Originally published at: Services, Mac, and iPhone Drive Apple’s Q4 2025 Quarterly Revenue Record - TidBITS
$102.5 billion: that’s how much revenue Apple generated in its fourth fiscal quarter of 2025. That mind-boggling figure is a September-quarter record and is 8% higher than the same quarter last year (see “Apple Sets Q4 2024 Revenue Record on Services and iPhone Growth,” 1 November 2024). Of that revenue, $27.5 billion was profit, driven by double-digit annual growth in the Services and Mac categories and 6% growth in the iPhone segment. Services revenues set an all-time record, and iPhone revenues set a September-quarter record. Nearly all geographic regions posted record revenues for the quarter, with only China showing a decline.
In the broader context, Services continue to make up an ever-larger portion of Apple’s overall revenue model, growing 2 percentage points to account for 28% of total revenue, and the Mac also performed well, increasing by 1 percentage point to 9%. iPad revenues remained flat, while iPhone and Wearables each dropped by 1 percentage point.
iPhone
The September quarter usually includes a few weeks of early sales of new iPhone models, so as much as we’re all thinking about the iPhone 17, Apple CFO Kevan Parekh said that iPhone revenue was mainly driven by the iPhone 16 family. Still, it performed well, earning $49 billion in revenue—a 6% increase from last year—despite Apple repeatedly saying that supply constraints prevented it from meeting demand at both the low and high ends—it felt like a mix of boasting and making excuses. Supply constraints primarily affected Greater China, even though the iPhone remained a top-selling model in urban China.
Mac
Mac sales generated $8.7 billion, a 13% increase from last year’s fourth quarter. Worldwide, Mac sales expanded across all geographic regions, with double-digit growth in emerging markets.
Although there’s nothing wrong with those results, even if they aren’t as high as the pandemic-era numbers from 2020 to 2022, Apple warned that next quarter will be a “very difficult compare” because of the “mother of all Mac launches” from last year—the M4-powered MacBook Pro, Mac mini, and iMac (see “New MacBook Pros Gain M4 Chips, 12MP Center Stage Camera, and Thunderbolt 5,” 30 October 2024). While sales of the M5 MacBook Pro will boost next quarter (see “New M5 Chip Accelerates the MacBook Pro, iPad Pro, and Vision Pro,” 15 October 2025), Apple’s warning suggests we won’t see M5 models of the Mac mini, iMac, or MacBook Air until next year. Nonetheless, Cook later said, “In the long run, I’m very bullish on the Mac,” and we expect the consumer-level M5 models to contribute to the next mother of all Mac launches.
iPad
The iPad posted flat revenue of $7.0 billion, just a hair above the same quarter last year. Apple attributed these results to the usual “difficult compare,” meaning that it’s hard to compete with sales from last year’s iPad Air and iPad Pro releases. The recently shipped M5 iPad Pro models will likely boost next quarter’s results, but probably not as much as new iPad or iPad Air models would have. The key question is whether iPadOS 26’s expanded and more Mac-like multitasking features will attract more people to buy iPads. And if so, will that impact Mac sales?
Wearables, Home, and Accessories
There was little exciting about the Apple Watch Series 11 or Apple Watch Ultra 3, which debuted during the quarter, as they offered only minor improvements over their predecessors. Nor were improved AirPods a significant revenue driver, despite their popularity. And even if it had shipped in time to impact the September-quarter results, it’s hard to imagine the M5 Vision Pro making much of a difference in revenue.
As such, it’s unsurprising that the Wearables category was flat—really a 0.3% drop—compared to last year’s quarterly results, which also decreased from 2023. However, CFO Kevan Parekh was quick to point out that both the Apple Watch and AirPod installed bases reached record highs in the quarter, and that the number of customers upgrading their Apple Watches also set a September-quarter record. We’ll see how Wearables performs in the upcoming holiday quarter.
Services
Services continues to be Apple’s rising star, generating $28.8 billion in revenue, a 15% increase over the year-ago quarter. In part, that’s due to the impressive 75.3% profit margins that Apple enjoys in Services; in comparison, product margins are just 36.2%. Beyond the raw numbers, Services income remains valuable for buffering Apple’s revenue from fluctuations caused by hardware cycles—we may buy new iPhones or Macs only every few years, but many of us pay Apple monthly for various services. Speaking of rising stars, in his opening statement, Cook happily reported that the Apple TV streaming service recently won 22 Emmys, with “The Studio” earning a record 13 wins—the most for any comedy in Emmy history—and “Severance” leading all dramas with 8 wins.
Although Apple doesn’t break out the individual components of Services, Parekh said Apple achieved all-time records across advertising, the App Store, Cloud Services, music, payment services, and video. When an analyst tried to get Apple to comment on search volumes decelerating due to AI use (presumably an attempt to elicit details about how much Apple earns from Google), Tim Cook dodged the question, shifting the topic to advertising, where he noted that the combined internal and third-party advertising set a record for the quarter. Sensing an unexpected opportunity, the analyst asked if both internal and external advertising individually set records, and Cook replied, “I’m dodging the question intentionally because we don’t split it at that level.” Or rather, Apple absolutely splits it at that level; it just doesn’t share the information with analysts.
Regional
Aside from Greater China, which dropped 4%, revenues grew in all geographic regions. Europe was the strongest with a 15% increase, followed by Rest of Asia Pacific at 14%, Japan at 12%, and the Americas at 6%. China’s results were still supported by government subsidies, though price caps limited their application to some of Apple’s products. Cook mentioned that he expects a return to revenue growth in China next quarter, based on the positive response to the new iPhone models in that region.
Tariffs, AI, and the Future
The elephant in the room last quarter—tariffs—turned out to be less problematic than feared. Parekh said Apple incurred about $1.1 billion in tariff-related costs during the quarter, exactly what the company predicted last quarter. Even though there will likely be many more iPhones sold next quarter, Apple expects tariff costs to rise only to $1.4 billion, as China’s tariffs just fell from 20% to 10%. Who knows if those tariff rates will stick around—as Cook said, Apple’s prediction “assumes a stable kind of environment for the quarter.” Stability in trade relations can be fleeting in today’s world.
As for AI, it remains unclear how much Apple’s AI features drive sales: in response to an analyst’s question, Cook remarked, “We don’t have a great in-depth survey yet on the current iPhone 17 because it’s very new in the cycle, and we give it some time to formulate. But I would say that Apple Intelligence is a factor. And, you know, we’re very bullish on it becoming a greater factor.” But how significant a factor is an open question. Earlier on, he said, “We’re also excited for a more personalized Siri. We’re making good progress on it, and as we’ve shared, we expect to release it next year.” At this point, it’s hard to believe that many people are buying Apple devices explicitly because of Apple Intelligence features; adoption among at least the TidBITS readership is low (see “Do You Use It? Apple Intelligence Sees Weak Adoption,” 20 June 2025).
But it may not matter. Apple hasn’t delivered massive hardware innovations or revolutionary AI capabilities so far this year, yet it still managed to set quarterly revenue records in three out of four fiscal quarters, narrowly missing in Q2 (see “Apple Q2 2025 Financials Solid Despite Upcoming Tariff Uncertainty,” 2 May 2025). As long as the company continues to ship incremental hardware updates and attract new customers to bolster the Services segment, it should remain financially healthy.
