Apple's Q3 revenue is expected to be $89.156 billion, adjusted net income is $21.378 billion, and adjusted EPS is $1.429, according to Bloomberg's consistent expectations.

Apple , headquartered in Cupertino, California, is preparing to announce its fiscal 2025 Q3 earnings on July 31, following the closure of the market. Key focus areas include iPhone performance, services growth and Apple Intelligence progress.

Apple's Q3 revenue is expected to be $89.156 billion, adjusted net income is $21.378 billion, and adjusted EPS is $1.429, according to Bloomberg's consistent expectations.

Apple's earnings will test its $3T valuation amid AI integration, supply chain shifts, and services growth.

Previous Quarter Review

Apple reported second fiscal-quarter earnings that beat Wall Street expectations, but the company’s closely-watched Services division came up light versus estimates.  

Here’s how Apple did versus consensus estimates for the quarter ending in March: 

• EPS: $1.65 vs. $1.63 estimated by LSEG 

• Revenue: $95.4 billion vs. $94.66 billion estimated by LSEG 

• iPhone revenue: $46.84 billion vs. $45.84 billion estimated, per StreetAccount 

• Mac revenue: $7.95 billion vs. $7.77 billion estimated, per StreetAccount  

• iPad revenue: $6.4 billion vs. $6.20 billion estimated, per StreetAccount 

• Wearables, Home, and Accessories revenue: $7.52 billion vs. $7.95 billion, per StreetAccount 

• Services revenue: $26.65 billion vs. $26.70 billion, per StreetAccount 

• Gross margin: 47.1% vs. 47.1%, per StreetAccount

Apple expects overall revenue to grow "low to mid-single digits" on an annual basis during the current quarter, ending in June, finance chief Kevan Parekh said on the call. Apple reported $85.78 billion in sales during the June quarter last year.

The company also expects gross margin to come in at 46% at the midpoint, taking into account tariff costs. Analysts were looking for third-quarter guidance of $1.48 in earnings per share on $89.45 billion of sales.

Apple expects tariffs to add $900 million to its costs for the current quarter, assuming no new tariffs or other major changes occur, Cook said on the call. However, he added that it is "very difficult" to predict beyond June "because I'm not sure what will happen with tariffs."

Q3 Results Outlook

Now, Apple's Q3 revenue is expected to be $89.156 billion, adjusted net income is $21.378 billion, and adjusted EPS is $1.429, according to Bloomberg's consistent expectations.

AI Integration: A Long-Term Play or Short-Term Detour?

Apple's “Apple Intelligence” platform, unveiled at WWDC 2025, marks a significant step in its AI journey. Features like Mail Summaries, Visual Intelligence, and Genmoji aim to enhance user experience while adhering to the company's privacy-first ethos. However, delays in overhauling Siri—pushed to 2026—highlight Apple's cautious approach compared to rivals like Microsoft and Meta.

The key question for Q3 is whether these incremental AI upgrades can drive user engagement and subscription growth. Services revenue, which grew 12% YoY in Q2 to $26.6 billion, is expected to hit $27.5 billion in Q3, fueled by

Apple Intelligence subscriptions. Yet, monetizing AI remains a challenge. Unlike Google or Amazon, Apple has not yet unlocked a direct revenue stream from generative AI, relying instead on ecosystem expansion and subscription tiers.

Investors should watch for clarity on Apple's hybrid AI strategy: leveraging internal models (like the Apple Foundation Model) alongside external partnerships with OpenAI and Anthropic. Success here could position Apple as a leader in enterprise AI, but missteps may see the stock underperform as peers like Microsoft capture AI-driven growth.

Manufacturing Resilience: Tariffs, Yields, and the India Shift

Apple's supply chain strategy is a double-edged sword. While shifting iPhone production to India and iPad/Watch manufacturing to Vietnam aims to mitigate U.S. tariff risks, the transition has introduced new costs. India's yield rate of 85% (vs. 95% in China) has led to higher rework expenses, and logistics costs are rising as production diversifies.

The Trump administration's 25% tariff threat on non-U.S. Apple products adds volatility. Tim Cook has already factored in $900 million in Q3 costs from current tariff rates, but further escalations could erode gross margins. With a projected 46% gross margin for Q3 (vs. 46.8% in Q2), any deviation downward will test investor patience.

A critical metric to watch is the cost-to-revenue ratio for manufacturing. If Apple can offset higher production costs through pricing discipline or operational efficiency, its margins may stabilize. However, aggressive discounts in China—where iPhone sales grew 8% YoY in Q2—risk diluting brand premium.

Services Growth: The New Engine or a Saturation Risk?

Services remains Apple's most consistent growth engine, with 1 billion paid subscriptions as of Q2. Double-digit growth in App Store sales, Apple Music, and iCloud has insulated the business from hardware cycles. Yet, saturation looms in core markets like the U.S. and Europe. Regulatory actions in the EU, targeting App Store fees, could further pressure margins.

The AI-driven Services expansion—such as Apple One's integration with AI-powered content curation—offers a path to reinvigorate growth. However, monetizing AI requires balancing user experience with pricing. For instance, Apple Intelligence subscriptions could follow a tiered model, but overloading users with paid features risks backlash.

Analyst's Opinions

As of July 22, 2025, Apple is rated a 'Buy' by analysts on Bloomberg, with 36 'Buy', 21 'Hold', and 3 'Sell' recommendations.

On July 21, Morgan Stanley reiterated the stock as “Overweight,” noting that it’s sticking with Apple shares ahead of a solid quarter.

The firm believes that strong iPhone, iPad, Mac sales, and favorable FX will lead Apple toward a robust quarter, and that its guidance will likely align with expectations. However, for the sentiment to improve, clarity on tariffs, the Alphabet ruling, and AI strategy is still required.

Investors shouldn’t be hoping for any meaningful updates in terms of artificial intelligence in the quarter. The firm is of the view that investors don’t appreciate Apple’s AI efforts, particularly because it is in continuous comparison with Google, Meta, and Amazon’s work.