Apple
What it does
Apple reports revenue for 5 product lines. In FY2025, iPhone brought in 50%, services brought in 26%, wearables and home brought in 9%, Mac brought in 8% and iPad brought in 7% of revenue.
By region, Americas made up 43%, then Europe at 27%.
From Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 27 Sep 2025.
Our coverage
Read it through a lens
How it makes money
Where Apple's FY2025 revenue came from, what it cost to earn, and what was left for shareholders.
- Income
- Costs and tax
- Profit
- % = share of revenue
Source: Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 27 Sep 2025 (31 Oct 2025), statement of operations, Notes 2 and 13. FY2025 is the year to 27 Sept 2025. Figures as reported, in US$ millions in the tooltips and table.
Technical: gross margin was 46.9%, operating margin 32.0% and net margin 26.9%. Operating costs and cost of revenue together took 68.0% of revenue.
Plain: of every dollar of sales, about 53 cents paid for making or delivering what was sold, about 15 cents went on running and growing the business, and about 27 cents ended up as profit for shareholders.
Revenue by product
Revenue by region
See the numbers
| FY2025 | US$M | % of revenue |
|---|---|---|
| Revenue | 416,161 | 100.0% |
| Cost of revenue | −220,960 | 53.1% |
| Gross profit | 195,201 | 46.9% |
| Research and development | −34,550 | 8.3% |
| Selling, general and administrative | −27,601 | 6.6% |
| Operating income | 133,050 | 32.0% |
| Other income (expense), net | −321 | 0.1% |
| Profit before tax | 132,729 | 31.9% |
| Income tax | −20,719 | 5.0% |
| Net profit to shareholders | 112,010 | 26.9% |
- Other income (expense) was a net cost of US$321M.
- Apple's reportable segments are these five regions. Its segment operating income leaves out research and development and other corporate costs, which came to US$42,627M.
Moat rating
Wide moat
9.1 / 10
ROIC averaged 93.3% over FY2021 to FY2025, 83.5 percentage points above a 9.71% cost of capital, and beat it in every year. Large share buybacks keep Apple's equity, and so its invested capital, small, which lifts the ratio.
Apple earns far more on the money tied up in its business than that money costs. Few companies come close.
The numbers
10.0 / 10Return on invested capital against cost of capital, computers and peripherals
- Average ROIC
- 93.3%
- Average excess return
- +83.5 pp
- Years above the hurdle
- 5 of 5
Spread 10 × 60% + durability 10 × 40% = 10.0
The sources
8.2 / 10Where Apple's advantage comes from
- 1. Brand and pricing power9 / 10
Gross margin of 46.9% in FY2025: 36.8% on products and 75.4% on services, with tariff costs weighing on products.
Apple charges premium prices and keeps almost half of every sales dollar after making the product.
- 2. Barriers to entry7 / 10
Research and development of US$34.6B in FY2025 across hardware, software and services that are designed together.
Making phones, software and services that work this well together takes years and a lot of money.
- 3. Switching costs9 / 10
Services brought in US$109.2B, 26% of sales: the App Store, iCloud, AppleCare and payments all build on devices people already own.
Your photos, apps, messages and watch all live in Apple's world. Leaving means rebuilding a lot of that.
- 4. Network effects7 / 10
The App Store links developers and users: more users draw more apps, and more apps draw more users.
Developers build for iPhone first because that's where paying customers are, which keeps customers coming.
- 5. Economies of scale9 / 10
Revenue of US$416.2B and an operating margin of 32.0% in FY2025.
Apple sells so many devices that it can spread design, software and marketing costs very thin.
Return on invested capital: Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 25 Sep 2021; Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 24 Sep 2022; Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 30 Sep 2023; Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 28 Sep 2024; Apple Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 27 Sep 2025. Hurdle: Aswath Damodaran, NYU Stern, Cost of capital by sector (US), data as of January 2026.
How we worked out ROIC: operating income after tax, divided by the capital invested at the start of the year. Tax is at the year's effective rate, or the 21% US federal rate where a pre-tax loss or a tax credit makes the effective rate meaningless. Invested capital is shareholders' equity plus borrowings, less cash and short-term investments, from the opening balance sheet in the same 10-K; lease liabilities are left out. This follows Damodaran's definition. The ratios are our calculation from the filed figures, not numbers the company reports.
Lens scores are rasinbunlover's judgment, reviewed 19 Oct 2026. A wide moat is a reason to dig deeper, not a verdict on the price. For education only. Not financial advice.
How we rate moats ›Value Apple with dbot
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