Apple beats Wall Street estimates with record revenue in Q3

Apple CFO Luca Maestri told investors in an earnings call that the vendor was pleased by its performance

Apple has logged record revenue of $83bn for its Q3, up two per cent year on year beating Wall Street's estimates.

However, it's services business saw growth slow from Q2.

Apple reports results for its cloud services business in the same segment as the App Store, Apple TV+, and Apple Music.

Q3 services revenue came in at $19.6bn, up 12 per cent year on year, but down from Q2's services revenue of $19.7bn.

Wall Street investors had expected Apple's services sales to hold steady at the $19.7bn-mark.

Apple's overall operating income also declined 4.6 per cent to $23.07bn year on year.

Apple CFO Luca Maestri told investors in an earnings call transcribed by Seeking Alpha that the vendor was pleased by its performance in a market beset by inflationary pressures.

"Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment," he said.

"We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category."

Apple and China Covid lockdowns

Apple CEO Tim Cook also conceded that Apple is vulnerable to the ongoing lockdowns affecting swathes of China and the vendor's supply chain.

"We continue to have supply constraints with Mac, but we're encouraged by the strong response from customers to our incredible lineup. iPad, like Mac, continued to see strong demand during the June quarter despite ongoing supply constraints." he said.

Anticipating further economic headwinds in the form of supply chain-constraints, inflation, the threat of a recession in the US and the Russia-Ukraine war, Cook said that the company is trying to remain "clear-eyed" as it looks into Q4.

Apple services Q4 outlook

CFO Luca Maestri added that the vendor's services performance is being bolstered by a rise in subscriptions already reached in Q3.

Paid subscriptions on Apple's platform grew to 860 million, up 35 million from Q2, and up more than 160 million in the last 12 months alone.

"The record level of performance of our services portfolio during the June quarter reflects the strength of our ecosystem," he said.

"First, our install base has continued to grow, reaching an all-time high across each geographic segment and major product category."

He added: "And we also saw increased customer engagement with our services during the quarter our transacting accounts, paid accounts and accounts with paid subscriptions.

"All grew double digits year over year and paid subscriptions showed very strong growth."

Other parts of the business have less of a rosy outlook.

Maestri referred to Apple advertising, accessories and home products as business units that are "pockets of weakness" for the vendor.

"Fortunately, we have a very broad portfolio, so we know we're going to be able to navigate that," he said.