MacDailyNews presents live notes from Apple’s Q225 Conference Call with analysts starting at 2pm PT / 5pm ET today, May 1, 2025.
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Apple’s live conference call webcast will begin at 2pm PT / 5pm ET here.
Apple today posted quarterly revenue of $95.4 billion, up 5 percent year over year, and quarterly diluted earnings per share of $1.65, up 8 percent year over year.
For the quarter, analysts’ consensus estimates called for Apple to report revenue of $94.62 billion and EPS of $1.62, both of which Apple beat.
Live notes in reverse chronological order:
• Interns, tap away! Prost, everyone! 🍻🍻🍻
• AAPL after hours: $205.22, -$8.10 (-3.80%) @ 5:56:12 PM EDT
• Cook: The C1 modem has done well; we have started on a journey
• Q: iPhone 16e with Apple C1 modem; how do you see Apple modems in the future?
• Cook: We want to have certain custom Apple LLMs; we’ve been working on LLMs for quite some time.
• Cook: We have a hybrid data center strategy; some to the $500 billion is for AI data center investments
• Q: AI strategy? How important is it for Apple to have its own foundational models? Apple data centers for AI?
• We are monitoring the Google antitrust case closely (as per Safari default search)
• Cook: We strongly disagree with the court’s Appl Store order and will appeal
• Q: Legal issues impact on Apple Services (i.e., App Store)
• Parekh: We definitely are making all of the investments we think we need
• However, with regard to the “more personal Siri,” we just need more time
• Cook: We’ve just recently expanded Apple Intelligence into several other languages
• Cook: We’ve released a slew of Apple Intelligence features that we talked about at WWDC 2024 last June
• Q: New Siri is taking longer than expected. Why?
• Cook: We continue to be very excited about the AI opportunities and the road map; we are pleased with the progress we are making
• Cook: We are shipping an LLM on iPhone 16 today; some of the queries are on-device and others go to the private cloud
• Q: Are current smartphone specs good enough to meet future edge AI requirements?
• Cook: We’re not giving out the exact splits; there will be CapEx and OpEx involved
• Q: $500 billion investment in America is for what, exactly?
• Cook: I’m not an economist. Our results accelerated sequentially. Don’t want to predict future; quite pleased with Q2 results
• Q: U.S. consumer affected by macroeconomy?
• Cook: Where Apple Intelligence was available, Apple saw stronger sales
• Q: Siri delay affect upgrades?
• Color provided assumes today’s tariffs and general worldwide economy of today
• Cook: Having everything in one location was to risky, so we’ve opened up new sources in supply chain; expect more of that in the future
• Cook: We have a complex supply chain. There’s always risk in supply chains
• Q: Export control issues?
• Cook: It’s embedded in our results and June quarter color we’ve provided
• Q: Services growth forecast, did third-party app stores in Europe affect App Store?
• Parekh: Every product is different; new products cost more; those costs reduce over time
• Cook: There is one that is already built into the margins we’ve provided
• Cook: We are excited to bring more manufacturing to the U.S.
• Q: Gross margin affected by manufacturing in India, the U.S., etc.?
• We do expect foreign exchange to improve in June quarter
• Services in June quarter?
• Cook: As an example, the build ahead (manufacturing purchase requirements) is helpful
• Q: $900 million tariff impact in the June quarter?
• Parekh: down 70 basis points YoY due to mix and foreign exchange
• Q: product gross margins down YoY?
• Cook: We are very engaged on tariffs and will continue to engage
• Any more color on tariffs?
• iPad held the top 2 tablet sales sports in China
• iPhone held the top 2 smartphone sales sports in China
• iPhone was the ket drive for the sequential improvement in China
• Cook: The Chinese subsidies played a favorable impact for sales in China
• Cook: iPhone sales were down 2% for the quarter, but roughly flat when you remove currency exchange
• Q: Seeing nationalism in China, leading to homegrown smartphone sales?
• Cook: I don’t want to predict the future. There is a 232 investigation happening now.
• Q: Tariffs after the June quarter?
• Cook: We did build inventory in the U.S. ahead of tariffs
• Cook: In the March quarter, Apple doesn’t believe they say pull-forward sales to get ahead of any potential tariff price increases
• Q: Did Apple build U.S. inventory ahead of tariffs?
• Cook: The vasty majority of Apple’s products are currently not subject to reciprocal tariffs as those products contain semiconductors, a category of products currently under review by the U.S. Commerce Department
• Cook: The existing tariffs that apply to Apple today mean that iPhones for America will come mainly from India and iPad, Mac, AirPods for America will come primarily from Vietnam
• Q: iPhones for U.S. to be sources from India?
• Apple expects tax rate of 16%
• Apple expects 45.5%-46.5% gross margin
• Apple expects June quarter to grow low to mid-single digits
• Guidance assumes current tariffs remain in effect
• The board of directors has also authorized an additional program to repurchase up to $100 billion of the company’s common stock
• The dividend is payable on May 15, 2025 to shareholders of record as of the close of business on May 12, 2025
• Apple’s board of directors has declared a cash dividend of $0.26 per share of the company’s common stock, an increase of 4 percent
• Apple has $98 billion total debt; net cash $35 billion
• Parekh touts enterprise use of Mac, iPhone, Vision Pro, etc.
• Apple Pay active users reached all-time record, up double digits YoY
• Apple has well over one billion paid subscriptions
• 95% customer satisfaction for Apple Watch in the U.S.
• Apple Watch active install base hit all-time high
• 97% customer satisfaction for iPad in the U.S.
• iPad active install base hit all-time high
• 94% customer satisfaction for Mac in the U.S.
• Mac active install base hit all-time high
• 97% customer satisfaction for iPhone in the U.S.
• iPhone active install base grew to an all-time high and in every geographic segment
• Total operating expenses: $15.268 billion (vs. $15.17 billion estimate)
• Parekh recaps revenue figures
• Cook: Exciting announcements coming next month at WWDC 2205
• Cook: For March quarter: limited impact from tariffs. Cannot estimate tariffs impact on June quarter. If tariffs stay the same, Apple estimates $900 million cost due to tariffs in the June quarter, but the situation is in flux
• Cook touts Apple renewable energy efforts, etc.
• Cook: We need more time to work on Siri
• Cook promotes privacy aspects of Apple Intelligence
• Cook: “Apple products are the best for generative AI”
• iOS 18.4 delivers Apple Intelligence to more languages across the globe
• Apple offers live sports in the Apple TV app
• Cook talks up “Severance,” The Studio,” and the upcoming “F1” movie, starring Brad Pitt
• Cook: Strong services performance across all of Apple’s categories
• Services revenue: $26.645 billion (vs. $26.72 billion estimate)
• Apple Retail Stores coming in UAE, India, and the UK
• Cook promotes Apple Vision Pro
• Cook: Apple Watch Series 10 is an essential health and fitness partner
• Wearables, home and accessories: $7.522 billion (vs. $8.05 billion estimate)
• New iPad Air with M3 is a powerful personal computer
• iPad revenue: $6.402 billion (vs. $6.15 billion estimate)
• Cook promotes new Macs and powerful Apple Silicon
• Cook: “Another great quarter for Mac”
• Mac revenue: $7.949 billion (vs. $7.77 billion estimate)
• Cook talks up new iPhone 16e and Apple C1 modem
• iPhone revenue: $46.841 billion (vs. $45.82 billion estimate)
• Apple has more than 9,000 suppliers across America from all 50 states
• Apple will spend over $500 billion in America over the next 4 years
• Services set new quarterly revenue record
• Quarterly diluted earnings per share of $1.65, up 8 percent year over year.
• Quarterly revenue of $95.4 billion, up 5 percent year over year
• Tim Cook: Good afternoon, everyone
• AAPL after hours: $207.85, -$5.47 (-2.56%) @ 5:01:07 PM EDT
• AAPL after hours: $207.99, -$5.33 (-2.50%) @ 4:50:08 PM EDT
• Awaiting start of conference call.
