Apple’s Earnings Top Estimates as Services Revenue Grows, But iPhone Sales Fall Short

Apple (AAPL) reported fiscal first-quarter earnings that topped estimates as its services revenue rose, though iPhone sales fell short.

The iPhone maker’s revenue rose 4% year-over-year to a record $124.3 billion, roughly in-line with the analyst consensus from Visible Alpha. Earnings came in at $36.33 billion, an all-time high of $2.40 per share, compared to $33.92, or $2.28 per share, a year earlier and above expectations.

The better-than-expected results came as Apple’s services revenue grew 14% to $26.34 billion. Mac and iPad sales rose over 15% to $8.99 billion and $8.09 billion, respectively. However, iPhone sales fell just under 1% to $69.14 billion, missing projections. It was the first full quarter since the iPhone 16 was released in September.

The results also came as the rapid rise in popularity of a lower-cost AI model from Chinese startup DeepSeek raised speculation that Apple’s ability to develop devices powerful enough to run AI models could prove less challenging and expensive than previously anticipated.

Shares of Apple fell about 1.5% in extended trading Thursday following the release. The stock was down about 5% for 2025 so far through Thursday’s close.