Good morning. Apple SVP and CFO Kevan Parekh participated in his first earnings call on Thursday, and it was a banger. Parekh reported that Apple, whose market cap is bigger than the GDP of most countries, is bringing in more money than ever and that its profit margins keep growing.
For its fiscal 2025 first quarter, which ended Dec. 28, Apple reported revenue of $124.3 billion, up 4% from a year ago, an all-time record. Earnings per share (EPS) came in at $2.40, up 10% year over year.
Services revenue reached an all-time record of $26.3 billion, up 14% year over year. Apple also had stronger-than-expected sales of Macs and iPads. The company’s gross margin was 46.9% at the high end of its guidance range and up 70 basis points.
“Our record revenue and strong operating margins drove EPS to a new all-time record with double-digit growth and allowed us to return over $30 billion to shareholders,” Parekh said in a statement.
He joined the company in 2013 and began his tenure as CFO on Jan. 1, most recently serving as VP of financial planning and analysis. Parekh succeeds former CFO Luca Maestri, who held the role for over 10 years. Maestri leads the corporate services teams.
During the earnings call on Thursday, an analyst noted that one of Maestri’s legacies was getting Apple to record margin levels and maintaining consistent pricing across the product range. However, as the company is experiencing high levels of profitability, Parekh was asked whether having a wider range of pricing across its products could potentially unlock further market share gains or boost overall product growth.
“I don’t think we’re going to really depart from what served us pretty well,” Parekh said. Apple has had a “disciplined pricing strategy,” he said. “We’re going to continually kind of stick with that as far as I can tell.”
Apple has certainly created a loyal fan base who are willing to pay premium prices for their products. The strategy revolves around product differentiation, brand equity, and perception of value. However, sales for the iPhone dropped slightly in the quarter, about 1% to $69.14 billion, compared to the same time last year. Apple CEO Tim Cook expects iPhone sales to recover as the company rolls out AI features.
Fortune’s David Meyer’s new feature article is “Apple is looking for its next iPhone-like hit. Can it find it before losing momentum?” The piece explores Apple’s dominance, but also where it’s lagging.
“Apple finished 2024 in record fashion, with a staggering $3.6 trillion market capitalization that not only topped every other company on the planet but also eclipsed the economic value of all but a handful of the world’s countries,” Meyer writes.
However, a late start to generative AI put Apple in “the embarrassing position of shipping the newest iPhone without its marquee features available at launch,” Meyer writes. And Apple has also had some recent product misfires.
“Even as Apple’s accomplishments and balance sheet give comfort to the faithful, a nagging question is likely to shadow the company as 2025 unfolds: Does Apple still have its mojo?” Meyer writes. You can read the complete article here.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
This story was originally featured on Fortune.com
