Apple (AAPL) Q3 FY2025 Earnings: Strong iPhone and Services Growth

Apple (AAPL) posted a strong fiscal Q3 2025, with better-than-expected top and bottom-line results driven by iPhone and Services strength. The company also issued a bullish forecast for the next quarter, easing concerns about macro headwinds and tariffs.


Financial Highlights (Q3 FY2025, quarter ended June 28):

  • Revenue: $94.04 billion, up ~10% YoY (beat consensus of ~$89.3B)
  • EPS (diluted): $1.57, up ~12% YoY (beat estimate of ~$1.43–1.45)

Segment Performance:

  • iPhone: ~$44.58 billion, +13% YoY, driven by strong iPhone 16 demand
  • Mac: ~$8.05 billion, +15% YoY, boosted by new M4 MacBook Air
  • iPad: ~$6.58 billion, down ~8% YoY, underperformed expectations
  • Wearables, Home & Accessories: ~$7.4 billion, down mid-to-high single digits YoY
  • Services: Record high $27.42 billion, +13% YoY, now 29% of total revenue

Key Drivers & Headwinds:

  • Tariff impact: U.S. import tariffs led to an early buying surge in Q3, contributing ~1 percentage point to revenue growth. However, tariffs cost Apple $800 million in Q3 and are expected to increase to ~$1.1 billion in Q4.
  • AI investment: Apple is accelerating AI development and may pursue strategic acquisitions. An AI-powered Siri refresh is planned for 2026.
  • China recovery: Revenue from Greater China rose ~4% to $15.4 billion, marking the first YoY growth in the region since 2023.

Outlook & Guidance:

Apple guided for mid to high single-digit revenue growth in Q4, ahead of analyst expectations. Gross margins are expected to remain strong and may improve sequentially. Management emphasized long-term confidence in AI, services, and product pipeline.


Stock Reaction (August 1, 2025):

  • Open: $210.94
  • High: $213.41
  • Low: $201.54
  • Close: $202.38, down 2.54% on the day

Shares rose in after-hours trading on the report but closed lower Friday, likely due to broader market weakness and tariff concerns.


Context vs. Peers:

Apple’s iPhone and Services results outpaced expectations and positioned the company well relative to tech peers. However, it still lags behind in AI deployment compared to Microsoft and Google. Services mix is approaching 30%, aligning with efforts to diversify beyond hardware.


Bottom Line:

Apple delivered a clear rebound with strong hardware and services results, easing near-term demand worries. The path forward depends on how well it executes in AI, manages tariff costs, and maintains momentum in China and the U.S.