Apple (NASDAQ:AAPL) prepares to report its fourth quarter fiscal 2025 financial results under a positive light due in part to resilient Services revenue and a shift in manufacturing for the U.S. market outside of China, according to J.P. Morgan.
“Impact of consumer adoption of link-out payments on Services growth was a key question on the mind of investors heading to F3Q print, however, Services growth accelerating to ~13% in F3Q as well as a guidance for similar growth into F4Q, highlighted limited overall impact from link-out payments,” said J.P. Morgan analysts, led by Samik Chatterjee, in a Monday investor note.
The App Store payment link-out option occurred following a federal court order. It forced Apple to allow consumers to make in-app purchases for iOS apps outside its store. It was part of a multi-year legal saga between Apple and Epic Games.
J.P. Morgan also highlighted Apple’s quick moves to relocate some of its manufacturing sites for U.S.-bound products outside of China to locations such as India and Vietnam to minimize the effects of semiconductor-specific tariffs.
“Shifting our focus back to the upcoming quarterly results and guidance, we expect robust high-single digit revenue growth in both F4Q25 and for the outlook to be shared for F1Q26E to reinforce to investors a positive product cycle for the company, but the greater surprises and upside revisions to consensus estimates are likely to stem from margin upsides supported by moderating tariff headwinds as well as margin mix benefits from robust Services revenue growth, setting up AAPL shares well for investors who will look forward to owning the visibility into upsides provided through a robust iPhone 17 product cycle and very likley to be followed by a strong product cycle with iPhone 18 series which will include the foldable iPhone,” Chatterjee noted.
Apple is slated to release its latest results on Thursday, Oct. 30. A consensus estimate expects Apple to report earnings per share of $1.77 on revenue of $102.19B. During the same quarter last year, Apple reported EPS of $1.64 on revenue of $94.93B.