Apple (AAPL) Q4 2025 Earnings Preview

Apple (AAPL) delivered a fiscal fourth-quarter earnings report that surpassed analyst expectations, fueling optimism with a robust forecast for the crucial December quarter. This performance sent shares of the tech titan soaring in after-hours trading, signaling investor confidence in Apple’s strategic direction and product lineup.

Here’s a detailed look at Apple’s Q4 2025 performance versus LSEG consensus estimates for the period ending September 27:

• EPS: $1.85 vs. $1.77 estimated
• Revenue: $102.47 billion vs. $102.24 billion estimated

Analyzing Apple’s core business segments reveals a mixed bag, hinting at evolving consumer preferences and strategic shifts within the company:

• iPhone revenue: $49.03 billion vs. $50.19 billion estimated
• Mac revenue: $8.73 billion vs. $8.59 billion estimated
• iPad revenue: $6.95 billion vs. $6.98 billion estimated
• Other Products revenue: $9.01 billion vs. $8.49 billion estimated
• Services revenue: $28.75 billion vs. $28.17 billion estimated

In an exclusive interview, Apple CEO Tim Cook projected a minimum 10% revenue increase for the current quarter, signaling strong confidence in the company’s trajectory. Cook elaborated, “We expect total company revenue to grow by 10 to 12% year over year, we expect iPhone revenue to grow double digits, year over year, and we expect that that would make the December quarter the best ever in the history of the company.”

This guidance significantly outpaces analyst expectations. LSEG-polled analysts anticipated Apple would guide to $132.31 billion in December quarter sales and earnings of $2.53 per share. An 11% growth rate over last year’s December quarter would place revenue for the upcoming period at a staggering $137.97 billion.

Cook attributed this bullish outlook to the overwhelmingly positive reception of the new iPhone 17 devices, launched in September. “We look at the results to date, the reception of the consumer on the very strong iPhone lineup,” Cook stated. “We’re looking at traffic in our stores, which is up significantly year on year. We see enthusiasm around the world.”

The company’s net income for the quarter stood at $27.46 billion, a substantial increase compared to $14.29 billion in the same period last year, which was impacted by a one-time tax charge.

For fiscal year 2025, Apple reported $416 billion in total revenue, a 6% increase over 2024. Sales in the September quarter alone surged by 8% year-over-year.

A deeper dive into specific product categories reveals both successes and areas for potential improvement. While overall iPhone revenue climbed 6% to $49.03 billion, this figure fell slightly short of the $50.19 billion expected by LSEG analysts. Notably, this quarter only captured just over a week of iPhone 17 sales, which launched on September 19.

Cook cited supply chain constraints affecting several iPhone 17 models, as well as some iPhone 16 variants, as a contributing factor. “Currently, we’re supply constrained on several models of the iPhone 17,” he confirmed.

The iPad business remained relatively flat, generating $6.95 billion in sales. While no new models were released during the quarter, the launch of an upgraded iPad Pro featuring the new M5 chip in October is anticipated to revitalize the category in subsequent quarters.

Apple’s Services division continues to be a major growth driver, expanding by 15% to $28.75 billion in sales. This segment, encompassing online subscriptions like iCloud and Apple Music, App Store fees, Google search licensing, payment fees, and AppleCare warranties, is particularly valuable to investors due to its recurring revenue stream and higher profit margins compared to hardware sales.

According to Cook, most components within the Services business are experiencing accelerating growth. Echoing this sentiment, Apple CFO Kevan Parekh indicated during an earnings call that the company anticipates similar Services growth in the current quarter.

The “Other Products” category, encompassing Apple Watch, AirPods, and Vision Pro, witnessed a slight decline, generating $9.04 billion in sales. The Vision Pro, while generating significant buzz, is still in its early adoption phase, and its impact on overall revenue remains to be seen.

The Mac business demonstrated robust growth, surging 13% to $8.72 billion in sales. Cook attributed this success to the strong performance of the MacBook Air laptop, which was refreshed in March with a $100 price reduction, lowering its entry-level price to $999. This move appears to have resonated with consumers seeking a balance of performance and affordability.

Sales in Greater China, including Hong Kong and Taiwan, experienced a 4% year-on-year decline, totaling $14.5 billion. However, Cook expressed optimism about a turnaround in the region, stating, “We expect China to return to growth this quarter because of the reception of the iPhone there, or the iPhone 17 family.”

Looking ahead, Cook reaffirmed the company’s commitment to releasing an updated version of Siri next year, along with further partnerships akin to the integration of OpenAI’s ChatGPT into Apple Intelligence. “Our intention is to integrate with more people over time,” Cook said, indicating a broader strategy to leverage AI advancements and enhance user experiences.

Addressing the impact of tariffs, Cook clarified that Apple has absorbed these costs rather than passing them on to consumers. Parekh revealed that the company incurred $1.1 billion in additional tariff-related expenses during the September quarter and projects $1.4 billion in tariff costs for the December quarter. Despite these challenges, Apple’s gross margin remained healthy at 47.2%, surpassing LSEG expectations of 46.4%.

“We held the pricing that we would have done without any tariffs, and we’re just absorbing the tariffs in gross margin,” Cook explained.