Apple services revenue misses as App Store changes weigh on growth
Apple said services revenue missed estimates as gaming slowed, App Store payment changes hit commissions and currency effects pressured results.
By Theo Nakamura · Staff Writer
· 3 min read
Apple services revenue came in below Wall Street’s expectations in the company’s fiscal third quarter, putting a rare weak spot inside an otherwise strong report. For investors, the miss matters because services are a high-profile growth engine for Apple, even as the company said it now has more than 1.5 billion paid subscriptions.
Apple reported $30.74 billion in services revenue for the quarter, compared with analyst expectations of $31.22 billion cited by CNBC. TechCrunch reported that Apple shares fell more than 4% in after-hours trading after the results, with the services shortfall and weaker results in China weighing on sentiment.
The services business includes areas such as AppleCare, music, video and cloud services, along with the App Store. Apple said the segment has grown from 1 billion paid subscriptions in January 2025 to more than 1.5 billion.
Why did Apple services revenue miss estimates?
Apple Chief Financial Officer Kevan Parekh pointed to several factors behind the slower services growth, according to TechCrunch. The App Store was one pressure point, with Apple citing weaker mobile gaming and changes to App Store business rules in some countries, including the United States.
The U.S. issue stems from a court order requiring Apple to let app developers send customers to payment options outside the App Store. That matters because Apple’s App Store model has historically included commissions on many in-app payments. If more payments happen outside Apple’s system, some transactions can sit outside the company’s commission stream.
Apple did not quantify how much the payment-rule changes hurt App Store revenue, according to TechCrunch. The company also told investors that the dispute is headed to the Supreme Court for a final decision.
Apple did not put the full services miss on App Store changes. The company said foreign exchange was the main factor. Foreign exchange refers to the impact of currency moves when revenue earned outside the United States is converted back into dollars for reporting.
Apple also pointed to a tougher comparison with earlier quarters that benefited from the success of its F1 theatrical release, according to TechCrunch.
Where Apple still showed services strength
Apple said the App Store still reached a June-quarter revenue record. That figure includes Apple Ads revenue, which TechCrunch noted has become a larger part of Apple’s business and recently expanded to Apple Maps.
The company also said services reached an all-time revenue record in developed markets and a June-quarter record in emerging markets. Apple said the services business posted double-digit revenue growth in the vast majority of markets it tracks.
Apple reported new all-time highs for both transacting accounts and paid accounts in the quarter, with both growing at double-digit rates in emerging markets, according to Parekh.
Several service lines also hit records, Apple said. Apple Ads, the App Store, AppleCare, Apple Music and Apple TV posted June-quarter records, while cloud and payment services reached all-time highs. Apple also said Apple TV viewership hit an all-time high during the quarter.
Apple pointed investors to newer and upcoming service-related products as potential future revenue sources. Those include Creator Studio subscriptions, bill-splitting features planned for Apple Cash and the Apple Upgrade program launched this week in partnership with Klarna, which could add services revenue if it helps more customers buy devices and attach services to their accounts.
This story draws on original reporting from TechCrunch.
