Apple’s Services business produced $109.2 billion of net sales in fiscal 2025—26.2% of the company total—and a 75.4% gross margin. The useful way to read that number is not to treat it as a single subscription business: it is a reporting category that combines several kinds of activity, while Apple does not disclose a complete revenue split for each one.
Apple’s fiscal 2025 annual filing names advertising, the App Store, and cloud services as the principal drivers of the category’s year-over-year increase. It also explains an important accounting boundary: for third-party apps sold through the App Store, Apple records the commission it retains, not the developer’s entire sale. Apple’s fiscal 2025 Form 10-K is the primary source for both points.
Key takeaways
- Apple reported $109.2 billion of Services net sales for the fiscal year ended September 27, 2025, up 14% from $96.2 billion in fiscal 2024.
- Services is a reporting category, not a separately reported division for advertising, App Store commissions, cloud, payments, subscriptions or support. Apple does not publish a complete revenue split among those activities.
- Services generated $82.3 billion of gross margin in fiscal 2025. That was 42.2% of Apple’s total gross margin, calculated from Apple’s disclosed category figures.
- The cleanest recurring checks are the annual 10-K’s category and margin tables, then the quarterly earnings release for the next reported Services update.
The fiscal 2025 numbers in context
Apple’s fiscal year ends in late September, so its 2025 annual figures cover the year ended September 27, 2025. Services was the company’s second-largest reported net-sales category, behind iPhone. It was larger than Mac, iPad, and Wearables, Home and Accessories individually. Apple reported the figures below in millions of U.S. dollars; the percentage columns are ATG Press calculations using the reported totals.
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| Fiscal year ended | Services net sales | Total net sales | Services share of sales | Services gross margin | Services share of total gross margin |
|---|---|---|---|---|---|
| Sep. 30, 2023 | $85.2bn | $383.3bn | 22.2% | $60.3bn | 35.7% |
| Sep. 28, 2024 | $96.2bn | $391.0bn | 24.6% | $71.1bn | 39.3% |
| Sep. 27, 2025 | $109.2bn | $416.2bn | 26.2% | $82.3bn | 42.2% |
*Source: Apple Form 10-K for fiscal 2025. “Services share of sales” equals Services net sales divided by total net sales. “Services share of total gross margin” equals Services gross margin divided by total gross margin. Rounded calculations may not sum exactly.*
The margin comparison is especially useful because it separates revenue scale from economics. Apple reported a 75.4% Services gross-margin percentage in fiscal 2025, versus 36.8% for Products. Gross margin is revenue less cost of sales; it is not operating income, and the filing does not allocate research, development, selling or administrative expense to individual Services lines. Apple’s reported category-margin table supplies the figures, not an estimate of profit by service.
What Apple means by “Services”
The 10-K describes several activities that sit within the broad category: advertising; AppleCare support; cloud services; digital content; payment services; and licensing and other services. Its product descriptions give a practical map rather than a revenue ranking.
- Digital content and platforms: the App Store, books, music, video, games and podcasts; Apple also names subscription offerings including Apple Arcade, Apple Fitness+, Apple Music, Apple News+ and Apple TV.
- Cloud services: services that store and keep customer content current across Apple devices and Windows personal computers.
- Payment services: Apple describes payment services among its Services offerings, but does not publish a separate annual revenue figure for them.
- Advertising, support, licensing and other services: these are part of the reporting category, but a reader should not infer a category-by-category dollar amount from the annual total.
This list is a definition, not a disclosed revenue mix. A common mistake is to assign the entire reported Services total to subscriptions or to the App Store. Apple’s filing does not support that. It does say that fiscal-2025 Services growth was driven primarily by advertising, the App Store and cloud services, which is narrower and more useful than guessing at an internal ranking.
Why App Store sales and Apple revenue are different
For a third-party application sold through the App Store, Apple says it does not control the product before it reaches the customer. The accounting result is that Apple records in Services revenue only the commission it retains, rather than the full price paid for the app. That distinction makes marketplace spending and Apple’s reported net sales different measures.
The same caution applies throughout the category. A count of subscriptions, a claim about a payment-service transaction volume, or a third-party estimate of advertising sales may help answer a separate question, but none is a substitute for Apple’s reported Services net sales. The filing’s category total is the audited reference; the unreported subcategories should remain unallocated unless Apple provides a figure.
A simple App Store accounting example
Suppose a customer spends $10 on a third-party app and, in a hypothetical example, the platform retains $2 as commission. Marketplace spending is $10, while the retained commission is $2. These illustrative amounts are not an Apple fee quote; they show why customer spending and platform revenue must be kept separate.
Before comparing this annual result with a Japanese company, align the exact reporting dates using our Japanese fiscal-year guide. Then compare the same measure: revenue with revenue, and gross profit with gross profit.
How Services changed Apple’s gross-profit mix
Services accounted for 26.2% of Apple’s fiscal-2025 net sales but 42.2% of its gross margin. Those two percentages are calculated from the category table in the 10-K: $109.158 billion divided by $416.161 billion for sales, and $82.314 billion divided by $195.201 billion for gross margin.
Revenue, gross profit and operating profit: a worked example
Using Apple's fiscal 2025 financial statements, Services net sales were $109.158 billion and Services cost of sales was $26.844 billion. Subtracting cost of sales gives $82.314 billion of gross profit. That calculation does not give operating profit.
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| Measure | Calculation or value | Meaning |
|---|---|---|
| Net sales | $109.158bn | Reported category revenue |
| Gross profit | $109.158bn − $26.844bn = $82.314bn | Revenue after cost of sales |
| Gross-margin rate | $82.314bn ÷ $109.158bn ≈ 75.4% | Gross profit per dollar of Services revenue |
| Services operating profit | Not provided by this calculation | Would require the relevant operating expenses |
Source: Apple fiscal 2025 financial statements. Arithmetic is by ATG Press; figures refer to fiscal 2025, not a current-quarter estimate.
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| Fiscal 2025 category | Net sales | Gross margin | Gross-margin percentage |
|---|---|---|---|
| Products | $307.0bn | $112.9bn | 36.8% |
| Services | $109.2bn | $82.3bn | 75.4% |
| Total | $416.2bn | $195.2bn | 46.9% |
*Source: Apple Form 10-K for fiscal 2025; amounts rounded from millions of U.S. dollars.*
A repeatable way to follow the next update
Start with the annual 10-K for the complete annual category table and the category-margin table. Then use the quarterly earnings release for the next Services revenue update, keeping the period clear: a June-quarter record is not an annual result. Apple’s July 30, 2026 third-quarter release said iPhone, Mac and Services each set June-quarter revenue records; its accompanying financial statements are the appropriate source for that quarter’s reported amount.
For market context only, the chart below is Apple Inc.’s Nasdaq-listed common stock (`NASDAQ:AAPL`). It does not establish demand, revenue or margin facts, and chart data may be delayed.
For a different view of a platform business, ATG Press’s Visa vs Mastercard cross-border metrics guide separates payment-volume measures from reported revenue. The same discipline applies here: identify the metric, the accounting boundary and the reporting period before comparing numbers.
What to watch—and what not to infer
The next high-value disclosures are the next quarterly Services figure, the annual category-margin table, and any specific Apple description of a growth driver. Regulatory, content-cost and platform-policy developments can matter to individual activities, but they should not be converted automatically into a companywide Services-revenue estimate.
Avoid three shortcuts: treating subscriptions as the full category; treating third-party App Store customer spending as Apple’s revenue; and calling category gross margin operating profit. Each shortcut loses an accounting distinction that Apple’s filing makes explicit.
Sources
- Apple Inc., Form 10-K for the fiscal year ended September 27, 2025, filed October 31, 2025; accessed September 4, 2026.
- Apple, “Apple reports third quarter results”, published July 30, 2026; accessed September 4, 2026.
This article is for informational purposes only and does not constitute investment advice.
