Introduction#
Apple Inc. [AAPL] closed fiscal 2024 with $391.04 billion in revenue, marking a +2.02% increase year-over-year. That modest top-line gain belies more striking improvements in profitability, as gross margin widened to 46.21%—the highest level in the last four years. Meanwhile, free cash flow reached $108.81 billion, underscoring the company’s unparalleled ability to generate liquidity. These results come amid mixed handset demand, enterprise AI traction, and a revitalized retail footprint, setting the stage for critical questions about capitalization, investment priorities, and competitive positioning.
Professional Market Analysis Platform
Make informed decisions with institutional-grade data. Track what Congress, whales, and top investors are buying.
Financial Performance Overview#
Apple’s fiscal 2024 income statement reveals incremental revenue growth against a challenging macro backdrop. While total net sales climbed from $383.29 billion in FY 2023 to $391.04 billion in FY 2024, net income dipped slightly to $93.74 billion from $97.00 billion the year prior—a -3.36% decline driven by elevated cost of revenue and flat iPhone unit shipments.
More company-news-AAPL Posts
Apple's Retail Revamp and AI Push Signal Growth Inflection
Apple’s Ginza reopening, Macs as AI infrastructure, and iPhone 17’s +25% pre-order surge set a strategic inflection for AAPL.
Apple's AI Playbook: Navigating iPhone 17, China Headwinds, and the AI Race
Apple’s iPhone 17 rollout and Apple Intelligence will determine if premium pricing and AI-driven Services can restore growth amid China and supply-chain risks.
Apple iPhone 17 Market Impact: Navigating AI Competition, China Risks, and Investor Valuation
iPhone 17’s premium ASPs and Apple Intelligence shape near-term revenue; China demand and AI adoption will determine whether Services and valuation hold or compress.
Table 1 below summarizes the key income statement trends over the past four fiscal years:
| Fiscal Year | Revenue (USD B) | Net Income (USD B) | Net Margin | Gross Margin | Operating Income (USD B) | Operating Margin |
|---|---|---|---|---|---|---|
| 2024 | 391.04 | 93.74 | 23.97% | 46.21% | 123.22 | 31.51% |
| 2023 | 383.29 | 97.00 | 25.31% | 44.13% | 114.30 | 29.82% |
| 2022 | 394.33 | 99.80 | 25.31% | 43.31% | 119.44 | 30.29% |
| 2021 | 365.82 | 94.68 | 25.88% | 41.78% | 108.95 | 29.78% |
Revenue growth of +2.02% in FY 2024 compares with a +2.25% three-year CAGR, indicating subdued top-line momentum relative to past cycles. However, Apple’s disciplined cost management lifted gross margin by over 200 basis points year-on-year and operating income by +7.77%, reflecting tight supply-chain controls and favorable product mix shifts towards services and higher-margin wearables.
Profitability and Margin Analysis#
Over the past four years, Apple has steadily improved its profitability. The gross margin expanded from 41.78% in FY 2021 to 46.21% in FY 2024. This progression underscores the success of pricing power, ongoing transition to service-driven recurring revenue, and engineering optimizations in hardware components.
Operating margin climbed 73 bps to 31.51% in FY 2024, while net margin moderated to 23.97% due to one-off tax adjustments and slightly higher interest expense on debt issuance. Nonetheless, Apple’s net margin remains near the upper quartile for large-cap technology peers, supported by $31.37 billion in R&D investment (8.02% of revenue) and lean SG&A at 6.67% of sales.
Key profitability ratios (TTM):
- ROIC: 47.6% (TTM)
- ROE: 154.9% (TTM)
- EBITDA margin: 34.44% (FY 2024)
Such metrics highlight Apple’s ability to generate outsized returns on deployed capital. The ROIC of 47.6% outpaces the company’s WACC by a wide margin, indicating aggressive reinvestment opportunities and the potential for further value creation.
Cash Flow and Capital Allocation#
Operating cash flow climbed +6.98% to $118.25 billion in FY 2024, fueled by strong EBITDA and working capital improvements. Free cash flow rose +9.26% year-over-year to $108.81 billion, after $9.45 billion in capital expenditures—reflecting measured investment in data centers, tooling, and next-gen product platforms.
Charting Apple’s cash flow trends:
| Cash Flow Metric | FY 2024 (USD B) | FY 2023 (USD B) | FY 2022 (USD B) | FY 2021 (USD B) |
|---|---|---|---|---|
| Net Cash from Operations | 118.25 | 110.54 | 122.15 | 104.04 |
| Capital Expenditure | -9.45 | -10.96 | -10.71 | -11.09 |
| Free Cash Flow | 108.81 | 99.58 | 111.44 | 92.95 |
| Dividends Paid | -15.23 | -15.03 | -14.84 | -14.47 |
| Share Repurchases | -94.95 | -77.55 | -89.40 | -85.97 |
Apple returned $110.18 billion to shareholders in FY 2024 via dividends and buybacks, representing a 113.9% free cash flow payout. While share repurchase spend accelerated +22.4%, the dividend payout ratio remained disciplined at 15.47%.
This balance of high cash returns and continued investment ensures Apple retains financial flexibility to pursue strategic priorities—ranging from AI platform development to potential bolt-on acquisitions in health tech or AR/VR.
Balance Sheet and Financial Health#
Apple’s balance sheet remains robust, albeit with slight shifts in asset composition. Total assets grew 3.5% year-over-year to $364.98 billion, driven by higher receivables and inventory in support of new product launches. Long-term debt decreased to $96.55 billion from $106.55 billion, reflecting debt maturities and opportunistic refinancing at lower rates.
| Balance Sheet Metric | FY 2024 (USD B) | FY 2023 (USD B) | FY 2022 (USD B) | FY 2021 (USD B) |
|---|---|---|---|---|
| Cash & Short-Term Investments | 65.17 | 61.55 | 48.30 | 62.64 |
| Total Current Assets | 152.99 | 143.57 | 135.41 | 134.84 |
| Total Debt | 119.06 | 123.93 | 132.48 | 136.52 |
| Net Debt | 89.12 | 93.97 | 108.83 | 101.58 |
| Total Equity | 56.95 | 62.15 | 50.67 | 63.09 |
| Current Ratio | 0.87x | 0.99x | 0.88x | 1.07x |
The net debt to EBITDA ratio stands at 0.50x, well below peer averages, granting Apple headroom for opportunistic leverage if needed. The current ratio of 0.87x reflects extensive working capital reinvestment but poses no immediate liquidity risk given robust free cash generation.
Valuation Metrics#
At a recent share price of $254.63, Apple trades at a trailing P/E of 35.07x and EV/EBITDA of 27.27x. Forward multiples compress modestly, with consensus 2025 P/E at 33.53x and 2026 P/E at 30.70x, reflecting expectations for EPS growth of 10.3% CAGR through 2028.
Key valuation metrics (TTM):
- Price/Sales: 9.28x
- Price/Book: 57.85x
- EV/Operating Cash Flow: 35.59x
Despite premium multiples, Apple’s growth outlook and capital returns profile justify multiple support—particularly given the enterprise AI opportunity and subscription-based Services segment, now accounting for 23% of revenue.
Strategic Highlights and Market Position#
Services and Recurring Revenue#
Services revenue reached $116.91 billion in FY 2024, up +6.6% year-over-year, driven by App Store, iCloud, and Apple Music subscriptions. The segment’s expanding gross margin (70%+) continues to offset hardware cyclicality, boosting overall profitability.
Enterprise AI and Mac Adoption#
Early traction in generative AI deployments on Apple Silicon has spurred corporate Mac conversions, particularly in creative and software development verticals. While not yet material to guidance, these softness offsets consumer smartphone deceleration and position Apple as a growing player in the enterprise ecosystem.
Retail Revamp and Flagship Stores#
The reopening of Apple Ginza and flagship store upgrades in key markets enhance brand experience. Retail footfall metrics, though confidential, are cited as matching pre-COVID levels in North America and APAC—boding well for cross-sell of high-margin accessories and services.
Competitive Landscape#
Apple’s primary competitors—Samsung, Microsoft, and Google—face mixed performance trends. Samsung’s smartphone share remains under pressure, while Microsoft capitalizes on enterprise cloud. Apple’s integrated hardware-software model and proprietary silicon confer a defensive moat, though regulatory scrutiny (e.g., VOIP-PAL suit) and antitrust inquiries pose operational headwinds.
In wearables, Apple Watch leads global shipments with ~35% share. In tablets, the iPad holds ~28% market share but contends with price-aggressive Android competitors in emerging markets. Apple’s Services and App Store commissions sustain high-return annuity streams relative to ad-driven models.
What This Means For Investors#
Investors should note that Apple’s core strengths—integration, ecosystem lock-in, and capital returns—remain intact despite slower handset growth. Key implications:
- Margin Expansion: Continued mix shift to Services and Accessories underpins profitability even if iPhone volumes plateau.
- Cash Flow Power: Free cash flow yields of ~4.2% on market cap ensure sustained shareholder returns.
- Valuation Discipline: Premium multiples demand execution in AI and emerging product categories (AR/VR) to justify P/E expansion.
- Balance Sheet Flexibility: Low net leverage supports opportunistic M&A or increased buyback funding.
Conclusion#
Apple’s FY 2024 performance underscores its resilience: modest revenue growth, best-in-class margins, and unrivaled cash generation. With enterprise AI momentum, a maturing Services segment, and disciplined capital allocation, Apple remains well-positioned to navigate hardware cycles and deliver sustainable returns. Investors should monitor incremental iPhone 17 demand signals, enterprise Mac adoption rates, and Services ARPU trends as potential catalysts for reaccelerated growth in the coming quarters.