Record Q1 for Apple: EPS $2.84 on $143.8B Revenue and 48-49% GM

Record Quarter: $143.8B Revenue and $2.84 EPS

Apple reported its “best-ever quarter” with revenue of $143.8 billion (+16% YoY) and “EPS reached an all-time record of $2.84, growing…19% year over year.” Management also highlighted Services at an all-time record $30 billion (+14% YoY), and iPhone at $85.3 billion (+23% YoY) with “all-time records across every geographic segment.” Regionally, Greater China grew 38% YoY, and Apple set “all-time revenue records” in The Americas, Europe, Japan, and the rest of Asia Pacific. Apple further reported company gross margin of 48.2% and an all-time operating cash flow record of $53.9 billion.

March Outlook: 13%–16% Growth and 48–49% Gross Margin

For March, CFO Kevan Parekh guided revenue growth of “13% to 16% year over year,” explicitly noting the outlook “comprehends our best estimates of constrained iPhone supply during the quarter.” Parekh also guided gross margin of “between 48-49%,” operating expenses of “between $18.4 billion and $18.7 billion” (driven by higher R&D YoY), and a tax rate “around 17.5%.” He also reiterated that the guidance assumes “global tariff rates, policies, and their application remain in effect as of this call” and that the “global macroeconomic outlook does not worsen from today.”

iPhone Strength, Installed Base at 2.5B, Services at $30B

Management attributed the quarter’s strength to an iPhone demand surge, with CEO Tim Cook saying iPhone demand “exceeded our expectations” and that Apple exited December with “very lean channel inventory” after iPhone revenue grew 23% YoY. Cook described iPhone 17 Pro and Pro Max, iPhone Air, and iPhone 17 as key contributors, and noted that Greater China growth was “driven by iPhone, which had record upgraders and double-digit growth on switchers.” Apple also emphasized ecosystem momentum: active devices surpassed 2.5 billion (“a new record…with more than 2.5 billion active devices”), and Cook stated that “the majority of users on enabled iPhones are actively leveraging the power of Apple Intelligence.” On Services, Apple set “all-time revenue record” results across advertising, cloud services, music, and payment services, and CFO noted increased engagement with “both transacting and paid accounts reaching all-time highs.”

What Analysts Pressed On: Memory, AI Monetization, Supply, and China/Services

Analysts focused on (1) margin drivers and supply constraints, (2) AI monetization and architecture, and (3) demand durability by geography. On supply, Cook said constraints are “driven by the availability of the advanced nodes…three nanometer” and that “it’s difficult to predict when supply and demand will balance.” On memory, Cook said “memory had a minimal impact on Q1,” while management expects memory to affect Q2 (“We do expect it to be a bit more of an impact to the Q2 gross margin”). On AI, CEO said Apple is integrating intelligence “across the operating system in a personal and private way,” and when asked about monetization, he framed it as creating “great value” that “opens up a range of opportunities across our products and services.” Regarding the Google collaboration, Cook stated Apple “determined that Google’s AI technology would provide the most capable foundation” and that it will power future Siri capabilities (CFO/CEO did not share commercial details). For Services, management declined detailed category growth confirmation but CFO emphasized “broad-based growth” and all-time records across multiple Services categories, while guidance assumes continued Services growth at a similar YoY rate to December.