Overview
Since the Report − 2.4%
Revenue grew 11.7% year over year, EPS beat the estimate by 6.1%; the stock fell 2.8% in its first reaction.
- RevenueQ4
- $114.48B
- ▲ 11.7% Annual · 1.0% Above Estimate
- Diluted EPSGAAP
- $2.10
- Estimate $1.98 · Beat by 6.1%
Verdict
HOLDApple posted record September-quarter revenue of $114.5 billion, and EPS beat estimates by 6.1%. The 7-10% December-quarter growth range was close to estimates, but memory costs cut the gross margin target to 45-46%. The stock fell 2.8% after hours, and the number to watch is whether actual December-quarter gross margin holds above 46%.
Close on Report DayNov 2
$338.32▼ 2.8%Report-Day Move
- Market Cap(Today)
- ≈ $4.82 T
- 1Y Return(At Report)
- + 26%
- P/E(At Today's Price · $8.97 · Trailing 12M)
- 36.8
- PEG(Next Twelve Months)
- 5.66
- Net Margin(Trailing 12M)
- 27.6%
Earnings Summary
In 30 Seconds- Revenue of $114.48 billion beat estimates by 1.0% and EPS of $2.10 beat by 6.1%; iPhone grew 17.5%.
- The 7-10% December-quarter revenue range is close to estimates, but memory costs pushed the gross margin target down to 45-46%.
- The stock fell 2.8% after hours following the call; the market read the quarter as a margin story.
The Numbers
iPhone Revenue
$57.58B
▲ 17.5% · September-Quarter Record
Services Revenue
$31.57B
▲ 9.8% Annual · All-Time High
Gross Margin
47.9%
47.2% a Year Ago · ~1 Point From Refunds
Stock Reaction
▼ 2.8%
After Hours ~6 PM ET · Close $338.32
Quarterly Revenue ($ Billion)
102
Q4 25 · $102 B
144
Q1 26 · $144 B · QoQ + 40.3%
111
Q2 26 · $111 B · QoQ − 22.7%
109
Q3 26 · $109 B · QoQ − 1.6%
114
Q4 26 · $114 B · QoQ + 4.6% · YoY + 11.7%
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26
Q1 FY27 Company Guidance
- Revenue Growth (December Quarter)7% – 10%7%10%
Midpoint 8.5% · Market Expectation 6.8% ($153.54B) · Includes Supply ConstraintsIn Line ✓
- Services Revenue Growth8% – 9%8%9%
9.8% in Q4 · $30.01B a Year Ago1.3-Point Slowdown ▼
- Gross Margin45% – 46%45%46%45% – 46%
48.2% a Year Ago · Q4 Ex-Refund ~46.9% · Memory and Siri AI Costs2.7-Point Annual Contraction ▼
- Operating Expenses20.4 – 20.8 billion20.4 billion20.8 billion20.4 – 20.8 billion
18.38 a Year Ago · 19.19 in Q4Up 12.1% Annually ▲
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±23% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Americas$48.7 BShare 42.5%▲ 10.2% YoY
- Europe$32.0 BShare 28.0%▲ 11.5% YoY
- Greater China$17.5 BShare 15.3%▲ 21.0% YoY
- Rest of Asia Pacific$9.71 BShare 8.5%▲ 15.0% YoY
- Japan$6.54 BShare 5.7%▼ 1.4% YoY
Key Metrics
Mac Revenue
$10.8 B
▲ 23.7% YoYPress Release
IPad Revenue
$6.23 B
▼ 10.4% YoYPress Release
Wearables, Home and Accessories Revenue
$8.30 B
▼ 7.9% YoYPress Release
Net Income
$30.7 B
▲ 11.8% YoYPress Release
Operating Cash Flow
$28.0 B
Press Release
R&D Expense
$11.7 B
▲ 32.0% YoYPress Release
Shares are computed over the segment total: $114 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“One of the greatest testaments to that is the all-new iPhone Duo, the most transformational iPhone since the original. It's the Siri we've always wanted. And like everything we make, Siri AI is built with essential privacy protections so no one can access users' data, not even Apple.”
- IPhone Duo and Supply Constraints
- Siri AI and Privacy
- Memory Cost Pressure
Summary and Review
Summary
Apple reported fiscal fourth-quarter revenue of $114.48 billion. That is 11.7% growth and 1.0% above the market expectation, so the revenue gate is in line. Diluted EPS of $2.10 beat estimates by 6.1%, so the profit gate is open. About $0.05 of that came from tariff refunds. The December-quarter range given on the call is 7-10% growth. Its midpoint is about $156 billion, 1.6% above estimates, so the guidance gate is also in line.
The stock closed the regular session down 1.8% at $338.32. In the first hour after the release, the after-hours price was nearly flat. Selling picked up after the call, and the stock fell 2.8% to $328.85 around 6:00 p.m. ET. The market read this report not as a growth story but as a margin story. Apple guided December-quarter gross margin to 45-46%. That is about 2.7 points below 48.2% a year ago.
Our view is 58 points and a hold; two gates are in line and one is open. The product side is strong: iPhone set a September-quarter record, and Mac and Greater China accelerated. The caveats are clear too. Memory costs and Siri AI expenses are pulling margins down. Supply constraints on Mac and iPad will persist into the December quarter. The operating expense target implies 11-13% annual growth. These caveats put the score in the lower half of its band.
Full Review
iPhone carried the new product cycle.
iPhone revenue was $57.58 billion. Growth was 17.5%, a September-quarter record. iPhone alone brought in 50.3% of total revenue. During the quarter Apple introduced iPhone 18 Pro, iPhone 18 Pro Max and the new iPhone Duo. Mac revenue rose to $10.79 billion, up 23.7%. Total products revenue was $82.90 billion, up 12.5%. The weak link is tablets and accessories. iPad revenue fell 10.4% to $6.23 billion. Wearables, Home and Accessories declined 7.9% to $8.30 billion. Growth is concentrated in a few big products. iPhone and Mac together brought in $68.38 billion. A year ago these two lines totaled $57.75 billion, so growth was 18.4%. The remaining products fell about 9% combined.
Services hit a record but lagged products.
Services revenue reached an all-time high of $31.57 billion. Growth was 9.8%. That is below the 12.5% growth in products. As a result, services' share of total revenue slipped from 28.1% a year ago to 27.6%. Services is Apple's most profitable business, so this mix shift weighs on margins. The effect was small this quarter. Still, when the iPhone cycle cools, services will have to carry growth. Apple expects services to grow 8-9% in the December quarter. That range is about 1.3 points below the September quarter's 9.8%. Even so, services added $2.82 billion of revenue in the quarter. That is nearly double the $1.44 billion lost in iPad and accessories. Apple said its installed base of active devices hit a record in every major category. That base is the raw material of services revenue.
Separate the tariff refund from margins.
Gross margin was 47.9%. That is 0.7 points above 47.2% a year ago. However, the company said about 1 point of this margin came from tariff refunds. Excluding the refund, margin was around 46.9%. That is 0.3 points below the same quarter last year. The refund added $0.05 to EPS. The previous quarter also included a $0.11 refund. Net income was $30.71 billion, up 11.8%. R&D expense rose 32% to $11.73 billion. AI investment is starting to show up in expenses. Total operating expenses were $19.19 billion. On the call, CFO Kevan Parekh said margin excluding refunds fell about 1 point from the prior quarter. The main reason is memory costs. The December-quarter target is 45-46%, and it includes Siri AI infrastructure costs. The operating expense target is $20.4-20.8 billion, up 11-13% from a year ago.
Greater China is a growth region again.
Greater China revenue was $17.54 billion, up 21.0%. That is the fastest growth of the five regions. The Americas grew 10.2% to $48.68 billion. Europe grew 11.5% to $32.01 billion. Rest of Asia Pacific rose 15.0%. Japan slipped 1.4%. The jump in China suggests the iPhone cycle resonated most there. The full year tells the same story. Fiscal 2026 revenue rose 15.1% to $478.83 billion. Annual EPS rose from $7.46 to $8.98. Every region except Japan grew by double digits. The Americas and Europe together account for 70.5% of revenue. As those two markets grow steadily, the recovery in China acts as extra leverage. Whether that recovery lasts will become clear in the holiday quarter.
Watch the margin next quarter.
Apple generated $28 billion in operating cash flow in the quarter and returned $28 billion to shareholders. Of that, $24 billion went to buybacks. Before the call, this page set two measures. The first was the midpoint of the growth range; above 7% would show the iPhone cycle carrying into the holidays. The midpoint came in at 8.5%, so that condition was met. The second was the gross margin range, and it came in below 47%. The reader's new rule looks at one line: the December quarter's actual gross margin. Above 46% would mean memory pressure has been offset. Below 45% would mean margin pressure is becoming structural. For how buybacks lift EPS, see share buybacks.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- iPhone revenue rose 17.5% to $57.58 billion, a September-quarter record.
- Mac revenue grew 23.7%, the fastest-growing product category.
- Greater China revenue rose 21.0%, the fastest of the five regions.
- Services revenue reached an all-time high of $31.57 billion.
- The 7-10% December-quarter revenue range points to the highest quarterly revenue in the company's history.
Risks
5- The December-quarter gross margin target is 45-46%, about 2.7 points below 48.2% a year ago.
- According to the company, supply constraints on Mac and iPad will continue into the December quarter.
- About 1 point of gross margin and $0.05 of EPS came from one-time tariff refunds.
- iPad revenue fell 10.4%, and wearables and accessories fell 7.9%.
- R&D expense rose 32%, limiting the pace of profit growth.
What to Watch
2- November 16Payment of the $0.27 per-share dividend; record date November 12.
- Late January 2027Q1 FY27 results, the first full holiday season for iPhone Duo and the test of the 45-46% margin target.
Upcoming Earnings
To Understand This