Apple reported better-than-expected earnings and revenue in its fiscal fourth quarter, driven by strong growth in services and robust early demand for the iPhone 17 lineup. Weakness in China, however, weighed on the results as local competition and product restrictions limited sales.
BNN Bloomberg spoke with Mark Newman, managing director and senior analyst at Bernstein, about Apple’s latest performance and why he sees continued strength in iPhone sales and margin resilience heading into 2026.
Key Takeaways
- Apple reported earnings per share of $1.85, beating estimates of $1.77.
- Services revenue rose 15 per cent year over year to $28.75 billion, surpassing forecasts.
- iPhone 17 demand remained strong globally, with particular strength in Japan and Europe.
- Revenue in China missed expectations due to local competition and product restrictions.
- Analysts see Apple gaining leverage in AI and search partnerships following the DOJ ruling on Google.
Read the full transcript below:
MERELLA: Apple’s fourth-quarter earnings are now coming into the newsroom. Let’s take a look at the numbers. Earnings per share came in at $1.85 — the estimate had been $1.77, so a big beat for Apple.Fourth-quarter revenue for the company came in at $102.47 billion. The estimate had been $102.19 billion, so another beat there as well.
iPhone revenue, following the recent launch of the iPhone 17, came in at $49.03 billion, slightly below the estimate of $49.33 billion. Services revenue for Apple was $28.75 billion, up 15 per cent year over year. The estimate had been $28.18 billion, so that’s a beat for Apple in services.
An important metric for the company is revenue in China. Greater China came in at $14.49 billion, below the $16.43 billion estimate — a miss there. In the Americas, revenue was $44.19 billion, up six per cent year over year, but just shy of the $44.45 billion estimate.
Let’s bring in Mark Newman, managing director and senior analyst at Bernstein, to talk about this. Mark, thanks for joining us. The new iPhone sales missed the target, but they were only on sale for about a week before the quarter ended. Does that concern you?
NEWMAN: Not at all. I think the numbers are very strong. Earnings beat expectations. The results just came out about 10 minutes ago, so we’re still going through them, but overall, they look strong across the board.
On iPhone sales, we looked at iPhone 17 sell-in and sell-through data for September — it’s been very strong. That’s confirmed by the earnings we’ve just seen. The iPhone 17 is performing well globally, especially in Japan and Europe. We’ll hear more from the company soon, but with strong volume growth and solid gross margins, I’d say these results are very confidence-building.
MERELLA: What about the miss in China, where revenue came in at $14.49 billion versus estimates above $16 billion? How significant is that market for Apple?
NEWMAN: China is obviously a huge market. It’s been a bit soft recently, partly because of local competition and partly because Apple wasn’t able to sell the iPhone Air there this quarter. The device doesn’t have a physical SIM card, and that’s been an issue for approval in China. That should change soon, so I’d say this is a temporary drag that will likely improve in coming quarters.
MERELLA: Remind us what falls under Apple’s services segment — that’s streaming and what else?
NEWMAN: Yes, it includes the App Store, payments from Google for search, Apple TV, iCloud accounts and other services. The biggest contributors are the Google search deal and the App Store.
MERELLA: There had been concern that the U.S. case involving Alphabet could force Google to cut ties with Apple, removing Google as the default search engine. But that outcome seems favourable for Apple, right?
NEWMAN: Yes, the recent DOJ ruling was very positive for Apple. They can continue charging Google for search, but it’s no longer exclusive. That opens the door for Apple to strike deals with other companies — potentially significant in the context of AI.
We believe Apple is working with Google on integrating its AI model into Apple’s own intelligence platform next year. That creates opportunities for Apple to monetize through multiple partners. The negotiating leverage really lies with Apple right now.
MERELLA: We’ll have to leave it there. Mark Newman, thanks for joining us. Mark is managing director and senior analyst at Bernstein.
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This BNN Bloomberg summary and transcript of the Oct. 30, 2025 interview with Mark Newman are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
