Transcript: Apple CEO Tim Cook on the company's 2017 Q1 earnings

Apple's record-breaking first-quarter results for 2017 are in. Here's our live-updating transcript of the call.

Apple CEO Tim Cook and CFO Luca Maestri spoke with analysts during the company's Q1 2017 earnings call. Here's our ongoing live transcript of their remarks! If you want more info on Apple's results, we recommend Six Color's ace charts for the quarter.*

Cook's opening remarks

Tim Cook

Good afternoon, everyone, and thanks very much for joining us. I'm very happy to share with you the outstanding results of Apple's December quarter.

We generated the highest quarterly revenue in Apple's history, along with all-time unit and revenue records for iPhone and Apple Watch; all-time revenue records for services and Mac; and all-time revenue records for four out of our five geographic segments.

The strong performance of our business also produced all-time record earnings-per-share. Revenue in the quarter was 78.4 billion dollars, which was above the top of our guidance range. iPhone had a tremendous quarter thanks to exceptional demand that beat our own internal expectations.

While iPhone 7 is our most popular model, we saw especially strong demand for iPhone 7 Plus, which was a higher portion of the new product mix than we've ever seen with Plus models in the past. Demand for iPhone 7 Plus exceeded supply throughout the quarter, and we came into supply/demand balance in January.

iPhone 7 Plus has earned rave reviews for its advanced new features, especially the dual-camera system, which produces stunning portraits and high-quality zoom. This is a uniquely Apple feature that is surprising and delighting our users. Both iPhone 7 and iPhone 7 Plus are empowering our customers to be more productive, more engaged, and more expressive than ever by integrating hardware, software, and services to create experiences that only Apple can deliver.

It was our best quarter ever for services, with almost 7.2 billion dollars in revenue. App Store customers broke all-time records during the holiday quarter, including 3 billion dollars in purchases in December alone, making it the App Store's single best month ever.

Our innovative and vibrant developer community has created over 2.2 million apps for doing almost anything that you can imagine. Apple's developer community has now earned over 60 billion dollars, including over 20 billion [dollars] in 2016 alone.

Revenue from our music business grew for the third quarter in a row, and our AppleCare and iCloud storage services had all-time record results. Apple Pay continued its strong momentum, with its number of users more than tripling over the past year, and hundreds of millions of transactions and billions of dollars in purchases in the December quarter alone.

Transaction volume was up over 500% percent year-over-year as we expanded to four new countries, including Japan, Russia, New Zealand, and Spain, bringing us into a total of 13 markets.

Apple Pay on the Web is delivering our partners great results. Nearly two million small businesses are accepting invoice payments with Apple Pay through Intuit QuickBooks Online, FreshBooks, and other billing partners, and beginning this quarter, Comcast customers can pay their monthly bill in a single touch with Apple Pay.

Services are becoming a larger part of our business, and we expect the revenues to be the size of a Fortune 100 company this year. Our services offerings are now driving over 150 million paid customer subscriptions; this includes our own services and third-party content that we offer on our stores.

We feel great about this momentum, and our goal is to double the size of our services business in the next four years.

The Mac not only returned to growth, but generated its highest quarterly revenue ever. Our latest data shows that most Mac customers are buying their first Mac, with the vast majority of them coming from a Windows PC.

The new MacBook [Pro] Touch with Touch Bar is an outstanding example of the innovation made possible by integrating world-class hardware and software. We were supply-constrained for the new MacBook Pro throughout the December quarter, and are just now coming into supply/demand balance.

It was also our best quarter ever for Apple Watch — both units and revenues — with holiday demand so strong that we couldn't make enough. Apple Watch is the best-selling smartwatch in the world, and also the most-loved, with the highest customer satisfaction in its category by a wide margin. Apple Watch is the ultimate device for a healthy life, and it's the gold standard for smartwatches. We couldn't be more excited about Apple Watch.

We're also thrilled with the response to AirPods: Customers love the magical experience AirPods are delivering, and if you haven't tried them yet, you'll be delighted when you do. They're far ahead of anything else on the market today, and we're working hard to catch up with the incredible demand.

With AirPods off to a fantastic start; a strong, full first year for Apple Watch; and Beats Headphones offering a great wireless experience using the Apple-designed W1 chip, we now have a rich lineup of wearable products. Their design, elegance, and ease of use make us very excited about the huge growth potential for wearables going forward.

Our ecosystem is broadening to more and more of the areas where people spend their time: at the gym, on the go, in the home, and on the job. For example, every major automaker is committed to supporting CarPlay, with over 200 different models announced including five of the top ten selling models in the United States. There are well over a million people using CarPlay now, and this continues to grow rapidly.

We're leading the industry by being the first to integrate home automation into a major platform with iOS 10. With Siri and the new Home app in iOS 10, everywhere you go you can easily and securely all of your home accessories with your iPhone, iPad, or your Apple Watch. The number of HomeKit-compatible accessories continues to grow rapidly, with many exciting solutions announced just this month, including video cameras, motion detectors, and sensors for doors, windows, and even water leaks. Perhaps even more importantly, we are unmatched when it comes to securing your home with HomeKit-enabled door locks, garage doors, and alarm systems.

I'm personally using HomeKit accessories in the Home app to integrate iOS into my home routine: Now, when I say "Good Morning" to Siri, my house lights come on and my coffee starts brewing. When I go to the living room to relax in the evening, I use Siri to adjust the lighting and turn on the fireplace. And when I leave the house, a simple tap of my iPhone turns the lights off, adjusts the thermostat down, and locks the doors. When I return to my house in the evening as I'm near my home, the house prepares itself for my arrival automatically by using a simple geofence.

This level of home automation was unimaginable just a few years ago, and it's here today with iOS and HomeKit.

We're making great progress in the enterprise market alongside our major partners. The combination of iOS and Cisco Technology is giving companies everywhere the opportunity to vastly improve the user experience for their mobile employees. With enhanced networking performance, up to 8x faster roaming, better reliability for apps, and native voice experience, we're excited about how much more productive the workforce will be with these capabilities. In fact, the total number of joint customer opportunities has grown over 70% since last quarter.

Enterprises are using IBM's new mobile-at-scale design and development model to deploy multiple iOS apps with speed and efficiency. For example, Fennar [sic] is transforming airport maintenance, and Cemex is revamping activities from attracting new clients to invoicing to after-sale support.

And later this spring, SAP will be rolling out its SDK for iOS, providing its community of more than 2.5 million developers the tools to build powerful, native iOS apps that leverage the SAP HANA cloud platform. We're delighted with how these partnerships are making it even easier for enterprise customers to transform how work gets done with iOS.

As we reflect on a record-breaking December quarter, I'd like to thank our developers, our business partners, and our employees for their incredible contributions and commitment, and I'd like to thank all of our customers around the world for their excitement and loyalty, which ultimately drives these results.

Now I'd like to turn it over to Luca [Maestri, CFO] to talk about the quarter in more detail.

We'll be updating this live as the call progresses, so check back!

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