Apple’s services revenue growth slows to $19.6B in Q3, reaches 860M paid subscriptions

Apple released its third-quarter earnings on Thursday and reported $19.6 billion in services revenue, marking a 12% year-over-year increase, but narrowly falling short of Wall Street predictions of about $19.7 billion. The tech giant’s third-quarter services revenue also falls short of last quarter’s record-breaking $19.8 billion and is also down from the 27% growth it reported during the same time period last year.

The category, which includes businesses like the App Store, Apple TV+, Apple Music, cloud services and others — also grew to reach 860 million paid subscriptions on Apple’s platform, which is up from the 825 million it reported in its previous quarter. This figure is up more than 160 million in the last 12 months alone, Apple said.

“The record level of performance of our services portfolio during the June quarter reflects the strength of our ecosystem on many fronts,” Apple CFO Luca Maestri said. “First, our install base has continued to grow, reaching an all time high across each geographic segment and major product category. We also saw increased customer engagement with our services during the quarter our transacting accounts, paid accounts and accounts with paid subscriptions. All grew double digits year over year and paid subscriptions showed very strong growth.”

Maestri also said that the company set all-time records for Apple Music, Apple Care, cloud services and payment services.

The company highlighted a few of its recent achievements in the services category, as Apple CEO Tim Cook outlined that Apple TV+ has now earn 250 wins and 1,110 award nominations and counting. Cook also outlined that this month, Apple TV+ earned 52 Emmy nomination across 13 titles, including “Severance” and “Ted Lasso.”

As for the rest of Apple’s third-quarter results, iPhone revenue was up slightly year-over-year, from $39.5 billion to $40.7 billion — amounting to a 3% jump from the same time period in 2021. But while the company’s overall picture beat Wall Street expectation, things fared less well across other categories. Mac, iPad and the combined wearables/home category all took a hit for the quarter.