The Street was clearly impressed with Apple‘s (NASDAQ: AAPL) fiscal third-quarter results this week. Shares popped nearly 6% on Wednesday, following the company’s earnings release on Tuesday afternoon. Apple’s third-quarter revenue and earnings per share surged 17% and 40% year over year, respectively, driven by strong growth in Apple’s iPhone, services, and other products segments.
But there was more to the quarter than Apple’s headline-generating revenue and earnings per share — both of which handily beat consensus estimates for the quarter. Key highlights from the quarter include record services revenue, soaring growth in subscriptions, accelerating growth in Apple’s wearables products, and more.
1. Apple spent $20 billion repurchasing shares
After authorizing $100 billion more for share repurchases earlier this year, Apple hasn’t been shy about spending this money. During Q3, the tech giant finished off the remaining $10 billion from its previous $210 billion repurchase authorization and spent another $10 billion from its new $100 billion share repurchase program, bringing total repurchases during the quarter to $20 billion.
This puts total repurchases during the first half of the year to a stunning $43.5 billion.
2. The iPhone’s average selling price was $724
One major boon for revenue growth during the quarter was a sharp increase in the average selling price (ASP) of iPhones. iPhone ASPs climbed to $724, up from $606 in the year-ago quarter.
This sharp rise in Apple’s average selling price meant that even though iPhone units sold increased just 1% year over year during the quarter, iPhone revenue climbed 20%. With iPhone revenue accounting for 56% of revenue during the quarter, this trend was a major contributor to Apple’s growth during the period.
3. Services revenue was $9.5 billion
Services revenue increased 31% year over year to $9.5 billion — an all-time quarterly record for the segment. Importantly, growth drivers for services were broad-based. Services revenue increased by double-digit growth rates in every geographic segment, and revenue from the App Store, Apple Care, Apple Music, Cloud services, and Apple Pay were all at record third-quarter highs, Apple CFO Luca Maestri said during the company’s third-quarter earnings call.
This momentum has Apple management confident that it is on track to double its fiscal 2016 services revenue by 2020.
4. Paid subscriptions were up 60%
The strong year-over-year growth in native and third-party subscriptions across Apple’s platforms brought total paid subscriptions to over 300 million. This figure is 30 million higher than it was at the end of Apple’s Q2. Apple added that there are now nearly 30,000 apps in the App Store offering subscriptions.
5. Wearables revenue increased 60%
Revenue from wearables, which is buried in Apple’s other products segment, increased 60% year over year. Consisting of Watch, AirPods, and Beats products, this segment saw its growth rate accelerate from the 50% year-over-year growth it enjoyed in Q2.
Specifically, Apple Watch continued to see notable momentum, with revenue from the device up in the mid-40% range from the year-ago quarter. And AirPod sales “have really gone through the roof,” Apple CEO Cook noted during the earnings call.
Overall, wearables revenue has grown to $10 billion on a trailing-12-month basis, Cook said. This is “a truly remarkable accomplishment for a set of products that has only been on the market for a few years,” he added.
Combining these metrics with Apple’s overall third-quarter performance, the tech giant is demonstrating how sustainable its growth story is.
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Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.