What Management Said
Read the full Q3 2025 transcript ↗Today, we are proud to report a June quarter revenue record of $94 billion, up 10% from a year ago, which was better than we expected. We saw an acceleration of growth around the world in the vast majority of markets we track, including Greater China and many emerging markets. We had June quarter revenue records in more than two dozen countries and regions, including the U.S., Canada, Latin America, Western Europe, the Middle East, India, and South Asia. These results were driven by double-digit growth across iPhone, Mac, and services.
We set a June quarter record for iPhone, which grew a strong 13% YoY. We saw iPhone growth in every geographic segment and double-digit growth in emerging markets, including India, the Middle East, South Asia, and Brazil. We set another all-time revenue record in services, which grew 13%, with double-digit growth in both developed and emerging markets. iPhone revenue was $44.6 billion, up 13% from a year ago, and we set a June quarter record for upgraders.
In Mac, we had another strong quarter, with revenue of $8 billion, up 15% YoY, largely driven by the strength of the M4 MacBook Air. Users are already excited for our biggest iPad software update ever with the upcoming release of iPadOS 26. That is all on top of a beautiful new software design that brings these updates to life. Turning to wearables, home, and accessories, revenue was $7.4 billion, and we saw a June quarter record for upgraders to Apple Watch.
What went well
- June quarter revenue record of $94B, up 10% YoY, better than expected, with acceleration across the vast majority of markets tracked
- iPhone set a June quarter record at $44.6B, up 13% YoY, with growth in every geographic segment and a June quarter record for upgraders
- Mac revenue of $8B, up 15% YoY, largely driven by the M4 MacBook Air, with a June quarter record for upgraders
- Services reached an all-time record of $27.4B, up 13% YoY, with double-digit growth in both developed and emerging markets and an all-time cloud services record
- Greater China returned to growth, up 4% YoY, driven by iPhone acceleration; installed base and iPhone install base hit record highs in the region
- Installed base of active devices reached an all-time high across all product categories and geographic segments
- June quarter records for both net income ($23.4B) and diluted EPS ($1.57, up 12% YoY); operating cash flow of $27.9B
What went wrong
- iPad revenue was $6.6B, down 8% YoY, against a difficult compare versus the prior-year iPad Air and iPad Pro launch
- Wearables, home and accessories revenue was $7.4B, down 9% YoY, on a difficult accessories compare from prior-year iPad launches
- Company gross margin of 46.5% was down 60bps sequentially, primarily driven by approximately $800M in tariff-related costs
- Products gross margin of 34.5% was down 140bps sequentially on mix and tariff-related costs
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Total company revenue growth | Q4 FY2025 (September quarter) | mid to high single digits YoY |
| Services revenue growth | Q4 FY2025 (September quarter) | similar YoY rate to June quarter |
| Gross margin | Q4 FY2025 (September quarter) | 46%-47%, including ~$1.1B tariff-related costs |
| Operating expenses | Q4 FY2025 (September quarter) | $15.6B-$15.8B |
| OI&E | Q4 FY2025 (September quarter) | around negative $25M, excluding mark-to-market of minority investments |
| Tax rate | Q4 FY2025 (September quarter) | around 17% |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| iPhone revenue | +13% | Popularity of the iPhone 16 family (up strong double digits vs the 15 family) and iPhone 16e; June quarter record for upgraders; growth in every geographic segment |
| Mac revenue | +15% | Strength of the M4 MacBook Air and continued move to Apple Silicon; June quarter record for upgraders |
| iPad revenue | -8% | Difficult compare against the prior-year launch of iPad Air and iPad Pro |
| Wearables, home and accessories revenue | -9% | Difficult accessories compare from prior-year iPad launches, despite an Apple Watch upgrader record |
| Services revenue | +13% | Broad-based growth across categories including a cloud services all-time record, plus double-digit growth in App Store, TV+ viewership and paid accounts |
| Greater China revenue | +4% | iPhone acceleration and Mac growth, aided by the first full quarter of government subsidies on certain products |
| Company gross margin | 46.5% (down 60bps sequentially) | Approximately $800M in tariff-related costs partly offset by cost savings |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariffs | Guided ~$900M for June quarter | ~$800M actual in June quarter; guiding ~$1.1B for September quarter; bulk were IEEPA tariffs tied to China, most products under Section 232 investigation | — |
| AI / Apple Intelligence investment | More than 20 Apple Intelligence features already released | Significantly growing investment (up in June quarter, again in September); more personalized Siri expected next year; opened on-device foundation models to developers | — |
| CapEx | Running near ~$4B annualized | Expected to grow substantially (not exponentially), driven largely by AI including Private Cloud Compute in first-party data centers under a hybrid model | — |
| China demand | Weak in prior periods | Returned to +4% growth with record install base and top-three iPhone models in urban China | — |
| Tariff-related demand pull-forward | — | Estimated ~1 point of the 10 points of Q3 growth, principally iPhone and Mac, largely in the U.S. in April | — |
| U.S. investment / supply chain | — | $500B U.S. commitment over four years; chips in Arizona, semiconductors across 12 states / 24 factories; MP Materials investment; India and Vietnam sourcing for U.S. products | — |
Q&A Summary
Are the upgrade records driven by upgrade-rate strength or a growing install base, and what drove CapEx growth (Michael Ng, Goldman Sachs)?
Cook: upgrade records driven by product strength (iPhone 16 family up double digits vs 15 family) and the move to Apple Silicon; tariff pull-forward was ~1 point of the 10 points of growth. Perek: CapEx growth driven significantly by AI investment including Private Cloud Compute in first-party data centers, under a hybrid model using third parties too.
How did the rest of the quarter play out after April search-decline reports, and is Apple losing strategic value as a search access point (Erik Woodring, Morgan Stanley)?
Cook: products continue to be very valuable; consumer behaviors are evolving and Apple is monitoring closely. On China, grew 4% driven by iPhone acceleration, aided by government subsidies, with record install base and top-three iPhone models in urban China.
How confident is Apple on launching a more personalized Siri next year, and why guide to deceleration if services stays at 13% (Ben Reitzes, Melius)?
Cook: making good progress on personalized Siri, expected next year; significantly growing AI investment and reallocating people. Perek/Cook: September deceleration reflects the ~1-point tariff pull-forward in Q3 and the difficult compare against prior-year iPad launches; FX only a minor tailwind.
Options if the Google revenue-share payments were disallowed, and risk that screen-based devices diminish in an AI world (Wamsi Mohan, Bank of America)?
Cook: will not speculate on the court ruling. On form factors, difficult to see a world without iPhone given all it does; other devices likely complementary, not substitutes.
How will Apple offset the $1.1B September tariff headwind, and did the Epic/steering decision hurt services (Amit Daryanani, Evercore)?
Cook: tariff cost up on higher volume; mitigating via supply-chain optimization and $500B U.S. investment. Perek: services had a very strong all-time-record quarter, broad-based; Epic change only introduced in June quarter, U.S. App Store had double-digit growth and a record.
Update on supply-chain strategy (India) and drivers of above-seasonal iPhone strength (David Vogt, UBS)?
Cook: most products under Section 232; majority of U.S. iPhones sourced from India, other U.S. products from Vietnam, international products mostly from China; $500B U.S. commitment. Perek: iPhone strength driven by iPhone 16 family and 16e product strength, a June quarter upgrader record.
Was there iPhone pull-in, and how does channel inventory look (Krish Sankar, TD Cowen)?
Cook: iPhone channel inventory was reduced during the quarter, ending toward the low end of the target range. Perek: pull-ahead seen mainly in April around tariff discussions, ~1 point of the 10 points of total-company growth. On edge AI, Cook declined to detail commoditization to protect strategy.
What underlies the ~1-point pull-forward estimate, and is December unique on tariffs (Samik Chatterjee, JPMorgan)?
Cook: pull-forward principally iPhone and Mac, largely U.S., mostly in April. On December, cautioned against projecting tariff costs given uncertain rates, prior build-ahead inventory, and higher Q1 volume; tariffs currently roughly linear with volume.
How much FX benefit this quarter and into guidance, and will CapEx move appreciably higher on AI (Aaron Rakers, Wells Fargo)?
Perek: virtually no FX impact on Q3 YoY revenue or gross margin; only a very small tailwind into September. CapEx will grow substantially (not exponentially), driven largely by AI, within a hybrid first/third-party model.
Is Vision Pro still enterprise-focused, and does Apple need to accelerate AI via M&A (Asif Malik, Citi)?
Cook: very focused on Vision Pro (visionOS 26 spatial widgets, personas, enterprise APIs) but won't detail roadmap. Apple acquired ~seven companies this year (about one every several weeks), all small; open to M&A that accelerates the roadmap regardless of size.
More on Apple Inc.
Reported 2025-07-31 · figures from the Apple Inc. Q3 2025 earnings call.
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