Reporting on its Q1 2025 financial results, Apple announced profits of $36.3 billion ($2.40 per diluted share, a 10% increase year over year) on revenues of $124.3 billion, an all-time record. The company’s revenues rose 4% compared to the year-ago quarter (see “Apple’s Q1 2024 Returns to Revenue Growth on Strong iPhone and Services Performance,” 2 February 2024).
Mac and iPad revenues increased year over year, but both Wearables and iPhone fell slightly. The big winner in the category revenue race was Services, which brought in a record $26.3 billion, up $3.2 billion from last year. Consequently, Services grew to account for 21% of Apple’s overall revenues, while an iPad rebound boosted its share to 7%, and Macs remained steady at 7%. Wearables continued its recent decline to 9% of the total, and although the iPhone remains Apple’s primary earner, it dropped slightly to account for 56% of revenues.
Apple said its overall installed base reached an all-time high of 2.35 billion, a milestone the company sets so regularly that only the sheer number is noteworthy. It’s challenging to grasp figures in the billions (cue Carl Sagan), but given that the world population is 8.2 billion, you can get a sense of Apple’s footprint. Of course, many people own multiple Apple products, but even still, the company said it had over 1 billion paid accounts.
Much like last quarter, Apple CEO Tim Cook repeatedly emphasized Apple Intelligence throughout the call, attributing the record levels of iPhone upgrades to Apple Intelligence features and noting that markets (differentiated by language) where Apple Intelligence was available outperformed those where it wasn’t. When asked which Apple Intelligence features were most used, Cook said it was different for different people and that most people use a mix, though he called out the email summary feature as having improved his life. (Charmingly, referring to part of Cook’s prepared remarks, the analyst asked him to “double-click on that comment.” Bonus points for working “double-click” into your everyday speech.) Last quarter, when Cook called Apple intelligence “a new era for iPhone” and “a compelling upgrade reason,” he lacked data to back that up, but it now appears that the latest data is proving him right.
Finally, this was the first call for Apple’s new CFO, Kevan Parekh, who replaced Luca Maestri at the beginning of the year.
iPhone
Although the iPhone’s revenue of $69.1 billion was slightly down from last year’s $69.7 billion, its revenues increased in most of Apple’s geographic segments apart from China, where overall sales fell by 11% compared to last year. When asked whether any emerging markets could compensate for the decline in iPhone sales in China, Cook noted that the iPhone was the top-selling model in India last quarter. He also pointed out that India is the second-largest smartphone market globally and that Apple has just begun to tap into the Indian market.
Mac
Last quarter, we wondered whether the M4 MacBook Pro, Mac mini, and iMac would significantly enhance the Mac segment’s results. The answer to that question is an unequivocal “Yes,” as the Mac generated $9.0 billion in revenue, a 16% increase from the $7.8 billion earned in the same quarter last year. Cook attributed the growth to strong uptake for the new M4 products and the continued success of the MacBook Air, which is still based on the M3 chip. When Apple upgrades the MacBook Air to the M4, as will likely happen by mid-2025, it will undoubtedly further increase Mac sales.
iPad
During some earnings calls, Apple executives lower their voices slightly and talk seriously about how a product had “a difficult compare.” The pandemic drove significant iPad sales in 2021 and 2022, and when sales dropped back to a more normal level in 2023, Apple was forced to report considerable revenue drops.
In Q1 2025, the iPad experienced the exact opposite: “an easy compare.” Because Apple didn’t release any iPads in 2023, breaking the drought only in mid-2024 (see “Apple Unveils New iPad Air, iPad Pro, Apple Pencil Pro, and Magic Keyboard,” 7 May 2024), this year’s $8.1 billion in revenue was set against a weak $7.0 billion in Q1 2024, resulting in a 15.2% increase.
We anticipate another “easy compare” for the iPad in Q2 2025, as the iPad Air and iPad Pro models released last year had no impact on Apple’s revenues until Q3 2024 (see “Apple’s Q3 2024 Record Revenues Surprise Tim Cook,” 2 August 2024).
One analyst inquired whether the extreme thinness of the iPad Pro significantly influenced sales, prompting Cook to disclose previously unmentioned details. He revealed that the performance of the iPad segment was more driven by the iPad Air and the entry-level iPad than by the iPad Pro. This aligns with our expectations, as the iPad Pro is considerably more expensive than the iPad Air for what most users need. Towards the end of the year, the iPad mini received a minor update to support Apple Intelligence, which may have also benefited that segment. Apple has not updated the entry-level iPad since October 2022, meaning an update to support Apple Intelligence’s chip requirements is due this year.
We briefly wondered if the question was actually a proxy to get Cook to comment on the value of thinness in products, given the rumors about a thinner “iPhone Air” potentially replacing the iPhone Plus in the September 2025 release cycle. However, it’s not a straightforward comparison since the iPad Pro represents the high end of functionality, while an iPhone Air would likely be less capable than the iPhone Pro models.
Wearables, Home, and Accessories
Apple’s Wearables, Home, and Accessories business generated $11.7 billion in revenue, a slight decrease from last year’s $12.0 billion. Cook attributed part of this decline to a “difficult compare” caused by the Apple Watch Ultra 2 release (see “2023 Apple Watch Models Add Double Tap Gesture,” 13 September 2023). Conversely, he suggested that sales of the AirPods Pro 2 boosted the category’s revenues with its recently introduced hearing health capabilities. However, expanding the Vision Pro to more countries does not appear to have significantly improved the Wearables figures.
Services
Once again, Services is the aspect of Apple’s business that keeps delivering. Services revenue rose to $26.3 billion, up from last year’s $23.1 billion, setting all-time sales records in both established and emerging markets. Paid accounts and subscriptions saw double-digit revenue growth, and Apple’s ever-expanding range of services will likely keep this category thriving for the foreseeable future.
Regional
With the exception of Greater China, which saw a revenue drop from $20.8 billion last year to $18.5 billion this year, all of Apple’s business regions reported revenue increases. Both Cook and Parekh cited various technical and economic factors contributing to the decline in China, but Parekh emphasized, “We achieved all-time revenue records in the Americas, Europe, Japan, and the rest of Asia Pacific, and grew in the vast majority of markets we track.”
The largest regional gains came from the Europe segment, likely due to strong sales in India, which Apple categorizes as part of Europe instead of Rest of Asia Pacific. Europe also includes the Middle East, which Apple highlighted several times as an emerging market that has set revenue records.
More of the Same
Kevan Parekh predicted single-digit growth for the upcoming quarter, pointing out that Apple faces foreign exchange “headwinds” due to a strong dollar. When asked about the possible impact of new US tariffs in the months ahead, Cook replied tersely, “We are monitoring the situation and don’t have anything more to add than that.” In other words, expect more of the same billions and billions in sales with ebbs and flows as Apple launches new products and reacts to macroeconomic forces.
