Apple Reports ‘All-Time High’ Quarterly Services Revenue, Which Includes Apple Music

Apple announced its financial results for its fiscal 2023 fourth quarter ending September 30, 2023.
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Apple announced its financial results for its fiscal 2023 fourth quarter ending September 30, 2023.
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Photo Credit: Brett Jordan

On Thursday, Apple announced its financial results for its fiscal 2023 fourth quarter that ended September 30. The revenue picture for Apple could be better, and Wall Street is unimpressed. However, services revenue, which includes Apple Music, ‘reaches a new all-time high.’

Apple’s revenue fell close to 1% YoY to $89.5 billion, even though this was the company’s big quarter with the latest iPhone release. Apple sales for iPhones advanced 2.8% to $43.8 billion, aligning with analysts’ estimates. However, a net income of $23 billion has exceeded analyst expectations.

During a call with analysts following the results, Apple CFO Luca Maestri said that the December quarter’s revenue would be similar to last year — leading to Apple shares dropping close to 2.4% on Friday — before paring some losses. Overall, shares have fallen nearly 10% from July’s all-time highs, although they are still up over 30% (so far) for this year.

Wall Street analysts had been forecasting a revenue growth of 5% in the current quarter, according to data from Bloomberg. The September quarter is now the fourth straight period for Apple reporting a decline in total revenue, matching a similar streak in 2001.

Analysts agree that the company’s slow economic pace in China is fueling Apple’s decline. Apple’s third largest market, China, shrank 2.5% to $15.1 billion, in the face of stronger domestic competitors like Huawei Technologies, a broad economic slowdown, a decline in smartphone demand, and higher government scrutiny.

Apple’s CEO, Tim Cook, said Apple Music set a revenue record for September, but the company provided no specific details.

Apple’s services division — which includes Apple Music, Apple TV, and other media-related offers — delivered $22.31 billion in revenue, versus the $21.36 billion expected by Wall Street. Revenue nonetheless rivals the $19.2 billion from 2022 and the $21.2 billion last quarter.

On the post-result call with analysts, Cook said, “We achieved all-time revenue records across App Store, advertising, AppleCare, iCloud, payment services, and video, as well as the September quarter revenue record on Apple Music.”

The division’s $21.2 billion in fiscal Q3 was driven mainly by what Maestri called, ‘Well over 1 billion paid subscriptions across the services on our platform, nearly double the number we had only three years ago.’

“We continue to see increased customer engagement with our Services. Both transaction and paid accounts grew double digits year over year, each reaching a new all-time high,” Maestri said.

During the call, Cook also answered an analyst’s question regarding Apple’s investments in generative artificial intelligence.

“We have work going on. I’m not going to get into details about what it is,” Cook said, adding, “But you can bet that we’re investing quite a bit. We’re going to do it responsibly. And you will see product advancements over time where those technologies are at the heart of them.”