Apple reports record revenue and earnings despite China headwinds

Apple announced financial results for its first fiscal quarter of 2025 ended December 28, 2024, posting record quarterly revenue of $124.3 billion, representing a 4% increase compared to the same period last year. The technology company's earnings per share reached $2.40, marking a 10% growth year over year.

The Cupertino-based company achieved significant milestones across multiple segments, although its performance in Greater China presented challenges. According to the financial statements, revenue from Greater China declined by 11% to $18.5 billion, with Tim Cook, Apple's CEO, noting that over half of this decline stemmed from changes in channel inventory.

Services revenue demonstrated substantial growth, reaching $26.3 billion, a 14% increase from the previous year. This segment continues to expand its user base, with paid subscriptions growing in double digits year over year. The company now maintains well over a billion paid subscriptions across its service platforms.

Mac sales showed strong momentum, generating $9 billion in revenue, a 16% increase compared to the previous year. This growth was broad-based, with double-digit improvements across all geographic segments. The performance was driven by the new Mac lineup, including the M4-based MacBook Pro, iMac, and Mac mini.

iPad revenue increased by 15% to $8.1 billion, primarily due to strong interest in the iPad mini and latest iPad Air models. According to company statements, over half of iPad purchases during the quarter came from customers new to the product.

iPhone revenue remained relatively stable at $69.1 billion. The company reported record upgraders for the iPhone, with particularly strong performance in markets where Apple Intelligence features were available. The iPhone active install base reached new heights across all geographic segments.

Wearables, Home and Accessories revenue experienced a slight decline of 2% to $11.7 billion. However, the Apple Watch install base achieved a new record, with over half of purchases coming from first-time buyers.

The company's gross margin for the quarter stood at 46.9%, showing improvement from the previous quarter. Services gross margin reached 75%, while products gross margin was 39.3%.

Apple's board of directors declared a cash dividend of $0.25 per share, payable on February 13, 2025, to shareholders of record as of February 10, 2025.

Looking ahead to the March quarter, Apple expects total company revenue to grow in the low to mid-single digits year over year, despite an anticipated 2.5 percentage point headwind from foreign exchange rates. Services revenue is projected to maintain low double-digit growth.

The company's financial position remains strong, with $141 billion in cash and marketable securities. During the quarter, Apple returned over $30 billion to shareholders through dividends and share repurchases.

Operating cash flow reached $29.9 billion, which included an $11.9 billion payment related to a state aid decision. The company continued its capital allocation strategy, repurchasing 100 million Apple shares through open market transactions.

The results reflect Apple's continued focus on innovation and expansion in emerging markets, particularly India, where the company achieved record revenue and plans to open additional retail stores. However, challenges in the Chinese market and broader macroeconomic conditions present ongoing considerations for the company's growth trajectory.