Services net sales increased 13% YoY to $27,423 million in Q3 2025, driven by advertising, App Store, and cloud services. iPhone net sales also grew 13% to $44,582 million, primarily due to higher net sales of Pro models, indicating strong demand for premium devices.

All geographic segments except Greater China showed Q3 2025 year-over-year net sales growth, with Rest of Asia Pacific leading at 20% and Japan at 13%. Americas and Europe also saw increases of 9% and 10% respectively, reflecting broad market strength.

During Q3 2025, the Company announced significant software updates including iOS 26, macOS® Tahoe 26, iPadOS® 26, watchOS® 26, visionOS® 26, and tvOS® 26. These regular updates highlight ongoing investment in its ecosystem and user experience.

Despite a decrease in Products gross margin percentage from 35.3% to 34.5% in Q3 2025 due to tariffs and product mix, this was partially offset by favorable costs. Services gross margin percentage improved from 74.0% to 75.6%, driven by higher net sales and a different mix of services, demonstrating agile cost management.

Management repurchased $21.0 billion of common stock in Q3 2025 and $69.3 billion for the nine months ended June 28, 2025. The announcement of a new $100 billion share repurchase program on May 1, 2025, underscores management's confidence in the company's valuation and future cash flows.

Research and development expense increased 10.7% year-over-year to $8,866 million in Q3 2025, primarily due to increases in headcount-related expenses and infrastructure-related costs. This reflects management's commitment to innovation and long-term product development.

The Company faces a €500 million fine and potential fines up to 10% of annual worldwide net sales from the EU's DMA investigation, alongside a civil antitrust lawsuit from the U.S. Department of Justice and an adverse ruling in the Epic Games lawsuit with potential criminal contempt proceedings. These legal challenges could materially impact operations and financial results.

Beginning in Q2 2025, new U.S. tariffs on imports from key manufacturing regions like China, India, and the EU were announced. These tariffs are expected to materially impact the Company's supply chain, raw material availability, pricing, and gross margins, creating significant operational uncertainty.

The Company explicitly states that macroeconomic conditions, including inflation, interest rates, and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, its results of operations and financial condition. This highlights ongoing sensitivity to broader economic trends.

iPhone net sales increased due to higher net sales of Pro models, suggesting the Company maintains strong pricing power and competitive advantage in the high-end smartphone market. This indicates a successful strategy of driving demand for higher-margin products.

Services net sales grew 13% year-over-year in Q3 2025, driven by advertising, the App Store®, and cloud services. This consistent growth highlights the Company's robust ecosystem and its ability to monetize its large installed base, providing a durable competitive advantage.

iPad net sales decreased 8% and Wearables, Home and Accessories net sales decreased 9% in Q3 2025 year-over-year. This indicates potential competitive pressures or shifting consumer preferences in these segments, suggesting a need for renewed product innovation or market strategy.

Total operating expenses increased 8.3% year-over-year to $15,516 million in Q3 2025, from $14,326 million. This rise was primarily attributed to higher headcount-related expenses and infrastructure-related costs in both Research and Development and Selling, General and Administrative categories.

Products gross margin percentage decreased from 35.3% in Q3 2024 to 34.5% in Q3 2025. This decline was primarily due to the impact of tariffs and a different mix of products, partially offset by favorable costs, indicating external pressures on product profitability.

As of June 28, 2025, the Company had manufacturing purchase obligations totaling $44.1 billion, with $43.8 billion payable within 12 months. This substantial commitment underscores the scale of its production and reliance on outsourcing partners and individual suppliers.

Research and development expense increased by $860 million, or 10.7%, to $8,866 million in Q3 2025 compared to Q3 2024. This significant investment, driven by headcount and infrastructure costs, indicates a strong commitment to developing new technologies and products.

The Company announced the release of new versions of its core operating systems during Q3 2025, including iOS 26, macOS® Tahoe 26, iPadOS® 26, watchOS® 26, visionOS® 26, and tvOS® 26. This consistent refresh cycle demonstrates ongoing technological advancement and ecosystem enhancement.

Services net sales growth in Q3 2025 was primarily driven by higher net sales from advertising, the App Store®, and cloud services. This indicates successful innovation and expansion of digital platforms, which are critical for long-term revenue diversification.

The Company repurchased $21.0 billion of common stock in Q3 2025 and $69.3 billion for the first nine months of 2025. A new $100 billion share repurchase program was authorized on May 1, 2025, signaling continued commitment to returning capital to shareholders and confidence in valuation.

The quarterly cash dividend was $0.26 per share in Q3 2025, and the Company intends to increase its dividend on an annual basis, subject to Board declaration. This demonstrates a stable and growing return for shareholders.

For the nine months ended June 28, 2025, the Company had net repayments of term debt totaling $5,201 million ($9,682 million repaid vs. $4,481 million issued). Total outstanding fixed-rate notes decreased from $96.7 billion to $91.8 billion, reflecting active management of its capital structure.

During the first nine months of 2025, the Company released €14.2 billion, or $15.4 billion, from escrow to Ireland, fully settling the State Aid Decision obligation. This resolves a significant long-standing tax-related regulatory matter.

The Company will adopt new FASB ASUs on Expense Disaggregation (ASU 2024-03) and Income Tax Disclosures (ASU 2023-09) in future quarters. These adoptions will require more granular disclosures, enhancing transparency in financial reporting and governance practices.

The 10-Q filing primarily focuses on financial performance and risks, with no specific new or updated disclosures regarding environmental commitments, social responsibility initiatives, or board diversity beyond standard compliance. Comprehensive ESG details are typically found in separate reports.

Beginning in Q2 2025, new U.S. tariffs were announced on imports from various countries, including key manufacturing hubs. These tariffs are expected to adversely impact the Company's business, supply chain, pricing, and gross margins, contributing to a challenging trade environment.

The Company explicitly states that macroeconomic conditions, including inflation, interest rates, and currency fluctuations, have had and could continue to have a material impact on its results. This highlights the ongoing sensitivity to global economic volatility and its potential to affect consumer spending.

Apple faces mounting regulatory pressure, including the EU's Digital Markets Act investigations and the U.S. Department of Justice antitrust lawsuit. These actions, along with the Epic Games lawsuit, signify a tightening regulatory landscape that could impose operational restrictions and significant financial penalties.