As always at this time of year, we’re in the midst of a flurry of Q1 results, positive and not so much. For Apple, it’s been a fantastic quarter, one of their best for this time of year to date, and they have seen a considerable increase in services revenue to boot. Our entertainment lawyer Los Angeles at Blake & Wang P.A., Brandon Blake, breaks it all down for us.
Q1, which covers January through March of this year, managed to beat both top and bottom-line forecasts despite some notable sales flops for the quarter. Services saw their best results to date, topping $30.9B. Notably, this is also the first report since CEO Tim Cook announced he will be standing down as CEO, finishing his tenure officially at the end of August this year. He will be replaced by the current head of hardware engineering, John Ternus.
By the figures, they saw quarterly revenue of $111.2B, a 17% increase year-on-year for what is formally Apple’s fiscal Q2, although it’s Q1 of the year itself. Diluted earnings per share rose 22%, to $2.01.
The Apple “services” division includes Apple TV alongside Apple Music, the App Store, and their Pay services, alongside other platforms they do not break out.
Honing in on the video business specifically, it has been particularly busy for the quarter. With Ted Lasso ready to return, a new 10-part series in Widow’s Bay, and the breakout for Severance, alongside some new comedic offerings and other series in the works, it’s one of the highest-volume production intervals we’ve seen for them to date. While Apple had immense success with the release of F1 theatrically last year, they are still playing their release cards close to their chest, and it’s unclear if they will be sending any release, let alone which ones, to cinemas through the remainder of the year.
They have also beefed up their live sports streaming rights, including new deals with Formula One, which will kick off with the Miami Grand Prix. They also have Major League Soccer and Friday night baseball to fill out their lineups.
Apple also reported double-digit growth across all its geographic segments, setting its business operating cash flow at $28B for the quarter, records for both its operating cash flow and earnings per share, as well as the record March quarter figures.
All in all, it’s a set of earnings that even notoriously difficult to please Wall Street has to be satisfied to see. Apple’s share price ticked up by about 3.7% on the back of the news and the quarterly earnings call that followed. Several analysts have also improved their outlook for the year for Apple stock as well.
Now, the real question is whether they will be able to sustain these results through the rest of the year, or if this record-breaking quarter will be a fluke among the notoriously fickle entertainment industry’s results in what is shaping up to be a tricky year for the industry indeed.
