WALTER10K CASE SUMMARY

The Good the strongest evidence Walter found

The highest sales and profit of the three years Apple presented — with Services doing the heavy lifting.

Net sales rose 6% to $416.2 billion in FY2025 from $391.0 billion in FY2024. Net income reached $112.0 billion, up from $93.7 billion, and diluted earnings per share rose to $7.46 from $6.08. Services net sales grew 14% to $109.2 billion and carried a 75.4% gross margin (up from 73.9%). Total gross margin percentage reached 46.9% (from 46.2%) — the highest of the three years shown. Every geographic segment grew except Greater China.

The Bad the clearest pressure the company disclosed

China shrank again, tariffs bit into product margins, and the cash tax bill jumped to $43.4 billion from $26.1 billion.

Greater China net sales fell 4% to $64.4 billion in FY2025 from $67.0 billion in FY2024 — the second straight decline shown ($72.6 billion in FY2023). Wearables, Home and Accessories fell 4% to $35.7 billion from $37.0 billion. Products gross margin percentage slipped to 36.8% from 37.2%, with tariff costs named as a cause. Cash generated by operating activities fell to $111.5 billion from $118.3 billion, and cash paid for income taxes jumped to $43.4 billion from $26.1 billion.

The Ugly the most serious risk Walter found

A €500 million EU fine under appeal, a U.S. government antitrust lawsuit, and a criminal-contempt referral — all open at once.

On April 23, 2025, the European Commission fined Apple €500 million under the Digital Markets Act and ordered it to remove restrictions on developers steering users outside the App Store; Apple has appealed. The same day, the Commission issued preliminary findings in a second DMA investigation — a final violation finding there could bring fines up to 10% of Apple’s annual worldwide net sales. In the U.S., the Department of Justice and state attorneys general sued Apple on March 21, 2024, alleging smartphone-market monopolization. And in the Epic Games case, on April 30, 2025 a federal court found Apple violated its 2021 injunction, barred any commission on purchases made outside apps, and referred Apple to the U.S. Attorney over possible criminal contempt; Apple’s expedited appeal was argued in October 2025. The filing also warns that remedies in the Google search case (September 2, 2025) could affect revenue Apple earns from Google search placement.

• Tariffs arrived. New U.S. tariffs began affecting Apple in the second quarter of FY2025; the filing names tariff costs as a reason Products margins fell, and flags a Section 232 national-security investigation into semiconductor imports.
• The EU fine landed. The €500 million DMA fine and cease-and-desist order came April 23, 2025 (now under appeal), and the second DMA investigation reached preliminary findings the same day.
• The Epic ruling escalated. The April 30, 2025 violation finding, the bar on out-of-app purchase commissions, and the criminal-contempt referral are all new this fiscal year.
• Google search payments moved into the risk column. The September 2, 2025 remedies order — and a possible reversal on appeal — could change what Apple earns from search-licensing arrangements.
• The buyback baton passed. The May 2024 $110 billion repurchase program was exhausted (final $19.8 billion in Q4 FY2025); a new May 2025 $100 billion program had about $99.8 billion remaining at year-end. The dividend rose to $1.02 per share from $0.98.
• New products launched in Q4 FY2025: iPhone 17 lineup, iPhone Air, Apple Watch Series 11, SE 3 and Ultra 3, and AirPods Pro 3.