Apple Inc. (AAPL): FY2024 Review — Revenue, Cash & Buybacks

Apple Inc. (AAPL) — FY2024 snapshot#

Apple reported a mixed set of results in its FY2024 accounts: revenue rose to $391.04B (+2.02% vs FY2023) even as net income declined to $93.74B (-3.36%), driven in large part by a higher effective tax rate. At the same time the company generated $108.81B of free cash flow (+9.26%) and executed $94.95B of share repurchases, producing total shareholder distributions of $110.18B for the year. That profile — modest top-line growth, strengthening cash conversion, compressed net profit and very large capital returns — sets up competing signals about growth, profitability and capital allocation that merit a line-by-line, numbers-first read of the statements for [AAPL].

Income-statement trends#

Across FY2021–FY2024 Apple’s top line moved from $365.82B to $391.04B. The pattern is not linear: revenue rose +7.79% in 2022, fell -2.80% in 2023, then recovered +2.02% in 2024. Put another way, the three‑year compound annual growth rate (CAGR) from FY2021 to FY2024 is approximately +2.24% (calculated as (391.04 / 365.82)^(1/3) - 1 = +2.24%). These numbers are from the company income statements provided for FY2021–FY2024.

Profitability shows a mixed but instructive picture: gross profit expanded to $180.68B in FY2024, delivering a gross margin of 46.21% (calculated: 180.68 / 391.04 = 0.4621). Operating income rose to $123.22B, producing an operating margin of 31.51% (123.22 / 391.04 = 31.51%). The operating line outperformed the top line because cost of goods sold and product mix improvements pushed gross margin higher while operating expenses grew more slowly in percentage terms than revenue.

Despite stronger gross and operating margins, net income fell to $93.74B (-3.36%). The principal arithmetic driver is an increase in the effective tax rate: FY2024 income before tax was $123.48B and net income $93.74B, implying an effective tax rate of roughly 24.09% ((123.48 - 93.74) / 123.48 = 24.09%). By contrast, FY2023’s effective tax rate was ~14.72% — a swing that largely explains why net income lagged despite higher operating income. The income statement metrics below summarize the four-year trend and include the calculations used for margins.

Rising investment in R&D and operating expenses matters in the margin story. Research & development expense increased from $21.91B (5.99% of revenue) in FY2021 to $31.37B (8.02% of revenue) in FY2024 (calculated: 31.37 / 391.04 = 8.02%). Selling, general & administrative expense (SG&A) likewise rose in absolute terms and as a percent of sales to 6.68% in FY2024 (26.10 / 391.04 = 6.68%). Those operating cost items explain why operating expenses as a share of revenue increased from 12.00% (FY2021) to 14.69% (FY2024), even as operating income expanded on a dollar basis.

Cash-flow quality#

Operating cash flow and free cash flow are strengths in FY2024. Net cash provided by operating activities came in at $118.25B, up from $110.54B in FY2023; free cash flow was $108.81B, up +9.26% vs FY2023 (calculated: (108.81 - 99.58) / 99.58 = +9.27%). Cash conversion — operating cash flow divided by net income — was strong at ~126.16% in FY2024 (118.25 / 93.74 = 1.2616, or 126.16%), indicating that accounting earnings are being converted into cash at a robust pace.

Capital expenditures have moderated as a share of revenues: FY2024 capex was $9.45B (reported as -$9.45B), or approximately 2.42% of revenue (9.45 / 391.04 = 2.42%), down from ~2.86% in FY2023. The combination of higher free cash flow and reduced capex produced a free cash flow margin of 27.84% in FY2024 (108.81 / 391.04 = 27.84%). That margin is unusually high for a hardware-centric company and is a core reason Apple can simultaneously invest, pay a dividend and repurchase large amounts of stock.

Financing activity shows very large distributions: share repurchases totaled $94.95B in FY2024 and dividends paid were $15.23B, so total cash returned to shareholders was $110.18B. Two arithmetic facts are material: buybacks alone were roughly 101.35% of net income (94.95 / 93.74 = 1.0135) and total distributions were about 101.25% of free cash flow (110.18 / 108.81 = 1.0125). In short, distributions in FY2024 modestly exceeded FCF and exceeded net income; the gap has been bridged by Apple’s balance-sheet liquidity and financing operations.

Balance-sheet changes and composition#

Total assets increased modestly to $364.98B in FY2024 from $352.58B the prior year, a rise of $12.40B (≈ +3.52%) (calculation: 364.98 - 352.58 = 12.40). Over the same period total liabilities rose by $17.59B (308.03 - 290.44 = 17.59), while total stockholders’ equity declined by $5.20B (56.95 - 62.15 = -5.20). The immediate accounting implication is a smaller equity cushion: equity as a percent of assets fell to ~15.6% (56.95 / 364.98 = 15.61%), down from ~17.6% the year before.

Debt dynamics were mixed. Reported long‑term debt declined by $10.00B (from 106.55 to 96.55), and total debt fell by $4.87B (123.93 to 119.06). Using the company’s convention of net debt = total debt − cash & cash equivalents (not including short‑term investments), net debt improved to $89.12B in FY2024 (119.06 − 29.94 = 89.12). If one uses a broader definition that subtracts cash and short‑term investments, net debt is smaller (119.06 − 65.17 = $53.89B). Either way, gearing metrics (net debt / EBITDA) remain low — well below 1x — indicating ample financial headroom on an operational cash-flow basis.

A notable balance-sheet item is retained earnings, which moved from −$0.214B (FY2023) to −$19.15B (FY2024) — a decline of ≈$18.94B. That swing, together with massive buybacks, explains most of the drop in shareholder equity despite positive net income. A simple cash-flow reconciliation (starting equity + net income - repurchases - dividends) does not exactly equal reported ending equity; the arithmetic indicates there are other components (foreign currency translation, other comprehensive income, treasury-stock entries) that offset or supplement the direct flows by roughly +$11.24B in FY2024 (calculation shown in the analysis). Those accounting movements matter because aggressive repurchases mechanically reduce equity and can distort book-value‑based ratios.

Key ratio calculations and data handling#

This section lays out the key ratios I calculated directly from the raw statements and the assumptions used. Where multiple data points in the feed conflicted, I prioritized the line-item financial statements (income statement, balance sheet, cash-flow statement) as the primary source for aggregated-dollar calculations (margins, flows, leverage). For share-based ratios (P/E using per-share EPS) I relied on the fundamentals TTM EPS when available, and flagged conflicts when the quote-level EPS differed.

Representative calculated ratios (all derived from the numbers above):

• Cash conversion (OCF / Net Income) FY2024 = 118.25 / 93.74 = 126.16%.
• Free cash flow margin FY2024 = 108.81 / 391.04 = 27.84%.
• Net margin FY2024 = 93.74 / 391.04 = 23.97%.
• Gross margin FY2024 = 180.68 / 391.04 = 46.21%.
• Effective tax rate FY2024 = (123.48 - 93.74) / 123.48 = 24.09%.
  These are arithmetic calculations performed on the raw FY2024 line items.

Capital‑structure and market multiples (explicit formulas and results): enterprise value (EV) is approximated as market capitalization + total debt − cash & short‑term investments. Using the provided market capitalization of $3,466.27B and FY2024 totals (debt = 119.06, cash+short investments = 65.17) gives EV ≈ $3,520.16B (3,466.27 + 119.06 − 65.17 = 3,520.16). EV / FY2024 EBITDA = 3,520.16 / 134.66 ≈ 26.15x. Price‑to‑sales (market cap / revenue) = 3,466.27 / 391.04 ≈ 8.87x. Price‑to‑earnings computed as price / EPS depends on EPS input: using the fundamentals TTM EPS of 6.66 gives a P/E ≈ 35.03x (price 233.33 / 6.66 = 35.03). Note: there is an internal discrepancy in the feed where quote-level EPS and P/E differ; I have flagged and documented that choice below.

Data conflicts and how they were handled#

The dataset includes a few internally inconsistent per‑share items versus aggregate-dollar lines. For example, the quote block lists EPS as 7.26 and a P/E of 32.14x, while the fundamentals TTM EPS is 6.66 and a P/E of 35.06x. Because share-count consistency requires using either market cap and price or company-reported EPS and shares, I prioritized the fundamentals TTM EPS for EPS-driven ratios and used the explicit market-cap figure for enterprise-value computations. Where the company’s balance-sheet and cash-flow aggregates were available, those totals were used as the authoritative source for flow and leverage calculations. All percentage and ratio calculations shown above are reproduced from those line items.

What the numbers reveal (not narrative claims)#

First, Apple’s profit engine remains extremely productive at the operating level. Gross margin expanded to 46.21% and operating margin to 31.51% in FY2024, implying sustained pricing power and/or a favorable product and services mix. The company produced $123.22B of operating income on $391.04B of sales, and operating income increased even as revenue growth stayed modest; that points to operational leverage working in Apple’s favor.

Second, the net-income compression in FY2024 is primarily an after‑tax phenomenon. While operating income rose, net income fell because the effective tax rate jumped to roughly 24.09% from the mid‑teens a year earlier. The taxation swing (an increase of ~9.4 percentage points) is the single largest numerical factor explaining the net-income decline. This is a deterministic accounting effect: higher pre‑tax expense for taxes reduces the bottom line even when core operations perform well.

Third, cash-flow strength is clear and persistent. Apple’s operating cash flow exceeded net income (cash conversion >100% in every year shown, ~126% in FY2024) and free cash flow margins are unusually high (nearly 28%). That cash yield fuels aggressive capital returns: FY2024 buybacks alone exceeded net income and total distributions slightly exceeded free cash flow, with the company bridging the difference using its existing liquidity and financing behavior. The arithmetic of distribution (>100% of FCF) is a concrete fact from the statements and implies less retained capital on the balance sheet going forward if distribution levels persist.

What this means for investors (data-first implications)#

From a financial-statement perspective the split signals are clear: Apple is a cash-generating machine whose operating economics (gross and operating margins) have improved, but the company is also deliberately returning a very large share of that cash to shareholders. That choice shows up algebraically in shrinking equity, reduced net debt (under certain definitions), and elevated returns on equity that are mechanically driven by a reduced equity base.

Liquidity and leverage metrics remain conservative on an operational basis: net debt to EBITDA is well under 1x using any reasonable definition of cash, and operating cash flow covers distributions, although total distributions modestly exceeded free cash flow in FY2024. In plain arithmetic terms that combination affords Apple flexibility to invest or defend against shocks, but it also reduces the balance-sheet buffer if distributions continue at this pace while revenue growth remains modest.

Finally, earnings variability is sensitive to non‑operating items — notably the tax line. The swing in effective tax rate (from ~14.7% to ~24.1%) materially altered reported profitability; investors should therefore treat net income volatility in FY2024 as largely driven by tax and non‑operating accounting items rather than deterioration of core operating performance, which improved on margins and cash generation.

Featured snippet (40–60 words)#

Apple’s FY2024 shows modest revenue growth (+2.02%) and stronger operating margins (31.51%), while net income fell to $93.74B because of a higher effective tax rate (~24.09%). Free cash flow rose to $108.81B and buybacks reached $94.95B, so distributions slightly exceeded FCF for the year.

Key takeaways#

Apple’s FY2024 financials contain three unambiguous arithmetic facts: (1) the company produced robust operating profitability and exceptional cash flow (OCF = $118.25B; FCF = $108.81B); (2) it returned cash to shareholders at a rate that consumed essentially all free cash flow (repurchases + dividends = $110.18B); and (3) reported net income was depressed versus operating income because the effective tax rate rose materially to ~24.09%.

Those facts translate into measurable balance-sheet effects: shareholder equity declined by ~$5.2B and retained earnings moved substantially more negative, while net debt declined modestly depending on the cash definition used. Ratios calculated directly from the statements show low leverage (net debt/EBITDA well below 1x) and very high return on equity figures that are mechanically inflated by a shrinking equity base.

For analysts and stakeholders the immediate implication is that core operations and cash-generation remain healthy, but the company’s capital-allocation choices (very large buybacks) are materially reshaping the balance sheet and amplifying book-value‑based metrics. The arithmetic is what it is: strong cash flows fund distributions today, but repeated distributions at this scale will continue to compress book equity unless offset by sustained earnings growth above current levels.

Conclusions#

The FY2024 statements present a company that is incrementally growing revenue, expanding operating margins and generating exceptional free cash flow, while choosing to return the majority of that cash to shareholders through buybacks and dividends. The decline in net income is largely explainable through a higher effective tax rate rather than deterioration in core operating profitability. Balance-sheet effects — lower equity, modestly lower debt, and high cash-conversion ratios — are direct consequences of that capital-allocation choice.

All numerical claims and ratios in this report were calculated from the line items in the provided FY2021–FY2024 income statements, balance sheets and cash-flow statements. When multiple per‑share metrics in the feed conflicted, I prioritized the fundamentals TTM EPS for EPS-driven ratios and the aggregate dollar line items for flows and leverage calculations; those conflicts are documented in the "Key ratio calculations and data handling" section above. This analysis intentionally focuses on what the numbers show rather than on narrative claims about product roadmaps or strategy.

(Selected tables and arithmetic are drawn directly from the provided FY2021–FY2024 financial data in the dataset.)