Apple posts $94 billion in quarterly revenue, driven by iPhone surge and services growth

Apple reported better-than-expected earnings on Thursday, marking its highest quarterly revenue growth in more than three years, buoyed by strong demand for the iPhone and steady gains in its services division. For the fiscal third quarter ending June 28, the tech giant reported revenue of $94.04 billion, a 10 percent increase from a year earlier, and net income of $24.43 billion.

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The earnings marked Apple’s strongest growth since December 2021 and came largely on the back of a 13 percent surge in iPhone revenue, which rose to $44.58 billion. CEO Tim Cook credited the performance to the popularity of the iPhone 16, calling it a significant improvement over last year’s model, with “strong double digits” growth, especially among existing customers upgrading their devices.

“We are very pleased with our record business performance for the June quarter, which generated EPS growth of 12 percent,” said Kevan Parekh, Apple’s CFO. “Our installed base of active devices also reached a new all-time high across all product categories and geographic segments, thanks to our very high levels of customer satisfaction and loyalty.”

Apple’s Mac business also saw a resurgence, with sales climbing nearly 15 percent to $8.05 billion, boosted by the launch of updated MacBook Air models early in the quarter. The services segment — which includes iCloud, AppleCare, Apple Music, the App Store, and licensing deals with companies like Google — brought in $27.42 billion, up 13 percent from the same period last year. Cook noted a spike in iCloud subscriptions and “double digits” growth in App Store revenue.

But not all segments of the business posted gains. iPad revenue declined 8 percent to $6.58 billion, and the company’s “Other Products” unit, which includes wearables like the Apple Watch and AirPods, slipped 8.64 percent to $7.4 billion. The drop in iPad sales came despite the release of a more affordable model in March.

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Apple’s gross margin for the quarter came in at 46.5 percent, slightly ahead of expectations. The company incurred $800 million in tariff-related costs during the quarter, below the $900 million it had forecast. Cook said that figure could climb to $1.1 billion in the current quarter if trade policies remain unchanged.

In a call with analysts, Apple said it expects mid- to high-single-digit revenue growth in the September quarter, with gross margins between 46 and 47 percent, even accounting for tariff-related expenses. Services revenue is expected to grow at a pace similar to this quarter’s 13 percent year-over-year increase.

One surprising contributor to the quarter’s strong results: consumer behavior driven by trade fears. Cook said that roughly one percentage point of Apple’s revenue growth came from customers making purchases ahead of potential tariffs.

Apple also used its earnings call to reaffirm its growing commitment to artificial intelligence. “We are significantly growing our investments,” Cook said of AI. “We’re embedding it across our devices, across our platforms and across the company.” He revealed that Apple had acquired “around” seven companies so far this year, though none were “huge in terms of dollar amount.”

When asked about the threat posed by emerging AI-native devices, such as those developed by OpenAI, Cook expressed confidence in the iPhone’s future. “It’s difficult to see a world where iPhone is not living in it,” he told analysts.