Apple Services Revenue Misses Estimates Despite Subscription Record

Apple Inc. reported services revenue of $30.74 billion for its fiscal third quarter, falling short of the $31.22 billion estimated by Wall Street analysts. The services segment was the only area to miss targets during a quarter that otherwise saw record-breaking hardware sales. Despite the revenue miss, the company reached a milestone of 1.5 billion paid subscriptions and set June quarter records for Apple Music, Apple TV, Apple Ads, AppleCare, and the App Store.

Chief Financial Officer Kevan Parekh attributed the shortfall to foreign exchange headwinds, a slowdown in mobile gaming, and a high comparison base from the "F1" theatrical release. He also cited court-mandated changes to the company's business model in the United States, which now permit developers to process payments outside the App Store.

Following the announcement and a separate revenue miss in China, Apple stock declined more than 4% in after-hours trading.