Apple reports better-than-expected quarter driven by iPhone sales
Apple reported second-fiscal quarter earnings on Thursday that beat Wall Street’s soft expectations for sales and revenue, driven by stronger-than-anticipated iPhones sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.”
However, Apple’s overall sales fell for the second quarter in a row. Apple shares rose less than 1% in extended trading.
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Here’s how the company did versus Wall Street expectations per Refinitiv consensus expectations:
- EPS: $1.52 vs. $1.43 expected
- Revenue: $94.84 billion vs. $92.96 billion expected
- Gross margin: 44.3% vs. 44.1% expected
Apple reported $24.16 billion in net income during the quarter versus $25.01 billion last year. Overall revenue was down 3% from last year’s $97.28 billion in sales.
Here’s how Apple’s individual product lines did versus StreetAccount consensus expectations:
- iPhone revenue: $51.33 billion vs. $48.84 billion expected
- Mac revenue: $7.17 billion vs. $7.80 billion expected
- iPad revenue: $6.67 billion vs. $6.69 billion expected
- Other Products revenue: $8.76 billion vs. $8.43 billion expected
- Services revenue: $20.91 billion vs. $20.97 billion expected
Apple didn’t provide formal guidance, continuing its practice that dates back to 2020 and the start of the Covid-19 pandemic. Management typically provides some data points on a call with analysts.
The highlight of Apple’s report was iPhone sales, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate.
IPhone revenue grew 2% during the quarter, suggesting that parts shortages and supply chain issues that had hampered the product for the last few years, including an iPhone factory shutdown late last year, had finally abated.
“It was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats,” Cook told CNBC’s Steve Kovach.
Chief Executive Officer (CEO) of Apple Tim Cook waves to people during the opening of the first Apple Inc. flagship store in Mumbai, India on April 18, 2023.
Imtiyaz Shaikh | Anadolu Agency | Getty Images
Apple’s Mac and iPad businesses didn’t fare as well. The company warned last quarter that both business segments would decline, partially due to parts shortages, but they decreased more than expectations.
Apple’s Mac business fell more than 31% to just over $7.17 billion. But it’s a difficult comparison versus the same time last year when Apple was still benefiting from the end of a pandemic boom in PC sales and a shift to its own chips that offer longer laptop battery life.
“There’s really two reasons for that,” Cook said. “One is the macro situation in general. And the other is where we’re still comparing to the very difficult compare of the M1 MacBook Pro 14 and 16-inch from the year-ago quarter.”
Revenue from iPads declined nearly 13% to $6.67 billion.
Apple’s Services business includes monthly subscriptions, revenue from Apple’s App Store, warranties, and search licensing revenue from companies like Google. Apple reported $20.9 billion in services revenue, a 5.45% annual increase, showing that the company’s most highest-margin line of business continues to grow.
Apple’s wearables division, including Apple Watch and headphones such as AirPods, dropped 1% during the quarter, beating analyst expectations. Last fall, Apple released a more expensive Apple Watch, called Ultra.
Apple’s greater China business, which includes Taiwan and Hong Kong in addition to the mainland, reported $17.81 billion in sales, down from last year’s $18.34 billion. Analysts had hoped that China’s demand for electronics would rise this year as the company exits out of Covid-era lockdowns and other restrictions.
While sales shrunk in most regions that Apple monitors, they grew in its Asia Pacific region to $8.11 billion.
Cook was optimistic about Apple’s prospects in India. Cook visited India last month to open Apple stores and meet with politicians.
“The switcher and first-time buyer metrics look very good there for India,” Cook said. Apple uses the term “switcher” to refer to first-time iPhone buyers who previously had Android devices.
As expected, Apple’s board authorized $90 billion in share repurchases and dividends. Apple said it paid $23 billion in buybacks and dividends in the March quarter. Apple also raised its dividend 4% to 24 cents per share.
Cook also said that Apple was not planning layoffs like those that other big tech companies have started over the past year.
“I view that as a last resort and, so, mass layoffs is not something that we’re talking about at this moment,” Cook said.
OpenAI CEO Sam Altman speaks during the Snowflake Summit in San Francisco on June 2, 2025.
Justin Sullivan | Getty Images News | Getty Images
OpenAI has been awarded a $200 million contract to provide the U.S. Defense Department with artificial intelligence tools.
The department announced the one-year contract on Monday, months after OpenAI said it would collaborate with defense technology startup Anduril to deploy advanced AI systems for “national security missions.”
“Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains,” the Defense Department said. It’s the first contract with OpenAI listed on the Department of Defense’s website.
Anduril received a $100 million defense contract in December. Weeks earlier, OpenAI rival Anthropic said it would work with Palantir and Amazon to supply its AI models to U.S. defense and intelligence agencies.
Sam Altman, OpenAI’s co-founder and CEO, said in a discussion with OpenAI board member and former National Security Agency leader Paul Nakasone at a Vanderbilt University event in April that “we have to and are proud to and really want to engage in national security areas.”
OpenAI did not immediately respond to a request for comment.
The Defense Department specified that the contract is with OpenAI Public Sector LLC, and that the work will mostly occur in the National Capital Region, which encompasses Washington, D.C., and several nearby counties in Maryland and Virginia.
Meanwhile, OpenAI is working to build additional computing power in the U.S. In January, Altman appeared alongside President Donald Trump at the White House to announce the $500 billion Stargate project to build AI infrastructure in the U.S.
The new contract will represent a small portion of revenue at OpenAI, which is generating over $10 billion in annualized sales. In March, the company announced a $40 billion financing round at a $300 billion valuation.
In April, Microsoft, which supplies cloud infrastructure to OpenAI, said the U.S. Defense Information Systems Agency has authorized the use of the Azure OpenAI service with secret classified information.
A United Launch Alliance Atlas V rocket is shown on its launch pad carrying Amazon’s Project Kuiper internet network satellites as the vehicle is prepared for launch at the Cape Canaveral Space Force Station in Cape Canaveral, Florida, U.S., April 28, 2025.
Steve Nesius | Reuters
United Launch Alliance on Monday was forced to delay the second flight carrying a batch of Amazon‘s Project Kuiper internet satellites because of a problem with the rocket booster.
With roughly 30 minutes left in the countdown, ULA announced it was scrubbing the launch due to an issue with “an elevated purge temperature” within its Atlas V rocket’s booster engine. The company said it will provide a new launch date at a later point.
“Possible issue with a GN2 purge line that cannot be resolved inside the count,” ULA CEO Tory Bruno said in a post on Bluesky. “We will need to stand down for today. We’ll sort it and be back.”
The launch from Florida’s Space Coast had been set for last Friday, but was rescheduled to Monday at 1:25 p.m. ET due to inclement weather.
Amazon in April successfully sent up 27 Kuiper internet satellites into low Earth orbit, a region of space that’s within 1,200 miles of the Earth’s surface. The second voyage will send “another 27 satellites into orbit, bringing our total constellation size to 54 satellites,” Amazon said in a blog post.
Kuiper is the latest entrant in the burgeoning satellite internet industry, which aims to beam high-speed internet to the ground from orbit. The industry is currently dominated by Elon Musk’s Space X, which operates Starlink. Other competitors include SoftBank-backed OneWeb and Viasat.
Amazon is targeting a constellation of more than 3,000 satellites. The company has to meet a Federal Communications Commission deadline to launch half of its total constellation, or 1,618 satellites, by July 2026.
Thomas Kurian, CEO of Google Cloud, speaks at a cloud computing conference held by the company in 2019.
Michael Short | Bloomberg | Getty Images
Google apologized for a major outage that the company said was caused by multiple layers of flawed recent updates.
The company released an incident report late on Friday that explained hours of downtime on Thursday. More than 70 Google cloud services stopped working properly across the globe, knocking down or disrupting dozens of third-party services, including Cloudflare, OpenAI and Shopify. Gmail, Google Calendar, Google Drive, Google Meet and other first-party products also malfunctioned.
“We deeply apologize for the impact this outage has had,” Google wrote in the incident report. “Google Cloud customers and their users trust their businesses to Google, and we will do better. We apologize for the impact this has had not only on our customers’ businesses and their users but also on the trust of our systems. We are committed to making improvements to help avoid outages like this moving forward.”
Thomas Kurian, CEO of Google’s cloud unit, also posted about the outage in an X post on Thursday, saying “we regret the disruption this caused our customers.”
Google in May added a new feature to its “quota policy checks” for evaluating automated incoming requests, but the new feature wasn’t immediately tested in real-world situations, the company wrote in the incident report. As a result, the company’s systems didn’t know how to properly handle data from the new feature, which included blank entries. Those blank entries were then sent out to all Google Cloud data center regions, which prompted the crashes, the company wrote.
Engineers figured out the issue in 10 minutes, according to the company. However, the entire incident went on for seven hours after that, with the crash leading to an overload in some larger regions.
As it released the feature, Google did not use feature flags, an increasingly common industry practice that allows for slow implementation to minimize impact if problems occur. Feature flags would have caught the issue before the feature became widely available, Google said.
Going forward, Google will change its architecture so if one system fails, it can still operate without crashing, the company said. Google said it will also audit all systems and improve its communications “both automated and human, so our customers get the information they need asap to react to issues.”
— CNBC’s Jordan Novet contributed to this report.
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