Apple sales led by the pricey iPhone X pushed quarterly results beyond expectations on Tuesday, with subscriptions from App Store, Apple Music and iCloud services bolstering business.
The company also forecast revenue above expectations for the fall, when it typically launches new iPhone models.
Apple sold 41.3 million iPhones in the fiscal third quarter, half a million less than expected, but the average iPhone selling price topped expectation by $30, hitting $724.
During a conference call with analysts, Apple CEO Tim Cook said the iPhone X was the most popular iPhone in the fiscal third quarter, gaining market share around the world.
Apple posted third-quarter revenue of $53.3 billion and profits of $2.34 per share.
It also forecast revenue of $60 billion to $62 billion for its fiscal fourth quarter, which will include early sales of new ophone models.
"We're thrilled to report Apple's best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth," said Cook. "Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline."
Apple services include streaming music and video, where Apple faces competition from rivals including Spotify Technology SA and Netflix.
Chief Executive Tim Cook said on a conference call with investors that "wearables", a category which includes wireless earphones and the Apple Watch, are making growing contributions.
Services revenue was $9.5 billion. The category includes the App Store, Apple Music, iCloud storage and Apple Pay. The company is working on expanding these offerings with original videos and a news subscription service. The revenue included $236 million from resolving lawsuits such as Apple's long-running dispute with Samsung.
Apple executives said the company had reached 300 million subscriptions on its devices, a figure that includes both Apple's own services such as music and third-party subscriptions such as Netflix, where Apple takes a cut of the revenue when it handles the billing.
Cook said Apple Music has more than 50 million users when free trials are counted and hinted at the company's video content efforts.
Apple has yet to say how it will distribute those shows or how much it will charge, but Cook said Apple is "thrilled about our pipeline that have some new services in it."
The company's Other Products segment continued to see strong growth, with revenue up 37 percent to $3.7 billion. The category includes AirPods headphones, the Apple Watch, Apple TV, and the HomePod. Cook said wearables were a highlight of the quarter, with sales up 60 percent year over year. The Apple Watch had a record quarter with mid-40 percent growth, the CEO also said. The company doesn't report sales figures for the Watch.
Apple said it sold 11.6 million iPads in the quarter, up from the 11.4 million in the year-ago period. In March, Apple launched an updated $329 iPad geared toward students. It's also working on an upgraded Pro model with iPhone X features like Face ID, which could increase sales of the device.
Apple's stock gained 12 percent this year though Tuesday's close -- before the results were announced -- putting the iPhone maker on a path to become the first U.S.-based company with a market value of $1 trillion.