Apple outlines mid- to high single-digit revenue growth for Q4 2025 driven by AI investment and record iPhone, Mac, and Services performance

Earnings Call Insights: Apple Inc. (AAPL) Q3 2025

Management View

CEO Timothy D. Cook reported a June quarter revenue record of $94 billion, representing a 10% increase year-over-year, and noted, “EPS set a June quarter record of $1.57, up 12% year-over-year.” Cook emphasized, “We saw an acceleration of growth around the world in the vast majority of markets we track, including Greater China and many emerging markets,” while highlighting double-digit growth across iPhone, Mac, and Services, with iPhone revenue up 13% year-over-year.
Cook outlined that, “We are embedding [AI] across our devices and platforms and across the company. We are also significantly growing our investments.” He referenced more than 20 Apple Intelligence features released and described Apple silicon as “at the heart of all of these experiences, enabling powerful Apple Intelligence features to run directly on device.”
CFO Kevan Parekh stated, “Our revenue of $94 billion was up 10% year-over-year and is a new June quarter record. We grew in every geographic segment and in the vast majority of the markets we track.” He added, “This strong business performance led to June quarter records for both net income at $23.4 billion and diluted earnings per share of $1.57, which was up 12% year-over-year.”

Outlook

Parekh provided guidance that, “We expect our September quarter total company revenue to grow mid- to high single digits year-over-year. We expect Services revenue to grow at a year-over-year rate similar to what we reported in the June quarter.” Gross margin is expected to be “between 46% and 47%, which includes the estimated impact of the $1.1 billion tariff-related costs.” Operating expenses are projected to be between $15.6 billion and $15.8 billion. The guidance assumes that “global tariff rates, policies and application remain in effect as of this call, the global macroeconomic outlook does not worsen from today and the current revenue share agreement with Google continues.”
Management reiterated a $0.26 per share cash dividend payable on August 14, 2025.

Financial Results

iPhone revenue was $44.6 billion, up 13% year-over-year, with Cook noting, “We set a June quarter record for upgraders.” Mac revenue reached $8 billion, up 15% year-over-year. iPad revenue was $6.6 billion, and Wearables, Home and Accessories revenue was $7.4 billion. Services revenue set an all-time record at $27.4 billion, up 13% year-over-year.
Gross margin stood at 46.5%, with Parekh attributing a 60 basis point sequential decline primarily to tariff-related costs of approximately $800 million. Operating expenses totaled $15.5 billion, up 8% year-over-year. Operating cash flow was $27.9 billion. Net income was $23.4 billion.
The company ended the quarter with $133 billion in cash and marketable securities and returned over $27 billion to shareholders through dividends and share repurchases.

Q&A

Michael Ng, Goldman Sachs: Asked about upgrade rates and CapEx. Parekh responded that CapEx growth is “a pretty significant driver… is the fact we are increasing our investment significantly in AI,” and Cook stated, “We did set an upgrade record. I think it directly is because of the strength of the product.”
Erik Woodring, Morgan Stanley: Inquired about search trends and China demand. Cook replied, “I think they continue to be very valuable… consumers’ behaviors are evolving, and we’re monitoring it very closely.” On China, Cook highlighted 4% growth in Greater China and set records for upgraders and installed base.
Ben Reitzes, Melius Research: Pressed on Siri and AI confidence. Cook said, “We’re making good progress on a more personalized Siri, and we do expect to release the features next year… we are significantly growing our investment.”
Wamsi Mohan, BofA Securities: Asked about Google payments and device form factors. Cook declined to speculate on the court ruling and stated, “It’s difficult to see a world where iPhone is not living in it.”
Amit Daryanani, Evercore: Queried about tariff offsets. Cook explained, “We’re already building chips in Arizona… building semiconductors across 12 states in 24 factories… we continue to explore these things and look for more that we can do.”
David Vogt, UBS: Asked about supply chain and iPhone demand drivers. Cook described the country of origin mix and U.S. manufacturing investments, and Parekh attributed iPhone strength to the product lineup and the introduction of the 16e.
Krish Sankar, TD Cowen: Sought clarity on channel inventory and pull-ahead effects. Cook said, “We reduced it, and it ended toward the low end of our targeted range,” and Parekh reiterated a 1 point pull-ahead impact due to tariffs.
Samik Chatterjee, JPMorgan: Asked about the pull-ahead estimate and tariffs. Cook specified effects were “principally on iPhone and Mac” and “largely occurred in April… largely the United States.”
Aaron Rakers, Wells Fargo: Inquired about currency and CapEx. Parekh noted, “For Q3, we really had no impact from a foreign exchange standpoint on the year-on-year results… you are going to continue to see our CapEx grow.”
Atif Malik, Citi: Asked about Vision Pro focus and AI M&A. Cook said, “We really believe in” Vision Pro and, on M&A, “We’re very open to M&A that accelerates our road map.”

Sentiment Analysis

Analysts displayed a neutral to slightly positive sentiment, with several questions probing sustainability of growth, tariff headwinds, and AI investments, but acknowledging record results and strong product momentum.
Management maintained a confident tone in prepared remarks, with Cook stating, “We are proud of our results for the June quarter,” but was more cautious and measured in Q&A, especially regarding regulatory and tariff risks, as seen in Cook’s comment, “I don’t really want to speculate on the court ruling.”
Compared to the previous quarter, both analyst and management tone remained consistently business-focused, but the current call reflected greater confidence in AI strategy and product momentum, while continuing to address tariff and regulatory uncertainties.

Quarter-over-Quarter Comparison

Guidance shifted from low to mid-single-digit expected growth in the previous quarter to mid- to high single-digit growth for the upcoming quarter, with Services revenue projected to maintain its growth rate.
Management’s focus moved from discussing initial impacts of tariffs and AI integration to emphasizing expanded AI feature sets, increased CapEx, and continued supply chain adjustments.
Analysts continued to focus on tariffs, supply chain, and AI, but with more questions on CapEx and the sustainability of recent growth.
Gross margin guidance slightly decreased and tariff-related costs increased quarter-over-quarter.
Management’s confidence in AI initiatives and product strength is more pronounced this quarter, with expanded remarks on Apple Intelligence and device upgrades.

Risks and Concerns

Management cited evolving tariff situations, estimating $1.1 billion in costs for the next quarter and cautioning that these estimates are subject to change based on rates and policies.
Regulatory and legal uncertainties were highlighted, particularly regarding the Google revenue share agreement and ongoing court cases, with Cook declining to speculate on possible outcomes.
Analysts raised concerns about demand pull-forward, supply chain country-of-origin risk, and the impact of regulatory changes on Services profitability. Management discussed mitigation strategies, including expanding U.S. manufacturing and ongoing supply chain optimization.

Final Takeaway

Apple delivered a record June quarter led by double-digit growth in iPhone, Mac, and Services, propelled by robust global demand and substantial investment in AI-driven features and infrastructure. Management projected mid- to high single-digit revenue growth for the next quarter, with Services growth holding steady, while navigating increased tariff-related costs and regulatory uncertainties. The company reinforced its commitment to innovation, supply chain diversification, and long-term capital investment, signaling continued momentum in product upgrades and AI integration across its platforms.

Read the full Earnings Call Transcript