Apple reports earnings and revenue beat, boosted by services business

Sales for iPhones missed estimates for the second time in three quarters, the only significant number that came up short of expectations in Thursday’s report.

Here’s how the company did compared to analyst estimates, according to LSEG consensus.

• EPS: $2.01 vs. $1.95
• Revenue: $111.18 vs. $109.66 billion

Wall Street is also looking at these key areas: 

• iPhone revenue: $56.99 billion vs $57.21 billion expected
• Mac revenue: $8.4 billion vs. $8.02 billion expected
• iPad revenue: $6.91 billion vs. $6.66 billion expected
• Wearables, Home and Accessories revenue: $7.9 billion vs. $7.7 billion expected
• Services revenue: $30.98 billion vs. $30.39 billion expected
• Gross margin: 49.3% vs. 48.4%

Revenue climbed 17% from $95.4 billion a year earlier, Apple said. The results mark the first time the company is facing Wall Street since the announcement last week that Tim Cook will be stepping down as CEO after 15 years on the job.

Apple said its board authorized an additional $100 billion in stock repurchases and declared a cash dividend of 27 cents per share, up 4%.

In March, Apple announced a number of new products, including its iPhone 17e, a refreshed iPad Air laptop with an M4 chip in 11-inch and 13-inch sizes. The biggest surprise was the MacBook Neo, a low-cost laptop priced at $599 and aimed at students and budget-conscious consumers.

Sales of iPhones rose 22% in the quarter from a year earlier. While device sales are always key to Apple’s results, top of mind for Wall Street is what to expect from incoming CEO John Ternus. Apple announced on April 20, that Ternus is succeeding Cook, who will become executive chairman on Sept. 1. Ternus is a longtime Apple exec who’s been running hardware.

One of the first things Ternus has to figure out is where Apple is going to go with artificial intelligence. Early in the quarter, Apple announced it would partner with Google to use its Gemini AI model to power its Siri product.

Services revenue in the quarter rose about 8% from $28.65 billion a year ago. Apple uses its massive base of iPhone customers to sell subscriptions to entertainment services, as well as for Apple Pay, iCloud and AppleCare.

Along with growth in services, Apple generates higher profit margins. Long stuck in the high 30s, Apple’s gross margin has been steadily moving up in recent years, reaching 49.3% in the latest quarter up from 48.2% in the previous period.

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