UBS analysts are noting early signs of a potential slowdown in Apple's (NASDAQ:AAPL) App Store revenue growth.
Notably, the investment bank said data from April points to a material deceleration compared to the previous month, with the App Store's global revenue rising by around 9% in April, down from 13% growth in March.
This figure is particularly noteworthy because it's more than 300 basis points (bps) below Apple's June quarter Services guidance of roughly 12.7%, while UBS estimated a growth rate of 12.3%.
For reference, Apple's Services revenue grew around 14% year-over-year in the March quarter, outpacing the UBS estimate for App Store growth of 12% for that period.
The analysts highlight that the year-over-year comparisons will only become tougher in the coming months, with May 2023 figures expected to be 8% higher than the same month last year, while June 2023 should be up 10% year-over-year.
These comparisons suggest that App Store revenue growth “could remain in the high-single digits for the quarter,” analysts wrote.
“While we caution extrapolating one-month data, on the margin if growth does not accelerate against tougher comps, upside to Services growth above the guide could be challenging,” they added.