Apple's revenue increases to $95.4 billion as supply chain shifts continue

: Apple reported impressive revenue growth in the second fiscal quarter of 2025, increasing to $95.4 billion with a net profit of $24.8 billion, despite geopolitical pressures and new tariffs threatening to disrupt its supply chain and increase costs. CEO Tim Cook highlighted the launch of iPhone 16e and growth in Services as key results, though shares fell 4% in after-hours trading due to investor concerns about performance in China and the cost impact of tariffs. Apple's board approved an additional $100 billion for share repurchases, and revenue from China declined by 2.3% to $16 billion as expenses related to tariffs could potentially add $900 million to quarterly costs. To mitigate these challenges, Apple is accelerating efforts to diversify manufacturing, focusing on India and Vietnam, while its core businesses, including iPhone, Mac, iPad, and Services, showcased resilient performances.

Apple's latest financial results underline significant achievements amidst ongoing supply chain challenges and geopolitical pressures. For the second fiscal quarter of 2025, Apple announced a revenue increase to $95.4 billion, with a net profit of $24.8 billion or $1.65 per diluted share. This is an upsurge from the $90.8 billion in revenue reported in the previous year, aided by strong performance across its product and services portfolio.

CEO Tim Cook, in discussing the results, noted the positive reception of the newly launched iPhone 16e, as well as double-digit growth in Services revenue. Despite surpassing market expectations, Apple's shares dipped by 4% after-hours, reflecting investor apprehension over the company's China operations and potential impact of tariffs, which are forecast to add $900 million to the June quarter costs.

Apple's gross margin slightly improved to 47.1%, up from last year's 46.6%, highlighting increased efficiency amidst rising operational costs. The board's approval of an additional $100 billion for stock buybacks showcases confidence in Apple's financial health and future prospects. Meanwhile, service revenue achieved a new record, although it marginally missed some analyst estimates.

China's revenue fell by 2.3% to $16 billion, stressing the company's ongoing struggles in a region that was historically a growth catalyst. The looming financial impact of tariffs on Chinese imports remains a pressing concern, as Apple's strategic response includes an emphasis on diversifying manufacturing away from China.

To alleviate tariff pressures and manage broader geopolitical risks, Apple is shifting more production outside China. By the end of the June quarter, the majority of iPhones for the U.S. market will be assembled in India, with a significant portion of their Mac and iPad production being moved to Vietnam. This move aligns with Apple's strategy of tapping into alternative manufacturing hubs to ensure supply chain resilience.

Sources: TechSpot, Apple Newsroom, Investing.com