iPhone and iPad maker Apple (NASDAQ: AAPL) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 9.6% year on year to $94.04 billion. Its GAAP profit of $1.57 per share was 10.1% above analysts’ consensus estimates.
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Apple (AAPL) Q2 CY2025 Highlights:
- Revenue: $94.04 billion vs analyst estimates of $89.54 billion (5% beat)
- Operating Profit (GAAP): $28.2 billion vs analyst estimates of $25.86 billion (9.1% beat)
- EPS (GAAP): $1.57 vs analyst estimates of $1.43 (10.1% beat)
- Products Revenue: $66.61 billion vs analyst estimates of $62.76 billion (6.1% beat)
- Services Revenue: $27.42 billion vs analyst estimates of $26.81 billion (2.3% beat)
- Gross Margin: 46.5%, in line with the same quarter last year
- Operating Margin: 30%, in line with the same quarter last year
- Free Cash Flow Margin: 26%, down from 31.1% in the same quarter last year
- Market Capitalization: $3.12 trillion
“Today Apple is proud to report a June quarter revenue record with double-digit growth in iPhone, Mac and Services and growth around the world, in every geographic segment,” said Tim Cook, Apple’s CEO.
Revenue Growth
Apple (with its installed base of 2 billion+ devices) proves that huge, scaled companies can still grow. The company’s revenue base of $273.9 billion five years ago has increased to $408.6 billion in the last year, translating into a decent 8.3% annualized growth rate.
In light of its big tech peers, however, Apple’s growth trailed Amazon (15.8%), Alphabet (17.5%), and Microsoft (14.5%) over the same period. This is an important consideration because investors often use the comparisons as a starting point for their valuations. When adjusting for these benchmarks, we think Apple’s price is fair. 
We at StockStory emphasize long-term growth, but for big tech companies, a half-decade historical view may miss emerging trends in AI. Apple’s recent performance shows its demand has slowed as its annualized revenue growth of 3.2% over the last two years was below its five-year trend. 
This quarter, Apple reported year-on-year revenue growth of 9.6%, and its $94.04 billion of revenue exceeded Wall Street’s estimates by 5%. Looking ahead, sell-side This projection illustrates the market sees some success for its newer AI-enabling Apple Intelligence products. However, its anticipated growth is still a far cry from its heyday in the 2010s.
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Products: Steve Jobs’s Legacy
Apple’s Products segment includes everything from its flagship iPhone, iPad, and MacBook computers to AirPods and Apple Watch. We are closely monitoring whether the GenAI-powered Apple Intelligence, which was released in September 2024 but has limited interoperability with older devices, can spur an upgrade cycle for the company.
Products sales are by far the biggest chunk of Apple’s revenue at 74.2%, and they grew by 6.4% annually over the last five years, slower than total revenue. Recently, sales have also decelerated, as revenue was flat over the last two years. Apple could really use that upgrade cycle right about now.
This quarter, Products sales were up 8.2% year on year, topping Wall Street’s estimates by 6.1%. Holding aside expectations, the recently improved rate of change shows that more customers are upgrading their devices than before. We’ll be watching to see if Apple Intelligence and iOS 18 can accelerate this trend. Wall Street seems to believe it won't move the needle.
Key Takeaways from Apple’s Q2 Results
We were impressed by how significantly Apple blew past analysts’ revenue expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates, as Products and Services all beat. Zooming out, we think this was a solid print. The stock traded up 2.4% to $212.58 immediately after reporting.
Indeed, Apple had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
