Apple wrapped its fiscal 2025 with a record-setting fourth quarter, reporting $102.5 billion in revenue and earnings per share of $1.85. Both figures beat Wall Street expectations and helped the company close out the year with $416 billion in total revenue and double-digit EPS growth. On the surface, this was a strong quarter, but the details show a more mixed picture, especially for the iPhone business and performance in China.
iPhone revenue totalled $49.03 billion, missing analyst expectations of $50.19 billion. That’s a notable miss given the launch of the new iPhone 17 lineup during the quarter. However, Apple attributed the underperformance to supply constraints, not a lack of demand. According to Tim Cook, several models across the iPhone 17 and even iPhone 16 lineups were supply-constrained during the quarter. The new phones were also only available for about a week before the quarter ended, limiting their overall contribution. Despite the shortfall, Apple expects the December quarter to be the best for iPhone, with Cook citing “off the chart” demand and strong in-store traffic.
Services remained a bright spot. The segment delivered $28.75 billion in revenue, ahead of expectations, and continues to serve as Apple’s fastest-growing and highest-margin business. Cook described performance across Services as a “run of the table,” and CFO Kevan Parekh noted that most components within the segment are seeing accelerating growth. Meanwhile, the Mac business posted a strong quarter with $8.73 billion in revenue, up 13% year over year. That growth was driven largely by the March refresh of the MacBook Air and a $100 price cut. iPad revenue was essentially flat at $6.95 billion. Wearables, including Apple Watch, AirPods, and Vision Pro, generated $9.01 billion in revenue.
Greater China remains a weak spot. Revenue from the region fell 4% year over year to $14.5 billion, missing estimates of $16.43 billion. Apple continues to face challenges there, but Cook expressed optimism for a rebound in Q1, citing strong initial demand for the iPhone 17 lineup in the region. He expects China to return to growth in the current quarter.
Margins held up despite significant cost pressure. Apple absorbed $1.1 billion in tariff-related costs during the quarter and expects to absorb $1.4 billion in Q1, all without passing those costs onto consumers. The company’s gross margin still came in at 47.2%, outperforming expectations and underscoring Apple’s pricing power and cost discipline.
Looking ahead, Apple is guiding for 10 to 12% revenue growth in the December quarter, which would put Q1 revenue between $135 and $138 billion. That’s well ahead of analyst expectations of $132.3 billion. The company also expects double-digit year-over-year growth in iPhone revenue and continued strong performance in Services. With a refreshed product lineup including the new iPhone Air, AirPods Pro 3, Apple Watch updates, and new Macs and iPads featuring the M5 chip, Apple is positioning itself for a big holiday season.
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