Apple Reports 10% Revenue Growth, Driven by iPhone and Services

Apple Inc. reported a 10% year-over-year increase in revenue for the third quarter of its 2025 fiscal year, ending June 28, 2024, with total revenue reaching 940 billion. This growth was driven by strong performances in the iPhone, Mac, and services segments, as well as increased demand in the Greater China region. The company's gross margin stood at 46.5%, slightly down from the previous quarter due to 8 billion in tariff-related costs. Net income for the quarter was 234 billion, with earnings per share at 1.57 dollars, a 12% increase year-over-year. Operating cash flow was 274 billion, and the company returned 270 billion to shareholders through dividends and stock buybacks.

Apple's iPhone segment saw a 13% year-over-year increase in revenue, reaching 446 billion. The iPhone 16 series, in particular, performed exceptionally well, with a two-digit percentage growth compared to the previous series. The company also highlighted that the iPhone has reached a cumulative shipment of 30 billion units since its launch in 2007. The Mac segment grew by 15% year-over-year, driven by strong sales of the M4 MacBook Air and Mac Studio. The iPad segment, however, saw an 8% year-over-year decrease in revenue, largely due to high comparison bases from the previous year's product launches. Wearables, Home, and Accessories segment revenue decreased by 9% year-over-year, primarily due to high comparison bases from the previous year's product launches.

Apple's services segment continued to grow, with revenue reaching 274 billion, a 13% year-over-year increase. Apple TV+ received 81 Emmy nominations, including 27 for "Severance" and 23 for "The Studio." Apple Music celebrated its 10th anniversary and unveiled a new studio in Los Angeles. The App Store saw a two-digit percentage growth in revenue, maintaining its position as a leading platform for app discovery and downloads. Other services, including iCloud, also saw significant growth, with over 10 billion paid subscriptions.

Apple's retail expansion continued with the launch of an online store in Saudi Arabia and plans to open new physical stores in the United Arab Emirates and India. The company also announced a 5 billion collaboration with MP Materials to strengthen the supply of rare earth materials in the U.S. and plans to invest 5000 billion in the U.S. over the next four years, focusing on advanced manufacturing, chip engineering, and AI. Apple also highlighted its commitment to accessibility, announcing updates to its products to support users with disabilities.

During the earnings call, Apple's CEO Tim Cook and CFO Kevin Parker discussed the company's AI investments and future plans. Cook emphasized that AI is a transformative technology that Apple is integrating into all its products and services. The company is increasing its AI investments and reallocating resources to focus on AI development. Cook also highlighted that Apple's devices are complementary rather than substitutive, and that the iPhone remains a core product for the company. Parker discussed the company's financial performance and outlook, noting that the company expects revenue growth to continue in the fourth quarter, with services revenue growth similar to the third quarter. The company also expects its gross margin to be between 46% and 47%, including 11 billion in tariff-related costs.

In response to questions about the Greater China region, Cook noted that the region saw a 4% year-over-year increase in revenue, driven by strong iPhone sales and government subsidies for some of Apple's products. He also highlighted that the region's installed base of devices reached an all-time high, with the iPhone and MacBook Air being the best-selling notebook and desktop computers in China, respectively. Cook also discussed Apple's AI investments, noting that the company is increasing its AI spending and reallocating resources to focus on AI development. He emphasized that Apple's AI strategy focuses on personalization, privacy, and seamless integration.

In response to questions about the impact of tariffs, Cook noted that the company expects tariff-related costs to increase to 11 billion in the fourth quarter, based on current tax policies. He also highlighted that the company is exploring ways to optimize its supply chain and increase its manufacturing presence in the U.S. to mitigate the impact of tariffs. Cook also discussed Apple's acquisition strategy, noting that the company has acquired seven companies this year, with a focus on accelerating its product roadmap. He emphasized that Apple is open to acquiring companies of all sizes and is not limited to the AI sector.

Overall, Apple's third-quarter earnings report highlights the company's strong financial performance and continued growth in key segments, as well as its commitment to investing in AI and expanding its retail presence. The company's focus on personalization, privacy, and seamless integration in its AI strategy is expected to drive future growth and innovation.