Apple exceeded market expectations with its financial results for the third quarter of 2025. The company's revenue reached $94 billion, marking a 10% increase compared to the same period last year, though it showed a slight decrease of 1% from the previous quarter. Despite this, the adjusted earnings per share (EPS) were $1.57, an increase of 12% year-over-year, surpassing Bloomberg consensus estimates by 10% and 5%, respectively.
During this quarter, which covers April to June, Apple set new record highs in most regions, demonstrating particularly strong performance in China. The iPhone, Mac, and Services segments each grew by double digits, significantly contributing to overall revenue growth. Notably, the iPhone 16 series and M4 MacBook Air achieved revenue growth rates of 13% and 15%, respectively, highlighting the robust demand for Apple's flagship products.
On the other hand, the iPad and Wearables segments declined by 8% and 9%, respectively, compared to the previous year. However, there was a positive trend in acquiring new customers, with over 50% of buyers being first-time purchasers. This expansion of the installed user base is a promising sign for future growth prospects.
The Services division continued its impressive growth, with a 13% increase in revenue, driven by strong performance in iCloud subscriptions, Apple TV+, and the App Store. This reflects ongoing expansion into subscription-based services and increased user engagement.
Despite incurring approximately $800 million in tariffs, Apple managed to minimize the impact through increased production capacity and supply chain optimization. The company estimates that around one percentage point of its total 10% revenue growth was attributable to pre-tariff demand, emphasizing their strategic efforts to stabilize costs.
Looking ahead to the fourth quarter of 2025, Apple has issued guidance that exceeds market expectations. According to analyst Kim Minkyung from Hana Securities, the company expects revenue growth in the mid-to-high single digits compared to the previous year, with operating margins anticipated to be between 46% and 47%. However, the forecast also notes that if current trade policies remain in place, tariff-related costs could reach about $110 million in the next quarter. In response, Apple is expanding manufacturing within the U.S., including utilizing TSMC’s Arizona plant for semiconductor production to offset tariff costs.
Nevertheless, analysts remain cautious about the demand for the iPhone 17 series. Uncertainties stem from Chinese consumer policies regarding electronic device upgrades, the impact of aggressive promotions in the previous quarter, and potential pre-sale demand in the U.S. market.
During the earnings call, Apple emphasized its increased investment in artificial intelligence (AI), revealing plans to allocate substantial capital expenditure toward cloud computing infrastructure and building its own data centers to boost AI capabilities. The company also indicated openness to mergers and acquisitions to accelerate its AI roadmap. Industry experts predict that Apple’s comprehensive hardware ecosystem will play a significant role in this AI strategy, with the launch of augmented reality (AR) glasses expected around 2027, potentially serving as a key milestone.
As technology rapidly evolves, investors and analysts are eagerly awaiting more concrete details about Apple’s long-term AI plans. How the company will balance innovation with user experience and privacy protections will be crucial in determining its future market position.
In summary, while Apple’s financial performance remains strong, focus is increasingly shifting toward its ambitions in artificial intelligence. The upcoming quarters are likely to be critical in demonstrating how Apple plans to integrate advanced AI features across its product and service lineup, potentially reshaping competitive dynamics in the tech industry.
