Cite the form and the period first. Apple's fiscal-2025 Form 10-K, filed October 31, 2025, reports total gross margin of $195,201 million — $195.2 billion — for the year ended September 27, 2025. That compares with $180,683 million in fiscal 2024 and $169,148 million in fiscal 2023, all carried in the same filing on a consistent basis, so the comparison is clean. Total net sales for fiscal 2025 were $416,161 million and total cost of sales $220,960 million, putting the consolidated gross-margin rate at 46.9%, up from 46.2% in 2024 and 44.1% in 2023.

The segment read is in the shape of that climb, and the 10-K hands it to you directly. Apple splits gross margin between Products and Services: Products gross margin was $112,887 million on a 36.8% rate; Services gross margin was $82,314 million on a 75.4% rate. Services thus contributed 42% of total gross margin while supplying only 26% of net sales — $109,158 million of Services revenue against $307,003 million of Products revenue. The gap between a 36.8% Products rate and a 75.4% Services rate is the entire mechanism behind the rising blended margin.

Watch where the increment came from. Across two fiscal years total gross margin rose roughly $26 billion, from $169,148 million to $195,201 million. Products gross margin moved only modestly — $108,803 million (2023) to $109,633 million (2024) to $112,887 million (2025), a gain of about $4 billion — while Services gross margin climbed from $60,345 million to $71,050 million to $82,314 million, nearly $22 billion. In other words, Services supplied the large majority of the two-year gross-margin gain. The Services rate itself expanded from 70.8% to 73.9% to 75.4% over the same span.

The category lines explain the revenue mix doing that work. In fiscal 2025 iPhone net sales were $209,586 million (up 4%), Mac $33,708 million (up 12%), iPad $28,023 million (up 5%), Wearables, Home and Accessories $35,686 million (down 4%), and Services $109,158 million, up 14% year over year. Services was the fastest-growing category on the top line and, at a 75.4% margin, the most powerful one on the bottom line. Hardware margin is real but bounded by component costs; the Services attach is what bends the blended rate upward.

Comparability discipline matters here. The consolidated gross-margin line should not be confused with the Services-only rate; the 10-K reports both, and conflating them overstates company-wide profitability. Apple also notes in the MD&A that Products gross margin actually slipped slightly in rate terms — 37.2% in 2024 to 36.8% in 2025 — even as the dollar figure rose, underscoring that the mix shift, not hardware pricing power, is carrying the story. Anyone comparing across years should pull all figures from this single filing rather than stitching restated numbers together.

Below gross margin, the operating statement shows where the cash goes. Total operating expenses were $62,151 million for fiscal 2025 (15% of net sales), of which research and development was $34,550 million and SG&A $27,601 million — R&D up 10% year over year from $31,370 million. Net income was $112,010 million ($7.49 basic EPS), up from $93,736 million in fiscal 2024. The point for the segment read is that the Services-rich gross margin is what funds an R&D budget north of $34 billion while still growing net income; a hardware-only margin structure could not carry both.

One structural note from the same filing: Apple manages and reports its business "primarily on a geographic basis," with reportable segments of Americas, Europe, Greater China, Japan and Rest of Asia Pacific — not Products versus Services. That is why the Products/Services gross-margin split lives in the MD&A rather than in the segment footnote; the reader has to pull it from the Gross Margin table, which is exactly the discipline this read applies. The filing also reminds that "substantially all of the Company's hardware products are manufactured by outsourcing partners" concentrated in a handful of Asian countries, a supply-chain dependency that bears on the Products margin specifically.

What the filing does not hand you is a forward guarantee. A 10-K records the period closed, not a forecast; the $195,201 million is fiscal 2025, full stop. Antitrust and regulatory pressure on the App Store and on developer-fee structures — disclosed elsewhere in the same document among the risk factors — is the live threat to the Services margin that powers this curve, because the 75.4% rate depends in part on the economics of those distribution and fee arrangements.

One more comparability flag the filing itself surfaces: cost of sales moved very differently across the two halves of the business. Products cost of sales was $194,116 million in fiscal 2025 (against $307,003 million of Products revenue), while Services cost of sales was only $26,844 million (against $109,158 million of Services revenue). That is the cost structure behind the margin gap — Services carries a fraction of the cost burden per revenue dollar that hardware does, because its incremental cost is largely platform and content, not bill-of-materials. So when the revenue mix tilts toward Services, the blended cost-of-sales ratio falls and the gross-margin rate rises almost mechanically. The $26 billion two-year gross-margin gain is that mechanism playing out on the filed numbers.

For an operator or investor, the throughline is simple: Apple's profitability story is now a mix story, and the mix is filed, not framed. Roughly $82 billion of the $195 billion gross margin comes from a Services line running above 75% margin, and that is where the durable gains have accrued. The underlying record is the sec.gov 10-K; this analysis was sourced and verified against the filing index maintained by SEC filings, the SEC filing data API & evidence index.