Apple's (AAPL) Q1 2025 financial performance demonstrated strong results, with total net sales reaching $124.3 billion, a 4% increase compared to $119.6 billion in Q1 2024. This growth was driven by a 14% increase in Services revenue, which reached $26.34 billion, and notable gains in Mac and iPad sales, which grew by 16% and 15%, respectively. However, iPhone sales were relatively flat, declining by 1%, and Wearables, Home, and Accessories saw a 2% decline.

Gross margin for Q1 2025 improved to $58.3 billion, up from $54.9 billion in Q1 2024, with a gross margin percentage of 46.9%, compared to 45.9% in the prior year. This improvement was primarily driven by higher Services net sales and a favorable Services mix, which resulted in a Services gross margin percentage increase to 75.0% from 72.8%. Products gross margin remained relatively flat at 39.3%.

Operating income for Q1 2025 was $42.8 billion, an increase from $40.4 billion in Q1 2024. This growth was supported by higher net sales and gross margin. Operating expenses also rose to $15.4 billion, up from $14.5 billion in the prior year, driven by increased research and development expenses (up 7%) and selling, general, and administrative expenses (up 6%).

Net income for Q1 2025 reached $36.3 billion, a 7% increase from $33.9 billion in Q1 2024. Earnings per share also improved, with basic EPS rising to $2.41 from $2.19 and diluted EPS increasing to $2.40 from $2.18. This reflects strong profitability despite higher operating expenses.

Apple's regional performance showed mixed results. The Americas and Europe saw net sales growth of 4% and 11%, respectively, driven by higher Services and iPhone sales. Japan experienced a 16% increase, while the Rest of Asia Pacific remained relatively flat. However, Greater China saw an 11% decline in net sales, primarily due to lower iPhone sales.

Liquidity and capital resources remained robust, with cash and cash equivalents increasing slightly to $30.3 billion as of December 28, 2024, compared to $29.9 billion at the end of September 2024. The company also reduced its commercial paper outstanding to $2.0 billion from $10.0 billion in the prior quarter, reflecting improved cash management.

Apple's capital return program continued to be a priority, with $23.3 billion spent on share repurchases and $3.9 billion paid in dividends during Q1 2025. The company maintained its quarterly dividend at $0.25 per share and plans to increase it annually, subject to board approval.

Key product updates and macroeconomic factors influenced Q1 2025 results. New product launches, including updates to the MacBook Pro, Mac mini, and iPad mini, contributed to higher Mac and iPad sales. However, macroeconomic conditions, such as inflation and currency fluctuations, had mixed impacts across regions, with unfavorable effects in the Americas and favorable effects in Europe and Greater China.