Apple’s (NASDAQ:AAPL) App Store revenue rose about 12% year-over-year in June, UBS analysts reported Tuesday, citing Sensor Tower data. The figure matches the growth rate seen in May, boosted slightly by currency tailwinds as the U.S. dollar weakened.
Foreign exchange had a roughly 200 basis-point positive effect, UBS noted, though on a currency-neutral (FXN) basis, growth slowed to around 10%, a decline of 70 basis points compared to the prior month. Still, “growth was fairly consistent between the U.S. (~12%) and Rest-of-World (ROW) (~13%) on a reported basis,” according to the UBS team, even as underlying comps varied.
In the U.S., App Store revenue in the June quarter rose by 11%, outperforming the March quarter by 100 basis points. Meanwhile, Rest-of-World (ROW) markets also showed 12% growth on a reported basis, an improvement of 250 basis points over the previous quarter. However, ROW’s FXN growth stayed flat at 10%.
UBS held firm on its June-quarter Services revenue projection for Apple, expecting roughly 11% growth. Still, the bank sees potential upside due to the FX environment: “Considering that FX should be at least a 100 bps smaller headwind than previously expected, we believe that there is upside risk to our ‘Services’ revenue estimate.”
The firm added that if Services growth exceeds expectations by one percentage point, total revenue from the segment could reach $27.1 billion rather than $26.9 billion, potentially increasing EPS by about one cent from the current forecast of $1.40.
As for regulatory changes, UBS said the new EU Digital Markets Act—which permits app distribution outside the App Store—has yet to meaningfully impact growth. “Sensor Tower data suggests the impact has been relatively muted in the EU thus far, with growth run rating in the mid-20s% since Jan-24,” analysts wrote.
With the EU contributing only a high-single-digit share of total App Store revenue and the U.S. accounting for nearly one-third, UBS concluded the broader financial risk remains “relatively limited,” even in light of recent App Store fee updates.
UBS maintained its Neutral rating on Apple stock, with a 12-month price target of $210, in line with the current market price.
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