Apple reports FY4Q23 earnings on Thursday. Today’s update contains the second half of Neil’s earnings preview. The first half is available here. The update begins with Neil’s granular financial estimates. The discussion includes qualitative explanations for estimates related to Apple’s product categories. We then look at Neil’s expectations for what Apple will say about guidance (FY1Q24). We conclude with Neil’s updated Apple earnings model and how the model has changed over the past three months. Access to Neil’s Apple earnings model is a benefit associated with Above Avalon membership at no additional cost.

Hello everyone. Welcome to November.

We will continue our Apple 4Q23 earnings preview with a look at my granular estimates. The update also includes a few thoughts on Apple’s FY1Q24 guidance and my updated earnings model.

In keeping with our usual practice, tomorrow’s update (Thursday) will be pushed back a day so that we have a special Friday edition of the update to review Apple’s earnings. Apple will release earnings Thursday at 4:30 pm ET.

My 4Q23 Apple Estimates

Here are my granular estimates for Apple’s 4Q23:

Revenue: $88.9B (consensus: $84.2B)
Overall gross margin: 44.9% (guidance: 44% to 45%)
Gross margin (HW): 36.7%
Gross margin (Services): 70.7%

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