Apple’s CFO Kevan Parekh on Thursday warned investors that the company’s September quarter revenue outlook was contingent on Apple’s search engine revenue agreement with Google continuing.
As noted by Jason Snell at Six Colors, this is appears to be the first time Apple has directly referred to the threat of losing this revenue within its prepared remarks.
Parekh said:
As we move into the September quarter, I’d like to review our outlook, which includes the types of forward-looking information that Suhasini referred to. Importantly, the color we’re providing assumes that the global tariff rates, policies, and application remain in effect as of this call, the global macroeconomic outlook does not worsen from today, and the current revenue-share agreement with Google continues.
Google pays Apple billions of dollars per year to be the default search engine in Safari on the iPhone, iPad, and Mac platforms. A November 2023 report indicated Apple gets around 36% of the revenue for Google searches in the Safari browser, due to the deal to make Google the main search in the browser.
While a U.S. federal judge ruled in August 2024 that Google’s deal with Apple violated antitrust law, the court has not yet issued any remedies, and Google will almost certainly appeal any decision not in its favor.
“I don’t really want to speculate on the court ruling and how they would rule and what we would do as a consequence of it,” said Apple CEO Tim Cook, on the earnings call.
