iPhone tide returns, Services tops $100B.

Apple FY2025 (ended 2025-09-27) revenue reached $416.2B, up 6.4% YoY; the Services segment crossed $109.2B for the first time (+14%) and rose to 26% of total revenue, becoming a structural anchor for group-level gross margin. Q1 FY2026 extended the iPhone 17 + Apple Intelligence-driven upgrade cycle, with revenue up 15.7% YoY and net income hitting an all-time high of $42.0B. This report draws on the three most recent SEC filings — FY2025 10-K, Q1 FY2026 10-Q, Q3 FY2025 10-Q — across four dimensions: products, geography, profitability, and shareholder returns.

Quick numbers

§01 · Key Metrics — the year at a glance

FY2025 was a “refueling year” for Apple’s cash machine. Services profit alone exceeds $82B — comparable to a hyperscale SaaS franchise — while in Q1 FY26 the iPhone 17 family drove a strong hardware return (+23% YoY); paired with Apple Intelligence and the visual / spatial computing roadmap, this constitutes a new dual pillar for the growth story. At the same time, the company returned more than $100B to shareholders in a single year via buybacks and dividends, sustaining the most aggressive capital-return cadence on the planet.

— Synthesis of 10-K / 10-Q disclosures; data not independently audited

§02 · Business — how the $416B is split

§03 · P&L — operating leverage intact

Income statement (quarterly + FY)

Per SEC disclosure · USD millions.

* Q4 FY25 derived from FY25 less 9M FY25 (Q3 10-Q); not separately disclosed. Apple does not split quarterly R&D and SG&A line items; figures shown are by-period disclosure minus subtraction.

§04 · Balance — the capital return machine

Three-period balance sheet comparison

2025-06-28 · 2025-09-27 · 2025-12-27 · USD millions.

Capital structure · single-class

$0.00001 par · no Class A/B split. As of 2025-12-27, 14,702,703 thousand common shares outstanding · 1 share, 1 vote.

Unlike Google/Meta/Reddit, Apple’s capital structure is fully one-share-one-vote — neither founders nor management hold any super-voting stock. Cumulative buybacks of more than 800 million shares over the past decade (on a retired basis) have driven shares outstanding from a peak of ~26B in FY12 down to 14.7B today — almost doubling the value behind each share.

§05 · Cash Flow — where the cash goes

Cash flow takeaways

• OCF still ~1.0× net income. FY25 OCF was $111.5B, almost matching $112.0B of net income; cash conversion is at the limit. Q1 FY26 alone delivered OCF of $53.9B (+80% YoY).
• Capex stepped up to $12.7B. FY25 Capex of $12.7B (3.1% of revenue) was a meaningful expansion from FY24’s $9.4B; spend skewed to data centers, AI infrastructure, and supply-chain diversification (India, Vietnam).
• Buybacks $90.7B + dividends $15.4B. FY25 shareholder returns totaled $106.1B, near 100% of FCF; diluted shares fell from 15.35B to 14.95B (-2.6%).
• SBC expense $12.9B. Stock-based comp was 3.1% of revenue, well below large-cap tech peers (typical SaaS at 8–15%); essentially fully absorbed by buybacks, with no dilution risk.

§06 · Leadership — who’s running this

Named Executive Officers

The following are the named executives identified from the FY2025 10-K (filed 2025-10-31) signature page and public appointment materials. Two material personnel changes during the period: on 2025-07-01 Sabih Khan succeeded Jeff Williams as COO; on 2026-01-01 Ben Borders succeeded Chris Kondo as Principal Accounting Officer. Luca Maestri handed the CFO role to Kevan Parekh in early 2025.

Executive change log

FY2025 – Q1 FY2026 · 10-Q / 10-K / 8-K disclosures.

1. 2025-01. Kevan Parekh succeeds as CFO; Luca Maestri moves to Vice President, Corporate Services.
2. 2025-07-01. Sabih Khan becomes COO; Jeff Williams (29-year tenure) transitions into retirement.
3. 2025-10-31. FY2025 10-K signed; Chris Kondo announces a 2026-01-01 role transition.
4. 2026-01-01. Ben Borders becomes Principal Accounting Officer, reporting to CFO Parekh.
5. Continuity. CEO, GC, retail/HR leadership unchanged; the core decision layer transitions smoothly.

Board of Directors

8 directors · 2025-10-31 10-K signature page.

Apple is the textbook broadly held public company — single-class common stock, one vote per share, no controlling holder or special voting agreements. Independent directors are 7 of 8 (Cook the sole executive director). Auditor is Ernst & Young LLP (PCAOB Firm ID 42).

§07 · Risk — what could derail this

1. Supply-chain & geopolitical concentration. The vast majority of finished products are assembled by outsourced partners in mainland China, India, Vietnam, and elsewhere; tariffs, export controls, and geopolitical conflict (explicitly cited in the 10-K) can directly raise costs or cause stock-outs. New tariff pressure already showed up in FY25 Products gross margin.
2. Greater China sales volatility. Greater China FY25 revenue of $64.4B was down 4% YoY at 15.5% of group; pressured by domestic-brand competition, soft consumer demand, and regulatory friction. Despite the +38% Q1 FY26 rebound on iPhone 17 Pro, the structural regional risk remains.
3. App Store and antitrust regulation. Within Services, the App Store take rate is the high-margin core; the EU DMA, the US Epic ruling, and alternative-payment rules in Korea/Japan have rolled in successively. Any forced change to take rates or distribution would pressure the 75% Services gross margin.
4. New-product cycle and AI cadence. The phased rollout of Apple Intelligence, the adoption pace of Vision Pro / Vision Air, and the magnitude of innovation in the next iPhone/Watch generations directly drive the upgrade cycle; any slip or feature gap (especially on-device LLM) could weaken trade-in willingness.
5. FX and macro sensitivity. International revenue was 57% of FY25 total; a stronger dollar compresses both nominal revenue and gross margin. The 10-K notes documented FX headwinds across Americas, Japan, and other segments. Beyond that, a global slowdown and a softer consumer-electronics cycle remain macro tail risks.

Bottom line · Structural story: the hardware cycle is back, and Services never left.

In FY2025 Apple won on two fronts simultaneously: (a) iPhone restarted high-end upgrades on the back of Apple Intelligence; (b) Services crossed the $100B annual mark while still growing 14%. Pricing for the next 1–2 years hinges on:

• Whether iPhone 17 / 18 can sustain Pro-tier mix
• Whether Services can keep 13%+ compounding
• Whether Greater China can return to +5% or better in FY26
• The global regulatory evolution of App Store take rates
• Whether the Vision lineup becomes a fourth growth pillar

“$145B liquid asset pool · $106B annual shareholder return · 14.7B shares and falling” — Apple is still the global benchmark for the capital-return machine.

§08 · Valuation — valuation in context

AAPL current valuation

Data as of 2026-04-20 · close.

Peer benchmark

Mega-cap TTM · latest.

Among the four Mega-caps, Apple shows a “middle-defensive” valuation profile: a 34× P/E sits slightly above MSFT (26.5×) and GOOGL (31.3×), reflecting the market’s willingness to pay a premium for stable cash flow, capital-return discipline, and brand power; but versus NVDA’s 40× P/E, 21× P/S, and 36× EV/EBITDA, AAPL still shows a clear growth discount — a function of its hardware base and single-digit revenue growth. EV/EBITDA of 25.6× tracks GOOGL and is well above MSFT’s 18×, primarily because the Services mix shift has lifted long-run margin expectations. Worth noting: a 2.6% FCF Yield looks unimpressive on its face, but does not reflect Apple returning essentially 100% of FCF as buybacks + dividends each year — under a “total return” lens (annual $106B shareholder return / $3.8T market cap ≈ 2.8%), plus the steady -2.7% share-count shrink, total shareholder yield is materially higher than the dividend yield alone.