Apple Reports Record-Breaking Q3 2025 Earnings with Strong iPhone Sales and Growing AI Investments

Apple’s Q3 2025 Financial Highlights

Apple Inc. has reported its third-quarter earnings for fiscal 2025, surpassing Wall Street expectations with record revenue and profits. The company posted a revenue of $94.04 billion, marking a 10% increase year-over-year, the largest quarterly revenue growth since December 2021. Net income reached $23.43 billion, or $1.57 per share, up from $21.45 billion, or $1.40 per share in the same period last year.

Strong iPhone Sales and Growth in China

iPhone sales were a key driver, increasing 13% year over year to $44.58 billion, fueled notably by the popularity of the iPhone 16 series, which saw “strong double-digit” growth. Apple’s presence in China also showed positive momentum with a 4% rise in sales to $15.37 billion, helped by subsidies that benefited certain products.

Other Business Segments

The Mac segment was the fastest growing, expanding nearly 15% to $8.05 billion, helped by new MacBook Air releases. The services division reached a record $27.42 billion, a 13% increase, supported by strong growth in iCloud and App Store revenues. However, iPad sales declined by 8%, and revenue from wearables, including Apple Watch and AirPods, fell approximately 8.6%.

Tariff Costs and Supply Chain Strategies

Apple absorbed $800 million in tariff-related costs during the quarter, slightly less than initially expected, with an estimated $1.1 billion expected next quarter. The company continues to mitigate tariff impacts through increased production in India and investments in US-based supply chain initiatives, including a $500 million investment in a rare earth materials manufacturer.

Commitment to AI and Future Outlook

CEO Tim Cook emphasized Apple’s significant increase in AI investments, including reallocating employees towards AI development and acquiring several companies to accelerate their roadmap. Anticipation surrounds the launch of a more personalized AI-powered Siri assistant in 2026. Despite challenges, Cook expressed confidence that the iPhone will remain central to Apple’s ecosystem, likely complementing future AI devices rather than being replaced by them.

Looking ahead, Apple expects mid- to high-single-digit revenue growth for the next quarter, with gross margins between 46% and 47%, factoring in tariff-related costs.

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Image Credit: CNBC

Summary

Apple’s Q3 2025 earnings showcase strong resilience and growth across key product lines, especially the iPhone and services. The company’s strategic focus on expanding AI capabilities and optimizing its supply chain positions it well for future innovation and market leadership amidst ongoing global trade challenges.