Apple’s third quarter saw positive market reaction, reflecting strong demand for its latest products and continued momentum in services. Management attributed the performance to the successful launch of the iPhone 17 lineup, robust MacBook Air sales, and double-digit service revenue growth. CEO Tim Cook highlighted, “We grew in the vast majority of markets we track and had September quarter revenue records in dozens of markets, including the U.S., Canada, Latin America, Western Europe, the Middle East, Japan, Korea and South Asia.” Persistent supply constraints on certain iPhone models limited upside, but did not dampen overall customer enthusiasm.
Is now the time to buy AAPL? Find out in our full research report (it’s free for active Edge members).
Apple (AAPL) Q3 CY2025 Highlights:
- Revenue: $102.5 billion vs analyst estimates of $101.6 billion (0.8% beat)
- Operating Profit (GAAP): $32.43 billion vs analyst estimates of $31.68 billion (2.4% beat)
- EPS (GAAP): $1.85 vs analyst estimates of $1.77 (4.5% beat)
- Products Revenue: $73.72 billion vs analyst estimates of $73.35 billion (small beat)
- Services Revenue: $28.75 billion vs analyst estimates of $28.22 billion (1.9% beat)
- Gross Margin: 47.2%, in line with the same quarter last year
- Operating Margin: 31.6%, in line with the same quarter last year
- Market Capitalization: $3.99 trillion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Apple’s Q3 Earnings Call
- Erik Woodring (Morgan Stanley) asked what is driving the iPhone 17’s strong demand. CEO Tim Cook credited the overall strength of the product lineup, with features from the Pro line now available in more affordable models.
- Benjamin Reitzes (Melius Research) questioned services revenue sustainability post-legal proceedings. CFO Kevan Parekh clarified growth was “organically driven,” with no unusual one-time impacts.
- Michael Ng (Goldman Sachs) probed the underlying catalysts for accelerated services growth. Parekh responded that growth was broad-based, across categories and geographies, without a single driver responsible for the outperformance.
- Amit Daryanani (Evercore) inquired about gross margin dynamics for the December quarter. Parekh explained that new product launches increase cost structure, but favorable product mix and operating leverage should support margins.
- Wamsi Mohan (Bank of America) sought clarification on how long iPhone supply constraints would persist. Cook declined to predict when supply would balance with demand but affirmed efforts to ramp up production.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the ability of Apple to resolve iPhone 17 supply constraints and meet elevated holiday season demand, (2) the pace of adoption for new AI-powered features across devices and their impact on user engagement, and (3) the ongoing growth trajectory of services revenue amid macroeconomic and regulatory variables. Execution in these areas will be crucial for sustaining Apple’s growth.
Apple currently trades at $269.83, in line with $271.38 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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