Apple Q4 Earnings Beat Estimates, Services Drive Top-Line Growth

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 SalesiPhone 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 AsiaEurope’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/YThe 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 StrongAs 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 GuidanceApple 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 ConsiderCurrently, 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report 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 ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks