AAPL after its Q4 FY26 call
September-quarter sales beat our forecast by +1.6% and earnings per share beat it by +6.1%. After the call, the analysts trimmed earnings for the next two years because the company said memory prices keep rising beyond December.
The call, in brief
Takeaways
Quarterly revenue reached $114.5B, up 12% from a year earlier, a record for the September quarter.
Our revenue of $114.5 billion was up 12% year-over-year, a September quarter revenue record.
iPhone sales rose 17% to $57.6B even though supply was short.
iPhone revenue was $57.6 billion, up 17% year-over-year despite supply constraints.
Earnings per share were $2.10, up 14%, helped by $0.05 from refunded tariffs.
Diluted earnings per share was $2.10, up 14% year-over-year, and included $0.05 of favorable impact from tariff refunds.
Apple expects holiday-quarter revenue to grow 7% to 10%, held back by limited supply.
We expect our December quarter total company revenue to grow between 7% and 10% year-over-year, which reflects our best view of constrained supply.
Profit margin should slip to 45% to 46%, mainly because memory chips cost more.
We expect gross margin to be between 45% and 46%. This includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI.
What management stressed
- The new Siri assistant
Apple's rebuilt voice assistant launched in September and is spreading to more languages.
We launched Siri AI in beta for U.S. English users in September and expanded to French, Japanese, Korean, Portuguese, and Spanish in October.
- Foldable iPhone Duo
Early reviews of the first foldable iPhone are strong, and Apple is racing to make enough.
We've been thrilled with the early response from reviewers and customers, and we are working hard to get iPhone Duo into customers' hands as quickly as we can.
- Mac sales surge
Mac sales jumped 24% to $10.8B, despite shortages of parts.
Turning to Mac, revenue was $10.8 billion, up 24% from a year ago despite supply constraints.
- Services hit a record
Apps, streaming, cloud storage and payments brought in $31.6B, up 10%.
Services revenue was $31.6 billion, up 10% year-over-year.
- Soaring memory chip prices
Memory prices are rising at a pace Apple has never seen, squeezing profits and pushing prices up.
What we're seeing with memory pricing right now is unprecedented.
- Cash returned to shareholders
Apple paid out $28B through dividends and buying back its own stock.
During the quarter, we returned $28 billion to shareholders.
What analysts asked
- New Siri and digital assistants4 questions
Siri will gain more abilities over time with privacy first; server costs are still too early to judge.
We just want to make sure that users are aware of what they're giving access to.
- Memory costs and profit margin4 questions
Most of the expected margin drop comes from pricier memory, partly offset by price rises and stockpiled parts.
We expect most of that decline to be driven by higher memory costs.
- Services and iCloud growth3 questions
Services should grow 8% to 9% next quarter; managers are upbeat on the long run and on iCloud plans.
we expect services growth to be between 8% to 9%
- Shortages and iPhone Duo supply3 questions
iPhone Duo is short of supply, and Mac and iPad will stay short in the holiday quarter because of memory.
And for the December quarter, we expect constraints on Mac and iPad, primarily driven by memory, as demand has been higher than what we expected.
- Higher prices and affordability2 questions
Too soon to judge buyer reaction to price rises; payment plans help keep devices affordable.
it's early to really read price elasticity at this point in time.
- Future product lineup2 questions
Apple would not discuss future products, including a standard iPhone 18 or merging Mac and iPhone software.
So obviously we don't make any comments about future roadmap, but we're excited about where we're at.
- Cash policy and spending2 questions
Apple dropped its old cash target but still invests what it needs, mostly in research, and returns the rest.
we're going to invest everything we need to invest in our business and return excess cash to shareholders.
- Growth in Greater China1 question
China sales rose 21% in the quarter, which Apple credits to its products.
Revenue was up 21% during the September quarter, which was a quarterly record.
Each line quotes the release or the call. The call's text is our machine transcription of the company's webcast.
What changed after the call
| Number | Before | After | Why |
|---|---|---|---|
| Q1 FY27 sales | $156.7B | $156.0B−0.4% | Analysts settled near the middle of the company's holiday outlook, which already reflects constrained supply.We expect our December quarter total company revenue to grow between 7% and 10% year-over-year, which reflects our best view of constrained supply. |
| Q1 FY27 diluted EPS | $2.99 | $2.90−3.0% | The company guided holiday gross margin lower, mainly on memory costs and Siri AI cloud costs.We expect gross margin to be between 45% and 46%. This includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI. |
| Q2 FY27 sales | — | $120.6B | New: the quarter after the next report. |
| Q2 FY27 diluted EPS | — | $1.97 | New: the quarter after the next report. |
| FY2027 sales | $510.0B | $512.0B+0.4% | September sales beat forecasts, and Mac and iPad demand ran above the company's own plans.And for the December quarter, we expect constraints on Mac and iPad, primarily driven by memory, as demand has been higher than what we expected. |
| FY2027 diluted EPS | $8.98 | $8.75−2.6% | Memory prices keep rising beyond December while the benefit of cheaper carry-in inventory fades.And looking beyond the December quarter, we see the pricing for memory purchases continuing to increase. As we said before, we do believe we'll see a decreasing benefit from the carry-in inventory on memory over time. |
| FY2028 sales | $550.0B | $544.0B−1.1% | Analysts let Greater China growth cool after a very strong year, trimming later sales.And taking a step back, Greater China was up 28% for the full year. |
| FY2028 diluted EPS | $10.10 | $9.69−4.1% | Unprecedented memory pricing slows the margin recovery the analysts had expected.What we're seeing with memory pricing right now is unprecedented. |
| FY2029 sales | — | $577.0B | New. |
| FY2029 diluted EPS | — | $10.68 | New. |
Before is our forecast made before the release: the middle forecast of 7 analysts, cutoff 2026-11-02 07:27:21 ET. After is the middle forecast of the 7 new forecasts. Each why is the editor's line, with the quote that shows it.
FY2028 sales, each analyst
| Analyst | Before | After | Change |
|---|---|---|---|
| Analyst F | $545.0B | $540.6B | −0.8% |
| Analyst G | $550.0B | $563.0B | +2.4% |
| Analyst C | $548.0B | $548.6B | +0.1% |
| Analyst A | $533.2B | $541.5B | +1.6% |
| Analyst E | $540.0B | $544.0B | +0.7% |
| Analyst B | $555.0B | $560.0B | +0.9% |
| Analyst D | — | $542.0B | — |
The outlook, rolled forward one quarter
The outlook page is written again from the new forecasts, with every part of the page before; it is also the next preview.
Our record
| Quarter | Our forecast | Outlook | Reported | Our miss |
|---|---|---|---|---|
| Q4 FY26 sales | $112.7B | — | $114.5B | +1.6% |
| Q4 FY26 diluted EPS | $1.98 | — | $2.10 | +6.1% |
The forecast made before the release becomes one graded row: our miss is what was reported against our forecast, − when our forecast was too high. The record grows by one row a quarter.