Full Transcript: Tim Cook at Apple Q3 2020 Earnings Conference Call

On October 29, Apple announced financial results for its fiscal 2020 fourth quarter ended September 26, 2020. Below is the full edited verbatim transcript of the earnings call conference event.

Listen to the MP3 Audio here:

TRANSCRIPT:

Operator: Good day everyone and welcome to the Apple Incorporated fourth quarter fiscal year 2020 earnings conference call. Today’s call is being recorded. At this time for opening remarks and introductions, I would like to turn things over to Tejas Gala, Senior Analyst, Corporate Finance and Investor Relations. Please go ahead, sir.

Tejas Gala – Senior Manager, Corporate Finance and Investor Relations

Thank you. Good afternoon and thank you for joining us. Speaking first today is Apple’s CEO, Tim Cook, and he will be followed by CFO, Luca Maestri. After that, we’ll open the call to questions from analysts.

Please note that some of the information you’ll hear during the discussion today, will consist of our forward-looking statements including without limitation those regarding revenue, gross margin, operating expenses, other income and expense, taxes, capital allocation and future business outlook, including the potential impact of COVID-19 on the company’s business, and results of operations.

These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecasts. For more information, please refer to the risk factors discussed in Apple’s most recently filed Annual Report on Form 10-K and the Form 8-K filed with the SEC today, along with the associated press release. Apple assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

I’d now like to turn the call over to Tim for introductory remarks.

Tim Cook – Chief Executive Officer

Thanks Tejas. Good afternoon and thanks for joining the call today.

Back in April, I said we were in the most challenging environment in which Apple as a company has ever operated. That atmosphere of uncertainty of resolve of making difficult calls with limited information has not only come to define Apple’s year, but each of our lives as individuals across this country, and around the world. It has been a chapter that none of us will forget.

In the face of these challenges, Apple stayed relentlessly focused on what we do best, seeing in every obstacle an opportunity to do something new, something creative, something better on behalf of our customers.

Today we report a quarter and a fiscal year that reflects that effort. This quarter, Apple achieved revenue of $64.7 billion, a September quarter record, despite the anticipated absence of new iPhone availability during the quarter, and the ongoing impacts of COVID-19, including closures at many of our retail locations.

We also set a new all-time record for Mac and Services. Outside of iPhone, each of our product categories saw strong double-digit year-over-year growth, despite supply constraints in several product categories.

Our results for this quarter were ahead of our expectations, driven by stronger-than-expected iPhone and Services performance. As we anticipated, we launched new iPhone models in October, a few weeks later than last year’s mid-September launch. Up to that mid-September point, customer demand for iPhone was very strong, and grew double-digits.

On Services, we saw stronger-than-expected performance across the board. Geographically, we set September quarter records in the Americas, Europe and Rest of Asia Pacific. We also set a September quarter record in India, thanks in part to a very strong reception to this quarter’s launch of our online store in the country.

Greater China is the region that was most heavily impacted by the absence of the new iPhones during the September quarter. Still we beat our internal expectations in the region, growing non-iPhone revenue strong double digits and iPhone customer demand grew through mid-September.

When you pull back the lens to the entire fiscal year, it’s a testament to the team’s work and to the resilience of the business in the era of COVID-19. This year, we set an all-time revenue record of $274.5 billion, growing 6% year-on-year. We grew every quarter, set all-time yearly records in Mac, Wearables Home and Accessories, and Services, and grew by double-digits in every product category outside of iPhone.

When we first began to grapple with COVID-19, I said there are worse things for a company whose business is innovation, than having to periodically do just about everything in an entirely new way. This year, we not only launched our most powerful and compelling generation of hardware, software and services ever, we did it in a way that pushes to reimagine every part of that innovation process, down to how we share these announcements with the world and how we get new products into our customers’ hands.

Working from kitchen tables and bedrooms, in distanced office settings and rework labs and manufacturing facilities, the team rebuilt every part of the plane while it was mid-air, and the results speak for themselves.

In a year that has been enormously challenging, our retail teams, contact centers, and all those who work with our customers most closely, have gone to creative and dedicated links to keep serving our customers, from adapting our stores for contactless pickup to new Apple Express storefronts, to new online customer support options. Amid store closings, reopenings and reimagining, these teams have been in an unfailing source of energy, creativity and determination.

Innovation isn’t just about what you make; it’s about how you approach problems, and these teams and every team across Apple have not faced a single question this year that they haven’t found an answer to with passion and resolve. Their actions didn’t just meet the moment; they will make us a better company moving forward.