Apple beats earnings expectations as iPhone sales drive 16% revenue growth

Apple posted stronger-than-expected fiscal first-quarter results on Thursday, beating Wall Street estimates as revenue jumped 16% year over year. Shares rose more than 1% in extended trading.

For the quarter ended in December, Apple reported earnings per share of $2.84, topping the $2.67 consensus estimate, while revenue reached $143.76 billion versus expectations of $138.48 billion, according to LSEG.

By segment, iPhone revenue surged to $85.27 billion, well above estimates, driven by strong demand for the iPhone 17 lineup. iPad revenue also exceeded expectations at $8.6 billion. Mac sales came in below forecasts at $8.39 billion and declined 7% from a year earlier. Revenue from Wearables, Home and Accessories missed estimates, while Services revenue was roughly in line with expectations. Gross margin reached 48.2%, beating forecasts.

Chief Financial Officer Kevan Parekh said Apple expects revenue to grow between 13% and 16% year over year in the current quarter, implying sales of $107.8 billion to $110.66 billion, above analysts’ expectations of $104.84 billion. The company cautioned that iPhone supply will remain constrained and said Services growth should mirror the 14% pace seen in the December quarter.

Net income rose to $42.1 billion, or $2.84 per share, up from $36.33 billion, or $2.40 per share, a year earlier. Overall iPhone revenue climbed 23%, marking a sharp turnaround from the prior holiday quarter, when sales dipped slightly.

“The demand for iPhone was just simply staggering,” CEO Tim Cook said, pointing to strong uptake of the latest models.

Apple’s installed base grew to 2.5 billion active devices, up from 2.35 billion a year ago, underscoring the expanding opportunity for services and software sales.

The company also posted strong results in Greater China, where revenue jumped 38% to $25.53 billion, fueled by record upgrades and gains from customers switching from rival brands.

While iPad sales rose 6%, with half of buyers new to the product, Mac and Wearables sales lagged. Services revenue grew 14% year over year, helped by a 36% increase in Apple TV viewership in December.

Apple highlighted its recent partnership with Google to integrate Gemini AI into Apple Intelligence, even as it continues to spend less on AI infrastructure than some rivals. Capital expenditures fell from a year earlier, though research and development spending climbed to $10.89 billion.

Executives acknowledged ongoing supply chain constraints, particularly in advanced chip manufacturing, as well as rising memory prices tied to AI-driven shortages. Apple also returned nearly $32 billion to shareholders through dividends and share repurchases during the quarter.