Apple Earnings Preview: Fiscal Q1 2025 – iPhone Expectations Continue to Move Lower

By: Melissa Otto, CFA
Vision Pro iPhone and China Apples Q1 Earnings and Outlook

Apple (NASDAQ: AAPL) Q1 2025 Earnings Preview

Apple – Consensus Expectations for Q1, Past Earnings Surprises, Revisions, and CAGR
Table 1

Source: Visible Alpha consensus (January 27, 2025). “Previous Surprises” indicate the direction that specific line items beat or missed. “Consensus Revisions” show the trajectory of line items from a given date.

Total revenues expected for fiscal Q1 have started to tick down slightly from the beginning of last quarter, according to Visible Alpha consensus, from $126.9 billion to $123.4 billion. This move is surprising, given Apple announced its new lineup ahead of the holiday season. Instead of numbers moving up, sentiment seems to reflect a view that the holiday buying was a bit underwhelming, due to continued weakness in China and fewer users upgrading in the US. Since last fall, expected Q1 iPhone units declined to 77 million and FY 2025 decreased further from 228 million to 223 million. Currently, Q1 is expected to deliver $70.7 billion in iPhone sales and $207.7 billion in 2025. Overall full-year iPhone revenue expectations have continued to edge down since early August 2024.

Apple Revisions
Table 2

Source: Visible Alpha consensus (January 27, 2025). Stock price data courtesy of S&P Global. AAPL current stock price is as of the market close on January 24, 2025.

Expectations for the high-margin Services segment remained stable for Q1 at $26 billion. The gross margin for the Services segment is over 70%, significantly higher than the 36% gross margin for Products. Given the large installed base, we are looking forward to what the company says in the Q1 earnings release about growth in Services and the role of Apple Intelligence in FY 2025.

Vision Pro will show another set of results this quarter. In Q1, the consensus of four analysts estimated 53,800 units to be sold, generating $279.7 million. For the full year, consensus revenue estimates for the Vision Pro are expected to remain flat year-over-year at $1.0 billion.

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About Melissa Otto, CFA

Melissa is Head of TMT Research at Visible Alpha. She spent 20+ years as an equity analyst and portfolio manager. At TIAA/Nuveen, Melissa specialized in covering global technology and consumer stocks and the Pan-Asia region. She also managed one of Fidelity's equity research teams as a director of research. In addition to her equity investing career, Melissa worked directly with software engineering teams at Bloomberg, Microsoft, and MSCI building cloud-based solutions to centralize and aggregate critical investment data for investors. Melissa studied Japanese at Harvard University, received her MA in economics from Brandeis University and MS degree from the University of Pennsylvania, and is a CFA charterholder. She is certified in Azure Fundamentals and Agile Project Management.

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