Apple Posts Record Quarterly Subscription Streaming Services Revenue

Apple Aug. 3 reported record services revenue of $21.2 billion for the third quarter (ended July 1). That was up more than 8% from services revenue of $19.6 billion in the prior-year period.

Services revenue includes sales of movies and TV shows on iTunes, the App Store, Mac App Store, Apple Music, Apple Pay, Apple TV+, Apple Arcade and Apple News+, among others.

“We are happy to report that we had an all-time revenue record in services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets, thanks to robust sales of iPhone,” CEO Tim Cook said on the call.

Yet, sales of iPhones actually dipped 2.5% in the quarter to $39.7 billion from $40.7 billion in the prior-year period. Mac revenue dropped almost 7.5% to $6.84 billion from $7.4 billion. Sales of iPad tablets declined almost 20% to $5.79 billion from $7.22 billion. Wearables, home and accessories, which includes Beats earplugs, increased 2.5% to $8.28 billion from $8 billion last year.

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The declines resulted in a 1% overall year-over-year revenue decline to $81.8 billion, which didn’t seem to phase management focused on what pleases investors: Free cash flow.

“Our installed base of active devices reached an all-time high in every geographic segment,” said CFO Luca Maestri. “During the quarter, we generated very strong operating cash flow of $26 billion, returned over $24 billion to our shareholders, and continued to invest in our long-term growth plans.”

Apple Reports Record Quarterly Services Revenue

Apple’s foray into subscription-based businesses continues to resonate on the bottom line. The tech giant April 28 reported record services revenue of $19.8 billion for the second quarter (ended March 26). That compared with revenue of $16.9 billion during the previous-year period. Overall, Apple posted a March quarter revenue record of $97.3 billion, up 9% year over year.

Services revenue includes sales of movies and TV shows on iTunes, the App Store, Mac App Store, Apple Music, Apple Pay, Apple TV+, Apple Arcade and Apple News+, among others.

“We are delighted to see the strong customer response to our new products,” CEO Tim Cook said in a statement.
 
CFO Luca Maestri said Apple reported record quarterly revenue for iPhone, Mac, and Wearables, Home and Accessories.
 
 
“Continued strong customer demand for our products helped us achieve an all-time high for our installed base of active devices,” said Maestri. “Our strong operating performance generated over $28 billion in operating cash flow allowed us to return nearly $27 billion to our shareholders during the quarter.”