Apple Inc.

Good day, and welcome to the Apple Q2 FY 2022 Earnings Conference call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Teji Scala, Director of Investor Relations and Corporate Finance. Please go ahead.

Thank you. Good afternoon, and thank you for joining us. Speaking first today is Apple CEO Tim Cook, and he'll be followed by CFO Luca Maestri. After that, we'll open the call to questions from analysts. Please note that some of the information you'll hear during today's discussion will consist of forward-looking statements, including, without limitation, those regarding revenue, gross margin, operating expenses, other income and expense, taxes, capital allocation, and future business outlook, including the potential impact of COVID-19 on the company's business and results of operations. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast. For more information, please refer to the risk factors discussed in Apple's most recently filed annual report on Form 10-K and the Form 8-K filed with the SEC today, along with the associated press release. Apple assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. I'd now like to turn the call over to Tim for introductory remarks.

Thank you, Tejas. Good afternoon, everyone, and thank you for joining us today. Apple is proud to report another record quarter with a March quarter revenue record of $97.3 billion, up 9% from a year ago and better than we anticipated. iPhone, Mac, and Wearables Home and Accessories had their best-ever March quarter, and services set an all-time record on the strength of subscription growth over the past year. Before I get into details, I want to take a moment to acknowledge the humanitarian tragedy unfolding in Ukraine. We're continuing to do everything we can to support our teams in the region, and we are donating to humanitarian efforts on the ground. We've also committed to donating products to support refugees arriving here in the United States. I also want to speak to the unpredictable nature of the pandemic. We are excited to be welcoming employees back to the offices in the U.S. and Europe. At the same time, we are monitoring COVID-related disruptions in China. Our thoughts are with all those in the path of the virus, and we remain as committed as ever to doing our part to help protect people and their communities. These times remind us that we cannot know what the future may hold, but they remind us too that technology infused with humanity makes a real difference in the world. And that's where our focus has remained, on driving the innovations that can enrich people's lives. Throughout the quarter, Apple continued its streak of unparalleled innovation at an unmatched pace. With Apple Silicon, our teams are pushing the limits of what we once thought possible, and we are seeing leaps and bounds in performance and efficiency. Last month, we announced another breakthrough with M1 Ultra, the world's most powerful chip for a personal computer. The incredible customer response to our M1-powered Macs helped propel a 15% year-over-year increase in revenue despite supply constraints. We now have our most powerful Mac lineup ever with the addition of the entirely new Mac Studio. Paired with a new studio display, a 5K resolution display equipped with its own A13 Bionic chip, this new desktop and display transform any workspace into a creative powerhouse. As we released the groundbreaking M1 Ultra, we also expanded our iPhone offerings, adding two beautiful green finishes to the iPhone 13 lineup and introducing the new 5G-enabled iPhone SE, which is great for our existing users who want a smaller iPhone and a great value for people buying an iPhone for the first time. They love how much power and performance we've injected into such an affordable device and rave about its incredible camera and its lightning-fast speeds. In the March quarter, iPhone revenue grew 5% over the previous year despite a challenging compare as we saw strong demand from our customers for the iPhone 13 family. And with the all-new iPad Air supercharged by M1, iPad brings more power and more versatility across the entire iPad lineup. For customers around the world, iPad continues to be essential for education, creativity, and entertainment. That's why we're continuing to see such a strong demand for iPad, even while navigating the significant supply constraint we predicted at the start of the quarter. Turning to wearables, home, and accessories, we are pleased to see these products continue to delight our users, growing 12% year over year. Customers are enthusiastically taking charge of their health with Apple Watch Series 7 and Apple Watch SE. The rich sound, beautiful colors, and compact design of HomePod Mini continue to make it a hit with customers. And there's still no better companion to Apple Music than AirPods with spatial audio that transforms the way we listen, putting our customers right in the center of the music. The seamless integration of hardware, software, and services is at the center of our work and philosophy at Apple. Apple services are designed to be easy to use with expert curation that brings our users compelling content from talented developers, creators, storytellers, and artists. These principles are reflected in all of the services we've developed, which continue to generate incredible enthusiasm from our customers. Services revenue rose to $19.8 billion in the March quarter, reflecting a 17% increase from a year ago. We were especially excited to cheer on Coda as it won the Academy Award for Best Picture, making Apple TV Plus the first streaming service to win in this category. We were honored to be stewards of this incredibly powerful, deeply moving film. In a little over two years, Apple TV Plus shows and movies have earned over 240 awards and more than 960 nominations. From Severance to We Crash to Pachinko, new Apple originals are connecting with audiences and earning praise from critics. We're also winning over sports fans with Friday Night Baseball, which debuted earlier this month, and They Call Me Magic, a four-part documentary that premiered last week tracing the life of the iconic Magic Johnson. Fitness Plus is helping users channel their inner athlete with a range of workout routines for any fitness level. We recently introduced a postpartum routine designed by mothers for mothers. And with our Apple Heart and Movement Study, we are helping researchers glean new insights into cardiovascular fitness. As our products and services entertain customers and help them stay healthy, we're also working to make their lives easier. Arizona, for example, is the first state to enable its citizens to securely add their driver's license and state IDs to Apple Wallet. More states and the territory of Puerto Rico will soon follow. We've also announced plans to introduce Tap to Pay on iPhone, a simple and secure way for businesses to accept contactless payments launching across the U.S. later this year. To meet the needs of customers wherever they are, our Apple retail teams are constantly adapting to better serve them. We opened a new store in the United Arab Emirates this quarter at a unique waterfront location with panoramic views of the Abu Dhabi skyline. And earlier this month, we opened a new store in Korea, our third and largest store in the heart of Seoul. And across the U.S., we marked the return of in-person Today at Apple sessions with a special program featuring music from pop icon Lady Gaga. I'd like to thank our team members working in Apple stores, customer care centers, channel partner stores, and our Apple care teams for bringing customers the best of Apple. As we look to the environment, we are making good progress on our commitment to achieve carbon neutrality across our products and supply chain by 2030. Through our green bonds program, we're investing in breakthrough technologies like low-carbon aluminum, which we will be integrating into the new iPhone SE. And we were pleased to announce recently that we've nearly doubled the number of our top suppliers who have committed to accelerating the transition to clean energy. We are also investing in renewable energy projects in communities most impacted by climate change around the world. As we do our part to protect our planet, we're also prioritizing people. As part of our longstanding commitment to inclusion and diversity, we're continuing to build a better, stronger Apple, rooted in a culture where everyone belongs. Last month, we published an update on the progress we've made with inclusion and diversity at Apple. We've hired more women than ever into leadership roles. And in the U.S., nearly 60% of all leadership openings were filled by people from underrepresented communities in 2021. We also recently announced a $50 million supplier employee development fund that will help workers in our supply chain discover additional educational opportunities and build new skills. And through our racial equity and justice initiative, we're continuing to advance our work to support underrepresented communities and help build a more just and equitable world. Before I hand it over to Luca, I want to acknowledge the challenges we are seeing from supply chain disruptions driven by both COVID and silicon shortages to the devastation from the war in Ukraine. We are not immune to these challenges, but we have great confidence in our teams, in our products and services, and in our strategy. Fundamentally, our work is about making technology that enriches people's lives and unlocks the full creative potential of humanity. And though the twists and turns of the future may be uncertain, what is certain is that we will never stop striving to be a force for good in the world in everything we do and everything we are. With that, I'll turn it over to Luca.