AsianFin -- Apple Inc. stock briefly surged as much as over 5% in extended trading as the management reassured investors with their stellar guidance for the current quarter after iPhone sales miss raised concerns over demand.
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Apple posted revenue of $102.47 billion for its fiscal 2025 fourth quarter ended September 27, 2025, beating analysts estimated $102.19 billion. The sales, with a 7.9% year-over-year (YoY) increase, slowed down following three months ago saw a 9.6% gain, the company’s largest revenue growth since December 2021.
The bottom line for the September quarter grew stronger than expectation. Diluted earnings per share (EPS) soared 90.7% YoY to $1.85, compared with analysts’ projection of $1.77. Net income came in at $27.47 billion with a 86.4% YoY increase, the fastest growth since June 2021. Gross margin rose 10.2% YoY to $48.34 billion, topping estimates of $47.41 billion.
On an earnings conference, Apple’s Chief Financial Officer (CFO) Kevan Parekh disclosed the company incurred $1.1 billion of tariff-related costs for the September quarter,in line with the impact it in July estimated for the period. The Cupertino, California-based company expected tariff will add $1.4 billion in costs in the current quarter, and the gross margin would be between 47% and 48%, with a midpoint of 47.5%, up from 47.2% for the past quarter.
The big highlight of the quarter is that this was the first ever quarter when Apple's revenue surpassed $100 billion. “Today, Apple is very proud to report a September quarter revenue record of $102.5 billion, including a September quarter revenue record for iPhone and an all-time revenue record for Services,” Apple CEO Tim Cook said in a statement.
The Services division,, which includes online subscriptions such as iCloud, Apple Music, as well as App Store fees, Google search licensing, payment fees, and AppleCare warranties for hardware, continued to play a key role in Apple’s top line growth and maintained its record-breaking streak over the past three years. It again delivered stronger-than expected YoY growth of 15%, rising to a new record of $28.75 billion, above analysts expected $28.18 billion.
But revenue from iPhone, the product contributing nearly half of Apple’s total sales for the September quarter, missed Wall Street anticipation. IPhone sales generated $49.03 billion with a 6.1% YoY increase, falling short of the analysts called for $49.33 billion.
The iPhone revenue miss was in part owing to Apple’s unexpected fall in sale in China, the world’s top smartphone market. Revenue from Greater China shed 3.6% YoY to $14.49 billion, and badly missing estimates of $16.43 billion by a whopping 12%. The results marked a return to a downward trend of sales. The market covering mainland China, Hong Kong and Taiwan witnessed sales advanced 4.35% YoY, reversing the quarterly decline over the past two years.
However, Cook felt confident in sales of the latest iPhone flagship, which are set to propel Apple’s performance in the current quarter covering the holiday season toward the year end.
Cook listed “our most extraordinary lineup of products as we head into the holiday season.” He said Apple in September launched its best iPhone lineup ever, including iPhone 17, iPhone 17 Pro and Pro Max, and iPhone Air, the thinnest iPhone ever and also rolled out the AirPods Pro 3 and the all-new Apple Watch lineup. Earlier this moth, the company released MacBook Pro and iPad Pro with the powerhouse M5 chip.
Cook in a CNBC interview said Apple expected total revenue for the quarter ended in late December to grow 10% to 12% YoY, and iPhone revenue is projected to grow double digits YoY. Therefore, “we expect that that would make the December quarter the best ever in the history of the company,” said Cook.
The guidance suggested Apple’s revenue would be nearly $138 billion, notching the fastest quarterly growth pace in at least four year. That was such an upbeat projection given analysts polled by LSEG expected revenue to be $132.31 in December quarter.
Cook said Apple has confidence in the guidance due to the strong reception for the iPhone 17 series. “We look at the results to date, the reception of the consumer on the very strong iPhone lineup,” Cook said. “We’re looking at traffic in our stores, which is up significantly year on year. We see enthusiasm around the world.”
The iPhone 17 series in fact marked up a small proportion of iPhone sales for the September quarter since the newest phones went on sale on September 19, leaving a little more than a week’s worth of sales for the new phones. Cook attributed the soft iPhone sales partially to the tight supply. He said several models, both for the iPhone 17 and its predecessor iPhone 16, were supply constrained during the quarter.
And the tight supply seems to continue in the current quarter. “Currently, we’re supply constrained on several models of the iPhone 17,” Cook said.
CFO Parekh on an earnings call said iPhone sales is anticipated to grow 10%-12% YoY for the December quarter,compared with analysts’ forecast of 6% growth. Cook said sales in Greater China is expected to return to growth during the quarter because of the reception of iPhone 17 family.
Cook told analysts Apple is "expanding its investments in AI", reiterating comments he’s made the last several quarters. He also said Apple was making more progress on the new Siri and reiterates the plan to release the updated version next year.
