Apple Delivers Record Quarter as iPhone 17 and Services Drive Growth
The growth came from stronger iPhone margins, record Services revenue, and lower production costs across the Mac and iPad lines.
• Apple posted a record September-quarter revenue of $102.5 billion, up 8% year over year, driven by strong iPhone 17 and Services performance.
• iPhone revenue rose 6%, with record growth in emerging markets like India, Latin America, and South Asia, despite limited availability of the iPhone 17.
• Services hit an all-time high of $28.8 billion, now surpassing $100 billion annually, making it Apple’s fastest-growing business segment.
While most of Silicon Valley spent the week riding waves of AI hype and market volatility, Apple did what it often does best, deliver.
The company released its fiscal fourth-quarter 2025 results on Thursday, posting a September-quarter revenue record of $102.5 billion, up 8% year over year, and diluted earnings per share of $1.85, up 13%.
That steady growth came as the company launched a wave of new products, including the iPhone 17 lineup, AirPods Pro 3, and an upgraded Apple Watch series, while laying the groundwork for what CEO Tim Cook called “the best December quarter in Apple’s history.”
A Record Quarter in a Challenging Year
Apple’s results may not have shocked anyone on paper, but the story behind the numbers is far more impressive. The company posted $27.46 billion in net income, nearly doubling last year’s figure of $14.29 billion, a period weighed down by one-time tax charges related to the reversal of a European State Aid decision. Full-year revenue climbed 6% to $416 billion, capping off what CEO Tim Cook called “a record fiscal year.”
These gains didn’t come easily. Apple navigated supply constraints on the iPhone 17 lineup, weaker sales in China, and $1.1 billion in tariff-related costs, yet still came out on top. The growth came from stronger iPhone margins, record Services revenue, and lower production costs across the Mac and iPad lines.
“We’re very proud to report a September quarter revenue record,” Cook said. “This includes records for iPhone and Services, and the most extraordinary product lineup we’ve ever had heading into the holidays.”
That lineup, led by the iPhone 17, iPhone 17 Pro and Pro Max, and the new iPhone Air, is already proving its strength. iPhone revenue rose 6% year over year to $49.03 billion, even though sales reflected just eight days of iPhone 17 availability. Cook described demand as “off the chart,” noting that several models, especially the Pro versions, were supply constrained during the quarter.
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“The product lineup is incredibly strong, as strong as ever,” he said. “The 17 Pro is the most pro phone we’ve ever done… strongest iPhone lineup ever, and it’s resonating around the world.”
Apple’s momentum even extended beyond its core markets. “iPhone grew in the vast majority of the markets we track, with September quarter records in many emerging markets, including Latin America, the Middle East, and South Asia, and an all-time record in India,” said Kevan Parekh, Apple’s CFO.
Services Keep Climbing as Hardware Holds Steady
If iPhones remain Apple’s engine, Services has become the company’s heartbeat. The segment hit a new all-time record of $28.8 billion, up from $25 billion a year ago, driven by growth in Apple Pay, iCloud, Apple Music, and App Store fees. It was the fastest-growing division, now surpassing $100 billion in annual revenue, a 14% increase from 2024.
“It was a run of the table,” Cook said of Services, noting double-digit growth across all major regions, including a September-quarter record in Greater China.
Meanwhile, Mac revenue rose 13% to $8.73 billion, supported by the success of the refreshed MacBook Air and lower entry pricing. The iPad business held steady at $6.95 billion, a result Apple attributed to tough year-over-year comparisons, as the previous year’s iPad Pro and Air launches had landed late in the quarter. Still, the company reported a new all-time high for its active install base, with half of iPad buyers being entirely new to the product and a 98% customer satisfaction rate in the US, signs that the category remains resilient even in a slower upgrade cycle.
The Wearables, Home, and Accessories category, which includes Apple Watch, AirPods, and Vision Pro, edged slightly lower at $9.01 billion, down from $9.04 billion last year. Apple said the small dip reflected softer accessory sales as the company lapped a strong update cycle in the prior year, partially offset by solid growth in Watch and AirPods demand.
China Softens, But Apple Looks Ahead
Even with record overall revenue, Apple’s performance in China was mixed. Sales in Greater China fell 4% year over year to $14.5 billion, down from $15 billion. Cook attributed the dip to temporary supply constraints and suggested the rebound would come in the December quarter as iPhone 17 shipments accelerate.
“We expect China to return to growth,” Cook said. “Traffic in stores is up significantly year on year, and enthusiasm for the iPhone 17 family is very strong.”
Cook’s optimism is reflected in Apple’s outlook: the company expects total revenue to grow 10–12% year over year in the December quarter, with double-digit iPhone growth, potentially setting up Apple’s best quarter ever, both for the company and the iPhone specifically.
AI, Tariffs, and What Comes Next
While competitors like Microsoft and Google leaned heavily into AI announcements this quarter, Apple chose a more understated path. Rather than rushing to market with consumer-facing AI products, the company is building the foundation for deeper, long-term integration across its ecosystem. CFO Parekh noted that Apple is “significantly increasing” its investments in artificial intelligence, with operating expenses projected between $18.1 and $18.5 billion next quarter.
Cook confirmed that Apple is continuing to develop multiple foundation models for Apple Intelligence, its on-device AI system announced earlier this year, and that the company is open to AI-related acquisitions to accelerate its roadmap. A revamped Siri, delayed earlier in the year, is now expected to launch in 2026.
When asked about AI’s role in driving iPhone demand, Cook said Apple Intelligence is already influencing upgrades. “We’re very bullish on it becoming a greater factor,” he said.
Tariffs, meanwhile, remain a lingering cost. Apple absorbed $1.1 billion in tariff-related expenses this quarter and expects $1.4 billion in the December quarter, even after rates on some Chinese imports dropped from 20% to 10%. Despite that, Apple maintained a gross margin of 47.2%, comfortably above Wall Street’s 46.4% estimate.
A Steady Hand in a Volatile Market
There weren't any big stunts or surprise reveals in this quarter, just Apple doing Apple things. And somehow, that calm, deliberate rhythm is what keeps it winning.
It has turned a brief iPhone 17 rollout into record September-quarter revenue, pushed Services to new highs, and quietly built investor confidence in its AI direction, all while navigating tariffs and slowing China sales.
As the tech industry races toward an AI-dominated future, Apple seems intent on pacing itself. Its Q4 2025 results may not be the loudest headline in tech this week, but they’re a reminder that sometimes, the most powerful moves are the quietest ones.
