Q4FY26 Apple Quarterly Earnings Call

CEO John Ternus opened his first earnings call as CEO by reporting September-quarter revenue of $114.5 billion, up 12% year over year, helping Apple deliver its best fiscal year ever for revenue and EPS. He highlighted a prolific launch period spanning the iPhone Duo, iPhone 18 Pro and Pro Max, touch-enabled MacBook Pro models, the OLED iPad Mini, Apple Watch health features, AirPods 5, HomeView, Apple TV 4K, HomePod Mini, and Siri AI. Apple’s active-device installed base exceeded 2.5 billion, while a Philippines Department of Education deal will deploy 170,000 MacBook NEOs.

iPhone revenue reached $57.6 billion, up 17%, with double-digit growth in the U.S. and Greater China, a September-quarter upgrader record worldwide, and Apple’s best fiscal year ever for iPhone upgraders. Ternus described the foldable iPhone Duo as a larger-display device designed to feel as natural as an iPad, saying early reviewer and customer response was strong but supply remained constrained. The iPhone 18 Pro models added variable aperture, photographic styles, A20 Pro, a vapor chamber, a dual 16-core neural engine, and the biggest battery-life increase ever on an iPhone. Mac revenue rose 24% to $10.8 billion, also constrained by supply.

Ternus said every current Mac is now a platform for AI, with Mac Mini and Mac Studio emphasizing local, private processing, while Siri AI uses screen awareness, personal context, and natural conversation under Apple’s privacy model. Siri AI launched in U.S. English in September and expanded to French, Japanese, Korean, Portuguese, and Spanish in October. Services revenue rose 10% to a record $31.6 billion, with records in video, cloud, payments, and advertising and a September record in music. Apple also cited more than 900 Apple TV wins, Apple Pay in over 90 markets, and new iCloud bundles including Apple TV and Apple Arcade.

CFO Kevin Parekh reported products revenue of $82.9 billion, company gross margin of 47.9%, products gross margin of 37.2%, services gross margin of 76%, operating expenses of $19.2 billion, net income of $30.7 billion, diluted EPS of $2.10, and operating cash flow of $28.1 billion. Tariff refunds contributed about one percentage point to company and product gross margin and $0.05 to EPS. iPad revenue fell 10% to $6.2 billion because of supply constraints and a difficult comparison with the prior year’s A16 iPad launch. Wearables, Home, and Accessories fell 8% to $8.3 billion against launches of Watch SE3 and AirPods Pro 3.

Apple said its services foundation continues to expand: transacting and paid accounts reached records, paid subscriptions exceeded 1.5 billion and grew double digits, and the App Store averaged nearly one billion weekly visitors. iCloud Plus plans now include Apple TV and Apple Arcade in more than 100 countries and regions, while Apple Maps ads are live in the U.S. and Canada. Parekh said services growth was pressured by foreign exchange, third-party licensing, mobile gaming weakness, App Store business-model changes, and U.S. court rules on link-out transactions. Apple expects 8%–9% services growth in the December quarter.

Parekh described expanding enterprise use of Apple hardware. Duke Health performed a hip-arthroscopy procedure using Apple Vision Pro and an FDA-authorized Stryker app. American Airlines is deploying more than 37,000 iPhone 17 devices for flight-attendant in-flight purchases using Tap to Pay, plus 25,000 iPads for pilots and mechanics. Gap is running loss-prevention AI entirely on Mac Mini across hundreds of stores, avoiding cloud token costs, while Christie’s uses local models on Mac Studio for workflows such as pricing estimates. Apple ended the quarter with $137 billion in cash and marketable securities, $80 billion in debt, and returned $28 billion to shareholders.

Apple expects December-quarter revenue to grow 7%–10% year over year, which Parekh said would make it the company’s best revenue quarter ever, despite constrained supply. Services are expected to grow 8%–9%, gross margin to be 45%–46%, operating expenses to reach $20.4–$20.8 billion, other income and expense to be about $300 million, and the tax rate to be about 17%. Executives said memory pricing is unprecedented and will be the main driver of sequential margin pressure. Apple has raised manufacturing purchase obligations by $33 billion since June and has increased product prices to offset some component inflation.

Asked whether consumer AI agents could displace the device as the primary customer relationship, Ternus argued that the iPhone remains the intelligent personal hub because it contains contacts, communications, health, and financial data that Siri can access privately—even Apple cannot access it. Siri is currently primarily request-based but uses a modern orchestrator-driven architecture that can expand toward more agentic capabilities. Parekh said server-side Siri AI costs will appear in services cost of sales, while Apple defers part of hardware revenue over a device’s life for bundled services. Usage limits on server-side features may eventually allow users to purchase expanded access.

Apple said the iPhone Duo remains supply constrained and that it cannot predict when supply and demand will balance. September constraints affected iPhone, Mac, and iPad; December constraints are expected mainly on Mac and iPad because memory demand exceeded expectations, while advanced-node constraints are easing as more products move to 2nm. Executives declined to comment on the omitted standard iPhone 18 or future roadmaps. Apple also said it no longer targets net-cash neutrality, instead evaluating cash and debt independently while investing what the business needs and returning excess cash. Greater China revenue rose 21% in the quarter and 28% for the fiscal year, which Apple attributed to strong products.