Apple's FY25 Q4 earnings correspond to the actual period of July/August/September 2025.
Apple FY2025 Q4 Earnings Summary:
Revenue was $102.5B, up 8% year over year. Non-GAAP net income was $27.5B, up 10% year over year.
Gross margin was 47.2%, up 1 percentage point year over year. Product gross margin was 36.2%, down 0.1 percentage point year over year. Services gross margin was 75.3%, up 1.3 percentage points year over year.
Operating margin was 31.6%, up 0.4 percentage point year over year. Non-GAAP net margin was 26.8%, up 0.5 percentage point year over year.
Active installed base of all products globally reached a new all-time high (devices that have used Apple services within 90 days are considered active; FY25 Q1 was over 2.35B).
iPhone revenue was $49B, up 6% year over year, marking the third consecutive quarter of year-over-year growth. Despite strong demand causing supply constraints for several iPhone 16/17 models, growth was achieved in the vast majority of markets. A significant backlog of iPhone 17 series orders is expected to remain at year-end. iPhone revenue set September-quarter records in many emerging markets including Latin America, the Middle East, and South Asia, and an all-time record in India. The active installed base of iPhone reached a new all-time high, and the number of switchers also set a September-quarter record.
Services revenue was $28.8B, up 15% year over year, setting a new all-time high for the twelfth consecutive quarter. Services transacting accounts and paid accounts hit all-time highs. Global paid subscriptions exceeded 1B (unchanged for eight quarters). Customer engagement continues to grow. Most services categories accelerated growth. Advertising, App Store, cloud services, Music, TV, and Payment Services all set revenue records. Apple Pay active users grew double digits year over year. Services set all-time records in the Americas, Europe, Japan, and Rest of Asia Pacific, a September-quarter record in Greater China, and achieved double-digit year-over-year growth in both developed and emerging markets.
Mac revenue was $8.7B, up 13% year over year, driven primarily by strong MacBook Air demand. Growth occurred in every region, with strong double-digit growth in emerging markets. The Mac installed base reached a new high. iPad revenue was $7B, flat year over year. The iPad installed base hit a new high, and the number of switchers set a September-quarter record.
Wearables, Home and Accessories revenue was $9B, down slightly year over year, marking the ninth consecutive quarterly decline. Growth from Watch and AirPods was offset by Accessories. Both Watch and AirPods installed bases hit new highs, with Watch switchers setting a September-quarter record.
Greater China revenue was $14.5B, down 4% year over year, marking the ninth consecutive quarter of growth lagging the company average. The main driver was insufficient iPhone 17 series supply. Greater China is expected to return to year-over-year growth next quarter. Greater China operating margin was 43.5%, a notable improvement.
Apple is gaining ground in many markets globally: it grew in the vast majority of markets and set September-quarter revenue records in dozens of markets including the US, Canada, Latin America, Western Europe, the Middle East, Japan, South Korea, and South Asia. It set an all-time revenue record in India (included in Europe revenue). For the first time this fiscal year, Apple disclosed regional gross margins: Americas 46.3%, Europe 47.2%, Greater China 45.4%, Japan 52%, Rest of Asia Pacific 47.4%. FY2025 US revenue was $151.79B, up 6.7% year over year, representing 35% of total revenue.
Driven by strong iPhone 17 series demand, FY26 Q1 revenue is guided to grow 10-12% year over year. Services year-over-year growth is expected to be consistent with last fiscal year (13%). Gross margin is guided to 47-48%, including $1.4B in tariff costs. OpEx is guided to $18.1-18.5B (up significantly sequentially due to AI investment). This implies Q1 Non-GAAP net income growth of roughly 11% year over year (approximately $40.2B).
The company repurchased $20.1B this quarter, a nine-quarter low. Dividends were $3.9B. Net cash was $34B.
Enterprise business this quarter secured an order for tens of thousands of iPhones from BMW Group. Capital One expanded its Mac Choice program, adding thousands of MacBook Airs for its workforce.
Committed to investing $600B in the US over the next four years (up from $500B last quarter).
Announced continued increases in AI investment. Data center investment will follow a hybrid strategy of self-build plus third-party.
Overall, this Apple earnings report beat market expectations on Services growth and next-quarter iPhone guidance. However, its growth rate (Revenue YoY +8%, Non-GAAP Net Income YoY +10%, Forward PE 34.2x) remains at the bottom among the four mega-cap peers [Microsoft (Revenue YoY +18%, Non-GAAP Net Income YoY +22%, Forward PE 32.6x), Google (Revenue YoY +16%, Net Income YoY +33%, Forward PE 27.7x), Amazon (Revenue YoY +13%, Net Income YoY +38%, Forward PE 38.4x)]. It has been repeatedly emphasized: Microsoft, Google, and Amazon all delivered solid profit results despite massive AI investment, yet the market still worries about over-investment hurting profits, while harboring great fantasies about Apple's AI at its current lower investment stage. The Apple Intelligence pie drawn at last year's WWDC still hasn't materialized.
Apple's Core Growth Formula:
AAPL=active installed base * customer engagement
Although both sides of Apple's core growth formula are still growing, the pace is slow, and the valuation is not actually low (ten-year average PE midpoint 22.7x).