Today Apple released their earnings for Q3 of fiscal year 2015, which ended June 27th. In what seems to be a never-ending sequence of records, once again, Apple posted a record third quarter. Revenue for the quarter came in at $49.6 billion, up 33% from a year ago. Gross margin was $19.7 billion, also up 33% from Q3 2014. Operating income was up almost 37% to $14.1 billion, and net income was $10.7 billion for the quarter, a gain of 37.8% year-over-year. Earnings per share was $1.85, up from $1.28 in Q3 2014.

Apple Q3 2015 Financial Results (GAAP)
  Q3'2015 Q2'2015 Q3'2014
Revenue (in Billions USD) $49.605 >$58.010 $37.432
Gross Margin (in Billions USD) $19.681 $23.656 $14.735
Operating Income (in Billions USD) $14.083 $18.278 $10.282
Net Income (in Billions USD) $10.677 $13.569 $7.748
Margins 39.7% 40.8% 39.4%
Earnings per Share (in USD) $1.85 $2.33 $1.28

Apple’s iPhone business has been the primary factor in these record breaking quarters, and the iPhone 6 and 6+ sales continued to be strong. For the quarter, Apple sold 47.5 million iPhones, which is a gain of 35% in units. Even more impressive is that these 35% more units resulted in 59% more revenue, with iPhone sales totalling $31.4 billion for this quarter alone.

Mac sales have also been strong, and while Apple has generally outpaced the PC market in sales growth for a while, Apple saw an additional 5% in Mac unit sales for Q4 compared to Q3, and 9% from a year ago. This is at a time where the rest of the PC market is contracting, so Mac sales were an impressive 4.8 million units, with revenue of just over $6 billion for the quarter. The resurgence of the Mac has been quite the rise, with Mac revenue being eclipsed quite a bit by the iPad not very long ago. Times have changed though and Apple’s PC business is currently the only one that has seen an increase in sales according to the reports floated around in the last couple of weeks.

iPad sales though are not so rosy. The iPad sales were very strong, and while sales are not exactly terrible, the number of units being sold has been dropping for some time. Much debate has been about why this is, but certainly owners of the iPad have not felt the need to refresh their devices anywhere nearly as quickly as phones. For the quarter, there were 10.9 million iPads sold, which resulted in revenue of $4.5 billion. The number of units sold is down 13% from Q2, and down 18% year-over year.

Apple Q4 2014 Device Sales (thousands)
  Q3'2015 Q2'2015 Q3'2014 Seq Change Year/Year Change
iPhone 47,534 61,170 35,203 -22% +59%
iPad 10,931 12,623 13,276 -13% -18%
Mac 4,796 4,563 4,413 +5% +9%

Services, which include iTunes sales, AppleCare, Apple Pay, and will include Apple Music in the future, saw a nice jump as well with just over $5 billion in revenue for the quarter. This is up 1% from last quarter, and up 12% from last year.

“Other Products” which is Apple TV, Apple Watch, Beats, iPods, and accessories had a big quarter, and while individual numbers were not announced, it is likely due to initial sales of the Apple Watch which came out in the quarter. For Q3, this group had sales of $2.6 billion, up 56% from last quarter and up 49% year-over-year. Likely most of the increase can be attributed to the Watch, but without knowing average selling price, it would be pretty difficult to try and extrapolate unit sales without more information.

Apple Q2 2015 Revenue by Product (billions)
  Q3'2015 Q2'2015 Q3'2014 Revenue for current quarter
iPhone $31.368 $40.282 $19.751 63.2%
iPad $4.538 $5.428 $5.889 9.1%
Mac $6.030 $5.615 $5.540 12.2%
iTunes/Software/Services $5.028 $4.996 $4.485 10.1%
Other Products $2.641 $1.689 $1.767 5.3%

This pipeline post is quite a bit shorter than the Microsoft earnings, but for all of the right reasons. There is less to say when things are going as well as they are for Apple right now. iPhone sales are still a huge part of their balance sheet, and seem to have no sign of slowing down. People obviously wanted a larger iPhone and sales have skyrocketed since the iPhone 6 and 6+ were launched. But I think we were all expecting this based on past performance. I think what is most interesting is how much of the PC market Apple has managed to chip away with Mac sales, which are up an amazing 9% when the rest of the market contracted.

For Q4, Apple is expecting revenue of $49 to $51 billion, with a gross margin of 38.5 to 39.5%.

Source: Apple Investor Relations

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  • p1esk - Wednesday, July 22, 2015 - link

    I don't know if they have. But it's not just they didn't publish anything. They haven't done anything of the kind I'm talking about.
    For example Siri: in the 5 years since they bought the technology (note: bought, not developed) it hasn't improved much. I occasionally try using it, last time a few months ago, and it's still as dumb as it was in the beginning. In the same 5 years NLP field has made some significant advances: Google came up with word2vec, Facebook developed memory networks, others demonstrated impressive results with seq2seq RNNs, etc. What has Apple done exactly in regards to Siri development?
  • name99 - Wednesday, July 22, 2015 - link

    To claim that Siri has not improved since it was released simply reveals that you either don't know what you're talking about, are not interested in the actual truth, or don't actually use the product, certainly not day to day.

    As for AI, you are aware that AI (at the sort of level of Google Now) is THE focus of iOS9? How can you claim Apple is doing nothing in this space when it is THE headline feature of their next version of iOS? The public face of this work is the Siri team, though who knows how much was done by a more "academic" research unit within Apple.

    You're welcome to claim (based on utterly no experience, with a product you've apparently never even heard of) that iOS9 sucks, and the rest of us are welcome to claim (based on your previous comments about Siri) that you honestly don't have a clue what you're talking about.
  • p1esk - Thursday, July 23, 2015 - link

    My claims about Siri is based on my experience with it. I don't use it every day precisely because it's not very useful. I do give it a try every few months or so, hoping it improves. From what I see, it hasn't. This is my personal opinion, based on my personal experience with it - nothing less, nothing more.
    For example, Siri does not even understand my accent most of the time. Google Now understand it much better. That's the first strike. Second, those of my questions it does understand, it just shows me google search results. Last I tried asking it a simple question: who's running for president? It didn't provide a clear answer. Try it, maybe you will have a better luck.
  • FunBunny2 - Thursday, July 23, 2015 - link

    -- Apple feels that they were ripped off regarding the iPhone

    Couldn't patent a round cornered rectangle??? boo hoo. Remember, it was Steve who crowed about stealing. And Apple has been brazen in doing so. Sauce for goose, and all that.
  • id4andrei - Wednesday, July 22, 2015 - link

    China is the biggest contributor to this quarter and has been ever since Apple struck a deal with China Mobile.
  • stefstef - Wednesday, July 22, 2015 - link

    balmers attempt to get into the important phone (os) market wasnt exactly unlogic. ballmers belief: people dont want windows phone due to the lack of attractive smartphones running it. now the wheel of knowledge turned ahead once more - people dont seem to not like the platforms on which windows phone is running. they just dont seem to like windows phone, which sounds like a harsh judgement, but as windows phone (like nokia symbian os) wasnt really a bad thing the cheers go to the competitors who make "good" solutions no longer a choice when it comes to the sales. despite that microsoft spent a lot of effort in making it up to the competition but finally never did it (e.g. app store).
  • TEAMSWITCHER - Wednesday, July 22, 2015 - link

    40% margins and nearly 50 billion dollars in revenue. There is simply nothing to argue about here. Apple is Awesome!
  • imaheadcase - Wednesday, July 22, 2015 - link

    They also lost like 50BILLION yesterday in stock market selloff.
  • name99 - Wednesday, July 22, 2015 - link

    "They" lost $50BILLION?
    I don't think you understand either stock ownership (most Apple stock is not owned by Apple the corporation) or accounting (the only people who lost money yesterday were those who bought at a higher price than they sold).

    True statement: Apple's market cap dropped by $50 billion yesterday
    False statement: Apple lost $50 billion yesterday.
    Additional true statement: No-one with a brain gives a damn about the momentary gyrations of stock prices. They go up they go down. They were lower than today on July 9, they'll probably be higher than yesterday by September.
  • WaltC - Wednesday, July 22, 2015 - link

    Let's face it, Apple is a cell-phone company today. Yawn...;)

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