UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number: 001-36743

Apple Inc.
(Exact name of Registrant as specified in its charter)

California 94-2404110
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)

One Apple Park Way

Cupertino, California 95014
(Address of principal executive offices) (Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Trading
Title of each class symbol(s) Name of each exchange on which registered
Common Stock, $0.00001 par value per share AAPL The Nasdaq Stock Market LLC
1.375% Notes due 2024 — The Nasdaq Stock Market LLC
0.000% Notes due 2025 — The Nasdaq Stock Market LLC
0.875% Notes due 2025 — The Nasdaq Stock Market LLC
1.625% Notes due 2026 — The Nasdaq Stock Market LLC
2.000% Notes due 2027 — The Nasdaq Stock Market LLC
1.375% Notes due 2029 — The Nasdaq Stock Market LLC
3.050% Notes due 2029 — The Nasdaq Stock Market LLC
0.500% Notes due 2031 — The Nasdaq Stock Market LLC
3.600% Notes due 2042 — The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to
submit such files).
Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
15,728,702,000 shares of common stock were issued and outstanding as of April 21, 2023.
 Apple Inc.

Form 10-Q
For the Fiscal Quarter Ended April 1, 2023
TABLE OF CONTENTS

Page
Part I
Item 1. Financial Statements 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
Item 4. Controls and Procedures 19
Part II
Item 1. Legal Proceedings 20
Item 1A. Risk Factors 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 21
Item 4. Mine Safety Disclosures 21
Item 5. Other Information 21
Item 6. Exhibits 21
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months Ended Six Months Ended

April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Net sales:
Products $ 73,929 $ 77,457 $ 170,317 $ 181,886
Services 20,907 19,821 41,673 39,337
Total net sales 94,836 97,278 211,990 221,223

Cost of sales:
Products 46,795 49,290 107,560 113,599
Services 6,065 5,429 12,122 10,822
Total cost of sales 52,860 54,719 119,682 124,421
Gross margin 41,976 42,559 92,308 96,802

Operating expenses:
Research and development 7,457 6,387 15,166 12,693
Selling, general and administrative 6,201 6,193 12,808 12,642
Total operating expenses 13,658 12,580 27,974 25,335

Operating income 28,318 29,979 64,334 71,467

Other income/(expense), net 64 160 (329) (87)
Income before provision for income taxes 28,382 30,139 64,005 71,380
Provision for income taxes 4,222 5,129 9,847 11,740
Net income $ 24,160 $ 25,010 $ 54,158 $ 59,640

Earnings per share:

Basic $ 1.53 $ 1.54 $ 3.42 $ 3.65
Diluted $ 1.52 $ 1.52 $ 3.41 $ 3.62

Shares used in computing earnings per share:

Basic 15,787,154 16,278,802 15,839,939 16,335,263
Diluted 15,847,050 16,403,316 15,901,384 16,461,304

See accompanying Notes to Condensed Consolidated Financial Statements.

Apple Inc. | Q2 2023 Form 10-Q | 1

 Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In millions)

Three Months Ended Six Months Ended

April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Net income $ 24,160 $ 25,010 $ 54,158 $ 59,640
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax (95) (21) (109) (381)

Change in unrealized gains/losses on derivative

instruments, net of tax:
Change in fair value of derivative instruments (13) 334 (1,001) 696
Adjustment for net (gains)/losses realized and included
in net income (191) (301) (1,957) (208)
Total change in unrealized gains/losses on
derivative instruments (204) 33 (2,958) 488

Change in unrealized gains/losses on marketable debt

securities, net of tax:
Change in fair value of marketable debt securities 1,403 (5,633) 2,303 (6,809)
Adjustment for net (gains)/losses realized and included
in net income 62 54 127 45
Total change in unrealized gains/losses on
marketable debt securities 1,465 (5,579) 2,430 (6,764)

Total other comprehensive income/(loss) 1,166 (5,567) (637) (6,657)

Total comprehensive income $ 25,326 $ 19,443 $ 53,521 $ 52,983

See accompanying Notes to Condensed Consolidated Financial Statements.

Apple Inc. | Q2 2023 Form 10-Q | 2

 Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions, except number of shares which are reflected in thousands and par value)

April 1, September 24,

2023 2022
ASSETS:
Current assets:
Cash and cash equivalents $ 24,687 $ 23,646
Marketable securities 31,185 24,658
Accounts receivable, net 17,936 28,184
Inventories 7,482 4,946
Vendor non-trade receivables 17,963 32,748
Other current assets 13,660 21,223
Total current assets 112,913 135,405

Non-current assets:
Marketable securities 110,461 120,805
Property, plant and equipment, net 43,398 42,117
Other non-current assets 65,388 54,428
Total non-current assets 219,247 217,350
Total assets $ 332,160 $ 352,755

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current liabilities:
Accounts payable $ 42,945 $ 64,115
Other current liabilities 56,425 60,845
Deferred revenue 8,131 7,912
Commercial paper 1,996 9,982
Term debt 10,578 11,128
Total current liabilities 120,075 153,982

Non-current liabilities:
Term debt 97,041 98,959
Other non-current liabilities 52,886 49,142
Total non-current liabilities 149,927 148,101
Total liabilities 270,002 302,083

Commitments and contingencies

Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares
authorized; 15,723,406 and 15,943,425 shares issued and outstanding, respectively 69,568 64,849
Retained earnings/(Accumulated deficit) 4,336 (3,068)
Accumulated other comprehensive income/(loss) (11,746) (11,109)
Total shareholders’ equity 62,158 50,672
Total liabilities and shareholders’ equity $ 332,160 $ 352,755

See accompanying Notes to Condensed Consolidated Financial Statements.

Apple Inc. | Q2 2023 Form 10-Q | 3

 Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(In millions, except per share amounts)

Three Months Ended Six Months Ended

April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Total shareholders’ equity, beginning balances $ 56,727 $ 71,932 $ 50,672 $ 63,090

Common stock and additional paid-in capital:

Beginning balances 66,399 58,424 64,849 57,365
Common stock issued 690 593 690 593
Common stock withheld related to net share settlement
of equity awards (281) (149) (1,715) (1,412)
Share-based compensation 2,760 2,313 5,744 4,635
Ending balances 69,568 61,181 69,568 61,181

Retained earnings/(Accumulated deficit):

Beginning balances 3,240 14,435 (3,068) 5,562
Net income 24,160 25,010 54,158 59,640
Dividends and dividend equivalents declared (3,684) (3,633) (7,396) (7,298)
Common stock withheld related to net share settlement
of equity awards (152) (190) (1,130) (1,920)
Common stock repurchased (19,228) (22,910) (38,228) (43,272)
Ending balances 4,336 12,712 4,336 12,712

Accumulated other comprehensive income/(loss):

Beginning balances (12,912) (927) (11,109) 163
Other comprehensive income/(loss) 1,166 (5,567) (637) (6,657)
Ending balances (11,746) (6,494) (11,746) (6,494)

Total shareholders’ equity, ending balances $ 62,158 $ 67,399 $ 62,158 $ 67,399

Dividends and dividend equivalents declared per share or RSU $ 0.23 $ 0.22 $ 0.46 $ 0.44

See accompanying Notes to Condensed Consolidated Financial Statements.

Apple Inc. | Q2 2023 Form 10-Q | 4

 Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

Six Months Ended

April 1, March 26,
2023 2022
Cash, cash equivalents and restricted cash, beginning balances $ 24,977 $ 35,929

Operating activities:
Net income 54,158 59,640
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization 5,814 5,434
Share-based compensation expense 5,591 4,517
Other (1,732) 1,068
Changes in operating assets and liabilities:
Accounts receivable, net 9,596 5,542
Inventories (2,548) 1,065
Vendor non-trade receivables 14,785 643
Other current and non-current assets (4,092) (3,542)
Accounts payable (20,764) (1,750)
Other current and non-current liabilities 1,757 2,515
Cash generated by operating activities 62,565 75,132

Investing activities:
Purchases of marketable securities (11,197) (61,987)
Proceeds from maturities of marketable securities 17,124 18,000
Proceeds from sales of marketable securities 1,897 24,668
Payments for acquisition of property, plant and equipment (6,703) (5,317)
Other (247) (735)
Cash generated by/(used in) investing activities 874 (25,371)

Financing activities:
Payments for taxes related to net share settlement of equity awards (2,734) (3,218)
Payments for dividends and dividend equivalents (7,418) (7,327)
Repurchases of common stock (39,069) (43,109)
Repayments of term debt (3,651) (3,750)
Proceeds from/(Repayments of) commercial paper, net (7,960) 999
Other (455) (105)
Cash used in financing activities (61,287) (56,510)

Increase/(Decrease) in cash, cash equivalents and restricted cash 2,152 (6,749)

Cash, cash equivalents and restricted cash, ending balances $ 27,129 $ 29,180

Supplemental cash flow disclosure:

Cash paid for income taxes, net $ 4,894 $ 9,301
Cash paid for interest $ 1,873 $ 1,406

See accompanying Notes to Condensed Consolidated Financial Statements.

Apple Inc. | Q2 2023 Form 10-Q | 5

 Apple Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Summary of Significant Accounting Policies

Basis of Presentation and Preparation

The condensed consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries
(collectively “Apple” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the
Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and
recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated
financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from
those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have
been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and
accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and
accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended September 24, 2022.

The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is
included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which
occurred in the first fiscal quarter of 2023. The Company’s fiscal years 2023 and 2022 span 53 and 52 weeks, respectively.
Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended
in September and the associated quarters, months and periods of those fiscal years.

Earnings Per Share

The following table shows the computation of basic and diluted earnings per share for the three- and six-month periods ended
April 1, 2023 and March 26, 2022 (net income in millions and shares in thousands):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Numerator:
Net income $ 24,160 $ 25,010 $ 54,158 $ 59,640

Denominator:
Weighted-average basic shares outstanding 15,787,154 16,278,802 15,839,939 16,335,263
Effect of dilutive securities 59,896 124,514 61,445 126,041
Weighted-average diluted shares 15,847,050 16,403,316 15,901,384 16,461,304

Basic earnings per share $ 1.53 $ 1.54 $ 3.42 $ 3.65

Diluted earnings per share $ 1.52 $ 1.52 $ 3.41 $ 3.62

Approximately 48 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for the
six months ended April 1, 2023 because their effect would have been antidilutive.

Apple Inc. | Q2 2023 Form 10-Q | 6

Note 2 – Revenue
Net sales disaggregated by significant products and services for the three- and six-month periods ended April 1, 2023 and
March 26, 2022 were as follows (in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
iPhone® $ 51,334 $ 50,570 $ 117,109 $ 122,198
®
Mac 7,168 10,435 14,903 21,287
iPad® 6,670 7,646 16,066 14,894
Wearables, Home and Accessories 8,757 8,806 22,239 23,507
Services 20,907 19,821 41,673 39,337
Total net sales $ 94,836 $ 97,278 $ 211,990 $ 221,223

Total net sales include $3.5 billion of revenue recognized in the three months ended April 1, 2023 that was included in deferred
revenue as of December 31, 2022, $3.0 billion of revenue recognized in the three months ended March 26, 2022 that was
included in deferred revenue as of December 25, 2021, $5.5 billion of revenue recognized in the six months ended April 1, 2023
that was included in deferred revenue as of September 24, 2022, and $4.8 billion of revenue recognized in the six months ended
March 26, 2022 that was included in deferred revenue as of September 25, 2021.

The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment
in Note 10, “Segment Information and Geographic Data” for the three- and six-month periods ended April 1, 2023 and March 26,
2022, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.

As of April 1, 2023 and September 24, 2022, the Company had total deferred revenue of $12.5 billion and $12.4 billion,
respectively. As of April 1, 2023, the Company expects 65% of total deferred revenue to be realized in less than a year, 26%
within one-to-two years, 7% within two-to-three years and 2% in greater than three years.

Note 3 – Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category
as of April 1, 2023 and September 24, 2022 (in millions):
April 1, 2023
Cash and Current Non-Current
Adjusted Unrealized Unrealized Fair Cash Marketable Marketable
Cost Gains Losses Value Equivalents Securities Securities
Cash $ 20,050 $ — $ — $ 20,050 $ 20,050 $ — $ —

Level 1 (1):
Money market funds 1,656 — — 1,656 1,656 — —
Mutual funds 345 5 (26) 324 — 324 —
Subtotal 2,001 5 (26) 1,980 1,656 324 —

Level 2 (2):
U.S. Treasury securities 22,754 1 (1,262) 21,493 9 8,002 13,482
U.S. agency securities 5,743 — (538) 5,205 — 199 5,006
Non-U.S. government securities 17,380 20 (961) 16,439 — 10,222 6,217
Certificates of deposit and time deposits 2,999 — — 2,999 2,881 118 —
Commercial paper 271 — — 271 — 271 —
Corporate debt securities 82,802 32 (6,049) 76,785 91 11,676 65,018
Municipal securities 790 — (20) 770 — 257 513
Mortgage- and asset-backed securities 22,438 9 (2,106) 20,341 — 116 20,225
Subtotal 155,177 62 (10,936) 144,303 2,981 30,861 110,461

Total (3) $ 177,228 $ 67 $ (10,962) $ 166,333 $ 24,687 $ 31,185 $ 110,461

Apple Inc. | Q2 2023 Form 10-Q | 7

 September 24, 2022
Cash and Current Non-Current
Adjusted Unrealized Unrealized Fair Cash Marketable Marketable
Cost Gains Losses Value Equivalents Securities Securities
Cash $ 18,546 $ — $ — $ 18,546 $ 18,546 $ — $ —

Level 1 (1):
Money market funds 2,929 — — 2,929 2,929 — —
Mutual funds 274 — (47) 227 — 227 —
Subtotal 3,203 — (47) 3,156 2,929 227 —
(2)
Level 2 :
U.S. Treasury securities 25,134 — (1,725) 23,409 338 5,091 17,980
U.S. agency securities 5,823 — (655) 5,168 — 240 4,928
Non-U.S. government securities 16,948 2 (1,201) 15,749 — 8,806 6,943
Certificates of deposit and time deposits 2,067 — — 2,067 1,805 262 —
Commercial paper 718 — — 718 28 690 —
Corporate debt securities 87,148 9 (7,707) 79,450 — 9,023 70,427
Municipal securities 921 — (35) 886 — 266 620
Mortgage- and asset-backed securities 22,553 — (2,593) 19,960 — 53 19,907
Subtotal 161,312 11 (13,916) 147,407 2,171 24,431 120,805

Total (3) $ 183,061 $ 11 $ (13,963) $ 169,109 $ 23,646 $ 24,658 $ 120,805

(1) Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.
(2) Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets
and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable
or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
(3) As of April 1, 2023 and September 24, 2022, total marketable securities included $13.1 billion and $12.7 billion, respectively,
that were restricted from general use, related to the State Aid Decision (refer to Note 5, “Income Taxes”) and other
agreements.

The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of
April 1, 2023 (in millions):
Due after 1 year through 5 years $ 81,352
Due after 5 years through 10 years 11,928
Due after 10 years 17,181
Total fair value $ 110,461

Derivative Instruments and Hedging

The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk.
However, the Company may choose not to hedge certain exposures for a variety of reasons, including accounting considerations
or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a
portion of the financial impact resulting from movements in foreign exchange or interest rates.

Foreign Exchange Risk

To protect gross margins from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts,
option contracts or other instruments, and may designate these instruments as cash flow hedges. The Company generally
hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to
12 months.

To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign currency
exchange rates, the Company may enter into forward contracts, cross-currency swaps or other instruments. The Company
designates these instruments as either cash flow or fair value hedges. As of April 1, 2023, the maximum length of time over
which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency
transactions is 19 years.

Apple Inc. | Q2 2023 Form 10-Q | 8

The Company may also enter into derivative instruments that are not designated as accounting hedges to protect gross margins
from certain fluctuations in foreign currency exchange rates, as well as to offset a portion of the foreign currency exchange gains
and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.

Interest Rate Risk

To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may enter into
interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value
hedges.

The notional amounts of the Company’s outstanding derivative instruments as of April 1, 2023 and September 24, 2022 were as
follows (in millions):
April 1, September 24,
2023 2022
Derivative instruments designated as accounting hedges:
Foreign exchange contracts $ 51,119 $ 102,670
Interest rate contracts $ 19,375 $ 20,125

Derivative instruments not designated as accounting hedges:

Foreign exchange contracts $ 111,696 $ 185,381

The gross fair values of the Company’s derivative assets and liabilities as of September 24, 2022 were as follows (in millions):
September 24, 2022
Fair Value of Fair Value of
Derivatives Designated Derivatives Not Designated Total
as Accounting Hedges as Accounting Hedges Fair Value
Derivative assets (1):
Foreign exchange contracts $ 4,317 $ 2,819 $ 7,136

Derivative liabilities (2):

Foreign exchange contracts $ 2,205 $ 2,547 $ 4,752
Interest rate contracts $ 1,367 $ — $ 1,367

(1) Derivative assets are measured using Level 2 fair value inputs and are included in other current assets and other non-
current assets in the Condensed Consolidated Balance Sheet.
(2) Derivative liabilities are measured using Level 2 fair value inputs and are included in other current liabilities and other non-
current liabilities in the Condensed Consolidated Balance Sheet.

The derivative assets above represent the Company’s gross credit exposure if all counterparties failed to perform. To mitigate
credit risk, the Company generally enters into collateral security arrangements that provide for collateral to be received or posted
when the net fair values of certain derivatives fluctuate from contractually established thresholds. To further limit credit risk, the
Company generally enters into master netting arrangements with the respective counterparties to the Company’s derivative
contracts, under which the Company is allowed to settle transactions with a single net amount payable by one party to the other.
As of September 24, 2022, the potential effects of these rights of set-off associated with the Company’s derivative contracts,
including the effects of collateral, would be a reduction to both derivative assets and derivative liabilities of $7.8 billion, resulting
in a net derivative asset of $412 million.

The carrying amounts of the Company’s hedged items in fair value hedges as of April 1, 2023 and September 24, 2022 were as
follows (in millions):
April 1, September 24,
2023 2022
Hedged assets/(liabilities):
Current and non-current marketable securities $ 14,651 $ 13,378
Current and non-current term debt $ (18,249) $ (18,739)

Apple Inc. | Q2 2023 Form 10-Q | 9

Accounts Receivable

Trade Receivables
The Company has considerable trade receivables outstanding with its third-party cellular network carriers, wholesalers, retailers,
resellers, small and mid-sized businesses and education, enterprise and government customers. The Company generally does
not require collateral from its customers; however, the Company will require collateral or third-party credit support in certain
instances to limit credit risk. In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit
insurance for certain customers or by requiring third-party financing, loans or leases to support credit exposure. These credit-
financing arrangements are directly between the third-party financing company and the end customer. As such, the Company
generally does not assume any recourse or credit risk sharing related to any of these arrangements.

As of both April 1, 2023 and September 24, 2022, the Company had one customer that represented 10% or more of total trade
receivables, which accounted for 10%. The Company’s cellular network carriers accounted for 32% and 44% of total trade
receivables as of April 1, 2023 and September 24, 2022, respectively.

Vendor Non-Trade Receivables

The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to
these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these
components directly from suppliers. As of April 1, 2023, the Company had three vendors that individually represented 10% or
more of total vendor non-trade receivables, which accounted for 43%, 19% and 13%. As of September 24, 2022, the Company
had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 54% and
13%.

Note 4 – Condensed Consolidated Financial Statement Details

The following tables show the Company’s condensed consolidated financial statement details as of April 1, 2023 and
September 24, 2022 (in millions):

Inventories
April 1, September 24,
2023 2022
Components $ 3,379 $ 1,637
Finished goods 4,103 3,309
Total inventories $ 7,482 $ 4,946

Property, Plant and Equipment, Net

April 1, September 24,
2023 2022
Gross property, plant and equipment $ 113,066 $ 114,457
Accumulated depreciation and amortization (69,668) (72,340)
Total property, plant and equipment, net $ 43,398 $ 42,117

Other Income/(Expense), Net

The following table shows the detail of other income/(expense), net for the three- and six-month periods ended April 1, 2023 and
March 26, 2022 (in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Interest and dividend income $ 918 $ 700 $ 1,786 $ 1,350
Interest expense (930) (691) (1,933) (1,385)
Other income/(expense), net 76 151 (182) (52)
Total other income/(expense), net $ 64 $ 160 $ (329) $ (87)

Apple Inc. | Q2 2023 Form 10-Q | 10

Note 5 – Income Taxes

European Commission State Aid Decision

On August 30, 2016, the European Commission announced its decision that Ireland granted state aid to the Company by
providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the
Company (the “State Aid Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the
Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated
the application of the tax opinions from that date forward. The Company and Ireland appealed the State Aid Decision to the
General Court of the Court of Justice of the European Union (the “General Court”). On July 15, 2020, the General Court annulled
the State Aid Decision. On September 25, 2020, the European Commission appealed the General Court’s decision to the
European Court of Justice and a hearing has been scheduled for May 23, 2023. The Company believes it would be eligible to
claim a U.S. foreign tax credit for a portion of any incremental Irish corporate income taxes potentially due related to the State
Aid Decision.

Note 6 – Debt

Commercial Paper
The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program.
The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and
share repurchases. As of April 1, 2023 and September 24, 2022, the Company had $2.0 billion and $10.0 billion of Commercial
Paper outstanding, respectively. The following table provides a summary of cash flows associated with the issuance and
maturities of Commercial Paper for the six months ended April 1, 2023 and March 26, 2022 (in millions):
Six Months Ended
April 1, March 26,
2023 2022
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net $ (5,315) $ 4,952

Maturities greater than 90 days:

Proceeds from commercial paper — 1,191
Repayments of commercial paper (2,645) (5,144)
Repayments of commercial paper, net (2,645) (3,953)

Total proceeds from/(repayments of) commercial paper, net $ (7,960) $ 999

Term Debt
As of April 1, 2023 and September 24, 2022, the Company had outstanding fixed-rate notes with varying maturities for an
aggregate carrying amount of $107.6 billion and $110.1 billion, respectively (collectively the “Notes”). As of April 1, 2023 and
September 24, 2022, the fair value of the Company’s Notes, based on Level 2 inputs, was $98.4 billion and $98.8 billion,
respectively.

Note 7 – Shareholders’ Equity

Share Repurchase Program

During the six months ended April 1, 2023, the Company repurchased 262 million shares of its common stock under an
authorized share repurchase program for $38.1 billion, excluding excise tax due under the Inflation Reduction Act of 2022. The
program does not obligate the Company to acquire a minimum amount of shares. Under the program, shares may be
repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended.

Apple Inc. | Q2 2023 Form 10-Q | 11

Note 8 – Benefit Plans

Restricted Stock Units

A summary of the Company’s RSU activity and related information for the six months ended April 1, 2023 is as follows:
Number of Weighted-Average Aggregate
RSUs Grant Date Fair Fair Value
(in thousands) Value Per RSU (in millions)
Balance as of September 24, 2022 201,501 $ 109.48
RSUs granted 84,902 $ 149.73
RSUs vested (54,795) $ 86.72
RSUs canceled (4,671) $ 122.79
Balance as of April 1, 2023 226,937 $ 129.76 $ 37,422

The fair value as of the respective vesting dates of RSUs was $1.1 billion and $8.0 billion for the three- and six-month periods
ended April 1, 2023, respectively, and was $1.0 billion and $9.5 billion for the three- and six-month periods ended March 26,
2022, respectively.

Share-Based Compensation
The following table shows share-based compensation expense and the related income tax benefit included in the Condensed
Consolidated Statements of Operations for the three- and six-month periods ended April 1, 2023 and March 26, 2022 (in
millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Share-based compensation expense $ 2,686 $ 2,252 $ 5,591 $ 4,517
Income tax benefit related to share-based compensation
expense $ (620) $ (649) $ (1,798) $ (2,185)

As of April 1, 2023, the total unrecognized compensation cost related to outstanding RSUs and stock options was $23.2 billion,
which the Company expects to recognize over a weighted-average period of 2.8 years.

Note 9 – Commitments and Contingencies

Unconditional Purchase Obligations

The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services
(“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of supplier
arrangements, licensed content and distribution rights. Future payments under noncancelable unconditional purchase obligations
with a remaining term in excess of one year as of April 1, 2023, are as follows (in millions):
2023 (remaining six months) $ 2,263
2024 2,716
2025 2,028
2026 2,602
2027 571
Thereafter 5,897
Total $ 16,077

Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that
have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at
least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual,
concerning loss contingencies for asserted legal and other claims.

Apple Inc. | Q2 2023 Form 10-Q | 12

Note 10 – Segment Information and Geographic Data
The following table shows information by reportable segment for the three- and six-month periods ended April 1, 2023 and March
26, 2022 (in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Americas:
Net sales $ 37,784 $ 40,882 $ 87,062 $ 92,378
Operating income $ 13,927 $ 15,279 $ 31,791 $ 34,864

Europe:
Net sales $ 23,945 $ 23,287 $ 51,626 $ 53,036
Operating income $ 9,368 $ 8,505 $ 19,385 $ 20,050

Greater China:
Net sales $ 17,812 $ 18,343 $ 41,717 $ 44,126
Operating income $ 7,531 $ 8,112 $ 17,968 $ 19,295

Japan:
Net sales $ 7,176 $ 7,724 $ 13,931 $ 14,831
Operating income $ 3,394 $ 3,496 $ 6,630 $ 6,845

Rest of Asia Pacific:

Net sales $ 8,119 $ 7,042 $ 17,654 $ 16,852
Operating income $ 3,268 $ 2,823 $ 7,119 $ 6,818

A reconciliation of the Company’s segment operating income to the Condensed Consolidated Statements of Operations for the
three- and six-month periods ended April 1, 2023 and March 26, 2022 is as follows (in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Segment operating income $ 37,488 $ 38,215 $ 82,893 $ 87,872
Research and development expense (7,457) (6,387) (15,166) (12,693)
Other corporate expenses, net (1,713) (1,849) (3,393) (3,712)
Total operating income $ 28,318 $ 29,979 $ 64,334 $ 71,467

Apple Inc. | Q2 2023 Form 10-Q | 13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section and other parts of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking
statements provide current expectations of future events based on certain assumptions and include any statement that does
not directly relate to any historical or current fact. For example, statements in this Form 10-Q regarding the potential future
impact of macroeconomic conditions on the Company’s business and results of operations are forward-looking statements.
Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not
guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I,
Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 24, 2022 (the “2022 Form 10-K”)
under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for
any reason, except as required by law.

Unless otherwise stated, all information presented herein is based on the Company’s fiscal calendar, and references to
particular years, quarters, months or periods refer to the Company’s fiscal years ended in September and the associated
quarters, months and periods of those fiscal years. Each of the terms the “Company” and “Apple” as used herein refers
collectively to Apple Inc. and its wholly owned subsidiaries, unless otherwise stated.

The following discussion should be read in conjunction with the 2022 Form 10-K filed with the U.S. Securities and Exchange
Commission (the “SEC”) and the condensed consolidated financial statements and accompanying notes included in Part I,
Item 1 of this Form 10-Q.

Available Information
The Company periodically provides certain information for investors on its corporate website, www.apple.com, and its investor
relations website, investor.apple.com. This includes press releases and other information about financial performance,
information on environmental, social and governance matters, and details related to the Company’s annual meeting of
shareholders. The information contained on the websites referenced in this Form 10-Q is not incorporated by reference into this
filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.

Business Seasonality and Product Introductions

The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in
part to seasonal holiday demand. Additionally, new product and service introductions can significantly impact net sales, cost of
sales and operating expenses. The timing of product introductions can also impact the Company’s net sales to its indirect
distribution channels as these channels are filled with new inventory following a product launch, and channel inventory of an
older product often declines as the launch of a newer product approaches. Net sales can also be affected when consumers and
distributors anticipate a product introduction.

Fiscal Period
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is
included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which
occurred in the first quarter of 2023. The Company’s fiscal years 2023 and 2022 span 53 and 52 weeks, respectively.

Quarterly Highlights
Weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on the Company’s total net sales, which
decreased 3% or $2.4 billion during the second quarter of 2023 compared to the same quarter in 2022. The year-over-year net
sales decrease consisted primarily of lower net sales of Mac, partially offset by higher net sales of Services.

During the second quarter of 2023, the Company announced the following new products:
• MacBook Pro® 14” and MacBook Pro 16”, powered by the Apple M2 Pro and M2 Max chip;
• Mac mini®, powered by the Apple M2 and M2 Pro chip; and
• Second-generation HomePod®.

The Company repurchased $19.1 billion of its common stock and paid dividends and dividend equivalents of $3.7 billion during
the second quarter of 2023.

Apple Inc. | Q2 2023 Form 10-Q | 14

Macroeconomic Conditions
Macroeconomic conditions, including inflation, changes in interest rates, and currency fluctuations, have directly and indirectly
impacted, and could in the future materially impact, the Company’s results of operations and financial condition.

Segment Operating Performance

The following table shows net sales by reportable segment for the three- and six-month periods ended April 1, 2023 and
March 26, 2022 (dollars in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 Change 2023 2022 Change
Net sales by reportable segment:
Americas $ 37,784 $ 40,882 (8)% $ 87,062 $ 92,378 (6)%
Europe 23,945 23,287 3% 51,626 53,036 (3)%
Greater China 17,812 18,343 (3)% 41,717 44,126 (5)%
Japan 7,176 7,724 (7)% 13,931 14,831 (6)%
Rest of Asia Pacific 8,119 7,042 15 % 17,654 16,852 5%
Total net sales $ 94,836 $ 97,278 (3)% $ 211,990 $ 221,223 (4)%

Americas
Americas net sales decreased during the second quarter and first six months of 2023 compared to the same periods in 2022 due
primarily to lower net sales of iPhone and Mac, partially offset by higher net sales of Services.

Europe
The weakness in foreign currencies relative to the U.S. dollar had a net unfavorable year-over-year impact on Europe net sales
during the second quarter and first six months of 2023. During the second quarter of 2023, the Europe net sales increase
consisted primarily of higher net sales of iPhone, partially offset by lower net sales of Mac. During the first six months of 2023,
the Europe net sales decrease consisted primarily of lower net sales of Mac, partially offset by higher net sales of iPhone.

Greater China
The weakness in the renminbi relative to the U.S. dollar had an unfavorable year-over-year impact on Greater China net sales
during the second quarter and first six months of 2023. During the second quarter and first six months of 2023, the Greater China
net sales decrease consisted primarily of lower net sales of iPhone and Mac.

Japan
The weakness in the yen relative to the U.S. dollar had an unfavorable year-over-year impact on Japan net sales during the
second quarter and first six months of 2023. During the second quarter of 2023, the Japan net sales decrease consisted
primarily of lower net sales of iPad, Services and iPhone. During the first six months of 2023, the Japan net sales decrease
consisted primarily of lower net sales of Services, Wearables, Home and Accessories and Mac.

Rest of Asia Pacific

The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on Rest of Asia Pacific
net sales during the second quarter and first six months of 2023. During the second quarter and first six months of 2023, the
Rest of Asia Pacific net sales increase consisted primarily of higher net sales of iPhone, partially offset by lower net sales of Mac.

Apple Inc. | Q2 2023 Form 10-Q | 15

Products and Services Performance
The following table shows net sales by category for the three- and six-month periods ended April 1, 2023 and March 26, 2022
(dollars in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 Change 2023 2022 Change
Net sales by category:
iPhone $ 51,334 $ 50,570 2% $ 117,109 $ 122,198 (4)%
Mac 7,168 10,435 (31)% 14,903 21,287 (30)%
iPad 6,670 7,646 (13)% 16,066 14,894 8%
Wearables, Home and Accessories 8,757 8,806 (1)% 22,239 23,507 (5)%
Services 20,907 19,821 5% 41,673 39,337 6%
Total net sales $ 94,836 $ 97,278 (3)% $ 211,990 $ 221,223 (4)%

iPhone
iPhone net sales were relatively flat during the second quarter of 2023 compared to the second quarter of 2022. Year-over-year
iPhone net sales decreased during the first six months of 2023 due primarily to lower net sales from the Company’s new iPhone
models launched in the fourth quarter of 2022.

Mac
Mac net sales decreased during the second quarter and first six months of 2023 compared to the same periods in 2022 due
primarily to lower net sales of MacBook Pro.

iPad
iPad net sales decreased during the second quarter of 2023 compared to the second quarter of 2022 due primarily to lower net
sales of iPad Pro® and iPad Air®. Year-over-year iPad net sales increased during the first six months of 2023 due primarily to
higher net sales of iPad, partially offset by lower net sales of iPad mini®.

Wearables, Home and Accessories

Wearables, Home and Accessories net sales were relatively flat during the second quarter of 2023 compared to the second
quarter of 2022. Year-over-year Wearables, Home and Accessories net sales decreased during the first six months of 2023 due
primarily to lower net sales of AirPods®.

Services
Services net sales increased during the second quarter and first six months of 2023 compared to the same periods in 2022 due
primarily to higher net sales from cloud services, music and advertising.

Apple Inc. | Q2 2023 Form 10-Q | 16

Gross Margin
Products and Services gross margin and gross margin percentage for the three- and six-month periods ended April 1, 2023 and
March 26, 2022 were as follows (dollars in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Gross margin:
Products $ 27,134 $ 28,167 $ 62,757 $ 68,287
Services 14,842 14,392 29,551 28,515
Total gross margin $ 41,976 $ 42,559 $ 92,308 $ 96,802

Gross margin percentage:

Products 36.7% 36.4% 36.8% 37.5%
Services 71.0% 72.6% 70.9% 72.5%
Total gross margin percentage 44.3% 43.7% 43.5% 43.8%

Products Gross Margin

Products gross margin decreased during the second quarter and first six months of 2023 compared to the same periods in 2022
due primarily to lower Products volume and the weakness in foreign currencies relative to the U.S. dollar, partially offset by a
different Products mix.

Products gross margin percentage increased during the second quarter of 2023 compared to the second quarter of 2022 due
primarily to a different Products mix, partially offset by the weakness in foreign currencies relative to the U.S. dollar. Year-over-
year Products gross margin percentage decreased during the first six months of 2023 due primarily to the weakness in foreign
currencies relative to the U.S. dollar, partially offset by a different Products mix.

Services Gross Margin

Services gross margin increased during the second quarter and first six months of 2023 compared to the same periods in 2022
due primarily to higher Services net sales, partially offset by the weakness in foreign currencies relative to the U.S. dollar and
higher Services costs.

Services gross margin percentage decreased during the second quarter and first six months of 2023 compared to the same
periods in 2022 due primarily to the weakness in foreign currencies relative to the U.S. dollar and higher Services costs, partially
offset by improved leverage.

The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of the 2022 Form
10-K under the heading “Risk Factors.” As a result, the Company believes, in general, gross margins will be subject to volatility
and downward pressure.

Apple Inc. | Q2 2023 Form 10-Q | 17

Operating Expenses
Operating expenses for the three- and six-month periods ended April 1, 2023 and March 26, 2022 were as follows (dollars in
millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Research and development $ 7,457 $ 6,387 $ 15,166 $ 12,693
Percentage of total net sales 8% 7% 7% 6%

Selling, general and administrative $ 6,201 $ 6,193 $ 12,808 $ 12,642

Percentage of total net sales 7% 6% 6% 6%

Total operating expenses $ 13,658 $ 12,580 $ 27,974 $ 25,335

Percentage of total net sales 14% 13% 13% 11%

Research and Development

The growth in research and development (“R&D”) expense during the second quarter and first six months of 2023 compared to
the same periods in 2022 was driven primarily by increases in headcount-related expenses.

Selling, General and Administrative

Selling, general and administrative expense was relatively flat during the second quarter and first six months of 2023 compared
to the same periods in 2022.

Provision for Income Taxes

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and six-month periods ended
April 1, 2023 and March 26, 2022 were as follows (dollars in millions):
Three Months Ended Six Months Ended
April 1, March 26, April 1, March 26,
2023 2022 2023 2022
Provision for income taxes $ 4,222 $ 5,129 $ 9,847 $ 11,740
Effective tax rate 14.9% 17.0% 15.4% 16.4%
Statutory federal income tax rate 21% 21% 21% 21%

The Company’s effective tax rate for the second quarter of 2023 was lower than the statutory federal income tax rate due
primarily to a lower effective tax rate on foreign earnings and the U.S. federal R&D credit, partially offset by state income taxes.
The Company’s effective tax rate for the first six months of 2023 was lower than the statutory federal income tax rate due
primarily to a lower effective tax rate on foreign earnings, the U.S. federal R&D credit and tax benefits from share-based
compensation, partially offset by state income taxes.

The Company’s effective tax rate for the second quarter of 2023 was lower compared to the second quarter of 2022 due
primarily to the impact of U.S. foreign tax credit regulations issued by the U.S. Department of the Treasury in 2022 and a higher
U.S. federal R&D credit. The Company’s effective tax rate for the first six months of 2023 was lower compared to the same
period in 2022 due primarily to the impact of U.S. foreign tax credit regulations issued by the U.S. Department of the Treasury in
2022 and a higher U.S. federal R&D credit, partially offset by lower tax benefits from share-based compensation.

Liquidity and Capital Resources

The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, along with cash generated
by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return
program over the next 12 months and beyond.

The Company’s contractual cash requirements have not changed materially since the 2022 Form 10-K, except for commercial
paper and manufacturing purchase obligations.

Apple Inc. | Q2 2023 Form 10-Q | 18

Commercial Paper
The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. As
of April 1, 2023, the Company had $2.0 billion of Commercial Paper outstanding, all of which was payable within 12 months.

Manufacturing Purchase Obligations

The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform
final assembly and testing of finished products. The Company also obtains individual components for its products from a wide
variety of individual suppliers. Outsourcing partners acquire components and build product based on demand information
supplied by the Company, which typically covers periods up to 150 days. As of April 1, 2023, the Company had manufacturing
purchase obligations of $40.5 billion, with $40.1 billion payable within 12 months. The Company’s manufacturing purchase
obligations are primarily noncancelable.

Capital Return Program

In addition to its contractual cash requirements, the Company has an authorized share repurchase program, under which the
remaining availability was $22.6 billion as of April 1, 2023. On May 4, 2023, the Company announced the Board of Directors had
authorized an additional program to repurchase up to $90 billion of the Company’s common stock. The programs do not obligate
the Company to acquire a minimum amount of shares.

On May 4, 2023, the Company also announced the Board of Directors raised the Company’s quarterly cash dividend from $0.23
to $0.24 per share, beginning with the dividend to be paid during the third quarter of 2023. The Company intends to increase its
dividend on an annual basis, subject to declaration by the Board of Directors.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles
and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management
to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Summary of Significant Accounting
Policies” of the Notes to condensed consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to
Consolidated Financial Statements in Part II, Item 8 of the 2022 Form 10-K describe the significant accounting policies and
methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material
changes to the Company’s critical accounting estimates since the 2022 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company’s market risk during the first six months of 2023. For a discussion of the
Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and
Qualitative Disclosures About Market Risk” of the 2022 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal
executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective
as of April 1, 2023 to provide reasonable assurance that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in
the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal
executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the second quarter of 2023, which were
identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the
Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.

Apple Inc. | Q2 2023 Form 10-Q | 19

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Epic Games
Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “Northern California
District Court”) against the Company alleging violations of federal and state antitrust laws and California’s unfair competition law
based upon the Company’s operation of its App Store®. The Company filed a counterclaim for breach of contract. On September
10, 2021, the Northern California District Court ruled in favor of the Company with respect to nine out of the ten counts included
in Epic’s claim, and in favor of the Company with respect to the Company’s claims for breach of contract. The Northern California
District Court found that certain provisions of the Company’s App Store Review Guidelines violate California’s unfair competition
law and issued an injunction. On April 24, 2023, the U.S. Court of Appeals for the Ninth Circuit affirmed the Northern California
District Court’s ruling. The Company is considering further review of the decision.

Other Legal Proceedings

The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the
ordinary course of business. The Company settled certain matters during the second quarter of 2023 that did not individually or
in the aggregate have a material impact on the Company’s financial condition or operating results. The outcome of litigation is
inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above
management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially
adversely affected.

Item 1A. Risk Factors

The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of
factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2022 Form 10-K under the
heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business, reputation,
results of operations, financial condition and stock price can be materially and adversely affected. There have been no material
changes to the Company’s risk factors since the 2022 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Share repurchase activity during the three months ended April 1, 2023 was as follows (in millions, except number of shares,
which are reflected in thousands, and per share amounts):
Total Number
of Shares Approximate
Purchased as Dollar Value of
Average Part of Publicly Shares That May
Total Number Price Announced Yet Be Purchased
of Shares Paid Per Plans or Under the Plans
Periods Purchased Share Programs or Programs (1)
January 1, 2023 to February 4, 2023:
Open market and privately negotiated purchases 36,980 $ 135.21 36,980

February 5, 2023 to March 4, 2023:

Open market and privately negotiated purchases 49,168 $ 150.33 49,168

March 5, 2023 to April 1, 2023:

Open market and privately negotiated purchases 43,164 $ 155.32 43,164
Total 129,312 $ 22,570

(1) On April 28, 2022, the Board of Directors authorized the purchase of an additional $90 billion of the Company’s common
stock under a share repurchase program. As of April 1, 2023, total utilization under the April 2022 authorization was $67.4
billion. On May 4, 2023, the Company announced the Board of Directors had authorized an additional program to repurchase
up to $90 billion of the Company’s common stock. The programs do not obligate the Company to acquire a minimum amount
of shares. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including
under plans complying with Rule 10b5-1 under the Exchange Act.

Apple Inc. | Q2 2023 Form 10-Q | 20

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the three months ended April 1, 2023, Katherine L. Adams, Timothy D. Cook, Luca Maestri, Deirdre O’Brien and Jeffrey
Williams, each an officer for purposes of Section 16 of the Exchange Act, had equity trading plans in place in accordance with
Rule 10b5-1(c)(1) under the Exchange Act. An equity trading plan is a written document that preestablishes the amounts, prices
and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock,
including sales of shares acquired under the Company’s employee and director equity plans.

Item 6. Exhibits
Incorporated by Reference
Filing Date/
Exhibit Period End
Number Exhibit Description Form Exhibit Date
31.1* Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2* Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1** Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
101* Inline XBRL Document Set for the condensed consolidated financial statements
and accompanying notes in Part I, Item 1, “Financial Statements” of this
Quarterly Report on Form 10-Q.
104* Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in
the Exhibit 101 Inline XBRL Document Set.

* Filed herewith.
** Furnished herewith.

Apple Inc. | Q2 2023 Form 10-Q | 21

 SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Date: May 4, 2023 Apple Inc.

By: /s/ Luca Maestri

Luca Maestri
Senior Vice President,
Chief Financial Officer

Apple Inc. | Q2 2023 Form 10-Q | 22

 Exhibit 31.1

CERTIFICATION

I, Timothy D. Cook, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Apple Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods
presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred
during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control
over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons
performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize
and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the Registrant’s internal control over financial reporting.

Date: May 4, 2023

By: /s/ Timothy D. Cook

Timothy D. Cook
Chief Executive Officer
 Exhibit 31.2

CERTIFICATION

I, Luca Maestri, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Apple Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods
presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred
during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control
over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons
performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize
and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the Registrant’s internal control over financial reporting.

Date: May 4, 2023

By: /s/ Luca Maestri

Luca Maestri
Senior Vice President,
Chief Financial Officer
 Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy D. Cook, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that the Quarterly Report of Apple Inc. on Form 10-Q for the period ended April 1, 2023 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained
in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Apple Inc. at the
dates and for the periods indicated.

Date: May 4, 2023

By: /s/ Timothy D. Cook

Timothy D. Cook
Chief Executive Officer

I, Luca Maestri, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that the Quarterly Report of Apple Inc. on Form 10-Q for the period ended April 1, 2023 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained
in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Apple Inc. at the
dates and for the periods indicated.

Date: May 4, 2023

By: /s/ Luca Maestri

Luca Maestri
Senior Vice President,
Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Apple Inc. and will be retained by Apple
Inc. and furnished to the Securities and Exchange Commission or its staff upon request.