This afternoon, Apple announced their earnings for the third quarter of their 2017 fiscal year. Revenue grew 7% year-over-year to $45.408 billion USD for the three months ending July 1, 2017, with a gross margin of 38.5%. Operating income was $10.77 billion for the quarter, up 6.6% from a year ago. Net income was $11.31 billion, up 11.8% as well. This resulted in earnings per share of $1.67, up from $1.42 a year ago.

Apple Q3 2017 Financial Results (GAAP)
  Q3'2017 Q2'2017 Q3'2016
Revenue (in Billions USD) $45.408 $52.896 $42.358
Gross Margin (in Billions USD) $17.488 $20.591 $16.106
Operating Income (in Billions USD) $10.768 $14.097 $10.105
Net Income (in Billions USD) $8.717 $11.029 $7.796
Margins 38.5% 38.9% 38.0%
Earnings per Share (in USD) $1.67 $2.10 $1.42

Apple has been the iPhone company for pretty much a decade now, and at time, Apple has been somewhat dependant on the iPhone for most of its earnings. That’s the case again this quarter, but Apple as a company is much more diversified now than even a year or two ago when iPhone revenues could account for over 70% of their earnings. This quarter, iPhone brought in $24.85 billion in revenue, which works out to 54.7% of Apple’s revenue. iPhone revenue was up 3% year-over-year, with unit sales of 41.026 million phones, up 2% from a year ago.

Services has quickly jumped from being an afterthought at the company, to now being their number two source of revenue, surpassing both the Mac and the iPad. Services revenue jumped 22%, to $7.27 billion. The iPhone ecosystem is a strong draw for many Apple customers, clearly.

Mac sales were only up 1% year-over-year, which is a bit surprising since they hadn’t yet launched their new laptops a year ago, but revenue was up 7% to $5.59 billion, so revenue-per-device is up nicely. Apple sold 4.29 million Macs in the last three months.

iPad has been the one sore spot for Apple for several years now, with slowing sales, but earlier this year, Apple announced a new, lower cost, entry level iPad. This strategy has paid off, at least for the interim, with iPad sales up 15% in terms of units sold. Apple sold 11.42 million iPads last quarter, compared to just 9.95 million a year ago. Revenue was only up 1% though, thanks to the lower cost of these entry level devices.

Apple Q3 2017 Device Sales (thousands)
  Q3'2017 Q2'2017 Q3'2016 Seq Change Year/Year Change
iPhone 41,026 50,763 40,399 -19% +2%
iPad 11.424 8,922 9,950 +28% +15%
Mac 4,292 4,199 4,252 +2% +1%

Other Products, which includes Beats, Apple TV, Apple Watch, and accessories, also had a very strong quarter, with revenue up 23% year-over-year to $2.73 billion. Apple doesn’t break down individual sales inside of Other Products though, but Apple did say Apple Watch sales were up 50% in the quarter. Up from what, we’re not sure, but obviously a big jump regardless.

For the fourth quarter of fiscal year 2017, Apple is expecting revenue between $49 and $52 billion, with a gross margin between 37.5 and 38 percent.

Source: Apple Investor Relations

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  • tipoo - Wednesday, August 2, 2017 - link

    Gee I wonder what following the words at the bottom of the image would find, logamaniac.
  • yankeeDDL - Wednesday, August 2, 2017 - link

    I use both (iPhone 6 for work and Galaxy S8). I have several colleagues that would never leave the iPhone: they are the ones who used crappy/old Android phones and got burned. I understand them, but up until the iPhone 7, included, they are inferior to many mid range and top range Android phones. Ginormous bezels, tiny battery. The iPhone's battery lasts ages if you use it as a phone. But give it a go with games, and it drains in few hours. The S8 trounces it in all respects, and it has 4X more pixels on the display.
    Takes ages to start up and the fingerprint reader is slooow (it is faster on the 7, to be fair).

    Anyway, the next iPhone should fix the bezel problem: let's see, but to those who think that iPhone just works, they have not tried equally expensive Android phones.
  • tipoo - Wednesday, August 2, 2017 - link

    Find something better than platform choice to feel smarter than others about, please. It's [date of reading].
  • bill.rookard - Wednesday, August 2, 2017 - link

    I'll never buy new-gen, I always go a generation or two back. The way Apple supports their devices for a longer period than Android/Windows(?) means that the devices are still usable and current in software much longer time frames.

    My GF is still rocking her iPhone 4s but it's only now starting to show it's age - so I'll be shopping around for a good 5s for her soon. My 5s is great. Still quick, still works, still being updated.
  • vivs26 - Wednesday, August 2, 2017 - link

    Computers overpriced? Yes. Phones? No. Flagship Android aint cheap.
  • Samus - Thursday, August 3, 2017 - link

    You'd have to be dumb and stupid to say investing in Apple 10 years, 5 years, or even last year, was a bad idea.

    Dumb, and stupid.
  • damianrobertjones - Wednesday, August 9, 2017 - link

    Capitals can be your friend.
  • StrangerGuy - Wednesday, August 2, 2017 - link

    "Apple did say Apple Watch sales were up 50% in the quarter. Up from what, we’re not sure, but obviously a big jump regardless."

    but-but-but what about the memes of Apple watch = gigantic failure the tech media loves to harp about?
  • tipoo - Wednesday, August 2, 2017 - link

    A giant failure that likely passed the revenue of Rolex and any other swiss watch brand.
  • AdditionalPylons - Wednesday, August 2, 2017 - link

    Dear Anandtech, I'm so fed up with these clickbait ads from Revcontent!
    And now there was even an ad that redirected the whole browser window without me even clicking on it!
    I haven't used Adblock for many years, but now it's back on!

    I find AT quality is great and I am willing to pay for the content on this site, but not by exposing myself to these horrible ads! Would it be an option to make a paid tier (verified e.g. using these forum accounts) with no ads?

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