsuit in the U.S. District Court for the District of New Jersey against the Company alleging monopolization or attempted
+monopolization in the markets for “performance smartphones” and “smartphones” in violation of U.S. antitrust laws. The DOJ is seeking
+equitable relief to redress the alleged anticompetitive behavior. In addition, various civil litigation matters have been filed in state and
+federal courts in the U.S. alleging similar violations of U.S. antitrust laws and seeking monetary damages and other nonmonetary relief.
+The Company believes it has substantial defenses and intends to vigorously defend itself.
+Epic Games
+Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “California District Court”)
+against the Company alleging violations of federal and state antitrust laws and California’s unfair competition law based upon the
+Company’s operation of its App Store. The California District Court found that certain provisions of the Company’s App Store Review
+Guidelines violate California’s unfair competition law and issued an injunction enjoining the Company from prohibiting developers from
+including in their apps external links that direct customers to purchasing mechanisms other than Apple in-app purchasing. The injunction
+applies to apps on the U.S. storefront of the iOS and iPadOS App Store. On January 16, 2024, the Company implemented a plan to
+comply with the injunction and filed a statement of compliance with the California District Court. A motion by Epic disputing the
+Company’s compliance plan and seeking to enforce the injunction, which the Company has opposed, is pending before the California
+District Court. The Company believes it has substantial defenses and intends to vigorously defend itself.
+Other Legal Proceedings
+The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary
+course of business. The Company settled certain matters during the third quarter of 2024 that did not individually or in the aggregate
+have a material impact on the Company’s financial condition or operating results. The outcome of litigation is inherently uncertain. If one
+or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the
+Company’s financial condition and operating results for that reporting period could be materially adversely affected.
+Item 1A.
+
+Risk Factors
+
+The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors,
+whether currently known or unknown, including those described in Part I, Item 1A of the 2023 Form 10-K and Part II, Item 1A of the Form
+10-Q for the quarter ended March 30, 2024 (the “second quarter 2024 Form 10-Q”), in each case under the heading “Risk Factors.”
+When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations, financial
+condition and stock price can be materially and adversely affected. Except for the risk factor disclosed in Part II, Item 1A of the second
+quarter 2024 Form 10-Q, which is hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no
+material changes to the Company’s risk factors since the 2023 Form 10-K.
+
+Apple Inc. | Q3 2024 Form 10-Q | 19
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+27/30
+
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+
+Item 2.
+
+aapl-20240629
+
+Unregistered Sales of Equity Securities and Use of Proceeds
+
+Purchases of Equity Securities by the Issuer and Affiliated Purchasers
+Share repurchase activity during the three months ended June 29, 2024 was as follows (in millions, except number of shares, which are
+reflected in thousands, and per-share amounts):
+
+Periods
+March 31, 2024 to May 4, 2024:
+Open market and privately negotiated purchases
+May 5, 2024 to June 1, 2024:
+Open market and privately negotiated purchases
+June 2, 2024 to June 29, 2024:
+Open market and privately negotiated purchases
+Total
+(1)
+
+Item 3.
+
+Total Number
+of Shares
+Purchased
+
+Average
+Price
+Paid Per
+Share
+
+Total Number of
+Shares
+Purchased as
+Part of Publicly
+Announced
+Plans or
+Programs
+
+45,690
+
+$
+
+169.74
+
+45,690
+
+51,729
+
+$
+
+188.38
+
+51,729
+
+41,354
+
+$
+
+205.54
+
+41,354
+
+138,773
+
+Approximate Dollar
+Value of
+Shares That May Yet
+Be Purchased
+Under the Plans or
+Programs (1)
+
+$
+
+114,074
+
+On May 4, 2023, the Board of Directors authorized the purchase of up to $90 billion of the Company’s common stock under a share
+repurchase program. As of June 29, 2024, remaining availability under the May 2023 program was $4.1 billion. On May 2, 2024, the
+Board of Directors authorized an additional program to repurchase up to $110 billion of the Company’s common stock. The programs
+do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in privately
+negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
+
+Defaults Upon Senior Securities
+
+None.
+Item 4.
+
+Mine Safety Disclosures
+
+Not applicable.
+Item 5.
+
+Other Information
+
+Insider Trading Arrangements
+On May 24, 2024, Tim Cook, the Company’s Chief Executive Officer, entered into a trading plan intended to satisfy the affirmative
+defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan provides for the sale, subject to certain price limits, of shares
+vesting during the duration of the plan pursuant to certain equity awards granted to Mr. Cook, excluding shares withheld by the Company
+to satisfy income tax withholding and remittance obligations. Mr. Cook’s plan will expire on May 24, 2026, subject to early termination in
+accordance with the terms of the plan.
+
+Apple Inc. | Q3 2024 Form 10-Q | 20
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+28/30
+
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+
+Item 6.
+
+aapl-20240629
+
+Exhibits
+Incorporated by Reference
+
+Exhibit
+Number
+
+31.1*
+31.2*
+32.1**
+101*
+104*
+
+Exhibit Description
+
+Form
+
+Exhibit
+
+Filing Date/
+Period End
+Date
+
+Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
+Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
+Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
+Inline XBRL Document Set for the condensed consolidated financial statements and
+accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly
+Report on Form 10-Q.
+Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in
+the Exhibit 101 Inline XBRL Document Set.
+
+*
+
+Filed herewith.
+
+**
+
+Furnished herewith.
+
+Apple Inc. | Q3 2024 Form 10-Q | 21
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+29/30
+
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+
+aapl-20240629
+
+SIGNATURE
+Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
+behalf by the undersigned thereunto duly authorized.
+Date: August 1, 2024
+
+Apple Inc.
+By:
+
+/s/ Luca Maestri
+Luca Maestri
+Senior Vice President,
+Chief Financial Officer
+
+Apple Inc. | Q3 2024 Form 10-Q | 22
+
+https://www.sec.gov/Archives/edgar/data/320193/000032019324000081/aapl-20240629.htm
+
+30/30
+
+