There had been a lot of reporting about strong iPhone 17 sales since it launched in September, and on October 30, we got the details.
In its fiscal fourth quarter earnings release, Apple reported record revenue and earnings for the September quarter, fueled by the new iPhone sales.
Apple has two main sources of income -- products, which include the iPhone, iPad, AirPods, computers, and others; and services, which include Apple TV, music streaming, as well as its financial products and cloud services.
Products revenue jumped about 5% to $73.7 billion, while services revenue hit an all-time high of $28.7 billion, up 15% year-over-year.
The iPhone remains Apple's cash cow, although growth had been slowing. In fiscal year 2024, iPhone sales were essentially flat and in fiscal year 2023 they were actually down year-over-year.
In the fiscal fourth quarter ended September 30, iPhone sales increased 6% to $49 billion. For the full fiscal year, the iPhone saw a return to growth, as net sales grew 4% to $209.6 billion. That was largely due to the strength of the iPhone 17 lineup, although the iPhone had sales growth in three of the four quarters.
However, while iPhone sales were excellent, they did fall short of lofty estimates as analysts had projected $50.2 billion in sales, perhaps due to the iPhone 17 hype.
"Today, Apple is very proud to report a September quarter revenue record of $102.5 billion, including a September quarter revenue record for iPhone and an all-time revenue record for Services," Tim Cook, Apple's CEO, said.
For the full fiscal year, Apple posted a record $416 billion in net sales, a 6% year-over-year increase. That was better than the 2% increase for the previous fiscal year.
Net income rose 20% in fiscal 2025 to $112 billion, or $7.46 per share, also a record.
Sales in China were weak, however, declining 3% in Q4 and 4% for the year. On the earnings call, Cook cited "supply constraints there," but expects a return to growth in China Q4.
Overall, Cook anticipates that the December quarter, fiscal Q1, will set records for net sales and the iPhone.
"We expect our December quarter total company revenue to grow by 10 to 12 percent year-over-year, which would be our best quarter ever. We expect iPhone revenue to grow double digits year-over-year, which would be our best iPhone quarter ever," Cook said on the call.
The firm anticipates a gross margin of between 47% and 48%, which includes an estimated impact of $1.4 billion of tariff-related costs. That would be on par with Q4.
In addition, Cook said Apple is "significantly increasing our investments in AI" and projects operating expenses of $18.1B to $18.5B. That would be up from $15.9 billion in Q4.
Apple stock opened about 2% higher Friday and is up 10% YTD.
Analysts lifted their price targets for Apple stock across the board, some higher than others. Argus and TD Cowen raised their targets to $325 per share, while Evercore bumped it up to $300 and DA Davidson raised it to $270 per share, which is roughly the current share price. And Rosenblatt only raised its target to $250 per share.
But if it reached $325, that would be a 19% gain. However, prior to today's upgrades, Apple only had a median price target of $260 per share, which suggests the stock price would drop 6% from its current level. That shows that there are concerns about its growth potential.