Apple Inc.

Previous wording

This Item and other sections of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. For example, statements in this Form 10-Q regarding the potential future impact of macroeconomic conditions and tariffs and other trade measures on the Company’s business and results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of the 2024 Form 10-K and Part II, Item 1A of this Form 10-Q, in each case under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Current wording

This Item and other sections of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. For example, statements in this Form 10-Q regarding the potential future impact of macroeconomic conditions and tariffs and other measures on the Company’s business and results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of the 2024 Form 10-K and Part II, Item 1A of this Form 10-Q, in each case under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Previous wording

Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. (“U.S. Tariffs”), including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union (“EU”), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications and delays to the U.S. Tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company’s products and services, all of which can further adversely affect the Company’s business and results of operations.

Current wording

Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. (“U.S. Tariffs”), including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union (“EU”), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to the U.S. Tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company’s products and services, all of which can further adversely affect the Company’s business and results of operations.

Previous wording

The following table shows net sales by reportable segment for the three- and six-month periods ended March 29, 2025 and March 30, 2024 (dollars in millions):

Current wording

The following table shows net sales by reportable segment for the three- and nine-month periods ended June 28, 2025 and June 29, 2024 (dollars in millions):

Previous wording

Americas net sales increased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to higher net sales of iPhone and Services. The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on Americas net sales during the second quarter and first six months of 2025.

Current wording

Americas net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of iPhone and Services. The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on Americas net sales during the third quarter and first nine months of 2025.

Previous wording

Greater China net sales decreased during the first six months of 2025 compared to the same period in 2024 due to lower net sales of iPhone. The weakness in the renminbi relative to the U.S. dollar had an unfavorable year-over-year impact on Greater China net sales during the second quarter of 2025.

Current wording

Greater China net sales increased during the third quarter of 2025 compared to the third quarter of 2024 due primarily to higher net sales of iPhone and Mac. Greater China net sales decreased during the first nine months of 2025 compared to the same period in 2024 due to lower net sales of iPhone, partially offset by higher net sales of Mac.

Previous wording

Japan net sales increased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to higher net sales of iPhone and Services. The weakness in the yen relative to the U.S. dollar had an unfavorable year-over-year impact on Japan net sales during the second quarter and first six months of 2025.

Current wording

Japan net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of iPhone and Services. The strength in the yen relative to the U.S. dollar had a favorable year-over-year impact on Japan net sales during the third quarter of 2025.

Previous wording

Rest of Asia Pacific net sales increased during the second quarter of 2025 compared to the second quarter of 2024 due primarily to higher net sales of Services and iPhone. Year-over-year Rest of Asia Pacific net sales increased during the first six months of 2025 due primarily to higher net sales of Services. Changes in foreign currencies relative to the U.S. dollar had a net unfavorable year-over-year impact on Rest of Asia Pacific net sales during the second quarter of 2025, while they had a net favorable impact during the first six months of 2025.

Current wording

Rest of Asia Pacific net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of Services and iPhone.

Previous wording

The following table shows net sales by category for the three- and six-month periods ended March 29, 2025 and March 30, 2024 (dollars in millions):

Current wording

The following table shows net sales by category for the three- and nine-month periods ended June 28, 2025 and June 29, 2024 (dollars in millions):

Previous wording

iPhone net sales increased during the second quarter of 2025 compared to the second quarter of 2024 due primarily to higher net sales of Pro models. Year-over-year iPhone net sales were relatively flat during the first six months of 2025.

Current wording

iPhone net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due to higher net sales of Pro models.

Previous wording

Mac net sales increased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to higher net sales of both laptops and desktops.

Current wording

Mac net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due to higher net sales of both laptops and desktops.

Previous wording

Wearables, Home and Accessories net sales decreased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to lower net sales of Wearables.

Current wording

Wearables, Home and Accessories net sales decreased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to lower net sales of Wearables and Accessories.

Previous wording

Services net sales increased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to higher net sales from advertising, the App Store® and cloud services.

Current wording

Services net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales from advertising, the App Store® and cloud services.

Previous wording

Products and Services gross margin and gross margin percentage for the three- and six-month periods ended March 29, 2025 and March 30, 2024 were as follows (dollars in millions):

Current wording

Products and Services gross margin and gross margin percentage for the three- and nine-month periods ended June 28, 2025 and June 29, 2024, were as follows (dollars in millions):

Previous wording

Products gross margin was relatively flat during the second quarter of 2025 compared to the second quarter of 2024. Year-over-year Products gross margin increased during the first six months of 2025 due primarily to favorable costs, partially offset by a different mix of products and weakness in foreign currencies relative to the U.S. dollar.

Current wording

Products gross margin increased during the third quarter of 2025 compared to the third quarter of 2024 due primarily to a different mix of products and favorable costs, partially offset by tariffs. Products gross margin increased during the first nine months of 2025 compared to the same period in 2024 due primarily to favorable costs and a different mix of products, partially offset by tariffs and the weakness in foreign currencies relative to the U.S. dollar.

Previous wording

Products gross margin percentage decreased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to a different mix of products and weakness in foreign currencies relative to the U.S. dollar, partially offset by favorable costs.

Current wording

Products gross margin percentage decreased during the third quarter of 2025 compared to the third quarter of 2024 due primarily to tariffs and a different mix of products, partially offset by favorable costs. Products gross margin percentage decreased during the first nine months of 2025 compared to the same period in 2024 due primarily to a different mix of products and tariffs, partially offset by favorable costs.

Previous wording

Services gross margin increased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to higher Services net sales.

Current wording

Services gross margin increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher Services net sales and a different mix of services.

Previous wording

Services gross margin percentage increased during the second quarter and first six months of 2025 compared to the same periods in 2024 due primarily to a different mix of services, partially offset by higher Services costs and weakness in foreign currencies relative to the U.S. dollar.

Current wording

Services gross margin percentage increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to a different mix of services, partially offset by higher costs.

Previous wording

Operating expenses for the three- and six-month periods ended March 29, 2025 and March 30, 2024 were as follows (dollars in millions):

Current wording

Operating expenses for the three- and nine-month periods ended June 28, 2025 and June 29, 2024, were as follows (dollars in millions):

Previous wording

The growth in research and development expense during the second quarter and first six months of 2025 compared to the same periods in 2024 was driven primarily by increases in headcount-related expenses and infrastructure-related costs.

Current wording

The growth in research and development (“R&D”) expense during the third quarter and first nine months of 2025 compared to the same periods in 2024 was driven primarily by increases in headcount-related expenses and infrastructure-related costs.

Previous wording

The growth in selling, general and administrative expense during the second quarter of 2025 compared to the second quarter of 2024 was driven primarily by increases in professional services and headcount-related expenses. Year-over-year selling, general and administrative expense increased during the first six months of 2025 due primarily to increases in variable selling expenses, headcount-related expenses and professional services.

Current wording

The growth in selling, general and administrative expense during the third quarter and first nine months of 2025 compared to the same periods in 2024 was driven primarily by increases in headcount-related expenses and variable selling expenses.

Previous wording

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and six-month periods ended March 29, 2025 and March 30, 2024 were as follows (dollars in millions):

Current wording

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and nine-month periods ended June 28, 2025 and June 29, 2024, were as follows (dollars in millions):

Previous wording

The Company’s effective tax rate for the second quarter of 2025 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, partially offset by state income taxes. The Company’s effective tax rate for the first six months of 2025 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, tax benefits from share-based compensation, the impact of foreign currency loss regulations issued by the U.S. Department of the Treasury in December 2024, and the tax impact from foreign currency revaluations related to the State Aid Decision.

Current wording

The Company’s effective tax rate for the third quarter of 2025 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes. The Company’s effective tax rate for the first nine months of 2025 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, tax benefits from share-based compensation, and the impact of the U.S. federal R&D credit, partially offset by state income taxes.

Previous wording

The Company’s effective tax rate for the second quarter of 2025 was lower compared to the second quarter of 2024 due primarily to the impact of changes in unrecognized tax benefits, partially offset by a higher effective tax rate on foreign earnings. The Company’s effective tax rate for the first six months of 2025 was lower compared to the same period in 2024 due primarily to the impact of changes in unrecognized tax benefits, the impact of foreign currency loss regulations issued by the U.S. Department of the Treasury in December 2024, and the tax impact from foreign currency revaluations related to the State Aid Decision, partially offset by a higher effective tax rate on foreign earnings.

Current wording

The Company’s effective tax rate for the third quarter of 2025 was higher compared to the third quarter of 2024 due primarily to the impact from foreign currency revaluations of unrecognized tax benefits. The Company’s effective tax rate for the first nine months of 2025 was lower compared to the same period in 2024 due primarily to the impact of changes in unrecognized tax benefits, partially offset by a higher effective tax rate on foreign earnings.

Previous wording

The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of March 29, 2025, the Company had manufacturing purchase obligations of $38.4 billion, which were payable within 12 months.

Current wording

The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of June 28, 2025, the Company had manufacturing purchase obligations of $44.1 billion, with $43.8 billion payable within 12 months.

Previous wording

During the first six months of 2025, the Company released from escrow €14.2 billion or $15.4 billion to Ireland in connection with the State Aid Decision, which fully settled the obligation.

Current wording

During the first nine months of 2025, the Company released from escrow €14.2 billion, or $15.4 billion, to Ireland in connection with the State Aid Decision, which fully settled the obligation.

Previous wording

In addition to its contractual cash requirements, the Company has an authorized share repurchase program, under which the remaining availability was $40.8 billion as of March 29, 2025. On May 1, 2025, the Company announced the Board of Directors had authorized an additional program to repurchase up to $100 billion of the Company’s common stock. The programs do not obligate the Company to acquire a minimum amount of shares.

Current wording

In addition to its contractual cash requirements, the Company has authorized share repurchase programs. The programs do not obligate the Company to acquire a minimum amount of shares. As of June 28, 2025, the Company’s quarterly cash dividend was $0.26 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.

Previous wording

During the second quarter of 2025, the Company repurchased $25.0 billion of its common stock and paid dividends and dividend equivalents of $3.8 billion.

Current wording

During the third quarter of 2025, the Company repurchased $21.0 billion of its common stock and paid dividends and dividend equivalents of $3.9 billion.