Apple: App Store Revenue Growth in March ‘Encouraging’

Evercore ISI analyst Amit Daryanani has reflected on the most recent Apple’s App Store revenue growth trends.

Revenue growth in March was 8% to push the Q1 growth rate to 7%. Although this growth rate is low, the analyst is encouraged that it increased in March after 9 straight months of deceleration.

The acceleration should continue going forward as comps begin to get much easier in April. While the App Store remains the largest component of services revenue, it has become less important to the overall business as evidenced by Dec-21 results. App Store revenue growth last quarter was ~13%, but growth for the overall services business came in at an impressive 24% (worth noting AAPL has called out Advertising as the top contributor to their services growth for 2 quarters in a row now), Daryanani said in a client note.

The current growth rate is much lower than the 17% consensus, although the analyst warns that the growth rate is likely to remain in the single digits.

Comps get easier starting in April, so we expect a return to double-digit growth at that time. The entertainment category remains a standout in terms of growth, likely due to the proliferation of streaming services. China and Japan remain the main drivers of the decel as both countries lap periods of strong growth, the analyst added.

Apple (NASDAQ:) stock closed at $178.44 yesterday.

By Senad Karaahmetovic