Apple Hits $102.5B Revenue But One Region Shows Alarming Drop

TLDR

• Apple reported $102.47 billion in revenue for its fiscal fourth quarter, beating Wall Street expectations by a wide margin.
• The company posted earnings per share of $1.85, surpassing the analyst estimate of $1.77 for the quarter.
• Greater China revenue declined 4% year-over-year to $14.49 billion, creating concerns about the region’s performance.
• iPhone revenue reached $49.03 billion but fell short of the $50.19 billion analyst forecast due to supply constraints.
• Services division became the fastest-growing segment with $28.75 billion in revenue, exceeding expectations and growing 15% year-over-year.

Apple posted $102.47 billion in revenue for its fiscal fourth quarter, beating Wall Street expectations. The tech giant saw an 8% increase compared to the same period last year. Earnings per share reached $1.85, surpassing the anticipated $1.77 per share.

The company’s performance showed strength across most regions, but Greater China presented challenges. Sales in the area, which covers mainland China, Hong Kong, and Taiwan, dropped 4% year-over-year. Revenue from Greater China totaled $14.49 billion for the quarter.

Apple shares remained flat in after-hours trading following the earnings announcement. The muted response came despite substantial overall numbers. Investors focused on iPhone revenue missing analyst targets rather than the broader financial success.

iPhone Sales Fall Short of Expectations While Other Segments Perform

The iPhone segment generated $49.03 billion in revenue for the quarter. Analysts had projected $50.19 billion, creating a gap between expectations and actual results. However, iPhone revenue still climbed 6% compared to last year’s figures.

CEO Tim Cook attributed the shortfall to supply constraints affecting several models.

he new iPhone 17 lineup had only contributed slightly for over a week.

Mac sales exceeded expectations with $8.73 billion in revenue, beating the $8.59 billion estimate. The division reported 13% year-over-year growth, driven by strong demand for the MacBook Air. Cook linked the Mac growth to the refreshed MacBook Air, launched in March, with a $100 price reduction.

iPad revenue came in at $6.95 billion, just below the $6.98 billion target. The segment showed minimal movement during the quarter. No new iPad models launched during this period, which explained the stagnant performance.

The Other Products category, which includes AirPods, Apple Watch, and Vision Pro, generated $9.01 billion. This figure surpassed the $8.49 billion forecast but declined slightly from previous quarters. The segment showed steady but unremarkable performance.

Apple Gross Margins Beat Analyst Estimates

Apple’s Services division emerged as the fastest-growing segment with $28.75 billion in revenue. The category exceeded analyst expectations of $28.17 billion. Services revenue grew 15% and includes App Store fees, Apple Music, iCloud, AppleCare, and Google search licensing.

Cook expressed strong confidence in the Services performance. “It was a run of the table,” he said during the earnings call. He noted that growth across various Services components continues to accelerate.

The company projects a record-breaking December quarter ahead. Apple expects revenue growth between 10% and 12% year-over-year. This guidance would push December quarter sales to approximately $137.97 billion.

He added that iPhone revenue is expected to grow by double digits year-over-year. Cook confirmed that this would make the December quarter the best in the company’s history.

Apple anticipates China sales will rebound in the current quarter. Cook cited strong reception for the iPhone 17 family in the region. Store traffic has increased substantially compared to last year, signaling positive momentum heading into the holiday season.

Cook confirmed that Siri will receive a major update next year, featuring enhanced AI capabilities. Apple plans to integrate OpenAI’s ChatGPT into Apple Intelligence.

The company maintained pricing despite tariff pressures from previous trade policies. Cook explained that Apple absorbs tariff costs within its gross margins rather than passing them on to consumers. Gross margin reached 47.2%, exceeding the 46.4% analyst estimate.

Net income jumped to $27.46 billion compared to $14.29 billion a year earlier. The previous year’s figure included a one-time tax charge that affected the bottom line. Apple’s fiscal 2025 revenue totaled $416 billion, representing a 6% increase over 2024.

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