Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2024.
Product, Service and Software Announcements
The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2025 included the following:
First Quarter 2025:
•MacBook Pro
•Mac mini
•iMac
•iPad mini
Second Quarter 2025:
•iPhone 16e
•iPad Air
•iPad
•MacBook Air
•Mac Studio
Third Quarter 2025:
•iOS 26, macOS Tahoe 26, iPadOS 26, watchOS 26, visionOS 26 and tvOS 26
Fourth Quarter 2025:
•iPhone 17, iPhone Air, iPhone 17 Pro and iPhone 17 Pro Max
•Apple Watch Series 11, Apple Watch SE 3 and Apple Watch Ultra 3
•AirPods Pro 3
Fiscal Period
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first quarter of 2023. The Company’s fiscal years 2025 and 2024 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks.
Macroeconomic Conditions
Macroeconomic conditions, including inflation, interest rates and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company’s results of operations and financial condition.
Apple Inc. | 2025 Form 10-K | 21
Tariffs and Other Measures
Beginning in the second quarter of 2025, new U.S. Tariffs were announced, including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the EU, among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to the U.S. Tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company’s products and services, all of which can further adversely affect the Company’s business and results of operations.
Segment Operating Performance
The following table shows net sales by reportable segment for 2025, 2024 and 2023 (dollars in millions):
Americas
Americas net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPhone and Services. The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on Americas net sales during 2025.
Europe
Europe net sales increased during 2025 compared to 2024 primarily due to higher net sales of Services, iPhone and Mac.
Greater China
Greater China net sales decreased during 2025 compared to 2024 primarily due to lower net sales of iPhone, partially offset by higher net sales of Mac.
Japan
Japan net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPhone, Services and iPad.
Rest of Asia Pacific
Rest of Asia Pacific net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPhone, Services and Mac.
Apple Inc. | 2025 Form 10-K | 22
Products and Services Performance
The following table shows net sales by category for 2025, 2024 and 2023 (dollars in millions):
(1)Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2025 compared to 2024 due to higher net sales of Pro models.
Mac
Mac net sales increased during 2025 compared to 2024 primarily due to higher net sales of laptops and desktops.
iPad
iPad net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPad Air, iPad mini and iPad, partially offset by lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales decreased during 2025 compared to 2024 primarily due to lower net sales of Accessories and Wearables.
Services
Services net sales increased during 2025 compared to 2024 primarily due to higher net sales from advertising, the App Store and cloud services.
Apple Inc. | 2025 Form 10-K | 23
Gross Margin
Products and Services gross margin and gross margin percentage for 2025, 2024 and 2023 were as follows (dollars in millions):
Gross margin:
Gross margin percentage:
Total gross margin percentage 46.9 % 46.2 % 44.1 %
Products Gross Margin
Products gross margin increased during 2025 compared to 2024 primarily due to favorable costs and a different mix of products, partially offset by tariff costs.
Products gross margin percentage decreased during 2025 compared to 2024 primarily due to a different mix of products and tariff costs, partially offset by other favorable costs.
Services Gross Margin
Services gross margin increased during 2025 compared to 2024 primarily due to higher Services net sales and a different mix of services.
Services gross margin percentage increased during 2025 compared to 2024 primarily due to a different mix of services, partially offset by higher costs.
The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.
Operating Expenses
Operating expenses for 2025, 2024 and 2023 were as follows (dollars in millions):
Percentage of total net sales 8 % 8 % 8 %
Percentage of total net sales 7 % 7 % 7 %
Percentage of total net sales 15 % 15 % 14 %
Research and Development
The growth in R&D expense during 2025 compared to 2024 was primarily driven by increases in headcount-related expenses and infrastructure-related costs.
Selling, General and Administrative
The growth in selling, general and administrative expense during 2025 compared to 2024 was primarily driven by increases in headcount-related expenses and variable selling expenses.
Apple Inc. | 2025 Form 10-K | 24
Provision for Income Taxes
Provision for income taxes, effective tax rate and statutory federal income tax rate for 2025, 2024 and 2023 were as follows (dollars in millions):
Statutory federal income tax rate 21 % 21 % 21 %
The Company’s effective tax rate for 2025 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by a change in valuation allowance and state income taxes.
The Company’s effective tax rate for 2025 was lower compared to 2024 due to a $10.7 billion year-over-year decrease in the provision for income taxes related to the State Aid Decision (refer to Note 7, “Income Taxes” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K) and the impact of changes in unrecognized tax benefits, partially offset by a change in valuation allowance and a higher effective tax rate on foreign earnings.
Liquidity and Capital Resources
The Company believes its balances of cash, cash equivalents and marketable securities, which totaled $132.4 billion as of September 27, 2025, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.
The Company’s material cash requirements include the following contractual obligations:
Debt
As of September 27, 2025, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $91.3 billion (collectively the “Notes”), with $12.4 billion payable within 12 months. Future interest payments associated with the Notes total $37.0 billion, with $2.6 billion payable within 12 months.
The Company also issues unsecured short-term promissory notes pursuant to a commercial paper program. As of September 27, 2025, the Company had $8.0 billion of commercial paper outstanding, which was payable within 12 months.
Leases
The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. As of September 27, 2025, the Company had fixed lease payment obligations of $16.8 billion, with $2.6 billion payable within 12 months.
Manufacturing Purchase Obligations
The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of September 27, 2025, the Company had manufacturing purchase obligations of $56.2 billion, with $55.4 billion payable within 12 months.
Other Purchase Obligations
The Company’s other purchase obligations primarily consist of noncancelable obligations to acquire capital assets, including assets related to product manufacturing, and noncancelable obligations related to supplier arrangements, licensed intellectual property and content, and distribution rights. As of September 27, 2025, the Company had other purchase obligations of $14.8 billion, with $7.0 billion payable within 12 months.
Deemed Repatriation Tax Payable
As of September 27, 2025, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”) was $8.8 billion, which was payable within 12 months.
Apple Inc. | 2025 Form 10-K | 25
Capital Return Program
In addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to acquire a minimum amount of shares. As of September 27, 2025, the Company’s quarterly cash dividend was $0.26 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board.
In May 2025, the Company announced a new share repurchase program of up to $100 billion and raised its quarterly dividend from $0.25 to $0.26 per share beginning in May 2025. During 2025, the Company repurchased $89.3 billion of its common stock and paid dividends and dividend equivalents of $15.4 billion.
Recent Accounting Pronouncements
Internal-Use Software
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software. ASU 2025-06 removes all references to software development stages and requires capitalization of software costs when management has committed to the software project and it is probable the software will be completed and perform its intended use. ASU 2025-06 will be effective for the Company in its first quarter of 2029, and early adoption is permitted. The Company is currently evaluating the timing and method of its adoption of ASU 2025-06.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. The Company will adopt ASU 2024-03 in its fourth quarter of 2028 using a prospective transition method.
Income Taxes
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Uncertain Tax Positions
The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The evaluation of the Company’s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, including the TCJA and the allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given that the final outcome of these uncertainties will not be different from that reflected in the Company’s reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results.
Apple Inc. | 2025 Form 10-K | 26
Legal and Other Contingencies
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to economic risk from interest rates and foreign exchange rates. The Company uses various strategies to manage these risks; however, they may still impact the Company’s consolidated financial statements.
Interest Rate Risk
The Company is primarily exposed to fluctuations in U.S. interest rates and their impact on the Company’s investment portfolio and term debt. Increases in interest rates will negatively affect the fair value of the Company’s investment portfolio and increase the interest expense on the Company’s term debt. To protect against interest rate risk, the Company may use derivative instruments, offset interest rate–sensitive assets and liabilities, or control duration of the investment and term debt portfolios.
The following table sets forth potential impacts on the Company’s investment portfolio and term debt, including the effects of any associated derivatives, that would result from a hypothetical increase in relevant interest rates as of September 27, 2025 and September 28, 2024 (dollars in millions):
Foreign Exchange Rate Risk
The Company’s exposure to foreign exchange rate risk relates primarily to the Company being a net receiver of currencies other than the U.S. dollar. Changes in exchange rates, and in particular a strengthening of the U.S. dollar, will negatively affect the Company’s net sales and gross margins as expressed in U.S. dollars. Fluctuations in exchange rates may also affect the fair values of certain of the Company’s assets and liabilities. To protect against foreign exchange rate risk, the Company may use derivative instruments, offset exposures, or adjust local currency pricing of its products and services. However, the Company may choose to not hedge certain foreign currency exposures for a variety of reasons, including accounting considerations or prohibitive cost.
The Company applied a value-at-risk (“VAR”) model to its foreign currency derivative positions to assess the potential impact of fluctuations in exchange rates. The VAR model used a Monte Carlo simulation. The VAR is the maximum expected loss in fair value, for a given confidence interval, to the Company’s foreign currency derivative positions due to adverse movements in rates. Based on the results of the model, the Company estimates, with 95% confidence, a maximum one-day loss in fair value of $590 million and $538 million as of September 27, 2025 and September 28, 2024, respectively. Changes in the Company’s underlying foreign currency exposures, which were excluded from the assessment, generally offset changes in the fair values of the Company’s foreign currency derivatives.
Apple Inc. | 2025 Form 10-K | 27
Item 8. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements Page
Consolidated Balance Sheets as of September 27, 2025 and September 28, 2024 31
Notes to Consolidated Financial Statements 34
Reports of Independent Registered Public Accounting Firm 49
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes.
Apple Inc. | 2025 Form 10-K | 28
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
Years ended
Net sales:
Cost of sales:
Operating expenses:
Earnings per share:
Shares used in computing earnings per share:
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2025 Form 10-K | 29
Apple Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Years ended
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax (267) 395 (765)
Change in unrealized gains/losses on derivative instruments, net of tax:
Change in fair value of derivative instruments 849 (832) 323
Change in unrealized gains/losses on marketable debt securities, net of tax:
Change in fair value of marketable debt securities 817 5,850 1,563
Total other comprehensive income/(loss) 1,601 4,280 (343)
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2025 Form 10-K | 30
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
ASSETS:
Current assets:
Non-current assets:
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Non-current liabilities:
Commitments and contingencies
Shareholders’ equity:
Accumulated other comprehensive loss (5,571) (7,172)
Total liabilities and shareholders’ equity $ 359,241 $ 364,980
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2025 Form 10-K | 31
Apple Inc.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In millions, except per-share amounts)
Years ended
Common stock and additional paid-in capital:
Accumulated deficit:
Accumulated other comprehensive loss:
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2025 Form 10-K | 32
Apple Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years ended
Operating activities:
Adjustments to reconcile net income to cash generated by operating activities:
Changes in operating assets and liabilities:
Investing activities:
Financing activities:
Proceeds from issuance of term debt, net 4,481 — 5,228
Proceeds from/(Repayments of) commercial paper, net (2,032) 3,960 (3,978)
Supplemental cash flow disclosure:
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2025 Form 10-K | 33
Apple Inc.
Notes to Consolidated Financial Statements
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries. The preparation of these consolidated financial statements and accompanying notes in conformity with GAAP requires the use of management estimates. Certain prior period amounts in the notes to consolidated financial statements have been reclassified to conform to the current period’s presentation.
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first fiscal quarter of 2023. The Company’s fiscal years 2025 and 2024 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Recently Adopted Accounting Pronouncements
Segment Reporting
Beginning with the 2025 annual reporting period, the Company adopted the FASB’s ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires the Company to disclose segment expenses that are significant and regularly provided to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 requires the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The Company adopted ASU 2023-07 using a retrospective transition method.
Revenue
The Company records revenue net of taxes collected from customers that are remitted to governmental authorities.
Share-Based Compensation
The Company recognizes share-based compensation expense on a straight-line basis for its estimate of equity awards that will ultimately vest.
Cash Equivalents
All highly liquid investments with maturities of three months or less at the date of purchase are treated as cash equivalents.
Trade Receivables
Trade receivables are stated at transaction price.
Marketable Securities
The cost of securities sold is determined using the specific identification method.
Inventories
Inventories are measured using the first-in, first-out method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation on property, plant and equipment is recognized on a straight-line basis.
Apple Inc. | 2025 Form 10-K | 34
Derivative Instruments
The Company presents derivative assets and liabilities at their gross fair values in the Consolidated Balance Sheets.
Income Taxes
The Company records certain deferred tax assets and liabilities in connection with the minimum tax on certain foreign earnings created by the TCJA.
Leases
The Company combines and accounts for lease and nonlease components as a single lease component for leases of corporate and retail facilities.
Note 2 – Revenue
The Company recognizes revenue at the amount to which it expects to be entitled when control of products or services is transferred to its customers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company’s Products net sales, control transfers when products are shipped. For the Company’s Services net sales, control transfers over time as services are delivered. Payment for Products and Services net sales is collected within a short period following transfer of control or commencement of delivery of services, as applicable.
The Company records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the Company’s expectations and historical experience.
For arrangements with multiple performance obligations, which represent promises within an arrangement that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). When available, the Company uses observable prices to determine SSPs. When observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, where applicable, prices charged by the Company for similar offerings, market trends in the pricing for similar offerings, product-specific business objectives and the estimated cost to provide the performance obligation.
The Company has identified the performance obligations regularly included in arrangements involving the sale of iPhone, Mac and iPad. The first material performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered at the time of sale. The second material performance obligation is the right to receive certain product-related bundled services, which include iCloud®, Siri® and Maps. The Company allocates revenue and any related discounts to all of its performance obligations based on their relative SSPs. Because the Company lacks observable prices for product-related bundled services, the allocation of revenue is based on the Company’s estimated SSPs. Revenue allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product is shipped. Revenue allocated to product-related bundled services is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided.
For certain long-term service arrangements, the Company has performance obligations for services it has not yet delivered. For these arrangements, the Company does not have a right to bill for the undelivered services. The Company has determined that any unbilled consideration relates entirely to the value of the undelivered services. Accordingly, the Company has not recognized revenue, and does not disclose amounts, related to these undelivered services.
For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. For third-party applications sold through the App Store, the Company does not obtain control of the product before transferring it to the customer. Therefore, the Company accounts for all third-party application–related sales on a net basis by recognizing in Services net sales only the commission it retains.
Apple Inc. | 2025 Form 10-K | 35
The following table shows disaggregated net sales, as well as the portion of total net sales that was previously deferred, for 2025, 2024 and 2023 (in millions):
(1)Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 13, “Segment Information and Geographic Data” for 2025, 2024 and 2023, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.
As of September 27, 2025 and September 28, 2024, the Company had total deferred revenue of $13.7 billion and $12.8 billion, respectively. As of September 27, 2025, the Company expects 66% of total deferred revenue to be realized in less than a year, 23% within one-to-two years, 9% within two-to-three years and 2% in greater than three years.
Note 3 – Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for 2025, 2024 and 2023 (net income in millions and shares in thousands):
Numerator:
Denominator:
Diluted earnings per share $ 7.46 $ 6.08 $ 6.13
Approximately 24 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for 2023 because their effect would have been antidilutive.
Apple Inc. | 2025 Form 10-K | 36
Note 4 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of September 27, 2025 and September 28, 2024 (in millions):
Level 1:
Level 2 (1):
Certificates of deposit and time deposits 917 — — 917 904 — 13
Level 1:
Level 2 (1):
(1)The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments, which generally have counterparties with high credit ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.
(2)As of September 28, 2024, cash and cash equivalents included $2.6 billion held in escrow and restricted from general use. These restricted cash and cash equivalents were designated to settle the Company’s obligation related to the State Aid Decision (refer to Note 7, “Income Taxes”).
(3)As of September 28, 2024, current marketable securities included $13.2 billion held in escrow and restricted from general use. These restricted marketable securities were designated to settle the Company’s obligation related to the State Aid Decision (refer to Note 7, “Income Taxes”).
Apple Inc. | 2025 Form 10-K | 37
As of September 27, 2025, 80% of the Company’s non-current marketable debt securities other than mortgage- and asset-backed securities had maturities between 1 and 5 years, 15% between 5 and 10 years, and 5% greater than 10 years. As of September 27, 2025, 13% of the Company’s non-current mortgage- and asset-backed securities had maturities between 1 and 5 years, 14% between 5 and 10 years, and 73% greater than 10 years.
The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies marketable debt securities as either current or non-current based on each instrument’s underlying maturity.
Derivative Instruments and Hedging
The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates.
All derivative instruments are recorded in the Consolidated Balance Sheets at fair value. The accounting treatment for derivative gains and losses is based on intended use and hedge designation.
Gains and losses arising from amounts that are included in the assessment of cash flow hedge effectiveness are initially deferred in accumulated other comprehensive income/(loss) and subsequently reclassified into earnings when the hedged transaction affects earnings, and in the same line item in the Consolidated Statements of Operations. Gains and losses arising from amounts that are included in the assessment of fair value hedge effectiveness are recognized in the Consolidated Statements of Operations line item to which the hedge relates along with offsetting losses and gains related to the change in value of the hedged item.
For derivative instruments designated as cash flow and fair value hedges, amounts excluded from the assessment of hedge effectiveness are recognized on a straight-line basis over the life of the hedge in the Consolidated Statements of Operations line item to which the hedge relates. Changes in the fair value of amounts excluded from the assessment of hedge effectiveness are recognized in other comprehensive income/(loss).
Gains and losses arising from changes in the fair values of derivative instruments that are not designated as accounting hedges are recognized in the Consolidated Statements of Operations.
The Company classifies cash flows related to derivative instruments in the same section of the Consolidated Statements of Cash Flows as the items being hedged, which are generally classified as operating activities.
Foreign Exchange Rate Risk
To protect gross margins from fluctuations in foreign exchange rates, the Company may use forwards, options or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months.
To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign exchange rates, the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of September 27, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency transactions is 17 years.
The Company may also use derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.
Interest Rate Risk
To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may use interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges.
Apple Inc. | 2025 Form 10-K | 38
The notional amounts of the Company’s outstanding derivative instruments as of September 27, 2025 and September 28, 2024, were as follows (in millions):
Derivative instruments designated as accounting hedges:
Derivative instruments not designated as accounting hedges:
As of September 27, 2025 and September 28, 2024, the carrying amount of the Company’s current and non-current term debt subject to fair value hedges was $12.6 billion and $13.5 billion, respectively.
Accounts Receivable
Trade Receivables
As of September 27, 2025, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 12%. The Company’s third-party cellular network carriers accounted for 34% and 38% of total trade receivables as of September 27, 2025 and September 28, 2024, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit risk.
Vendor Non-Trade Receivables
The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. The Company does not reflect the sale of these components in products net sales. Rather, the Company recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As of September 27, 2025, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 46% and 23%. As of September 28, 2024, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 44% and 23%.
Note 5 – Property, Plant and Equipment
The following table shows the Company’s gross property, plant and equipment by major asset class and accumulated depreciation as of September 27, 2025 and September 28, 2024 (in millions):
Machinery, equipment and internal-use software 83,420 80,205
Total property, plant and equipment, net $ 49,834 $ 45,680
Depreciation expense on property, plant and equipment was $8.0 billion, $8.2 billion and $8.5 billion during 2025, 2024 and 2023, respectively.
Apple Inc. | 2025 Form 10-K | 39
Note 6 – Consolidated Financial Statement Details
The following tables show the Company’s consolidated financial statement details as of September 27, 2025 and September 28, 2024 (in millions):
Other Non-Current Assets
Other Current Liabilities
Accrued distribution and marketing 8,919 7,679
Note 7 – Income Taxes
European Commission State Aid Decision
On August 30, 2016, the Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (“State Aid Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward.
The Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (“General Court”). On July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the Commission appealed the General Court’s decision to the European Court of Justice (“ECJ”). On September 10, 2024, the ECJ announced that it had set aside the 2020 judgment of the General Court and confirmed the Commission’s 2016 State Aid Decision. As a result, during the fourth quarter of 2024 the Company recorded a one-time income tax charge of $10.2 billion, net, which represented $15.8 billion payable to Ireland via release of amounts held in escrow, partially offset by a U.S. foreign tax credit of $4.8 billion and a decrease in unrecognized tax benefits of $823 million.
Provision for Income Taxes and Effective Tax Rate
The provision for income taxes for 2025, 2024 and 2023, consisted of the following (in millions):
Federal:
State:
Foreign:
Foreign pretax earnings were $82.0 billion, $77.3 billion and $72.9 billion in 2025, 2024 and 2023, respectively.
Apple Inc. | 2025 Form 10-K | 40
A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate (21% in 2025, 2024 and 2023) to income before provision for income taxes for 2025, 2024 and 2023 is as follows (dollars in millions):
Change in valuation allowance 2,091 — —
Impact of the State Aid Decision (486) 10,246 —
Deferred Tax Assets and Liabilities
As of September 27, 2025 and September 28, 2024, the significant components of the Company’s deferred tax assets and liabilities were as follows (in millions):
Deferred tax assets:
Capitalized research and development $ 15,041 $ 10,739
Accrued liabilities and other reserves 6,154 6,114
Deferred tax liabilities:
Minimum tax on foreign earnings 1,217 1,674
Total deferred tax liabilities 7,471 6,805
As of September 27, 2025, the Company had $4.7 billion in foreign tax credit carryforwards in Ireland and $4.0 billion in California R&D credit carryforwards, both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary differences.
Apple Inc. | 2025 Form 10-K | 41
Uncertain Tax Positions
As of September 27, 2025, the total amount of gross unrecognized tax benefits was $23.2 billion, of which $10.6 billion, if recognized, would impact the Company’s effective tax rate. As of September 28, 2024, the total amount of gross unrecognized tax benefits was $22.0 billion, of which $10.8 billion, if recognized, would have impacted the Company’s effective tax rate.
The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2025, 2024 and 2023 is as follows (in millions):
Increases related to tax positions taken during a prior year 1,971 1,727 2,044
Decreases related to tax positions taken during a prior year (71) (386) (1,463)
Decreases related to settlements with taxing authorities (2,939) (1,070) (19)
The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. Tax years 2018 and after 2021 for the U.S. federal jurisdiction, and after 2014 in certain major foreign jurisdictions, remain subject to examination. Although the timing of resolution or closure of examinations is not certain, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease as much as $6 billion in the next 12 months.
Note 8 – Leases
The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases typically have original terms not exceeding 10 years and generally contain multiyear renewal options, some of which are reasonably certain of exercise.
Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the underlying leased assets. Lease costs associated with fixed payments on the Company’s operating leases were $2.1 billion for 2025 and $2.0 billion for both 2024 and 2023. Lease costs associated with variable payments on the Company’s leases were $16.1 billion, $13.8 billion and $13.9 billion for 2025, 2024 and 2023, respectively.
The Company made fixed cash payments related to operating leases of $2.1 billion in 2025 and $1.9 billion in both 2024 and 2023. Noncash activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.8 billion, $1.0 billion and $2.1 billion for 2025, 2024 and 2023, respectively.
The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 27, 2025 and September 28, 2024 (in millions):
Lease-Related Assets and Liabilities Financial Statement Line Items 2025 2024
Right-of-use assets:
Operating leases Other non-current assets $ 11,205 $ 10,234
Finance leases Property, plant and equipment, net 1,033 1,069
Lease liabilities:
Operating leases Other current liabilities $ 1,579 $ 1,488
Finance leases Other current liabilities 538 144
Other non-current liabilities 692 752
Apple Inc. | 2025 Form 10-K | 42
Lease liability maturities as of September 27, 2025, are as follows (in millions):
OperatingLeases FinanceLeases Total
The weighted-average remaining lease term related to the Company’s lease liabilities as of September 27, 2025 and September 28, 2024 was 9.8 years and 10.3 years, respectively. The discount rate related to the Company’s lease liabilities as of September 27, 2025 and September 28, 2024 was 3.4% and 3.1%, respectively. The discount rates related to the Company’s lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined.
As of September 27, 2025, the Company had $523 million of fixed payment obligations under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases are expected to commence between 2026 and 2027, with lease terms ranging from 1 year to 21 years.
Note 9 – Debt
Commercial Paper
The Company issues unsecured short-term promissory notes pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of September 27, 2025 and September 28, 2024, the Company had $8.0 billion and $10.0 billion of commercial paper outstanding, respectively, with maturities generally less than nine months. The weighted-average interest rate of the Company’s commercial paper was 4.19% and 5.00% as of September 27, 2025 and September 28, 2024, respectively. The following table provides a summary of cash flows associated with commercial paper for 2025, 2024 and 2023 (in millions):
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net $ (5,820) $ 3,960 $ (1,333)
Maturities greater than 90 days:
Proceeds from commercial paper 5,836 — —
Repayments of commercial paper (2,048) — (2,645)
Proceeds from/(Repayments of) commercial paper, net 3,788 — (2,645)
Apple Inc. | 2025 Form 10-K | 43
Term Debt
The Company has outstanding Notes, which are senior unsecured obligations with interest payable in arrears. The following table provides a summary of the Company’s term debt as of September 27, 2025 and September 28, 2024:
Unamortized premium/(discount) and issuance costs, net (309) (321)
Hedge accounting fair value adjustments (294) (358)
Less: Current portion of term debt (12,350) (10,912)
Total non-current portion of term debt $ 78,328 $ 85,750
To manage interest rate risk on certain of its U.S. dollar–denominated fixed-rate notes, the Company uses interest rate swaps to effectively convert the fixed interest rates to floating interest rates on a portion of these notes. Additionally, to manage foreign exchange rate risk on certain of its foreign currency–denominated notes, the Company uses cross-currency swaps to effectively convert these notes to U.S. dollar–denominated notes.
The effective interest rates for the Notes include the interest on the Notes, amortization of the discount or premium and, if applicable, adjustments related to hedging.
The future principal payments for the Company’s Notes as of September 27, 2025, are as follows (in millions):
Total term debt principal $ 91,281
As of September 27, 2025 and September 28, 2024, the fair value of the Company’s Notes, based on Level 2 inputs, was $80.4 billion and $88.4 billion, respectively.
Note 10 – Shareholders’ Equity
Share Repurchase Program
During 2025, the Company repurchased 402 million shares of its common stock for $89.3 billion. The Company’s share repurchase programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
Apple Inc. | 2025 Form 10-K | 44
Shares of Common Stock
The following table shows the changes in shares of common stock for 2025, 2024 and 2023 (in thousands):
Note 11 – Share-Based Compensation
2022 Employee Stock Plan
The Apple Inc. 2022 Employee Stock Plan (“2022 Plan”) is a shareholder-approved plan that provides for broad-based equity grants to employees, including executive officers, and permits the granting of RSUs, stock grants, performance-based awards, stock options and stock appreciation rights. RSUs granted under the 2022 Plan generally vest over four years, based on continued employment, and are settled upon vesting in shares of the Company’s common stock on a one-for-one basis. All RSUs granted under the 2022 Plan have dividend equivalent rights, which entitle holders of RSUs to the same dividend value per share as holders of common stock. A maximum of approximately 1.3 billion shares were authorized for issuance pursuant to 2022 Plan awards at the time the plan was approved on March 4, 2022.
Restricted Stock Units
A summary of the Company’s RSU activity and related information for 2025 is as follows:
Number ofRSUs(in thousands) Weighted-AverageGrant-Date FairValue Per RSU
The weighted-average grant-date fair value of RSUs granted in 2024 and 2023 was $173.78 and $150.87, respectively. The Company estimates the grant-date fair value of RSUs based on the closing price of the Company’s common stock on the date of grant.
The total vesting-date fair value of RSUs was $17.1 billion, $15.8 billion and $15.9 billion for 2025, 2024 and 2023, respectively. The majority of RSUs that vested in 2025, 2024 and 2023 were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes, and remitted cash to the appropriate taxing authorities. Total payments to taxing authorities for employees’ tax obligations were $6.1 billion in 2025 and $5.6 billion in both 2024 and 2023.
Share-Based Compensation
The following table shows share-based compensation expense and the related income tax benefit included in the Consolidated Statements of Operations for 2025, 2024 and 2023 (in millions):
As of September 27, 2025, the total unrecognized compensation cost related to outstanding RSUs was $21.8 billion, which the Company expects to recognize over a weighted-average period of 2.5 years.
Apple Inc. | 2025 Form 10-K | 45
Note 12 – Commitments, Contingencies and Supply Concentrations
Unconditional Purchase Obligations
The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, licensed intellectual property and content, and distribution rights. Future payments under unconditional purchase obligations with a remaining term in excess of one year as of September 27, 2025, are as follows (in millions):
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Concentrations in the Available Sources of Supply of Materials and Product
Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers, tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage and significant commodity pricing fluctuations. Restrictions on international trade can increase the cost or limit the availability of the Company’s products and the components and rare earths and other raw materials that go into them.
The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers’ yields have matured or their manufacturing capacities have increased. The Company has entered into agreements for the supply of many components; however, the Company may not be able to extend or renew agreements for the supply of components on similar terms, or at all, and may not be successful in obtaining sufficient quantities from its suppliers or in a timely manner, or in identifying and obtaining sufficient quantities from an alternative source. In addition, component suppliers may fail, be subject to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Company’s requirements, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms, or at all.
Substantially all of the Company’s hardware products are manufactured by outsourcing partners that are located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam.
Apple Inc. | 2025 Form 10-K | 46
Note 13 – Segment Information and Geographic Data
The Company manages its business primarily on a geographic basis. The Company’s CEO is its CODM.
The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia, New Zealand and those Asian countries not included in the Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic region.
The CODM uses segment net sales and operating income information to make certain decisions, such as product and service pricing, and to decide how to allocate resources related to sales activities and marketing investments. Net sales for geographic segments are generally based on the location of customers and sales through the Company’s retail stores located in those geographic locations. Operating income for each segment consists of net sales to third parties, related cost of sales, and operating expenses directly attributable to the segment. The information provided to the CODM for purposes of making decisions and assessing segment performance excludes asset information.
The following tables show information by reportable segment for 2025, 2024 and 2023 (in millions):
Americas Europe GreaterChina Japan Rest ofAsia Pacific Corporate Total
Research and development — — — — — (34,550) (34,550)
General and administrative — — — — — (8,077) (8,077)
Americas Europe GreaterChina Japan Rest ofAsia Pacific Corporate Total
Research and development — — — — — (31,370) (31,370)
General and administrative — — — — — (7,458) (7,458)
Americas Europe GreaterChina Japan Rest ofAsia Pacific Corporate Total
Research and development — — — — — (29,915) (29,915)
General and administrative — — — — — (6,672) (6,672)
Apple Inc. | 2025 Form 10-K | 47
The following tables show net sales for 2025, 2024 and 2023 and long-lived assets as of September 27, 2025 and September 28, 2024 for countries that individually accounted for 10% or more of the respective totals, as well as aggregate amounts for the remaining countries (in millions):
Net sales:
Long-lived assets:
(1)China includes Hong Kong and Taiwan.
Apple Inc. | 2025 Form 10-K | 48
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Apple Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Apple Inc. (the “Company”) as of September 27, 2025 and September 28, 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended September 27, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at September 27, 2025 and September 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 27, 2025, in conformity with U.S. generally accepted accounting principles (“GAAP”).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of September 27, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated October 31, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Uncertain Tax Positions
Apple Inc. | 2025 Form 10-K | 49
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2009.
San Jose, California
October 31, 2025
Apple Inc. | 2025 Form 10-K | 50
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Apple Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Apple Inc.’s internal control over financial reporting as of September 27, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”). In our opinion, Apple Inc. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of September 27, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of September 27, 2025 and September 28, 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended September 27, 2025, and the related notes and our report dated October 31, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Jose, California
October 31, 2025
Apple Inc. | 2025 Form 10-K | 51
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of September 27, 2025 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Inherent Limitations over Internal Controls
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:
(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
(ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of September 27, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the Company’s internal control over financial reporting, which appears in Part II, Item 8 of this Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2025, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Apple Inc. | 2025 Form 10-K | 52
Item 9B. Other Information
On October 31, 2025, the Company announced that Chris Kondo, Senior Director of Corporate Accounting and Principal Accounting Officer, will transition from his role on January 1, 2026. Following the transition, Mr. Kondo will continue to work on other projects. Ben Borders, the Company’s Director of Technical Accounting, will become Senior Director of Corporate Accounting and assume the role of Principal Accounting Officer. Mr. Borders will report to Kevan Parekh, the Company’s Chief Financial Officer.
Insider Trading Arrangements
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item will be included in the Company’s definitive proxy statement to be filed with the SEC within 120 days after September 27, 2025, in connection with the solicitation of proxies for the Company’s 2026 annual meeting of shareholders (“2026 Proxy Statement”), and is incorporated herein by reference.
Item 11. Executive Compensation
The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.
Apple Inc. | 2025 Form 10-K | 53
PART IV
Item 15. Exhibit and Financial Statement Schedules
(a)Documents filed as part of this report
(1)All financial statements
Index to Consolidated Financial Statements Page
Consolidated Balance Sheets as of September 27, 2025 and September 28, 2024 31
Notes to Consolidated Financial Statements 34
Reports of Independent Registered Public Accounting Firm* 49
*Ernst & Young LLP, PCAOB Firm ID No. 00042.
(2)Financial Statement Schedules
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this Form 10-K.
(3)Exhibits required by Item 601 of Regulation S-K (1)
Incorporated by Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/Period End Date
4.1** Description of Securities of the Registrant.
Apple Inc. | 2025 Form 10-K | 54
Incorporated by Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/Period End Date
Apple Inc. | 2025 Form 10-K | 55
Incorporated by Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/Period End Date
4.30* Apple Inc. Deferred Compensation Plan. S-8 4.1 8/23/18
10.9* Apple Inc. Executive Cash Incentive Plan. 8-K 10.1 8/19/22
21.1** Subsidiaries of the Registrant.
23.1** Consent of Independent Registered Public Accounting Firm.
31.1** Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2** Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
Apple Inc. | 2025 Form 10-K | 56
Incorporated by Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/Period End Date
*Indicates management contract or compensatory plan or arrangement.
**Filed herewith.
***Furnished herewith.
(1)Certain instruments defining the rights of holders of long-term debt securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Registrant hereby undertakes to furnish to the SEC, upon request, copies of any such instruments.
Item 16. Form 10-K Summary
None.
Apple Inc. | 2025 Form 10-K | 57
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 31, 2025 Apple Inc.
By: /s/ Kevan Parekh
Kevan Parekh
Senior Vice President,Chief Financial Officer
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy D. Cook and Kevan Parekh, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Name Title Date
TIMOTHY D. COOK
KEVAN PAREKH
CHRIS KONDO
/s/ Wanda Austin Director October 31, 2025
WANDA AUSTIN
/s/ Alex Gorsky Director October 31, 2025
ALEX GORSKY
/s/ Andrea Jung Director October 31, 2025
ANDREA JUNG
/s/ Arthur D. Levinson Director and Chair of the Board October 31, 2025
ARTHUR D. LEVINSON
/s/ Monica Lozano Director October 31, 2025
MONICA LOZANO
/s/ Ronald D. Sugar Director October 31, 2025
RONALD D. SUGAR
/s/ Susan L. Wagner Director October 31, 2025
SUSAN L. WAGNER
Apple Inc. | 2025 Form 10-K | 58