Apple reported record revenue, strong growth in all product categories, and the expansion of services internationally.
From Nasdaq: 2025-01-30 20:15:17
Apple reported record revenue of $124.3 billion for Q1 fiscal year 2025, up 4% from last year. EPS also set a record at $2.40, up 10%. The company saw growth in all regions, with all-time revenue records in many markets. Apple also announced over 2.35 billion active devices and the expansion of Apple Intelligence features internationally. In the December quarter, Mac revenue reached $9 billion, up 16% year over year, driven by excitement for the latest Mac lineup. iPad revenue also saw growth at $8.1 billion, up 15% from a year ago. Wearables, home, and accessories revenue hit $11.7 billion, with the new Apple Watch Series 10 and AirPods Pro 2. Services revenue reached an all-time high of $26.3 billion, growing 14% year over year. Apple TV+ continues to draw attention with award-winning content and new shows in the pipeline.
Apple set an all-time revenue record of $124.3 billion for the December quarter, up 4% year over year. Retail expansion includes new stores in China, Spain, and the U.S., with plans to add a fifth store in the UAE and bring the online store to Saudi Arabia. Apple continues to innovate and connect with customers worldwide. Apple achieved all-time revenue records in multiple regions and saw growth in most markets. Products revenue was up 2% year over year, driven by iPad and Mac sales. Services revenue hit a record $26.3 billion, up 14%. The company reported all-time high net income of $36.3 billion and diluted earnings per share of $2.40, up 10% year over year. Operating cashflow was $29.9 billion, with iPhone revenue reaching $69.1 billion and Mac revenue hitting $9 billion, both setting all-time records. iPad revenue was up 15% year over year, and wearables, home, and accessories revenue was $11.7 billion, down 2%. Services revenue reached an all-time high of $26.3 billion, up 14% year over year, with over a billion paid subscriptions across the platform. In enterprise, businesses like Deutsche Bank and SAP are expanding their use of Apple products and services. Apple ended the quarter with $141 billion in cash and marketable securities and returned over $30 billion to shareholders. Timothy Donald Cook — Chief Executive OfficerHi, Ben. Thanks for the question. Yeah, the DeepSeek situation is definitely something we’re keeping an eye on. We do see the potential for lower costs of compute to benefit us in terms of margins and execution. However, we’re always focused on providing the best products and services to our customers, regardless of external factors. So, while it’s something we’re aware of, it doesn’t change our overall strategy. Ben Reitzes — AnalystGreat, thanks for that, Tim. And just a quick follow-up, you know, in terms of the services business, you mentioned strong growth in the December quarter. I was wondering if you could provide any more color on what specific services are driving that growth and what your outlook is for that segment going forward. Thanks. Tim Cook, CEO of Apple, discusses the company’s focus on innovation and efficiency. He expresses optimism for future product pipeline and potential for smartphone innovation.
Apple reports record iPhone upgrades and high install base. Apple Intelligence has helped drive upgrades in markets where it was launched. iPad Pro’s thin form factor contributed to overall iPad sales growth of 15% in the quarter.
Apple sees robust growth in emerging markets, particularly in India. Apple plans to open new stores in India and has seen success with iPhone sales in the market. Double-digit growth in install base in emerging markets is also noted.
Analysts question Tim Cook on potential for future iPhone innovation and growth in emerging markets. Apple reports strong growth trends in emerging markets and sees potential for these markets to offset challenges in China. Apple continues to see double-digit growth in the iPhone install base in emerging markets. Apple reported strong growth in Macs and iPads, with a 16% increase in Mac sales and a 15% increase in iPad sales. The success was attributed to new product launches and the popularity of the MacBook Air. Apple believes they have the best AI PC on the market. Services business hit an all-time high in the December quarter, with 14% growth and over a billion paid subscriptions. They expect good momentum and increasing engagement across all service offerings. Gross margins are guided to be flat sequentially, with FX headwinds impacting revenue growth but offset by favorable costs and service mix. Channel inventory in China reduced over the quarter due to higher sales than expected. Apple is comfortable with their worldwide channel inventory position. Kevan Parekh — Senior Vice President, Chief Financial OfficerYeah, on the product side, we’re really pleased with our gross margin performance. We had a strong quarter at 39.3%. And we continue to focus on driving efficiencies and cost savings across our product portfolio to maintain healthy margins. We’re confident in our ability to sustain this level of performance moving forward. Apple reported a strong sequential improvement in gross margin, driven by favorable mix and leverage in the December quarter. The launch of new products tends to benefit from higher volume leverage, with customers gravitating towards pro products with favorable margins. A mix of product launches and favorable commodity costs contributed to the strong performance.
CEO Tim Cook believes Apple Intelligence will go mainstream as more users adopt new features. The iPhone 15 Pro or iPhone 16 is required to use Apple Intelligence, with a growing user base expected to increase usage. New language rollouts in April will further expand the user base and usage of intelligent features.
Apple remains committed to a disciplined pricing strategy that has served them well. The company does not plan to depart from their current pricing strategy, balancing short-term comparisons with long-term growth. Maintaining consistent pricing across products has been a key factor in Apple’s success.
Apple is monitoring the potential tariff impact under the new administration and has no further comments at this time. CEO Tim Cook believes the killer feature of Apple Intelligence will vary for different users, with many finding daily use in a variety of features, including Siri.
CEO Tim Cook expects a high level of daily usage for various Apple Intelligence features, including an upgraded Siri expected in the coming months. The company anticipates strong adoption of the suite of features among different user groups, with Siri playing a significant role in user engagement.
Analysts are curious about the average useful life of Apple devices in the market. CEO Tim Cook did not provide further insights on this topic during the call but emphasized the company’s focus on product quality and durability. The longevity of Apple devices is an important factor in customer satisfaction and brand loyalty. Apple CEO, Timothy Cook, discusses the potential for accelerated product refresh opportunities in the future based on strong fiscal ’21 performance. Different types of users have varying upgrade habits, creating a broad market opportunity. Replays of the earnings call will be available for two weeks on Apple Podcasts or as a webcast on apple.com/investor. Financial analysts and press can contact Apple for further inquiries.
Read more at Nasdaq: Apple (AAPL) Q1 2025 Earnings Call Transcript