Apple reported a 4% increase in overall revenue for its first fiscal quarter, surpassing Wall Street estimates in several areas but falling short on iPhone sales expectations and witnessing an 11.1% drop in China sales. Shares surged by 3% in extended trading as optimistic guidance for the March quarter offset concerns.

Key highlights include:

• Earnings per share: $2.40 (vs. $2.35 expected)
• Revenue: $124.3 billion (vs. $124.12 billion expected)
• Services revenue: $26.34 billion (up 14% YoY)
• Gross margin: 46.9% (highest on record)

Apple’s Services segment, driven by subscriptions, showed robust growth, boasting over 1 billion subscriptions. CEO Tim Cook noted that markets with access to the Apple Intelligence AI suite outperformed in iPhone sales. The rollout of additional languages, including simplified Chinese, is planned for April.

Despite weak performance in China, Mac and iPad sales saw a 15% growth each, attributed to new product launches such as the iMac and MacBook Pro. Apple also posted a net income of $36.33 billion, a 7.1% increase from last year.