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Apple reported a tough December quarter on Thursday, including the company’s biggest quarterly revenue decline since 2016, along with sales drops in its iPhone, Mac and wearables businesses.

At first, investors didn’t like the results, with Apple shares dropping as much as 4% in extended trading.

But the stock had a brief rally after Chief Financial Officer Luca Maestri started to give data points on a call with analysts, suggesting Apple’s performance will get better during the current quarter even if overall sales will still be down from last year.

The tech giant hasn’t provided guidance since the start of the pandemic. But its data points — or “directional insights,” as management calls it — allow analysts covering the stock to get a sense of how the company is doing and update their models.

Here’s how Apple’s forward-looking statements on Thursday break down.

“For iPhone, we expect our March quarter year-over-year revenue performance to accelerate relative to the December quarter year-over-year revenue performance,” Maestri said. “This represents an acceleration in our underlying year-over-year business performance, as the December quarter benefited from an extra week.”

The iPhone is Apple’s biggest product segment by far, amounting for 56% of sales in the most recent quarter. Apple said on Thursday that iPhone sales had declined over 8% year over year. But Maestri’s comment suggests they won’t continue to fall as quickly in the March quarter.

Management said one reason for the drop in November and December was that it couldn’t make enough high-end iPhones because of Covid restrictions at Chinese factories, and that production had recovered.

Still, there’s a risk that customers who couldn’t find a new phone during the holiday season will just give up, rather than buying one in the current quarter. Apple CEO Tim Cook said it was “very hard to estimate” this possibility when analysts asked on the call.

Before Thursday, analysts had expected Apple to guide to about $98 billion in sales in the company’s fiscal second quarter.

On Thursday, Apple said that revenue had declined 5.49%. Last year, in the March quarter, Apple reported $97.28 billion in sales. A similar decline in the March quarter this year would put sales around $92 billion.

So on the surface, this should’ve been a disappointment.

But as Apple explained, a drop of 5.49% would actually be an improvement from the December quarter, because Apple’s results in that quarter were artificially boosted by the fact that there was an extra week. In other words, December 2022’s year-over-year revenue performance was even worse than it looked.

In addition, Covid lockdowns at factories in China were a big factor in the shortfall, but Apple said on Thursday that its production was back to a level it was comfortable with, suggesting that supply won’t be as big a drag on the March quarter as it was in December.

“For Services, we expect revenue to grow year-over-year while continuing to face macroeconomic headwinds in areas such as digital advertising and mobile gaming,” Maestri said.

Services revenue was one of the few pleasant surprises for Apple on Thursday, as its $20.77 billion in sales beat Wall Street consensus expectations. The segment includes App Store, warranties, iCloud, and Apple Music, among other things.

Last year, Apple reported $19.82 billion in services revenue in the March quarter, so the company is suggesting an increase from there, even though executives said it remains a tough environment with decreased gaming and advertising sales.

“For Mac and iPad, we expect revenue for both product categories to decline double digits year-over-year because of challenging compares and macroeconomic headwinds,” Maestri said.

This represents a significant shift for the iPad, which was Apple’s fastest growing hardware business during the December quarter, spiking nearly 30% on a year-over-year basis to $9.4 billion in sales. Now Apple is suggesting the business will go from 30% growth to more than a 10% decline.

In contrast, the Mac business declined nearly 29% during the December quarter, but Cook told analysts it was partially because of when the company released new laptops, and Apple announced new Mac desktops and laptops in January. Mac sales will be down at least 10% in the March quarter, based on these comments, but will likely improve.

“We expect gross margin to be between 43.5% and 44.5%. We expect OpEx to be between $13.7 billion and $14.9 billion,” Maestri said.

Apple’s margins remain significantly higher than they were before the pandemic. For example, in the quarter ending in December 2019, the last full quarter before the Covid pandemic was declared, Apple reported a gross margin of 38.4%.

“We’re doing a lot of work on the cost structure and that is paying off,” Maestri said.

Cook told CNBC’s Steve Kovach on Thursday that Apple had actually come in under its operating expenses goal for the December quarter.

“We’re being prudent and deliberate. If you look at our OpEx guidance, what we said we were going to do this quarter, we came in half of a billion dollars underneath it,” Cook said. “So we are squeezing costs out.”

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Google agrees to pay Texas $1.4 billion data privacy settlement

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Google agrees to pay Texas .4 billion data privacy settlement

A Google corporate logo hangs above the entrance to the company’s office at St. John’s Terminal in New York City on March 11, 2025.

Gary Hershorn | Corbis News | Getty Images

Google agreed to pay nearly $1.4 billion to the state of Texas to settle allegations of violating the data privacy rights of state residents, Texas Attorney General Ken Paxton said Friday.

Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.

The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.

Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.

“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.

“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.

“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”

Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.

Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.

“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.

“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”

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Virtual chronic care company Omada Health files for IPO

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Virtual chronic care company Omada Health files for IPO

Omada Health smart devices in use.

Courtesy: Omada Health

Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.

Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.

Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.

Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.

The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.

But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.

Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.

In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.

“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”

WATCH: The IPO market is likely to pick up near Labor Day, says FirstMark’s Rick Heitzmann

The IPO market is likely to pick up near Labor Day, says FirstMark's Rick Heitzmann

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Google would need to shift up to 2,000 employees for antitrust remedies, search head says

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Google would need to shift up to 2,000 employees for antitrust remedies, search head says

Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.

Sajjad Hussain | AFP | Getty Images

Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.

Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.

The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.

The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones. 

Read more CNBC tech news

Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.

Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”

The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.

Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.

“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.

Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.

Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.

The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.

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