Apple (NASDAQ:AAPL) reported its first-quarter results after the market close on Tuesday, and the company didn't disappoint, reporting record-breaking results across numerous product categories, business segments, and geographical markets.
In the company's press release and the subsequent conference call with analysts, Apple executives laid out a compelling list of metrics that illustrate just how successful the quarter was, and that, taken together, paint a rosy picture for the iPhone maker in the months and years to come.
With the return to growth of the iPhone and record-setting performances from both the services and wearables segments, Apple generated quarterly revenue of $91.8 billion, up 9% year over year. It was also an all-time quarterly record, one of many in the company's report. After four consecutive quarters of year-over-year declines, sales of the iPhone grew 8% year over year to $56 billion and accounted for nearly 61% of Apple's total sales.
The return of the iPhone to growth helped Apple's results in a number of ways, not the least of which was a solid boost to the bottom line. Apple reported net income of more than $22 billion, resulting in earnings per share of $4.99, up 19% year over year.
CEO Tim Cook said during the call that Apple's installed base of devices topped 1.5 billion, adding more than 100 million new devices to the tally over the past 12 months alone. He pointed out that Apple's user base reached new all-time highs for each of the company's main product categories -- iPhone, Mac, and iPad -- and geographic segments. One of the biggest benefits of the growing installed base is that it helps fuel the company's continuing growth, particularly in the services segment.
Speaking of services, Cook stunned investors three years ago when he set a goal to double fiscal 2016 services revenue within four years. Annual services revenue at the time was $24.4 billion, marking the goalpost at a lofty $48.8 billion. Now, just three years later, Apple is on the cusp of fulfilling Cook's vision with quite a bit of time to spare. During the quarter, services generated revenue of $12.7 billion, up 17% year over year, with a tally of $48.1 billion over the trailing-12-months. As Cook noted during the call, Apple has already achieved its target on a run-rate basis.
Apple's wearables, home, and accessories segment has become one of the company's most important growth areas, generating revenue of $10 billion during the quarter, up 37% year over year, while the sub-segment of wearables grew 44%. Cook said the wearables "product category is now the size of a Fortune 150 company." To put that into perspective, the No. 150 company on the list, Broadcom, generated revenue of $20.8 billion in 2019.
With the iPhone becoming a more prominent aspect of Apple's results and the lower gross margins of its flagship device, it was all the more impressive that the company reported gross margin of 38.4%, an increase of 40 basis points sequentially. CFO Luca Maestri attributed the feat to leverage resulting from higher revenue and a favorable mix -- even in the face of a negative 60 basis point headwind due to foreign currency exchange rates. The tech giant's margins improved across both products and services.
Investors celebrated the iPhone's return to growth and Apple's robust quarterly performance by bidding the stock up to a new all-time high above $327 per share. That means that over the past year alone, Apple stock has gained more than 109%, making it one of the best-performing technology stocks during that period.