It’s hard to overstate Apple’s recent earnings report. Suffice it to say, it was impressive from all angles. When the dust settled, Apple posted $102.5 billion in revenue, representing a new Q4 record. What’s more, Apple for the fiscal year reported a whopping $416 billion in revenue, which itself is another all-time record. And though naysayers may point out that iPhone revenue was slightly below analyst expectations, Tim Cook during Apple’s earnings conference call said that both the iPhone 16 and iPhone 17 experienced supply shortages during the September quarter. In other words, any shortfall in projected iPhone revenue had more to do with a lack of supply than lower-than-expected demand.
Looking ahead, iPhone revenue growth is expected to rise significantly. Specifically, Cook said that Apple expects iPhone revenue for the upcoming December quarter to jump by at least 10%. If Cook’s prediction pans out, Apple’s upcoming quarter will be the most profitable quarter in company history. Diving a bit deeper, note that the iPhone during the holiday quarter last year generated $69.1 billion in revenue. Assuming a 10-15% increase, iPhone-based revenue for the current holiday quarter will fall somewhere in the range of $76 billion and $79 billion. That’s an astounding projection, all the more so because Cook doesn’t typically issue specific revenue predictions for the iPhone. It stands to reason that Cook is quite confident about upcoming iPhone sales.
Cook also confirmed that Apple’s next-gen version of Siri remains on track to launch early next year. Incidentally, a report from last week claims that some Apple engineers are worried that it may not live up to expectations.
Apple’s Services revenue isn’t slowing down anytime soon
One of Apple’s biggest growth engines is the company’s Services business. Apple’s range of services encompass revenue from the App Store, Apple Music, iCloud, AppleCare, Apple Pay, Apple TV, and more. For the quarter gone by, services-based revenue accounted for $28.75 billion in quarterly revenue. All the more impressive, Apple CFO Kevan Parekh added that the margin on Apple’s services revenue is 75.3%, which is to say that Apple’s suite of services, over a three month period, generated $21.6 billion in pure profit. Further, Parekh added that services revenue increased in nearly all markets. Apple further boasted that services revenue set records in every geographic region, a list that includes the Americas, Europe, China, Japan, and the Asia Pacific. For the full fiscal year, services revenue topped $100 billion for the first time, representing a nearly 15% increase year over year.
Consequently, annual revenue from Apple’s Services division now rivals the annual revenue from stalwart companies like Pepsi and Disney. Looking ahead, there’s no indication that Apple’s services growth will slow down anytime soon. Apple said that it expects services revenue to keep growing by about 15% in 2026. If the projection pans out, Apple’s services next year will generate $115 billion in revenue.
During the earnings conference call, one analyst asked if Apple can attribute the rise in services revenue to any particular geographic region or singular service. Apple executives responded by saying that they saw growth across all regions and that there wasn’t any one service uniquely responsible for the impressive increase in revenue. In the wake of Apple’s impressive earnings report, shares of the company are up nearly 3% in after-hours trading.
