Apple reported record-breaking revenue for the fourth quarter and fiscal year 2025, driven by strong services growth and iPhone sales despite supply constraints. The company set new revenue records in numerous markets and highlighted ongoing innovation and customer enthusiasm. CEO Tim Cook expressed excitement for the upcoming holiday season with a promising product lineup. Apple introduced private cloud compute servers and highlighted AI investment. Apple has launched the iPad Pro, MacBook Pro, and Apple Vision Pro, all powered by the M5 chip, with new design features and software updates for a unified user experience. AI and Apple Silicon are at the forefront to enhance user capabilities and personalization.

iPhone set a revenue record at $49 billion in the September quarter, driven by the iPhone 17 Pro with A19 Pro chip. MAC revenue was $8.7 billion, with strong performance from MacBook Air and Mac mini. iPad revenue was $7 billion, boosted by the new M5 iPad Pro with enhanced AI performance.

Wearables, Home, and Accessories revenue was $9 billion, with the launch of Apple Watch Ultra 3, Series 11, and SC3 offering advanced health features and improved battery life. AirPods Pro 3 have been well-received for their sound quality and active noise cancellation powered by AI.

Services revenue reached an all-time high of $28.8 billion in the September quarter, up 15% year-over-year, showcasing the growing popularity of Apple’s subscription services. AI and machine learning are at the core of new health features like hypertension notifications on Apple Watch, highlighting Apple’s commitment to improving user well-being. Apple reported double-digit growth in both developed and emerging markets, setting new records in advertising, App Store, cloud services, Music, payment services, and video. Apple TV won big at the Emmy Awards with 22 wins, including 13 for Severance. Apple also announced new partnerships and content for Apple TV, including F1 coverage.

Apple celebrated the 10-year anniversary of Apple News and announced plans to invest $600 billion in the U.S. over the next 4 years. The company continues its commitment to innovation, accessibility, and sustainability, with a focus on advanced manufacturing, silicon engineering, and artificial intelligence. Apple also opened new retail stores in various markets and announced the Apple Manufacturing Academy in Detroit.

Apple’s revenue reached a new September quarter record of $102.5 billion, up 8% year-over-year. Products revenue was $73.7 billion, with growth in iPhone and MAC sales. Services revenue hit an all-time high of $28.8 billion, driven by double-digit growth in most markets and service categories. Company gross margin was 47.2%, above guidance.

Apple reported net income of $27.5 billion and diluted earnings per share of $1.85, both September quarter records. iPhone revenue was $49 billion, up 6% year-over-year, with growth in emerging markets and high customer satisfaction. Mac revenue was $8.7 billion, up 13% year-over-year, driven by MacBook Air. Apple reported strong growth in all geographic segments and record-high customer satisfaction for Mac, iPad, and Apple Watch in the U.S. Services revenue hit an all-time high of $28.8 billion, with over $100 billion for the fiscal year. The company returned $24 billion to shareholders and expects double-digit growth in the December quarter, with the best revenue ever. CEO Tim Cook attributes the success of the iPhone 17 to its innovative features and design. market different from international markets in this regard? And how do you think about managing the balance between those two groups?

Timothy Cook: Michael, thanks for the question. We continue to see a good balance between upgraders and switchers. We’re seeing strong performance in both categories, both in the U.S. and internationally. We’re focused on providing value and innovation to all customers, regardless of whether they are upgrading or switching from other brands. We believe that our product lineup offers something for everyone, and that’s reflected in our strong sales numbers.

In the September quarter, Apple saw record numbers of upgraders, but it’s too early to comment on switchers to the iPhone 17. Channel inventory was low due to constraints on certain models. Gross margins for the December quarter are expected to increase due to new product launches and favorable product mix.

In China, revenue was down 4% in the September quarter due to supply constraints on the iPhone. However, traffic is up significantly year-over-year, and Apple expects growth with the iPhone 17 family this quarter. Subsidies in China are playing a favorable role in driving momentum for Apple in the region.

Apple is currently facing supply constraints on several models of the iPhone 17, leading to uncertainty on when supply will balance with demand. Advertising, a combination of third-party and first-party, set a record during the quarter, but Apple does not split this at a detailed level.

Overall, Apple is working hard to fulfill customer orders amidst strong demand, especially in China. The company is optimistic about returning to growth with the iPhone 17 family and is focused on addressing supply constraints to meet customer needs. Apple reported an increase in consumer demand driven by subsidies on certain price ranges. Operating expenses increased due to investments in AI and product roadmap, leading to gross margin expansion. Tariffs are projected to increase to $1.4 billion in December quarter, factoring in tariff rate changes in China. iPhone constraints led to missed sales, but demand for iPhone 17 family remains strong. Apple sees potential in AI-infused services impacting consumer behavior on the App Store. Apple is optimistic about the potential for developers to benefit from on-device models. The company is seeing strong demand for the iPhone 17, with constraints on supply. They are continuing to build out their private compute cloud for Siri and Apple Intelligence. CapEx costs were associated with this initiative in 2025.

The iPhone Air has been well-received, with Apple expecting double-digit growth this quarter. The company is focusing on creating Apple Foundation models and surveilling the market for potential M&A opportunities. They are open to partnerships with other LLM providers to advance their roadmap.

Apple is bullish on the role of Apple Intelligence in consumer purchasing decisions. The company is seeing record sales levels, with AI capabilities becoming a greater factor in driving purchases. They plan to continue their hybrid approach to data centers, leveraging first-party and third-party capacity for AI investments. Looking to invest $1,000? Stock Advisor’s average return is 1,055%, outperforming the S&P 500’s 194%. Get the 10 best stocks to buy now when you join. Contact Josh Rosenstock at (408) 862-1142 for press inquiries or Suhasini Chandramouli at (408) 974-3123 for financial analysis questions. Conference call ends, thanks for participating.

Read more at Nasdaq: Apple Q4 2025 Earnings Call Transcript