Apple notches largest revenue growth since December 2021; Mac business grew the fastest during the June quarter
Apple announced third-quarter earnings on Thursday, surpassing Wall Street’s profit and revenue forecasts. The Mac division led growth among Apple’s segments in the June quarter, with iPhone sales rising 13% year-over-year and total revenue increasing 10%, marking the company’s strongest quarterly revenue growth since December 2021.
• Revenue: $94.04 billion vs. $89.53 billion expected
• Earnings per share: $1.57 vs. $1.43 expected
• iPhone revenue: $44.58 billion vs. $40.22 billion expected
• Mac revenue: $8.05 billion vs. $7.26 billion expected
• iPad revenue: $6.58 billion vs. $7.24 billion expected
• Other Products revenue: $7.40 billion vs. $7.82 billion expected
• Services revenue: $27.42 billion vs. $26.80 billion expected
• Gross margin: 46.5% vs. 45.9% expected
The company provided what it calls color about the company’s performance during the September quarter so far on a call with analysts on Thursday. Apple said it expects mid- to high-single-digit increases in overall revenue, services growth to be similar to this quarter’s 13% year-over-year growth and for gross margin to be between 46% and 47%, even including costs related to tariffs.
Apple incurred $800 million in tariff costs in the June quarter, Apple CEO Tim Cook said on the call. That came in lower than the $900 million estimate the company provided in May. For the September quarter, assuming no changes, Apple could incur about $1.1 billion in tariff costs, Cook said.
For perspective, Apple’s average revenue per day in its fiscal 2025 third quarter was approximately $1.033 billion.
Cook said iPhone revenue was strong because the iPhone 16 is more popular compared to the iPhone 15 devices on sale last year at the same time. Cook said iPhone 16 sales were up “strong double digits” versus its predecessor. Cook specifically highlighted popularity among current iPhone users upgrading to a new one.
Apple’s Mac business grew the fastest of any of Apple’s units during the June quarter, growing nearly 15% to $8.05 billion in revenue. Apple released updated MacBook Air laptops, its best-selling Mac, just before the quarter started.
The company’s services business, which includes Apple’s warranties, content subscriptions, licensing deals with Google and iCloud continued to grow to $27.42 billion in the period, a 13% increase. Cook highlighted growth in the company’s iCloud subscriptions and said App Store revenue grew “double digits” during the quarter.
Cook said Apple views AI as “one of the most profound technologies of our lifetime.”
“We are significantly growing our investments,” Cook said about AI. “We’re embedding it across our devices, across our platforms and across the company.”
“We’re open to MA that accelerates our roadmap,” Cook said. Apple had about $133 billion in cash on hand at the end of the June quarter.
Asked about the potential for AI devices such as those being developed by OpenAI to threaten sales of the iPhone, Cook said he believed they were likely to be complements to the iPhone, not replacements.
The stock price is still rangebound. AAPL is up less than 2% after an all-time record third quarter. A notable AI acquisition or some other meaningful AI news would break that constraint.
One question analysts failed to ask (likely because they’d like to be invited to future conference calls) is a question one could imagine Steve Jobs would ask today were he able: If AI is “one of the most profound technologies of our lifetime,” then why is Apple years behind in AI?
Cook finally sees it now because hindsight is 20/20. For a company with the resources of Apple, a reactive CEO can work, but the company needs to react when it misses things more quickly.
It’ll likely be two years – an eternity in tech time – after Apple regaled us all with WWDC24 vaporware video of AI Siri before Apple finally releases its initial version of AI Siri in mid-2026.
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