Apple Inc. reported all-time record-breaking earnings for its first fiscal quarter of 2025, driven by strong iPhone sales and significant growth across its product lines. The results, released Thursday, show the technology giant achieved $124.3 billion in revenue, marking a 4% increase year-over-year, surpassing Wall Street's expectations of $124 billion. Notably, the company posted earnings per share (EPS) of $2.40, up 10% from the same quarter last year, which translates to $36.3 billion in net income.
This quarter marked the first full period during which the new iPhone 16 models were available, generating $69.1 billion in sales. Although this figure showed a slight decrease from the previous quarter's $69.7 billion, CEO Tim Cook highlighted the positive outcome of having the highest level of iPhone upgraders recorded to date. "We’ve never seen a higher level of upgraders before. The install base hit a new all-time high as well," Cook stated during the earnings call.
Sales of other product lines also saw significant growth. Mac revenue rose to nearly $9 billion compared to $7.8 billion last year, and iPad sales increased to $8.1 billion from $7 billion. Services revenue was particularly impressive, climbing to $26.3 billion, up from $23.1 billion. Cook noted, "Today Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4 percent from a year ago," indicating the positive reception of Apple's latest products during the holiday season.
Despite the revenue surge, concerns around iPhone sales growth were alleviated by the company's steady guidance on revenue and profit margins for the upcoming quarter. They expect continued growth fueled by the recently launched Apple Intelligence features, which are being rolled out to more languages and markets. Cook mentioned, "We rolled out new features in December, allowing users to access AI capabilities and improve experiences across devices." This announcement has spurred investor optimism, reflected in Apple's stock price reaching $245.57 after the earnings report, with shares rising 3.4% on Friday.
Investor sentiment remained buoyed, as Cook's remarks emphasized Apple's focus on innovation and improving customer experiences through their growing array of services. These services have increasingly become a cornerstone of Apple's earnings, accounting for more than 21% of total revenue. Cook noted, "We achieved all-time revenue records across the majority of the countries and regions we track," showcasing Apple's global market dominance.
One of the most apparent drivers for the success of the latest iPhones has been the introduction of AI capabilities through Apple Intelligence. Cook stated, "We see all of those being used [in different markets], and the feedback has been overwhelmingly positive." He anticipated significant adoption as the service expands to additional languages and markets, aiming to make Apple Intelligence available globally.
On the call, Chief Financial Officer Kevan Parekh indicated optimism about the cash flow, stating, "Our record revenue and strong operating margins drove EPS to a new all-time record and allowed us to return over $30 billion to shareholders." Shareholder returns through dividends and stock buybacks remain central to Apple’s strategy, reflecting its steady commitment to shareholder value amid market fluctuations.
Despite challenges faced with regulatory hurdles, particularly noted for the Chinese market where Apple's revenue declined by more than 11%, Cook highlighted resilience and adaptability within their broader markets. He addressed the difficulties head-on, stating, "Half of the decline was driven by change in channel inventory from the beginning to the end of the quarter." Moving forward, Apple’s focus will remain on increasing customer engagement and strategic expansion, especially in strongly growing markets like Latin America and South Asia.
Market analysts suggest continuing sentiment will depend on Apple's ability to maintain this momentum and ease investor concerns surrounding potential economic impacts on demand. This includes monitoring developments related to China's regulatory environment and the success of the Apple Intelligence features.
Investors are also keeping close tabs on technical levels for Apple's stock, with some indicating significant support levels around $235 and $218. Recent performance trends have called attention to resistance levels around $260, which could signal whether the positive momentum will sustain.
Overall, Apple’s strong Q1 performance has solidified its status as one of the resilient giants of the tech industry, setting the stage for another promising fiscal year in 2025.