What Management Said
Read the full Q4 2025 transcript ↗Afternoon, and welcome to the Apple Q4 fiscal year 2025 earnings conference call. You can find a reconciliation of these measures in our fourth quarter earnings release, which is available on our Investor Relations website. Apple is proud to report $102.5 billion in revenue, up 8% from a year ago and a September quarter record. Services achieved an all-time revenue record of $28.8 billion, growing 15% from a year ago.
We also set a September quarter revenue record in emerging markets and an all-time revenue record in India. These results come at the close of an extraordinary year for Apple, in which we achieved an all-time revenue record of $416 billion for the fiscal year. We also launched a beautiful new software design that creates a unified experience across all of our platforms for the very first time. In Mac, we had a strong September quarter with revenue of $8.7 billion, up 13% year-over-year, driven by the strength of the MacBook Air.
Turning to services, as I mentioned earlier, revenue was $28.8 billion for the September quarter, 15% higher year-over-year and an all-time record. We saw double-digit growth in both developed and emerging markets and set new all-time records across advertising, App Store, cloud services, music, payment services, and video. Our revenue of $102.5 billion was up 8% year-over-year and is a new September quarter record. We set September quarter records in the Americas, Europe, Japan, and the rest of Asia-Pacific, and grew in the vast majority of markets we track.
What went well
- September quarter revenue record of $102.5B, up 8% YoY, capping an all-time fiscal-year revenue record of $416B
- iPhone set a September quarter revenue record at $49B, up 6% YoY, despite supply constraints on several iPhone 16 and 17 models given strong demand
- Mac revenue of $8.7B, up 13% YoY, driven by MacBook Air, with strong double-digit growth in emerging markets
- Services reached an all-time record of $28.8B, up 15% YoY (fastest growth in years), pushing full-year services past $100B (up 14%)
- Company gross margin of 47.2% was above the high end of guidance and up 70bps sequentially on favorable mix
- September quarter records for net income ($27.5B) and diluted EPS ($1.85, up 13% YoY adjusted); operating cash flow a September-quarter record $29.7B
- Installed base of active devices reached another all-time high across all product categories and geographic segments
What went wrong
- Greater China revenue was down 4% YoY, driven by iPhone supply constraints (management framed it as supply- rather than demand-driven)
- iPhone and iPhone 17/16 models were supply-constrained, ending channel inventory toward the low end of the target range; Apple could have sold more
- iPad revenue of $7B was flat YoY against a difficult full-quarter compare from the prior-year iPad Air/iPad Pro launch
- Wearables, home and accessories revenue of $9B was flat YoY as accessories lapped strong prior-year iPad-launch performance
- Services gross margin of 75.3% was down 30bps sequentially
- Operating expenses of $15.9B were up 11% YoY on increased R&D investment
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Total company revenue growth | Q1 FY2026 (December quarter) | 10%-12% YoY, expected best quarter ever |
| iPhone revenue growth | Q1 FY2026 (December quarter) | double digits YoY, expected best iPhone quarter ever |
| Services revenue growth | Q1 FY2026 (December quarter) | similar YoY rate to FY2025 (~14%) |
| Gross margin | Q1 FY2026 (December quarter) | 47%-48%, including ~$1.4B tariff-related costs |
| Operating expenses | Q1 FY2026 (December quarter) | $18.1B-$18.5B |
| OI&E | Q1 FY2026 (December quarter) | around $150M, excluding mark-to-market of minority investments |
| Tax rate | Q1 FY2026 (December quarter) | around 17% |
| Mac | Q1 FY2026 (December quarter) | very difficult compare against prior-year M4 MacBook Pro, Mac Mini and iMac launches |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| iPhone revenue | +6% | iPhone 16 family strength with September quarter records in many emerging markets and an all-time record in India, despite supply constraints on several iPhone 16 and 17 models |
| Mac revenue | +13% | MacBook Air strength; growth in every geographic segment and strong double-digit growth in emerging markets |
| iPad revenue | flat (0%) | Difficult compare against the prior-year full-quarter impact of the iPad Air and iPad Pro launch, offset by better-than-expected iPad performance |
| Wearables, home and accessories revenue | flat (0%) | Growth in Watch and AirPods offset by accessories lapping strong prior-year iPad-launch performance |
| Services revenue | +15% | Broad-based all-time records across advertising, App Store, cloud services, music, payment services and video; sequential acceleration across most categories (organic, no one-time items) |
| Greater China revenue | -4% | Driven by iPhone supply constraints rather than demand; store traffic up significantly, return to growth expected in December quarter |
| Company gross margin | 47.2% (up 70bps sequentially) | Favorable mix; includes ~$1.1B tariff-related costs in line with prior estimate |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| iPhone supply constraints | Not a factor in prior quarter | Constrained on several iPhone 16 and 17 models on very strong demand (not a ramp issue); China decline attributed to supply; large iPhone 17 backorders exiting Q4 | — |
| China | -4% (September quarter) | Store traffic up significantly, iPhone 17 well received; return to growth expected in December quarter; subsidies a favorable factor within price caps | — |
| Tariffs | ~$1.1B actual in September quarter (in line with estimate) | Guiding ~$1.4B for December quarter; reflects China tariff moving from 20% to 10%, making it non-linear to volume | — |
| AI investment / CapEx | Guided rising AI investment | OpEx up 11% YoY on R&D and guided up sharply to $18.1B-$18.5B for December; built out Private Cloud Compute in first-party data centers in 2025; server plant in Houston started; hybrid model retained | — |
| Memory / component costs | — | Slight tailwind on memory and storage prices; new products carry a slightly higher cost structure that the team drives down over time | — |
| Personalized Siri | Expected next year | Making good progress, still expected next year; open to multi-pronged approach including own foundation models, partners and M&A | — |
Q&A Summary
Why is the iPhone 17 so successful, and how is Apple managing component/memory cost inflation (Erik Woodring, Morgan Stanley)?
Cook: it is about product strength, the strongest lineup ever (17 Pro, iPhone Air, iPhone 17). Parekh: world-class procurement is finding cost opportunities; currently a slight tailwind on memory and storage; landed at 47.2% and guiding 47%-48%; new products carry higher cost that is driven down over time.
How will iPhone in China trend in December, and was strong services boosted by tax or the Google antitrust resolution (Ben Reitzes, Melius)?
Cook: China vibrant, store traffic up significantly, iPhone 17 well received, return to growth expected in December. Parekh: no tax impact and nothing from the Google trial; the all-time-record $28.8B services quarter (and >$100B full year, +14%) was all organic.
What drove the services acceleration, and any shift between upgraders vs switchers or channel inventory (Michael Ng, Goldman Sachs)?
Parekh: no single driver; broad-based across categories and geographies. Cook: September quarter record for upgraders but too early in the 17 cycle to call upgraders vs switchers; channel inventory ended toward the low end given constraints on several 17 models on strong demand.
Walk through December gross-margin expectations and what drove September China weakness (Amit Daryanani, Evercore)?
Parekh: guiding 47.5% midpoint, ~25-30bps higher sequentially; new-product cost structure more than offset by favorable product mix and typical seasonal leverage. Cook: China down 4% driven by iPhone supply constraints; return to growth expected in December on iPhone 17 reception.
Will Apple exit December still iPhone-constrained, and is mid-teens services growth sustainable (Wamsi Mohan, Bank of America)?
Cook: advertising (first- plus third-party combined) set a record but Apple does not split the components; he intentionally did not break out the sustainability detail beyond the 14% December services guide.
What role do China smartphone subsidies play, and unpack the December OpEx step-up (Samik Chatterjee, JPMorgan)?
Cook: subsidies are favorable but apply only to certain price ranges; several Apple products exceed the cap and are ineligible. Parekh: the OpEx increase is driven mostly by R&D for AI and the product roadmap; OpEx grows faster than revenue but gross-margin expansion sustains healthy operating leverage.
Explain the tariff step from $1.1B to $1.4B given the much larger iPhone volume, and is there attach-rate upside this holiday (David Vogt, UBS)?
Cook: the $1.4B assumes a stable environment and comprehends the China tariff moving from 20% to 10%, which is why it is not linear to volume. On attach, Apple encourages buying accessories with iPhone; Mac faces a very difficult compare against the prior-year multi-Mac launch and DRAM upgrades.
Can you quantify iPhone business left on the table from constraints, and could AI web services change App Store behavior (Krish Sankar, TD Cowen)?
Cook: constraint was not manufacturing capacity but under-calling iPhone 16 build vs demand; not publicly quantifying it; iPhone 17 demand very strong with backorders. On App Store, AI is an opportunity as developers adopt Apple's on-device models.
Any mix shift within iPhone 17 (Pro vs Pro Max), and update on Private Cloud Compute buildout (Aaron Rakers, Wells Fargo)?
Cook: too early to call mix, constrained on both top and entry; Private Cloud Compute in use for Siri queries, the Houston server plant just started manufacturing with a ramp planned. Parekh: 2025 included CapEx to build out Private Cloud Compute in first-party data centers.
Does iPhone Air signal the foldable market, and is Siri a three-pronged (own models / partners / M&A) strategy (Atif Malik, Citi)?
Cook: iPhone Air is not necessarily a proxy for foldables; thrilled with iPhone reception, hence double-digit December growth guide. On AI, Apple builds its own foundation models on-device and in Private Cloud Compute and continually surveils M&A that could advance the roadmap.
Is AI a material purchase consideration yet, and will Apple change its hybrid data-center approach and Apple Silicon role (Richard Kramer, Arete)?
Cook: many factors drive purchases; too early on the iPhone 17 survey, but Apple Intelligence is a factor expected to grow. Parekh: CapEx will rise on AI, but the hybrid first/third-party model has served well and will continue, with ongoing Private Cloud Compute buildout.
More on Apple Inc.
Reported 2025-10-30 · figures from the Apple Inc. Q4 2025 earnings call.
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