Apple reported $64.0 billion in revenue for its fiscal fourth quarter ended September 28, 2019, up 2% from a year earlier. Net income was approximately $13.7 billion, down from $14.1 billion, while diluted earnings per share rose to a fourth-quarter record of $3.03 from $2.91.
The October 30, 2019 results showed a company in transition: iPhone revenue fell 9% to $33.4 billion, but Services, Wearables and iPad helped offset much of the decline.
As an Amazon Associate I earn from qualifying purchases.
Apple’s Q4 2019 results at a glance
This was Apple’s fourth fiscal quarter of 2019, not the fourth calendar quarter. Apple’s fiscal year ends on the last Saturday of September, so the quarter largely covered July through September. Both fiscal 2019 and fiscal 2018 contained 52 weeks.
| Metric | Q4 FY2019 | Q4 FY2018 | Change |
|---|---|---|---|
| Revenue | $64.0 billion | $62.9 billion | Up 2% |
| Net income | Approximately $13.7 billion | $14.1 billion | Down |
| Diluted EPS | $3.03 | $2.91 | Up 4% |
| Gross margin | 38.0% | 38.3% | Down 30 basis points |
| Services revenue | $12.5 billion | Approximately $10.6 billion | Up 18% |
Apple also reported $19.9 billion in operating cash flow and said international sales represented approximately 60% of quarterly revenue. Revenue divided by net income produces a calculated net margin of roughly 21.4%.
#1 Best Overall
The headline therefore needs some qualification. Revenue and diluted EPS improved, but net income declined and gross margin narrowed slightly. This was not an across-the-board improvement in every earnings measure.
The iPhone remained Apple’s center of gravity
iPhone revenue was approximately $33.4 billion, down 9% year over year. It still represented more than half of Apple’s quarterly revenue, making the iPhone slowdown the most important weakness in the report.
The quarter included the early sales period for the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max. Apple characterized the year-over-year decline as an improvement from the larger declines earlier in fiscal 2019, but improvement in the rate of decline was not the same as a return to iPhone revenue growth.
Free tools Windows power users keep installed
One-click scans. No signup required.
Apple also said its active installed base reached a new high in every geographic segment. That installed base mattered because it provided a large audience for subscriptions, cloud storage, payments, support and other services even when customers were replacing iPhones less frequently.
Greater China remained a pressure point. Apple said its year-over-year comparison there improved to a 2% decline in the quarter, but the region was still weaker than a year earlier.
Services supplied faster-growing, higher-margin revenue
Services revenue reached a record $12.5 billion, up 18% from approximately $10.6 billion in Q4 FY2018. Apple said all five geographic segments produced record Services results.
The category was broader than a single subscription business. It included the App Store, AppleCare, Apple Music, cloud services, payment services, licensing and App Store search advertising. Apple reported record results in several of those areas and said paid subscriptions across its services platform had reached approximately 450 million, compared with more than 330 million a year earlier.
Quick wins for a faster PC:
Clear out junk files and repair common Windows errorsFree Scan →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Services accounted for about 20% of quarterly revenue but approximately 33% of the gross-margin mix. Apple reported an approximate Services gross margin of 64.1%, compared with approximately 31.6% for products. That difference made the revenue mix strategically significant: a dollar of Services revenue generally contributed more gross profit than a dollar of product revenue, although Apple remained heavily dependent on hardware sales.
The earnings report supports the interpretation that Apple was becoming less dependent on hardware volumes, but it did not show that Services had replaced the iPhone. iPhone revenue was still nearly three times Services revenue in the quarter.
How the other product categories performed
Apple emphasized category revenue rather than unit volumes. It did not provide current-quarter unit sales for the iPhone, iPad or Mac, so unit estimates from outside analysts should not be presented as Apple disclosures.
- Mac: approximately $7.0 billion in revenue.
- iPad: approximately $4.7 billion in revenue.
- Wearables, Home and Accessories: approximately $6.5 billion in revenue.
- Services: $12.5 billion, up 18% year over year.
Wearables, Home and Accessories was an important offset to iPhone weakness. Apple identified strong performance from products such as Apple Watch and AirPods as a contributor to the quarter. iPad also performed well, while Mac revenue was comparatively steady.
Outdated Drivers Are Slowing You Down
One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchPC Slower Than It Used to Be?
A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11Fiscal 2019 in context
For the full fiscal year, Apple reported approximately $260.2 billion in revenue and $55.3 billion in net income. Both were below fiscal 2018 levels, with the annual decline attributed primarily to lower iPhone revenue.
| Category | FY2019 sales | Year-over-year change |
|---|---|---|
| iPhone | $142.381 billion | Down 14% |
| Mac | $25.740 billion | Up 2% |
| iPad | $21.280 billion | Up 16% |
| Wearables, Home and Accessories | $24.482 billion | Up 41% |
| Services | $46.291 billion | Up 16% |
| Total | $260.174 billion | Down 2% |
Apple said annual Services growth came primarily from the App Store, licensing and AppleCare. Wearables growth was driven primarily by AirPods and Apple Watch.
Year-over-year category comparisons should be read with some care because Apple changed the classification of certain bundled software-service revenue in 2019. The figures above are Apple’s reported presentation and are not a perfectly like-for-like economic comparison in every component.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why revenue rose while net income fell
The mixed result is easiest to understand by separating the income statement measures:
- Revenue measures sales and increased 2%.
- Gross margin measures what remained after the cost of products and services and slipped from 38.3% to 38.0%.
- Net income reflects the result after operating expenses, other items and taxes and declined from $14.1 billion to approximately $13.7 billion.
- Diluted EPS divides earnings available to shareholders by diluted shares outstanding and rose from $2.91 to $3.03.
EPS can rise even when total net income falls if the diluted share count is lower. The supplied results establish that revenue, net income, margin and EPS moved in different directions; they do not by themselves justify attributing the EPS increase to one specific factor.
Best Value
What Apple expected for the holiday quarter
In October 2019, Apple guided for fiscal first-quarter 2020 revenue of $85.5 billion to $89.5 billion and a gross margin of 37.5% to 38.5%. Management also indicated that foreign-exchange movements would be a meaningful factor.
This was guidance for Apple’s holiday quarter as understood at the time, not a current forecast and not the result Apple ultimately reported later. It covered the first major holiday period for the iPhone 11 lineup and the company’s expanding accessories and services portfolio. The period also included the launch of AirPods Pro, Apple Card expansion and Apple TV+.
Comments about customer response to new products, holiday demand and Apple TV+ were management views and should be treated as attributed expectations rather than guarantees.
The Tool Desk
Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →What investors should take from the report
- Apple was still an iPhone-led company. The iPhone generated $33.4 billion in quarterly revenue, so its 9% decline remained central to the financial picture.
- The installed base was becoming more valuable. Record Services revenue and subscription growth showed how Apple could monetize customers beyond an individual hardware sale.
- Growth was shifting toward newer categories. Services and Wearables grew faster than the company overall, while iPad also delivered annual growth.
- Headline metrics required context. A revenue record and record quarterly EPS appeared alongside lower net income and a slightly lower gross margin.
- Geography still mattered. International sales made up about 60% of revenue, and Greater China remained a source of pressure despite an improved comparison.
For personal-finance readers, the result is best viewed as a historical example of why a company’s revenue headline, earnings per share and net income can tell different stories. Apple was not simply growing or shrinking: its business mix was changing, with slower iPhone sales partly offset by faster-growing Services, Wearables and iPad revenue.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
