Earlier this week, Apple (Nasdaq: AAPL) announced its third-quarter results that shattered market expectations across all segments. The company continued to report stellar growth across all product lines delivering double-digit growth overall.

Apple’s Financials

Apple’s quarterly revenues grew 36% over the year to $81.4 billion, significantly ahead of the market’s forecast of $73.3 billion. EPS was $1.30, surpassing the Street’s forecast of $1.01. Overall, profits grew 93% to $21.7 billion.

By segment, iPhone revenues grew 49.78% to $39.57 billion. Mac sales grew 16% to $8.24 billion and iPad sales grew 12% to $7.37 billion. Revenues from Wearables grew 40% to $8.76 billion. The services segment revenues grew 33% to $17.48 billion, compared with 27% growth a year ago.

Apple did not provide any forecast for the current quarter but mentioned that it expected double-digit y-o-y growth to continue. The market estimates revenues of $72.93 billion for the quarter with an EPS of $1.00 and revenues of $354.61 billion with an EPS of $5.18 for the year.

The only warning signal from the company was about supply constraints surrounding silicon supplies that are expected to impact its September quarter sales for iPads and iPhones. The market was not pleased with the warning, and despite the record-setting growth, Apple’s stock fell 1.5% in the after-hours trading session.

Apple’s Stellar Performance

Typically, the June quarter is a slow quarter for Apple. But the continued pandemic conditions have worked in Apple’s favor. As work-at-home and remote schooling trends continue, sales of Apple’s personal devices have gone up. Sales of iPhones had slowed in the quarters prior to the pandemic – a trend that was attributed to the saturation of the smartphone market. But analysts believe that the increased dependence on technology has helped reverse the trend. According to Apple, the increase in iPhone sales, for instance, was not on account of upgrades by existing users but was also driven by new users switching from Android devices to iOS devices. The good news wasn’t restricted to the products.

Apple’s services segment also continues to show strong growth. Apple ended the quarter with over 700 million paid subscribers for its services, growing 150 million over the year. Apple is driving the subscription numbers by offering a number of bundles, which allow consumers to group together subscriptions to streaming, data, music, and other services. The improved content line-up also helps. Within content, Apple shows received 35 Primetime Emmy Award nominations, including 20 nominations for Ted Lasso, which became the most nominated comedy series this year. Within Apple Fitness+, the company recently released new episodes of Time to Walk, an inspiring audio experience on Apple Watch that aims at encouraging Fitness+ users to get active by walking more often. Apple does not break out its subscriber numbers for individual services.  

If the market was worried about Apple’s ability to maintain the growth, those suspicions have been put to rest. Demand continues to grow across all regions and products/services in the form of both installed base growth and increased services engagement. Apple expects double-digit growth in the current quarter, but with demand constraints, that growth is expected to create a backlog in the year, and build a more sustained growth trajectory in the quarters to come.

Its stock is trading at $144.98 with a market capitalization of $2.42 trillion. It touched a 52-week high of $150.00 earlier this month and a 52-week low of $93.25 in September last year.