Originally published at: Apple Reports Record-Breaking Q3 2025 Results - TidBITS
Reporting on its Q3 2025 financial results, Apple announced profits of $23.4 billion ($1.57 per diluted share, representing a 12% year-over-year increase) on revenues of $94.0 billion. The company’s revenues rose 10% compared to the year-ago quarter (see “Apple’s Q3 2024 Record Revenues Surprise Tim Cook,” 2 August 2024) and set a new Q3 record.
iPhone, Mac, and Services revenues saw double-digit year-over-year growth, but iPad and Wearables revenues fell slightly. Growth in Services continues to make it an ever-larger share of Apple’s overall revenue model, up to 29% of the total. The Mac rebounded slightly to account for 9% of the total but hasn’t regained the double-digit share it often enjoyed before 2021. The iPhone remains Apple’s cash cow, accounting for 47% of the company’s earnings. The iPad’s portion of Apple’s earnings continues to drop, as does Wearables, which had been growing through 2021.
iPhone
After three years of fairly flat sales following a massive jump in 2021, iPhone revenues enjoyed a 13% increase from the year-ago quarter, bringing in $44.6 billion. Apple repeatedly emphasized that the growth was largely due to the strength of the iPhone 16 lineup in comparison to the iPhone 15 lineup, explicitly calling out the iPhone 16e.
However, Tim Cook also acknowledged that consumer uncertainty around the Trump administration’s tariff threats was responsible for about 1% of Apple’s 10% overall revenue growth for the quarter. In other words, when the administration was threatening to slap unprecedented tariffs on goods manufactured overseas, particularly in China, many people bought iPhones in April in anticipation of Apple raising prices. In response, Apple moved the manufacturing for the majority (71%) of iPhones sold in the US to India, with most other US-destined products being manufactured in Vietnam. The vast majority of products destined for other countries remain manufactured in China.
Additionally, regional governments in China have launched subsidies for consumer electronics to spur consumer spending. Apple’s participation in those promotions helped the iPhone to take the top three sales spots in urban China.
Another interesting data point: Apple said that it has now shipped over three billion iPhones since the product’s introduction in 2007. That’s a lot of iPhones.
Mac
Thanks to strong demand for the M4 MacBook Air, revenues in the Mac segment rose an impressive 15% from last year’s third quarter to $8 billion, just below 2021’s record of $8.2 billion. The 2021 record came in part from pandemic-driven demand, but also with the first year of Macs with Apple silicon. Although it might seem as though most people would have upgraded from Intel-based Macs by now, Cook emphasized that Apple set a June quarter record for Mac upgraders thanks to the strength of Apple silicon. It wasn’t just sales to consumers either; Apple CFO Kevan Parekh said, “We had the best June quarter ever for Mac at enterprise.”
iPad
iPad revenues declined 8% compared to last year’s third quarter results, achieving $6.6 billion in revenues. Apple attributed the drop to no new models being introduced during the quarter as compared to last year’s introduction of M2 iPad Air and M4 iPad Pro—one of the company’s “difficult compares.” This rings hollow given Apple’s March 2025 release of the M3 iPad Air, which was credited with improving iPad revenues last quarter (see “Apple Q2 2025 Financials Solid Despite Upcoming Tariff Uncertainty,” 2 May 2025). Apparently, the M3 iPad Air didn’t continue to generate sales the way that the M4 MacBook Air did, even though both came out in March 2025.
When given the opportunity during the earnings call’s Q&A period, Tim Cook notably chose not to comment on iPad revenues; he did, however, point out the Mac-like changes coming to the iPad in the forthcoming iPadOS 26. Based on reports from beta testers, the iPadOS 26 multitasking changes will significantly boost the iPad’s capabilities and could drive more sales.
Wearables, Home, and Accessories
The Wearables segment, like the iPad results, reported a year-over-year revenue decline, tallying $7.4 billion in revenues, a 9% drop. Kevan Parekh attributed some of the decrease to another “difficult compare” against last year’s third quarter, which saw the release of the Apple Vision Pro and accessory sales (like the Apple Pencil and Magic Keyboard) associated with the release of the M2 iPad Air and M4 iPad Pro. However, Apple also set a quarterly record for Apple Watch upgraders, and the Apple Watch installed user base reached an all-time high.
While Vision Pro revenues are likely a drop in the bucket and don’t seem likely to improve much, Apple seemed to be emphasizing the enterprise uses of the Vision Pro more than one might expect from the company’s consumer-focused marketing. In particular, Cook called out CAE’s use of the Vision Pro to help pilots become more familiar with aircraft procedures.
Services
Over the last decade, the Services revenue graph has never faltered in its relentless climb. For this year’s third quarter, Services brought in $27.4 billion, representing a 13% increase from the same quarter last year. As always, the Services revenue benefits from the ever-increasing number of Apple users—Tim Cook said that the iPhone and Mac installed bases again hit all-time highs during the quarter. The App Store came in for its share of glory, setting a June quarter revenue record. Kevan Parekh also noted that the growth in the number of iCloud paying accounts helped drive an all-time revenue record in cloud services. Furthermore, though the boost in prestige may not result in direct revenue increases, Cook was delighted to report that Apple TV+ productions received a record 81 Emmy nominations.
Regional
Revenues grew in all geographic segments, led by a 20% increase from the year-ago quarter in Asia Pacific, a 13% increase in Japan, a 10% increase in Europe, and a 9% increase in the Americas. The smallest increase came from China, at 4%, which was still a nice rebound from the decline Apple posted last quarter. Apple attributed the rise in China to government subsidies that helped iPhone sales and strong Mac performance, which made the MacBook Air the top-selling laptop and the Mac mini the top-selling desktop in China.
Tariffs and AI
Uncertainty over tariffs continues to cloud Apple’s financial future. For this quarter, Apple actually benefited slightly from the tariffs. Cook said that 1% of Apple’s 10% revenue growth came from “pull-forward” sales—people buying in anticipation of higher prices due to tariffs. Since Apple’s Q3 2024 revenues were $85.8 billion, Q3 2025’s $94.0 billion represented an increase of $8.2 billion. 1% of that is $820 million. In contrast, Cook said that tariffs in this quarter cost Apple approximately $800 million, slightly less than Apple’s tariff revenue.
However, in wording that was carefully crafted to avoid arousing political ire, Cook said, “For the September quarter, assuming the current global tariff rates, policies, and applications do not change for the balance of the quarter, and no new tariffs are added, we estimate the impact to add about $1.1 billion.” Then the Trump administration imposed a 25% tariff on products made in India and 20% on products made in Vietnam. However, smartphones, computers, and various electronic parts have been exempt since April 2025. Cook did take pains to mention Apple’s plans to invest $500 billion in US manufacturing, which already provides some chips, glass for the iPhone, and the Face ID module.
Also, while pundits and users alike repeatedly decry Apple’s inability to deliver useful AI features (see “Do You Use It? Apple Intelligence Sees Weak Adoption,” 20 June 2025), Cook was optimistic about Apple’s AI future, calling AI “one of the most profound technologies of our lifetime” and stating that Apple was “significantly growing” its investment in AI technology. That includes large capital expenditures (“capex” in analyst speak) for building additional Private Cloud Compute datacenters and investing in third-party capacity. That Apple chose to emphasize these AI investments to analysts shows that the company is well aware that it can’t afford to be seen as being left behind in the AI race, however true that seems to be at the moment.
Apple faces two major challenges in the coming year: navigating an arbitrarily complex international trade landscape and delivering on its AI promises before customer patience runs thin. The company has shown impressive agility in shifting production between countries to minimize tariff impacts, but the capriciousness of US tariff policy could force Apple either to raise prices or accept lower profits. Meanwhile, Apple’s significant AI investments suggest the company knows it needs to ship compelling features that match or exceed its competitors’ offerings.
We could ask Siri how that’s going, but she’d probably just defer to ChatGPT.
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