SEC Form 10-K: Management's Discussion & Analysis SEC Form 10-K: Management's Discussion & Analysis Management's Discussion and Analysis of Financial Condition and Results of Operations: The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This Item generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included, and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Product, Service and Software Announcements: The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2024 included the following: First Quarter 2024: iOS 18, macOS Sequoia, iPadOS 18, watchOS 11, visionOS 2 and tvOS 18, updates to the Company's operating systems; and Apple Intelligence(TradeMark), a personal intelligence system that uses generative models. Fourth Quarter 2024:: iPhone 16, iPhone 16 Plus, iPhone 16 Pro and iPhone 16 Pro Max; Apple Watch Series 10; and: AirPods 4.: 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 2022 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks. 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. Segment Operating Performance Americas Americas net sales increased during 2024 compared to 2023 due primarily to higher net sales of Services. Europe: Europe net sales increased during 2024 compared to 2023 due primarily to higher net sales of Services and iPhone. Greater China: Greater China net sales decreased during 2024 compared to 2023 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 2024. Japan: Japan net sales increased during 2024 compared to 2023 due primarily to higher net sales of iPhone. The weakness in the yen relative to the U.S. dollar had an unfavorable year-over-year impact on Japan net sales during 2024. Rest of Asia Pacific: Rest of Asia Pacific net sales increased during 2024 compared to 2023 due primarily to higher net sales of Services. 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 2024. Products and Services Performance (1)Services net sales include amortization of the deferred value of services bundled in the sales price of certain products. iPhone: iPhone net sales were relatively flat during 2024 compared to 2023. Mac: Mac net sales increased during 2024 compared to 2023 due primarily to higher net sales of laptops. iPad: iPad net sales decreased during 2024 compared to 2023 due primarily to lower net sales of iPad Pro and the entry-level iPad models, partially offset by higher net sales of iPad Air. Wearables, Home and Accessories: Wearables, Home and Accessories net sales decreased during 2024 compared to 2023 due primarily to lower net sales of Wearables and Accessories. Services: Services net sales increased during 2024 compared to 2023 due primarily to higher net sales from advertising, the App Store(Registered) and cloud services. Gross Margin Products and Services gross margin and gross margin percentage for 2024, 2023 and 2022 were as follows (dollars in millions): Products Gross Margin Products gross margin and Products gross margin percentage increased during 2024 compared to 2023 due 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 2024 compared to 2023 due primarily to higher Services net sales. Services gross margin percentage increased during 2024 compared to 2023 due 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 this Form 10-K 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 2024, 2023 and 2022 were as follows (dollars in millions): Research and Development The growth in R&D expense during 2024 compared to 2023 was driven primarily by increases in headcount-related expenses. Selling, General and Administrative: Selling, general and administrative expense increased $1.2 billion during 2024 compared to 2023. Provision for Income Taxes Provision for income taxes, effective tax rate and statutory federal income tax rate for 2024, 2023 and 2022 were as follows (dollars in millions): The Company's effective tax rate for 2024 was higher than the statutory federal income tax rate due primarily to a one-time income tax charge of $10.2 billion, net, related to the State Aid Decision (refer to Note 7, "Income Taxes" in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K) and state income taxes, partially offset by a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation. The Company's effective tax rate for 2024 was higher compared to 2023 due primarily to a one-time income tax charge of $10.2 billion, net, related to the State Aid Decision, a higher effective tax rate on foreign earnings and lower tax benefits from share-based compensation. Liquidity and Capital Resources: The Company believes its balances of unrestricted cash, cash equivalents and marketable securities, which totaled $140.8 billion as of September 28, 2024, 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 material cash requirements include the following contractual obligations: Debt: As of September 28, 2024, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $97.3 billion (collectively the "Notes"), with $10.9 billion payable within 12 months. Future interest payments associated with the Notes total $38.5 billion, with $2.6 billion payable within 12 months. The Company also issues unsecured short-term promissory notes pursuant to a commercial paper program. As of September 28, 2024, the Company had $10.0 billion of commercial paper outstanding, all of which was payable within 12 months. Leases: The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. As of September 28, 2024, the Company had fixed lease payment obligations of $15.6 billion, with $2.0 billion payable within 12 months. 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 September 28, 2024, the Company had manufacturing purchase obligations of $53.0 billion, with $52.9 billion payable within 12 months. Other Purchase Obligations: The Company's other purchase obligations primarily consist of noncancelable obligations to acquire capital assets, including assets related to product manufacturing, and noncancelable obligations related to supplier arrangements, licensed intellectual property and content, and distribution rights. As of September 28, 2024, the Company had other purchase obligations of $12.0 billion, with $4.1 billion payable within 12 months. Deemed Repatriation Tax Payable: As of September 28, 2024, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act of 2017 (the "TCJA") was $16.5 billion, with $7.2 billion expected to be paid within 12 months. State Aid Decision Tax Payable As of September 28, 2024, the Company had an obligation to pay EUR14.2 billion or $15.8 billion to Ireland in connection with the State Aid Decision, all of which was expected to be paid within 12 months. The funds necessary to settle the obligation were held in escrow as of September 28, 2024, and restricted from general use. Capital Return Program: In addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to acquire a minimum amount of shares. As of September 28, 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. In May 2024, the Company announced a new share repurchase program of up to $110 billion and raised its quarterly dividend from $0.24 to $0.25 per share beginning in May 2024. During 2024, the Company repurchased $95.0 billion of its common stock and paid dividends and dividend equivalents of $15.2 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. 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 U.S. generally accepted accounting principles ("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 Consolidated Financial Statements in Part II, Item 8 of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company's consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Uncertain Tax Positions: The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The evaluation of the Company's uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, including the TCJA and the allocation of international taxation rights between countries. Although management believes the Company's reserves are reasonable, no assurance can be given that the final outcome of these uncertainties will not be different from that reflected in the Company's reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination. Resolution of these uncertainties in a manner inconsistent with management's expectations could have a material impact on the Company's financial condition and operating results. Legal and Other Contingencies: The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management's expectations could have a material impact on the Company's financial condition and operating results. Top Management and Board of Directors Top Management Top Management [Three top executives with tenure > 11 yrs]
Board Of Directors Board Of Directors [One director with tenure > 14 yrs]
Board Of Directors [Four directors with tenure < 4 yrs]
Independent Ratings of Directors + Tim Cook- Glassdoor Ranking: Tim Cook was ranked 32 in the Glassdoor Employee Review's list of 100 Top CEOs in the United States for 2021. + Tim Cook- Bloomberg Pay Index Ranking: Tim Cook was ranked 3 in the Bloomberg Pay Index list in the United States for 2021, an improvement from rank 8 in 2020. According to Bloomberg Pay Index, Tim Cook's total compensation had increased by (222.13%) $588.7 million from $265 million to $853.8 million in 2021. + Tim Cook- Harvard Business Ranking: Tim Cook was ranked 62 in the Harvard Business Review's list of 100 Best-Performing CEO's in the world for 2019. INSIDER OWNERSHIP AND SELLING IN THE PAST 12 MONTHS Shares Held by Insiders as on May 08, 2025 (Value computed at price $197.49)
Tim Cook now has a beneficial interest in 3,409,693 Apple shares worth $673.4 million. Luca Maestri now has a beneficial interest in 107,788 Apple shares worth $21.3 million. Susan L. Wagner now has a beneficial interest in 1,255 Apple shares worth $247,850. Ronald D. Sugar now has a beneficial interest in 1,255 Apple shares worth $247,850. Alex Gorsky now has a beneficial interest in 1,255 Apple shares worth $247,850. Andrea Jung now has a beneficial interest in 1,255 Apple shares worth $247,850. Arthur D. Levinson now has a beneficial interest in 1,113 Apple shares worth $219,806. Insider selling Summary in the past 12 months
Peer Comparison & Ranking of AAPL FAANG PEER COMPARISON: AAPL - SIZE (all figures in $) In its FAANG Peer Group of 5 companies (Facebook, Apple, Amazon, Netflix and Alphabet's Google) AAPL is ranked AAPL is ranked first (1) by MCap, second (2) by Revenue, Net Profit and third (3) by PV$1000, Total Assets.
FAANG PEER COMPARISON: AAPL - VALUATION INDICATORS In value terms, comparing relative value of its shares, AAPL is ranked + 3 out of 5 by Price/Earnings per share [32.5] + 3 out of 5 by Price/Sales per share [7.6] + 4 out of 5 by Turnover Rate (%) [103.1]
BUYSELLSIGNALS FUNDAMENTALS VALUATION RANKING: Apple vs NASDAQ Market Out of 2,912 stocks and 2 units in the NASDAQ Market, Apple is ranked second(2) by Net Profit $, second(2) by Revenue, seventh(7) by Total Assets and seventh(7) by ROE.
MARKET SHARE Apple has a position of market dominance in the Technology sector. Apple vs Technology sector [Technology sector Total in Brackets] Revenue of $391 billion[67.5% of aggregate sector revenue of $730.1 billion; down from 67.5% in the previous year.] GLOBAL RANK [out of 46,079 stocks] AND RANK OF APPLE IN THE AMERICAN REGION [out of 9,094 stocks]
RANK OF APPLE IN THE NASDAQ-100 INDEX [out of 91 stocks], IN THE NASDAQ MARKET [out of 2878 stocks] AND IN THE TECHNOLOGY SECTOR [out of 219 stocks]
LONG-TERM FUNDAMENTAL RANKING: 4 OUT OF 5 [5 is best] Apple is ranked number 1 out of 271 listed technology companies in the United States with a market capitalization of $2,966.3 billion. Within its sector it has a relatively low P/E of 32.3. Stocks are scored on a set of parameters reflecting fundamental analytical tools involving valuation, size and financial performance. They are ranked according to the average values of those parameters. The highest ranking is 5 and the lowest ranking is 1. Patents Number of Patents Issued to Apple by the US Patent Office and the European Patent Office A total of 35,906 patents were issued to Apple in the last eleven years. In the past year 4,284 patents were issued, 1.3 times average of 3,264 patents per year.
Rank by patents issued in the past 12 months: Apple vs NASDAQ stocks Apple is ranked 2 by patents issued in the past year out of 3,730 NASDAQ listed companies. A total of 97,073 patents were issued to NASDAQ listed companies in the past year, an average of 82.5 patents per company. Apple received 7,773 patents in the past 12 months, 299 times average. Tax & Dividend Average Income Tax Paid (Past 5 Years) In the past 5 years, Income Tax as % of profit before tax increased from 14.4% to 24.1%, Income Tax as % of sales increased from 3.5% to 7.6% and Income Tax as % of operating cash flow increased from 14.4% to 24.1%.
The 5-year average of profit before tax was 16.5%. Footprint of Low Tax Subsidiaries Corporate Tax rate of Apple in country of incorporation:
Dividend History In the past 2 years annual dividends have increased by 4.0c from 96.0c to 100.0c. Based on a start date of 2 years ago, there has been no decline in dividends over the last 2 years.
Financials as Reported FY 2024, Past 10 Years Financials as reported (FY 2024 [year-ended 28 September 2024 ]) 10-K RESULTS OF OPERATIONS AND FINANCIAL CONDITION (In $ Million, except per share data and shares outstanding) INCOME STATEMENT AS REPORTED (FY 2024 [year-ended 28 September 2024 ])
BALANCE SHEET AS REPORTED (FY 2024 [year-ended 28 September 2024 ])
CASH FLOW AS REPORTED (FY 2024 [year-ended 28 September 2024 ])
Download APPLE Financials Past 10 Years
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