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.