Apple Reports $94B Q3 Revenue as iPhone Sales Jump 13.5%

Apple’s Q3 iPhone sales soar to $44.6 billion as global demand surges despite economic headwinds and AI competition

Key Takeaways

• Apple reports record Q3 revenue of $94.04 billion, marking a 10% year-over-year increase and beating analyst expectations of $89.22 billion with net income climbing to $1.57 per share.
• iPhone sales surge 13.5% to $44.58 billion, substantially outpacing forecasts of $40.22 billion and driving growth despite increasing global competition and AI concerns.
• Services revenue hits new high at $27.42 billion, up 13% from last year, reinforcing Apple’s strategic shift toward diversified revenue streams beyond hardware sales.

Introduction

Apple delivers a standout performance in its third quarter, setting a new revenue record that surpasses Wall Street expectations and sends shares climbing in after-hours trading. The tech giant reports revenue of $94.04 billion for the quarter ending June 28, 2025, marking a 10% increase from the previous year’s $85.78 billion.

Net income reaches $1.57 per share, significantly beating analyst forecasts of $1.43 per share on expected revenue of $89.22 billion. The results demonstrate Apple’s continued ability to generate growth across its core business segments, even as investors express concerns about the company’s artificial intelligence strategy and competitive positioning.

Key Developments

Apple’s iPhone business leads the charge with sales totaling $44.58 billion, representing a remarkable 13.5% increase from the previous year’s $39.3 billion. This performance substantially exceeds analyst forecasts of approximately $40.22 billion, driven by rebounding demand in key international markets.

The Services segment achieves another milestone, generating $27.42 billion in revenue compared to $24.2 billion in the same quarter last year. This 13% growth reflects the success of offerings like Apple TV+ and strengthens the company’s strategic pivot toward recurring revenue streams.

Mac sales experience robust growth of nearly 15%, reaching $8.05 billion versus $7.01 billion in the prior year. However, not all product categories maintain this momentum, with iPad revenue declining 7% to $6.6 billion and the Wearables, Home, and Accessories segment dropping 8.6% to $7.4 billion.

Market Impact

Apple shares rise more than 2.5% in after-hours trading following the earnings announcement, reflecting investor optimism about the company’s sustained growth trajectory. The positive reaction comes despite Apple’s stock declining 16% year-to-date, underperforming the broader S&P 500 index.

The company’s gross margin improves to 46.5%, while net profit reaches $23.4 billion, underscoring Apple’s financial strength. The board announces a quarterly dividend of $0.26 per share, payable on August 14 to shareholders of record on August 11.

Apple’s installed base of active devices reaches a new all-time high, demonstrating customer loyalty even amid intensifying competition in the technology sector. This metric provides a foundation for continued services growth and ecosystem expansion.

Strategic Insights

The results highlight Apple’s successful diversification strategy, with services now representing a larger portion of total revenue. The company’s advertising business, recently rebranded as “Apple Ads,” contributes to this growth alongside the App Store, cloud services, and digital content offerings.

Geographically, Apple navigates challenging conditions effectively, with China sales reaching $15.37 billion compared to $14.73 billion in the previous year. This growth occurs despite geopolitical tensions and impending tariff increases, as Apple accelerates its manufacturing shift from China to India.

The company’s AI strategy remains under scrutiny, with Apple introducing “Apple Intelligence” features at WWDC25 while facing criticism for lagging behind competitors like Meta and Microsoft in artificial intelligence capabilities, according to Fortune.

Expert Opinions and Data

CEO Tim Cook emphasizes the achievement’s significance, stating, “Apple is proud to report a June quarter revenue record with double-digit growth in iPhone, Mac, and Services and growth around the world, in every geographic segment.” Cook discussed the results alongside new CFO Kevan Parekh, who expressed being “very pleased” with the company’s performance.

Industry analysts maintain bullish outlooks due to Apple’s robust ecosystem and user retention capabilities, though some express impatience regarding the company’s AI roadmap. Analyst Dan Ives suggests Apple consider a transformative acquisition to accelerate its AI capabilities and compete more effectively with rivals.

The earnings report arrives amid broader digital security challenges, with nearly half of mobile users encountering scams daily. Younger generations, particularly Gen Z and Millennials, face increased exposure to phishing and smishing attacks across tech platforms.

Conclusion

Apple’s third-quarter performance demonstrates the company’s ability to generate substantial growth across its core business segments while successfully diversifying revenue streams. The record-setting results reflect strong iPhone demand, expanding services adoption, and effective navigation of international market challenges.

The earnings reinforce Apple’s position as a dominant force in consumer technology, even as questions persist about its long-term competitive stance in artificial intelligence. Apple maintains its practice of not providing forward guidance, citing market unpredictability and product launch timing as key factors in this decision.