App Store revenue rises 14% in October; UBS calls it ‘solid result’

Revenue from Apple’s (NASDAQ:AAPL) App Store rose 14% year-over-year in October on a foreign exchange neutral basis, investment firm UBS said, calling the gain a “solid result.”

Apple shares rose 1.5% in early trading on Thursday.

“Mid-teens growth despite a tough YoY comp (Oct-23 + ~13.5%), similar to the month of Sept, is a solid result in our view,” analyst David Vogt wrote in a note to clients about the data, which was released from intelligence firm Sensor Tower. “However, we remain cautious considering that the rest of the Dec quarter faces similarly challenging comps in the ~13% range while iPhone sell-through is unlikely to accelerate, typically a source of incremental App Store demand.”

Vogt, who has a Neutral rating and $236 price target on Apple, added that it’s “too early” to attribute the strength to Apple Intelligence (given that iOS 18.1 was released on October 28), but the growth is a “positive data point” compared to Apple’s guidance for its Services segment.

“Broad-based strength drove global App Store growth App Store growth in both the US and [the rest of the world] was ~15% in the month of [October],” Vogt added. “While we estimate that the US composes only one-third of App Store [revenue], the US faces comps of ~20% and ~19% in Nov and Dec, respectively. Moreover, [the rest of the world] faces comps of ~10% and ~11% in the same timeframe, a lower hurdle than the US but still a tough comp in our view, limiting the sustainability of Oct’s strength.”