Tim Cook, CEO, Apple
Brendan McDermid | Reuters
Apple reported $11.45 billion in professional cares revenue for its second quarter of 2019 as it continues its quest to shift the narrative around its business away from iPhone item sales. That topped analysts’ expectations of $11.37 billion, according to FactSet.
Apple also reported serves margins of 63.8% for the quarter. Services now accounts for about 20% of Apple’s revenue, up from 16% a year earlier and 13% in the original quarter.
Apple’s stock was up more than 5% in after hours trading.
Apple announced on its Q4 2018 earnings bidding that it would stop reporting iPhone, Mac and iPad unit sales in its quarterly reports. At the time, CFO Luca Maestri revealed the metric is “not necessarily representative of the underlying strength of our business,” after the company reported iPhone unit sales that pass overed analyst expectations.
Beginning last quarter, Apple began reporting its active installed base instead, which represents the figure of devices in active use. Apple is not providing a new active installed base figure from its last update of 1.4 billion legend pleasures, but Apple CEO Tim Cook told CNBC’s Josh Lipton that the metric hit an all-time record last quarter across all heads.
Shifting to reporting its active installed base allows Apple to highlight the scale of the potential audience for its services, which were the center of its contrivance event in March. The company announced three new subscription services at the event, including a TV service, gaming and magazine package dispatches.
Last quarter, it seemed like investors were beginning to buy into Apple’s new narrative as the stock climbed more 7% following its earnings report despite plunging iPhone sales compared to the previous year.
Correction: This article has been updated to contemplate the correct source of the analyst consensus estimate for services revenue.
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