Apple's Q2 2025: Key Contradictions on iPhone Sales, Tariffs, Services Growth, and Margins

Impact of Apple Intelligence on iPhone sales, tariff impact on costs, services revenue growth expectations, impact of component prices and input costs on gross margins are the key contradictions discussed in Apple's latest 2025Q2 earnings call.



Revenue Growth and Product Performance:
- Apple reported revenue of $95.4 billion for Q2 Fiscal Year 2025, up 5% year-over-year, reaching the high end of the range provided last quarter.
- The growth was driven by strong performance in iPhone and iPad sales, particularly with the introduction of iPhone 16e and the M3-powered iPad Air.

Services Revenue Record:
- Apple's Services revenue reached an all-time record of $26.6 billion, up 12% year-over-year.
- This growth was supported by strong performance across all service categories, including Apple TV+, Fitness+, and Apple Pay.

Geopolitical and Tariff Impact:
- Apple's iPad installed base grew 15% from a year ago, driven by the new M3-powered iPad Air.
- The company's business in China showed sequential improvement, with iPhone being the key driver, despite geopolitical tensions and tariffs.

Sustainability and Supply Chain Initiatives:
- Apple cut emissions by 60% from 2015 levels, achieving a significant milestone in its sustainability efforts.
- The company is expanding its supply chain in the U.S., with plans to source more than 19 billion chips from various states, supporting local economies.