Apple revenue rises 12% to $114.5 billion as margin expected to fall
Key Facts
Apple posted revenue of $114.5 billion in the fiscal fourth quarter ended September 26, 2026, up 12% year over year, according to results announced by the company. Net income was $30.71 billion, or $2.10 per share, for the July-to-September period. The results were the first earnings report led by CEO John Ternus, who took the role on September 1, 2026. The figures topped analysts’ average estimates of $113.4 billion in revenue and $1.99 per share. But guidance for the next quarter pointed to expected margin pressure despite growth in sales and earnings.
Revenue rose from $102.5 billion in the year-earlier quarter to $114.5 billion, according to Associated Press data, matching the 12% annual growth rate reported by Apple. Net income climbed from $27.47 billion to $30.71 billion. Earnings per share increased from $1.85 to $2.10 over the same period. Analysts’ estimates cited by Associated Press were $113.4 billion in revenue and $1.99 per share. Actual results exceeded both estimates, while LSEG’s average forecast before the announcement pointed to revenue of $113.39 billion, growth of about 11%, and net income of $29.04 billion.
CEO John Ternus said the quarter set a September revenue record, with iPhone sales reaching a record for the quarter and services revenue hitting an all-time high. Before the results, analysts had expected services revenue to grow about 10% to $31.56 billion, its slowest pace in more than 3 years. For iPhone, analysts had forecast sales to rise about 15% to $56.54 billion, compared with growth of about 22% in the prior three months. The results included only 9 days of sales of the new iPhone 18 Pro models. These comparisons put services growth and phone sales in different contexts: an expected slowdown in services growth and expected slower iPhone sales growth than in the previous period.
Gross margin was 47.9% in the fiscal fourth quarter, but Apple expects it to fall to a range of 45% to 46% in the December quarter, according to Associated Press. The company attributed the expected decline mainly to higher memory costs and expenses related to the Siri AI launch. This guidance does not include a forecast for revenue growth of 7% to 10% in the December quarter; the metric cited in the coverage is the gross margin range. In the quarter ended September, diluted earnings per share of $2.10 included a positive impact of $0.05 from tariff refunds. Those refunds also contributed about one percentage point to gross margin, according to Apple’s statement. This means the comparison between the two quarters’ margins includes a favorable effect in September, alongside the memory costs and launch expenses expected to weigh on the December quarter.
Apple said fiscal 2026 revenue reached a record $479 billion, while operating cash flow was $28 billion in the fiscal fourth quarter. The company said the year ended with record annual revenue and double-digit growth in earnings per share. For the quarter, operating cash flow of $28 billion came alongside revenue of $114.5 billion and net income of $30.71 billion. The annual figures provide context for the September result: quarterly revenue grew year over year, and annual revenue reached a new record. Tariff refunds added five cents to quarterly earnings per share and supported gross margin by about one percentage point, according to the company’s disclosure.
Apple shares fell 1.8% in regular trading on November 2, closing at $338.32, according to Associated Press. During the earnings call that day, the stock fell 2.6% to $329.60. EL7 data shows a November 2 close of $338.32. The move came after results beat estimates for revenue and earnings per share, alongside the company’s forecast of a lower gross margin range in the December quarter. The margin guidance links the coming period’s pressure to higher memory costs and expenses related to the Siri AI launch.
Ternus became CEO on September 1, 2026, after Apple announced in April that he would succeed Tim Cook, who moved to the role of executive chairman. The company announced its results on November 2 and scheduled the results call to begin at 2:00 p.m. Pacific Time that day. Apple made a replay of the call available for about two weeks after it ended. The call followed Ternus’s first quarterly results since taking the role. The results combined a beat on analysts’ estimates with an expected decline in gross margin in the December quarter, which ends amid higher memory costs and expenses related to the Siri AI launch.