Steve Kovac, what do the Apple numbers look like. >> Yeah, John, we got beats on the top and bottom lines here. Let me go through.There's a lot to unpack here as we see the stock down about 3% on first blush. EPS was a beat 185 compared to $1.77% expected. Revenue, a small beat here, 102.47% billion.Street wanted to see 102.24%. Now, iPhone revenues, it was a miss. That might be why we're seeing some negative reaction here, but sales were still up 6% year-on-year.They came in at 49.03% billion. Street was l ...

Core Insights - The primary focus of the article is on Apple's strong performance in its services segment, which is driving overall revenue growth and profitability, particularly as the company heads into fiscal 2026 [4][13]. Financial Performance - Apple reported a record revenue of $94.0 billion for fiscal Q3, marking a 10% increase year over year, with earnings per share rising by 12% to $1.57 [3]. - Services revenue reached $27.42 billion, up approximately 13% year over year, constituting about 29% of total sales for the period [1][3]. Services Segment - The services segment is crucial for Apple's profitability, boasting a gross margin of around 76%, compared to roughly 35% for hardware products [1][4]. - Services accounted for nearly one-third of Apple's total revenue, significantly increasing from less than 18% in fiscal 2019 [6][7]. - The trend indicates that services will continue to represent a larger share of Apple's sales, contributing to sustained earnings growth [8]. Product Strategy - New product launches, including the iPhone 17 lineup and updated wearables, are expected to drive hardware sales, but the real growth driver remains the services business [5][12]. - The introduction of features like Apple Intelligence and AI enhancements is anticipated to deepen user engagement and create new revenue streams [9][10]. Market Position and Valuation - Apple's stock valuation is currently high, with a price-to-earnings multiple in the 30s, reflecting investor expectations for steady, high-margin earnings growth primarily driven by services [14]. - The company's strong financial position allows for continued investment in services, supporting its ecosystem and enabling share buybacks and dividends [15].