At the end of June, Apple’s fiscal third quarter came to a close, and the company released its earnings report today. Total revenue increased by 5% to $85.78 billion, exceeding analysts' expectations. Revenue from iPads grew by 24%, while the main product category, iPhones, saw a 1% decline in revenue, although the quarterly results were still better than market expectations.

As CNBC explains, Apple continues to derive about 46% of its total revenue from smartphone sales, amounting to $39.29 billion, which is 1% less than the same period last year. Analysts surveyed by LSEG expected revenue in this segment to be no more than $38.81 billion, so Apple's figures were a pleasant surprise. CEO Tim Cook noted that excluding currency fluctuations, Apple increased its iPhone revenue in the last quarter.

The company had to increase spending to prepare for the fall announcement of Apple Intelligence features related to artificial intelligence. It is not making forecasts on how this announcement will impact its business. Many specialists who were previously engaged in other tasks have been reassigned to AI solutions, as Tim Cook admitted. Regarding the development of computing infrastructure for AI, the company is ready to adhere to a hybrid approach, combining its own server capacities with leased ones.

In the current quarter, Apple expects a comparable revenue increase, as admitted by CFO Luca Maestri. Over the past three quarters, the company's service segment revenue grew by an average of 14%, allowing Apple to hope for similar growth rates in the near future. Operating expenses in the current quarter are expected to remain between $14.2 billion and $14.4 billion. The profit margin is expected to be between 45.5% and 46.5%. Net profit for the last quarter increased from $19.88 billion to $21.45 billion year-on-year. The profit margin reached 46.3%, beating the expected 46.1%.

The iPad segment showed a 24% revenue increase to $7.16 billion. Last quarter, the company introduced new tablet models for the first time since 2022. About half of iPad buyers last quarter were purchasing an Apple tablet for the first time.

The Mac computer segment saw a 2% year-on-year increase in revenue to $7 billion, though this result fell short of expectations. Wearable devices, accessories, and home electronics brought in 2% less revenue than the previous year, totaling no more than $8.10 billion, but still exceeded analysts' forecasts. Two-thirds of Apple Watch buyers last quarter were purchasing the device for the first time. The services segment, which includes various subscriptions, generated 14% more revenue than the previous year, totaling $24.21 billion. This revenue category continues to be the fastest-growing for Apple. At least 1 billion users are subscribed to Apple’s paid services. Overall, the number of active Apple devices continues to grow in all regions. In February, it reached 2.2 billion devices, though the current figure is unspecified.

However, in China, Taiwan, and Hong Kong, Apple's revenue fell by 6% to $14.72 billion compared to the second calendar quarter of last year. External analysts noted that the iPhone faces significant competitive pressure in the Chinese market. Tim Cook remains confident in the company's long-term success. Last quarter, Apple spent $32 billion on dividends and stock buybacks.