Apple’s Jaw-Dropping Q2 2021 by the Numbers
Apple has announced Q2 2021 profits of $23.6 billion ($1.40 per diluted share) on revenues of $89.6 billion. The company’s revenues were up 54% compared to the year-ago quarter, and its profits were more than double the $11.25 billion that Apple reported for Q2 2020 (see Apple’s Q2 2020 Was a “Very Different Quarter” Than Expected, 30 April 2020).
As has been the case for some time, iPhone revenues constituted more than half of Apple’s income for the quarter, but while the slice of the pie for each of the other categories was smaller than the iPhone’s, the pie itself turned out to be much larger than in past March quarters. For example, while Mac sales accounted for only about 10% of quarterly revenues this year compared to 9% last year, this year’s slice of the pie amounted to over $9 billion in income, besting last year’s Mac revenues by nearly $4 billion.
Let’s look at Apple’s sales categories. First, iPhone…
Hold onto your hat: the iPhone results are wild. iPhone sales increased 65.5% year over year. Yes, you saw that right. Apple raked in $47.9 billion in iPhone sales in Q2 2021, compared to $29 billion in the year-ago quarter. Cook credited the iPhone’s success to the “strong popularity of the iPhone 12 family.” To be fair, the delayed release of the iPhone 12 models also pushed a lot of its sales into this quarter’s results instead of them being realized in the previous quarter, which has been the pattern in prior years.
iPad quarterly sales increases year-over-year were even more astronomical: sales were up 78.7%. Although Apple sold “only” $4.4 billion of iPads in Q2 2020, the product line brought in $7.8 billion in Q2 2021. While this is not quite an all-time quarterly sales record for the tablet, the results were second only to Q2 2013, in which iPad sales hit $8.7 billion. As it was, iPad sales records still were smashed regionally: for example, Apple broke its all-time iPad revenue in Japan. Cook credited the iPad’s explosive growth to waves of people now working and learning from home. 50% of new iPad buyers in Q2 had never owned one before.
The Mac had its biggest Q2 by far since we started tracking it in 2012. It brought in $9.1 billion of revenue, a year-over-year increase of 70.1%, compared to $5.4 billion in Q2 2020. CFO Luca Maestri said that the past three quarters have been the best ever for the Mac. Cook credited the Mac’s current popularity not only to the many people working and learning from home during the pandemic, but also to the introduction of Apple’s M1 chip, which is replacing Intel’s chips in the Mac line. Like the iPad, half of all Mac buyers in Q2 were first-time buyers. The Mac set new all-time revenue records in Europe and Asia Pacific in Q2.
The Services category continues to grow, with a 26.6% year-over-year revenue increase, which seems small only compared to the astonishing iPhone, Mac, and iPad revenue increases. Services brought in $16.9 billion in Q2 2020, up from $13.3 billion in Q2 2021. Maestri said that Apple’s services now have 660 million subscribers. He added that all the drivers for Apple services are moving in the “right directions,” such as a large and growing customer base. Tim Cook also took a few opportunities to brag about the awards and nominations netted by Apple TV+ content, a small contributor to revenues but a substantial contributor to mindshare: he noted that the content service has garnered 352 award nominations and 92 wins.
Wearables was the weakest category this quarter, increasing by “only” 24.7%. It brought in $7.8 billion during the quarter, up from $6.3 billion in the year-ago quarter. Cook said that 75% of Apple Watch sales in Q2 were to new Apple Watch owners. Although the closure of many Apple stores during the pandemic and the reduced services offered by others during this time may have adversely affected sales of some wearables, the online sales of wearables took up more of the slack than had been expected.
Apple performed well in all of its geographic sales regions, with revenues in every region increasing by at least 30%. Mac sales broke records in Europe and Asia Pacific, and iPad broke all-time sales records in Japan. In Greater China, where Apple sells a lot of goods, revenues increased from $9.5 billion in the year-ago quarter to $17.7 billion this quarter. Whether at home or abroad, Apple is doing very, very well right now.
Where does Apple go from here? For one, don’t expect Q2 results next year to be as impressive as this year’s Q2. Last year, the March quarter was especially challenging, between the COVID-19 pandemic, its concomitant lockdowns, and supply chain issues. Apple had a lot of room to grow.
That said, Apple is on perhaps the firmest footing it has ever been on. The iPhone, iPad, and Mac are more popular than ever. The risky switch from Intel processors to Apple’s own M1 chip in the Mac has been nothing short of a smashing success, both critically and commercially. And Apple’s Services business seems to have unlimited room for growth. So, while Apple may not exceed these results next quarter—Cook noted that Apple would be “supply-gated, not demand-gated” in the coming quarter, having burned through much of its material reserves to counter supply constraints in Q2—the demand for Apple goods and services seems only to be accelerating, a prospect even sweeter than one of Ted Lasso’s famous biscuits.
Even more remarkable than it seemed. Apple’s holiday quarter usually far out paces every other quarter. This one, a non-holiday quarter, came close to matching the largest holiday quarter Apple’s ever had. That’s…impressive.
Facebook also posted record earnings for Q2 yesterday, but they did acknowledge that Apple’s new tracking/privacy features will have a significant negative impact going forward. However, they did try to put an optimistic spin on it:
Maybe its US-only terminology but I’m confused by the heading “Q2 2021”. What exactly does this cover? I would normally say its “the second quarter of 2021”, which specifically covers April to June, inclusive. But it can’t be as we’re not past June yet… So I’m guessing its the financial year, starting in 2020, ending in 2021, that the numbers refer to. Which confusingly is talking about the last 3 months of 2020.
Is it just me or does this confuse others (not from the US)? In Australia we specifically call the FY: “2020-2021” to avoid such ambiguity.
Yes, that’s a fiscal quarter. Apple’s fiscal year is October - September (well, technically I think it starts the last Sunday in September). So Q1 2021 was approximately October 1 2020 - December 31 2020. Q2 2021 was January 1 2021 - March 31 (technically 27) 2021. Some articles do better jobs than others calling out specifically “fiscal year”, although for financial matters, like quarterly results, fiscal year is pretty much always assumed (at least in the US, and I’m not sure how it could be otherwise being that’s how it’s reported by the company.)
And yes, it can be confusing. I worked for quite a while for a company that had a non-aligned fiscal year and everybody had to stop and translate in their head what a fiscal quarter really meant (the biggest being to respect quiet and lockup periods.)
All our business people always use FY21 vs. CY21 to be clear. Problem is, depending on company the FY starts with a different quarter. So Apple’s matches the US Federal Government’s (starting 10/1), but my wife’s company also here in the US starts their FY one quarter ahead (7/1). Go figure. So Q2 remains ambiguous unless you know what and who. Sometimes articles point out exactly what period they are referring to.
Fiscal quarters don’t necessarily align with calendar quarters either. For example, my employer’s fiscal year begins September 1st.
One quick way to check is to pull up the company’s financial numbers on Yahoo Finance. For example, Apple (AAPL). You can see that each year’s annual income data (always as of the end of the fiscal year) is dated September 30, meaning that their fiscal year starts on October 1st.
Sorry! Everyone else has explained it well. We’ve been writing these articles covering Apple’s financial reports for so many years that we assumed everyone was familiar with the terminology by now.
The publishing and advertising companies I worked with typically had fiscal years starting in November or December. It was because the fall back to school, and then the holiday, seasons were typically their strongest revenue producers. They also had to spend big bucks in the summer in advance for paper and production of larger issues, and more expensive media time. The holiday and back to school seasons are also big revenue generators for Apple.
This is the same in the UK. Even when it’s clearly the fiscal year being talked about, both years are always referenced, usually in the form
As seems to also be the case in the US, you need to know what organisation you’re talking about to understand what period this relates to. The government’s fiscal year runs 6 Apr–5 Apr, an organisation I worked for ran 1 Mar–28/29 Feb, and another used the calendar year (in which case they’d obviously refer to
Thanks for this - a nuance I completely missed until now.
Join the discussion in the TidBITS Discourse forum