Apple AAPL reported fourth-quarter fiscal 2025 GAAP earnings of $1.85 per share, which beat the Zacks Consensus Estimate by 6.94%. Apple reported GAAP earnings of 97 cents per share in the year-ago quarter and, excluding adjustments (one-time income tax charge) of 67 cents per share non-GAAP earnings of $1.64 per share.
Net sales increased 8% year over year to $102.47 billion and beat the Zacks Consensus Estimate by 1.25%. Overall, product sales (71.9% of sales) climbed 5.4% year over year to $73.72 billion. Services revenues grew 15.1% year over year to $28.75 billion and accounted for 28.1% of sales. The figure beat the consensus mark by 2.51%.
Apple’s Top Line Rides on Strong iPhone and Mac Sales
iPhone sales increased 6.1% year over year to $49.03 billion and accounted for 47.8% of total sales. iPhone sales missed the Zacks Consensus Estimate by 1.39%. iPhone sales benefited from strong shipments of the iPhone 16 family.
Mac sales of $8.73 billion increased 12.7% year over year and accounted for 8.5% of total sales. The figure beat the Zacks Consensus Estimate by 2.63%. Mac sales benefited from strong demand for the MacBook Air.
Apple Inc. Price, Consensus and EPS Surprise
Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. Quote
iPad sales of $6.95 billion were flat year over year and accounted for 6.8% of total sales. The figure beat the Zacks Consensus Estimate by 1.07%.
Wearables, Home and Accessories sales decreased 0.3% year over year to $9 billion and accounted for 8.8% of net sales. The figure beat the consensus mark by 8.49%. The segment benefited from the launch of Apple Watch Ultra 3 and AirPods Pro 3.
Apple Rides on Strong Europe, Japan and the Rest of Asia
Europe’s sales grew 15.2% year over year to $28.7 billion in the reported quarter and accounted for 28% of net sales. Japan sales increased 12% year over year to $6.64 billion and accounted for 6.5% of total sales. Rest of Asia sales soared 14.3% year over year to $8.44 billion and contributed 8.2% of total sales.
Apple achieved record fiscal fourth-quarter sales in emerging markets and an all-time sales record in India.
Americas’ sales were $49.03 billion, up 6.1% year over year and accounted for 47.8% of total revenues. However, Greater China sales decreased 3.6% year over year to $14.49 billion and accounted for 14.1% of total sales.
Apple’s Gross & Operating Margins Expand Y/Y
The gross margin of 47.2% expanded 100 basis points (bps) on a year-over-year basis. The gross margin expanded 70 bps sequentially, driven by a favorable mix. Apple incurred $1.1 billion in tariff-related costs in the reported quarter.
Products’ gross margin expanded 170 bps sequentially to 36.2% due to a favorable mix. Services’ gross margin was 75.3%, down 30 bps sequentially.
Operating expenses rose 11.4% year over year to $15.91 billion due to a 14.2% increase in research & development expenses and 8% growth in selling, general & administrative expenses.
Operating margin expanded 50 bps on a year-over-year basis to 31.6%.
Apple’s Balance Sheet Remains Strong
As of Sept. 27, 2025, cash & marketable securities were $132.42 billion compared with term debt of $90.68 billion. Apple had cash & marketable securities worth $132.99 billion compared with term debt of $91.78 billion as of June 28, 2025.
Including commercial paper of $7.98 billion, total debt was $98.66 billion as of Sept. 27, 2025.
Apple returned nearly $24 billion in the reported quarter through dividend payouts ($3.9 billion) and share repurchases ($20 billion).
Apple Offers Positive Q1 Guidance
Apple expects the December quarter’s (first-quarter fiscal 2026) net sales to grow between 10% and 12% on a year-over-year basis. The company expects iPhone sales to grow in double digits year over year. The Mac segment is expected to face a tough year-over-year comparison, and Services are expected to grow at the 2025 rate.
Gross margin is expected to be 47-48% in the first quarter of fiscal 2026, including a tariff impact of $$1.4 billion. Operating expenses are expected to be between $18.1 billion and $18.5 billion.
Zacks Rank & Stocks to Consider
Currently, Apple carries a Zacks Rank #3 (Hold).
Fair Isaac FICO, Cirrus Logic CRUS and CoreWeave CRWV are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.
Fair Isaac shares have dropped 20.3% year to date. This Zacks Rank #1 (Strong Buy) company is scheduled to release fourth-quarter fiscal 2025 results on Nov. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cirrus Logic shares have returned 33.1% year to date. CRUS is scheduled to release second-quarter fiscal 2026 results on Nov. 4. Cirrus Logic has a Zacks Rank #2 (Buy).
CoreWeave shares have surged 227.7% since its initial public offering. CRWV is set to report its third-quarter 2025 results on Nov. 10. CoreWeave currently has a Zacks Rank #2.
Apple Inc. (AAPL) : Free Stock Analysis Report
Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
Fair Isaac Corporation (FICO) : Free Stock Analysis Report
CoreWeave Inc. (CRWV) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
