Apple Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Apple Inc. reported a strong Q4 fiscal year 2025, with record revenue driven by iPhone and Services growth. Management expressed optimism about future growth, particularly in emerging markets and with new AI-powered products and services. They also addressed supply constraints and macroeconomic factors impacting the business.
Key Financial Results:
Q4 2025 revenue: $102.5 billion, up 8% year-over-year and a September quarter record.
Services revenue: All-time record of $28.8 billion, up 15% year-over-year.
EPS: $1.85, a September quarter record.
Fiscal year 2025 revenue: All-time record of $416 billion.
Gross margin: 47.2%, up 70 basis points sequentially.
Operating cash flow: September quarter record at $29.7 billion.
Net Income: $27.5 billion.
Business Segment Results:
iPhone revenue: $49 billion, up 6% year-over-year.
Mac revenue: $8.7 billion, up 13% year-over-year.
iPad revenue: $7 billion, flat year-over-year.
Wearables, Home and Accessories revenue: $9 billion, flat year-over-year.
Services revenue: $28.8 billion, up 15% year-over-year.
Capital Allocation:
Returned $24 billion to shareholders during the quarter.
$3.9 billion in dividends and equivalents.
$20 billion through open market repurchases of 89 million Apple shares.
Cash and marketable securities: $132 billion.
Total debt: $99 billion.
Net cash: $34 billion.
Declared a cash dividend of $0.26 per share.
Industry Trends and Dynamics:
Strong demand for Apple products, particularly iPhone 17.
Growth in emerging markets like India, Latin America, and the Middle East.
Increased adoption of Apple products in enterprise.
Competitive Landscape:
iPhone 17 Pro sets a new standard for the smartphone industry.
Apple Silicon (A19 Pro chip and M5) provides a competitive advantage in AI.
Apple Watch is the world's most popular watch.
Macroeconomic Environment:
Global tariff rates and policies are impacting gross margin.
Tariff-related costs estimated at $1.1 billion in Q4 and projected to be $1.4 billion in the December quarter.
Assumes the global macroeconomic outlook does not worsen.
Tariffs moving from 20% to 10% in China.
Growth Opportunities and Strategies:
Expansion of AI capabilities across products and services.
New features like live translation and visual intelligence.
Workout Buddy for personalized fitness insights.
Personalized Siri expected to be released next year.
Expansion in emerging markets.
Investment in innovation and user experiences.
Commitment to invest $600 billion in the US over the next four years.
Building a new factory in Houston for advanced AI service.
Partnership with Formula One for Apple TV.
Financial Guidance and Outlook:
Expects December quarter total company revenue to grow by 10% to 12% year-over-year.
Expects iPhone revenue to grow double digits year-over-year.
Expects Services revenue to grow at a year-over-year rate similar to fiscal year 2025.
Gross margin expected to be between 47% and 48%.
Operating expenses expected to be between $18.1 billion and $18.5 billion.
OI&E to be around $150 million.
Tax rate to be around 17%.
