Apple Inc. (AAPL) Q3 2025 Earnings Summary

Executive Summary

Apple delivered a June-quarter record: revenue $94.036B (+10% YoY) and diluted EPS $1.57 (+12% YoY), with broad-based strength across iPhone, Mac, and Services; company gross margin was 46.5% .
Significant beats vs S&P Global consensus: revenue +$4.9B (+5.5%) and EPS +$0.14 (+9.5%); gross margin modestly above consensus as well; upgrade activity set June-quarter records for iPhone and Mac, aided by strong product lineup and modest tariff-related pull-forward in April (~1 pt to total company growth) * * *.
Guidance: September-quarter revenue to grow mid-to-high single digits YoY, Services growth similar to Q3’s +13%, GM 46–47%, OpEx $15.6–$15.8B, OI&E ~-$25M, tax ~17%; tariffs expected to add ~$1.1B to costs in Q4, up from ~$800M in Q3 .
Stock reaction catalysts: sustained Services momentum (paid subscriptions “well over a billion”), AI narrative intensifying (personalized Siri targeted for next year), and clearer tariff headwind quantification; watch for China demand, App Store/legal developments, and AI-driven capex trajectory .

What Went Well and What Went Wrong

What Went Well

iPhone revenue $44.6B (+13% YoY), June-quarter record for upgraders; strength across every geographic segment driven by the iPhone 16 lineup .
Mac revenue $8.0B (+15% YoY), records for upgraders; strong adoption of M4 MacBook Air and Apple Silicon transition momentum .
Services revenue $27.4B (+13% YoY), all-time record; broad-based strength with new highs in cloud services (iCloud paying accounts growth) and App Store double-digit growth in the US; “We have well over a billion paid subscriptions” .

What Went Wrong

iPad $6.6B (-8% YoY) and Wearables/Home/Accessories $7.4B (-9% YoY) faced difficult compares tied to prior-year iPad launches and accessory dynamics .
Tariffs: ~$800M cost pressure in Q3, with ~$1.1B expected in Q4; Q3 GM down 60 bps sequentially primarily due to tariffs and mix in Products .
Q4 growth guide mid-to-high single digits reflects tariff pull-forward impact in April (~1 pt) and tougher iPad comp; FX only a minor tailwind sequentially .

Financial Results

Headline Metrics vs Prior Periods and Estimates

Metric	Q3 2024	Q2 2025	Q3 2025 Actual	Q3 2025 Consensus
Revenue ($USD Billions)	$85.777	$95.359	$94.036	$89.162*
Diluted EPS ($)	$1.40	$1.65	$1.57	$1.434*
Gross Margin %	46.3% (calc from $39.678/$85.777)	47.1% (calc from $44.867/$95.359)	46.5%	46.04%*
Products GM %	—	—	34.5%	—
Services GM %	—	—	75.6%	—
Operating Income ($B)	$25.352	$29.589	$28.202	—
Net Income ($B)	$21.448	$24.780	$23.434	—
Operating Expenses ($B)	$14.326	$15.278	$15.516	—

Values marked with * are from S&P Global consensus (actuals shown alongside where available). Values retrieved from S&P Global.

Category Net Sales (YoY)

Category	Q3 2024 ($B)	Q3 2025 ($B)	YoY Growth
iPhone	$39.296	$44.582	+13.5% (calc)
Mac	$7.009	$8.046	+14.8% (calc)
iPad	$7.162	$6.581	-8.1% (calc)
Wearables, Home & Accessories	$8.097	$7.404	-8.6% (calc)
Services	$24.213	$27.423	+13.2% (calc)
Total Net Sales	$85.777	$94.036	+9.6% (calc)

Geographic Net Sales (YoY)

Geography	Q3 2024 ($B)	Q3 2025 ($B)	YoY Growth
Americas	$37.678	$41.198	+9.3% (calc)
Europe	$21.884	$24.014	+9.8% (calc)
Greater China	$14.728	$15.369	+4.4% (calc)
Japan	$5.097	$5.782	+13.5% (calc)
Rest of Asia Pacific	$6.390	$7.673	+20.1% (calc)
Total Net Sales	$85.777	$94.036	+9.6% (calc)

KPIs and Balance Sheet/Cash Flow

KPI	Q3 2025	Prior Context
Installed base of active devices	All-time high (all categories/geos)	Q2 also reached new highs
iPhone/Mac upgraders	June-quarter records	—
Paid subscriptions	Well over 1B	—
US customer satisfaction	iPhone 98%; Mac 97%; iPad 98%; Watch 97%	—
Operating cash flow	$27.9B	Q2: $24B (press release commentary)
Cash + marketable securities	$133B	—
Total debt	$102B; net cash $31B	—
iPhone channel inventory	Reduced; ended toward low end of targeted range	—
Tariff costs	~$800M in Q3	~$1.1B expected in Q4
Dividend	$0.26/share; payable Aug 14, 2025	Q2 dividend increased to $0.26 (+4%)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total company revenue growth (YoY)	Q4 (Sep-25)	Not provided	Mid to high single digits YoY	New
Services revenue growth (YoY)	Q4 (Sep-25)	Not provided	Similar to Q3’s +13%	Maintained (vs Q3 trend)
Gross margin (%)	Q4 (Sep-25)	Not provided	46%–47%	New
Operating expenses ($B)	Q4 (Sep-25)	Not provided	$15.6–$15.8	New
OI&E ($M)	Q4 (Sep-25)	Not provided	~-$25 (ex mark-to-market)	New
Tax rate (%)	Q4 (Sep-25)	Not provided	~17%	New
Tariff impact ($B)	Q4 (Sep-25)	~$0.8 in Q3	~$1.1 expected in Q4	Raised (headwind)
Dividend/share	Q3 (Jun-25)	$0.26 (Q2 increase)	$0.26; payable Aug 14, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 FY25)	Current Period (Q3 FY25)	Trend
AI/technology initiatives	Q1: Apple Intelligence expanding languages; emphasis on Apple silicon . Q2: New Macs/iPads leveraging Apple silicon .	Embedding AI across platforms; >20 Apple Intelligence features; personalized Siri targeted next year; significant investment ramp .	Intensifying investment and product integration
Supply chain	Q1/Q2 press releases did not highlight tariffs; product introductions and carbon progress .	Tariffs ~$800M in Q3; ~$1.1B expected Q4; country of origin mix (US iPhones: majority India; US Macs/iPads/Watches: majority Vietnam); continued US manufacturing investments .	Rising tariff headwind; ongoing diversification
Tariffs/macro	Not referenced in Q1/Q2 releases .	GM down 60 bps sequentially largely due to tariffs; modest April demand pull-forward (~1 pt to company growth) .	Clearer quantified headwind
Product performance	Q1 record revenue/EPS; Services all-time high . Q2: Revenue $95.359B, EPS $1.65; Services record .	iPhone +13% YoY; Mac +15% YoY; iPad -8% YoY; Wearables -9% YoY; Services +13% YoY record .	Mixed: core products strong; peripherals softer
Regional trends	Q1: Greater China $18.513B; Americas $52.648B . Q2: Greater China $16.002B; Americas $40.315B .	Q3: Greater China +4% YoY; upgraders record; promotions/subsidies aided; US/EU/APAC robust growth .	Improving China; broad-based global strength
Regulatory/legal	Q1/Q2: no explicit mentions in releases .	US App Store growth double-digit despite Epic-related changes; monitoring effects; Google revenue share assumes continuation in guidance .	Manageable so far; watch legal outcomes
R&D execution & capex	Q2: operating cash flow $24B; buybacks/dividends increased .	Capex to grow substantially (AI infra, Private Cloud Compute), hybrid infra model; OpEx $15.5B (+8% YoY) .	Capex rising with AI
Health features	Q1: product lineup accolades .	Hearing health (AirPods Pro 2), Watch health/safety features; watchOS 26 updates .	Ongoing differentiation
Enterprise & Vision Pro	Q1/Q2 releases did not highlight enterprise .	Best June quarter for Mac in enterprise; VisionOS 26 with spatial widgets/personas and new enterprise APIs .	Building enterprise use cases

Management Commentary

“June quarter revenue record of $94 billion, up 10%… EPS set a June quarter record of $1.57, up 12% YoY… double-digit growth in iPhone, Mac and services” — Tim Cook .
“Company gross margin was 46.5%… down 60 bps sequentially, primarily driven by approximately $800 million in tariff-related costs” — CFO Kevin Perek .
“We are embedding [AI] across our devices… significantly growing our investments… making good progress on a more personalized Siri, and… expect to release these features next year” — Tim Cook .
“We ended the quarter with $133 billion in cash and marketable securities… total debt $102 billion… net cash $31 billion… returned over $27 billion to shareholders” — CFO Kevin Perek .
“For the September quarter… gross margin… 46%–47%… operating expenses $15.6–$15.8B… OI&E around -$25M… tax rate around 17%” — CFO Kevin Perek .

Q&A Highlights

Upgrades and demand pull-forward: June-quarter records for iPhone/Mac upgraders driven by product strength; April tariff-related pull-forward contributed ~1 pt to company growth; iPhone channel inventory reduced to low end of target range .
Tariffs and mitigation: ~$800M Q3 impact; ~$1.1B expected in Q4 driven by higher volume; origin mix includes India (US iPhones) and Vietnam (US Macs/iPads/Watches); continued US investments and supply chain optimization .
China: +4% YoY; subsidies and promotions helped; records for iPhone install base/upgraders; MacBook Air top-selling laptop and Mac Mini top-selling desktop in China .
Capex and AI infra: Capex to grow substantially (not exponential), focused on AI/private cloud compute; hybrid infra leveraging third parties; OpEx guided up modestly .
Services and legal: US App Store double-digit growth with all-time record; monitoring Epic-related changes; guidance assumes Google revenue share continues .

Estimates Context

Revenue beat: $94.036B actual vs $89.162B consensus (+$4.9B, +5.5%)*.
EPS beat: $1.57 vs $1.434 consensus (+$0.136, +9.5%)*.
Gross margin modest beat: 46.5% actual vs 46.04% consensus (+46 bps)*.
Estimates count: 28 for revenue; 29 for EPS*.
Values retrieved from S&P Global.

Implications: Consensus likely needs to reflect sustained Services strength, stronger iPhone/Mac upgrades, and heightened tariff headwinds impacting margin trajectory and Q4 guide.

Key Takeaways for Investors

Broad-based beat with strong iPhone/Mac/Services and record EPS should support near-term sentiment; watch Q4 guide anchored by tariff headwinds and tough iPad compare .
Services momentum (cloud, App Store, paid subscriptions >1B) underpins margin resilience and valuation support; legal outcomes remain a swing factor .
AI investment ramp (personalized Siri next year; infra build-out) is a medium-term catalyst; rising capex signals commitment to on-device and private cloud compute .
China’s stabilization (+4% YoY) with strong upgraders and product mix is constructive; track sustainability of promotions/subsidies .
Tariffs are a quantified headwind (Q3 ~$800M; Q4 ~$1.1B) impacting mix and margins; supply chain diversification and US manufacturing investments are strategic offsets .
Capital return remains robust (net cash $31B; $27B returned in Q3); dividend maintained at $0.26 with ongoing buybacks .
Near-term trading: focus on Services trajectory and AI narrative vs tariff/margin headwinds; medium-term thesis centers on Apple silicon/AI integration, subscription scale, and ecosystem stickiness .