Transcript: Apple CEO Tim Cook on the company's 2018 Q2 earnings
Apple's second-quarter results for 2018 are in. Here's our transcript of the call.
Apple CEO Tim Cook and CFO Luca Maestri spoke with analysts during the company's Q2 2018 earnings call. Here's our ongoing live transcript of their remarks!
If you want more info on Apple's results, we recommend checking out the awesome charts from Six Colors.
Cook's opening remarks
Tim Cook
We're proud to announce the results of a very successful quarter today, setting new March quarter records for both revenue and earnings. We generated $61.1 billion of revenue. that's up 16% from last year, making it our sixth consecutive quarter of accelerating revenue growth. Our performance was broad-based with iPhone revenue up 14%, services up 31%, and wearables up almost 50%. We grew in each of our geographic segments, and in greater China and Japan, revenue was up more than 20%. iPhone second quarter performance capped a tremendous fiscal first half with $100 billion in iPhone revenue, an increase of $12 billion over last year, setting a new first-half record and achieving our highest first-half growth rate in three years. iPhone gained share during the quarter based on IDC's latest estimates for the global smartphone market and customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. since we split the line with the launch of iPhone 6 and 6 Plus in 2014, this is the first cycle in which the top-of-the-line iPhone model has also been the most popular.
Q2 was our best quarter ever for services and momentum there continues to be incredibly strong. Revenue topped $9 billion for the first time, up more than $2 billion over last year's March quarter. We had all-time record revenue from the App Store, from Apple Music, from iCloud, from Apple Pay, and more — all of which are a powerful illustration of the importance of our huge, active installed base of devices and the loyalty and engagement of our customers. Across all our services, paid subscriptions surpassed $270 million, up over $100 million from a year ago, and up $30 million in the last 90 days alone contributing to the overall increase in services revenue.
Apple Pay continues its strong growth, with active users more than doubling and transactions tripling year over year. We believe the availability of Apple Pay at major transit systems have been a key driver of adoption among commuters, and in March we launched Express Transit with Apple Pay in Beijing and Shanghai — the second and third largest transit systems in the world. Apple Pay is already the most successful mobile transit payment system in Tokyo, which has the busiest transit system of all. With the launch of Brazil in April, Apple Pay is now available in 21 markets and we expect Norway, Poland, and Ukraine to launch in the next several months.
This was another outstanding quarter for our wearables business, which includes Apple Watch, Beats, and AirPods with combined revenue of almost 50% year over year. Looking at its revenue over the last four quarters, our wearables business is now the size of a Fortune 300 company. Apple Watch had another great quarter with revenue growing by strong double digits year over year to a new March quarter record. Millions of customers are using Apple Watch to help them stay active, healthy, and connected, and they have made it a top selling watch in the world. We launched carrier support for Series 3 with cellular in mainland China, Hong Kong, and Thailand during the quarter with more markets on the way. And now with watchOS 4.2, there are more features than ever before. For example, in addition to tracking your workouts and heart rate, skiers and snowboarders can record runs, see vertical descent and calculate speed, as well as contribute data directly to the Apple Watch Activity App. AirPods are incredibly popular and we're seeing them in more and more places — in the gym, in coffee shops, wherever people are enjoying music on their Apple devices. This product is a runaway hit and we're working hard to meet the incredible demand. We started shipping HomePod in February and it's widely recognized as having the best audio quality for its size and class. HomePod is a breakthrough speaker that delivers amazing sound and we believe it will change the way people listen to music at home. It's currently available in the United States, the United Kingdom, and Australia, and we're looking forward to adding new features to HomePod and introducing it to more markets around the world soon.
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