Apple today announced financial results for the fourth fiscal quarter of 2026, which corresponds to the third calendar quarter of the year. The quarter included a number of August and September product releases from Apple, as well as the CEO transition from Tim Cook to John Ternus that took place on September 1.
For the quarter, Apple posted revenue of $114.5 billion and net quarterly profit of $30.7 billion, or $2.10 per diluted share, compared to revenue of $102.5 billion and net quarterly profit of $27.5 billion, or $1.85 per diluted share, in the year-ago quarter.
Gross margin for the most recent quarter was 47.9 percent, compared to 47.2 percent in the year-ago quarter. Apple also declared a quarterly dividend payment of $0.27 per share, payable on November 16 to shareholders of record as of November 12.
Apple set September quarter records for total revenue, iPhone revenue, and earnings per share, and an all-time record for Services revenue.
For the full fiscal year, Apple recorded $478.8 billion in sales and $132.2 billion in net income, compared to previous record highs of $416.2 billion in sales and $112.0 billion in net income set in fiscal 2025.
"Today, Apple is proud to report a September quarter revenue record of $114.5 billion, up 12 percent from a year ago, with iPhone reaching a September quarter record and Services reaching an all-time high, capping off our best fiscal year ever," said John Ternus, Apple's CEO. "We're closing the year with our most ambitious lineup yet. That includes the iPhone Duo, the most transformational iPhone since the original, alongside iPhone 18 Pro and iPhone 18 Pro Max, our most powerful iPhones yet. We also just introduced a whole new generation of hardware for the home and brought Touch to Mac for the first time. Together with the all-new Siri AI, it's an incredible lineup to carry us into the holiday season."
Apple will provide live streaming of its fiscal Q4 2026 financial results conference call at 2:00 pm Pacific, and MacRumors will update this story with coverage of the conference call highlights.
Conference call recap ahead...
1:39 pm: Apple's share price is down about a quarter of a percentage point in after-hours trading following the earnings release, after dropping 1.8% in regular trading today.
1:40 pm: "Apple delivered September quarter records for net income and EPS. Our record September quarter capped off a strong fiscal 2026, with all-time record revenue of $479 billion and double-digit EPS growth," said Kevan Parekh, Apple's CFO. "We generated $28 billion in operating cash flow during the quarter, allowing us to return $28 billion to shareholders. Thanks to our very high levels of customer satisfaction and loyalty, our installed base of active devices reached a new all-time high across all major product categories and geographic segments."
1:42 pm: Year-over-year revenue change by product segment: Mac up 23.7%, iPhone up 17.5%, Services up 9.8%, Wearables down 7.9%, and iPad down 10.4%.
1:44 pm: Revenue performance by geographic segment: Greater China up 21.0%, Rest of Asia Pacific up 15.0%, Europe up 11.5%, Americas up 10.2%, and Japan down 1.4%.
1:58 pm: Apple's quarterly earnings call with analysts will begin momentarily. Expected on the call are Apple CEO John Ternus and CFO Kevan Parekh.
2:00 pm: The call is beginning.
2:02 pm: We're starting with the standard notices about forward-looking statements from investor relations head Suhasini Chandramouli. "Apple assumes no obligation to update any forward-looking statements, which speak only as of the date they are made."
2:02 pm: John: "Hello, everyone, and thanks for joining us. It's a privilege to be with you for the first time as Apple CEO. I'm honored to represent our teams and the work they do every day."
2:03 pm: "Today, Apple is pleased to report $114.5 billion in revenue, up 12% from a year ago, and a September quarter record. These results helped Apple achieve its best ever fiscal year for revenue and EPS."
2:04 pm: He's going over recent launches, including the iPhone 18 Pro and Duo, as well as the touch MacBook Pro, new iMac and iPad Mini, and new Apple Watch and AirPods models, and the new smart home products.
2:05 pm: "I'm feeling great about the opportunities ahead for Apple, from our product roadmap and broad range of services to promising areas like health, emerging markets, enterprise, and education. As one example, we recently secured our biggest education deal ever for Mac with the Department of Education in the Philippines. They're going to deploy 170,000 MacBook Neos to teachers and staff."
2:06 pm: "Apple is the greatest company in the world, we've assembled an extraordinary collection of talent: the best engineers, designers, developers, and experts in every corner of our business, from our supply chain to our stores. Every day, we bring the right people together with the best ideas to build products and services that change lives. Guided by a foundational set of values and a belief that the best technology should make a better world. We do that by making products that are powerful and intuitive and meet Apple's uncompromising standards for quality, performance, design, and durability. That's the Apple experience customers love."
2:06 pm: "Apple Services amplify the experience of every device, helping people work, play, listen, watch, and stay connected to the world around them. I'm delighted with where our services business is today and where it's going. And with an installed base of more than 2.5 billion active devices, I'm looking forward to expanding our offerings and improving the lives of users around the world."
2:07 pm: "We see tremendous opportunity in AI as well. Siri AI marks a new chapter in AI at Apple. It is a completely reimagined assistant that is powerful, personal, private, and deeply relevant to our users' daily lives. Siri AI picks up what's relevant to our users, understands what's on their screen, and holds a natural conversation, all to help them with the things they do every day. It's the Siri we've always wanted."
2:07 pm: "We are very pleased with the reviews and feedback we've received, and we're so excited that more and more users are getting to experience it."
2:07 pm: "Then there's Mac, which is having an AI moment all its own. Mac is what brought me to Apple, and through the years, it has opened a world of possibilities. More than 40 years after the first Mac, the category is having its biggest moment yet."
2:08 pm: "From Mac to iPhone to iPad, we are proud that our products are the best platforms in the industry for AI, for both first-party and third-party applications, and we're excited about the opportunities that creates. Ultimately, everything we do at Apple is for our users."
2:08 pm: "We had an excellent quarter at Apple. In addition to September quarter and fiscal year records in total company revenue, iPhone set a September quarter revenue record, capping its best fiscal year ever."
2:09 pm: "Services achieved an all-time record during the quarter to close out our best year ever there too. We grew in the vast majority of markets we track, setting September quarter records in the Americas, Europe, Greater China, and the rest of Asia Pacific. We also set September quarter revenue records in both developed and emerging markets. In addition to an all-time record in India."
2:09 pm: "iPhone revenue was $57.6 billion for the September quarter, up 17% from a year ago, despite supply constraints and foreign exchange headwinds, we grew strong double digits in the U.S. and Greater China to achieve September quarter revenue records. We also set a September quarter record for upgraders worldwide, as well as in the U.S., China Mainland, and India, helping to deliver our best fiscal year ever for upgraders globally."
2:10 pm: He's back to touting the strong response to the iPhone 18 Pro and Duo.
2:12 pm: "Turning to Mac, revenue was $10.8 billion, up 24% from a year ago, despite supply constraints. We had double-digit growth in the majority of markets we track, and particularly strong performance in our emerging markets, where we set a September quarter revenue record. We also set a September quarter record for customers new to the Mac. According to IDC, we gained share globally during the quarter and for the full fiscal year, and we have never sold more Macs in a fiscal year than we did this time, which is a truly remarkable testament to these incredible products."
2:12 pm: He's again going over the recent Mac announcements.
2:13 pm: "Now turning to iPad, where revenue was $6.2 billion for the September quarter." Then he began talking about the new iPad mini, without elaborating on iPad's numbers.
2:13 pm: "In Wearables, Home, and Accessories, revenue was $8.3 billion for the September quarter." He then went into talking about the new products that were recently launched.
2:15 pm: "Services revenue was $31.6 billion, up 10% from a year ago, and an all-time record. We saw double-digit growth in the majority of markets that we track, and we set all-time revenue records in the Americas and Europe, as well as the September quarter record in the rest of Asia Pacific."
2:16 pm: "Turning to Apple Pay, we recently launched in India with Access Bank, bringing a seamless, safe, and secure way to pay in one of the biggest markets in the world. Today, Apple Pay is available in over 90 markets, giving customers around the world peace of mind built into every transaction."
2:17 pm: "People love Apple products and services for the countless ways they make life easier, more enjoyable, and just plain better. They also count on Apple to create technology responsibly, built the right way, not the easy way."
2:18 pm: "We're also pleased to be doing more and more manufacturing in the United States through our American Manufacturing Program. We're deepening partnerships with suppliers across the country... Nearly 100 components in our newest iPhones come from American companies in more than a dozen states. All told, Apple supports more than 450,000 American jobs with 1000s of suppliers and partners across all 50 states."
2:18 pm: "I am proud of what we've accomplished this quarter, and I'm excited for what's ahead. ahead. We have everything we need to be extraordinarily successful, and with this team, this vision, this mission, and these values, I have no doubt that we will."
2:18 pm: We're switching to Kevan now for more details into the numbers.
2:19 pm: "Our revenue of $114.5 billion was up 12% year over year, a September quarter revenue record. This strong performance was despite sequential foreign exchange headwinds of nearly two percentage points, as well as supply constraints on iPhone, Mac, and iPad."
2:19 pm: "Products revenue was $82.9 billion, up 12 percent year over year, driven by strong double-digit growth on iPhone and Mac. Our install base of over two and a half billion active devices has reached another all-time high across all major product categories and geographic segments."
2:20 pm: "Services revenue was $31.6 billion, up 10 percent year over year. We saw strong performance in many services categories, with all-time records in video, cloud services, payment services, and advertising, and a September quarter record in music."
2:20 pm: "Company gross margin was 47.9%, and products gross margin was 37.2%. These both included a benefit from tariff refunds, which had a favorable impact of approximately one percentage point in the September quarter. When you remove the tariff refunds from both the June and September quarter, both company and products gross margin would be down about one point sequentially, primarily driven by higher memory costs. As of the September quarter, we have received the vast majority of the refunds related to tariffs paid. Services gross margin was 76%, up 40 basis points sequentially."
2:21 pm: "Operating expenses came in at $19.2 billion, up 21% year over year as we continued to make investments in R and D. Net income was $37 billion. Diluted earnings per share was $2.10, up 14% year over year, and included five cents of favorable impact from tariff refunds. Both net income and EPS set September quarter records, even when excluding the tariff refund benefit. Operating cash flow was also very strong at $28.1 billion."
2:21 pm: "This performance marked our best fiscal year yet, with $478.8 billion in revenue, up 15% year over year, and a fiscal year record for EPS of $8.98, up 20% year over year."
2:22 pm: "iPhone revenue was $57.6 billion, up 17 percent year over year, despite supply constraints. We grew double digits in the majority of markets we track, and we also reached September quarter revenue records across both developed and emerging markets. As John mentioned, it was a record year for the total company, and we also had our best year ever for iPhone, both worldwide and in every geographic segment. The iPhone active install base grew to an all-time high, and iPhone had a record year for upgraders globally and in several markets, including the U.S., China mainland, India, and Japan. According to a recent survey from World Panel, iPhone was a top-selling model in the U.S., urban China, India, the UK, Germany, Australia, and Japan."
2:23 pm: "Mac revenue was $10.8 billion, up 24% year over year, despite supply constraints. This performance was driven by the strength of the MacBook Neo and MacBook Pro. We saw double-digit growth in both developed and emerging markets, with all-time records in markets like India and Southeast Asia. Emerging markets continued to see strong performance on Mac, resulting in Mac's best fiscal year there, driven by record upgraders and customers new to the Mac."
2:23 pm: "iPad revenue was $6.2 billion, down 10% year over year, driven by the supply constraints I mentioned earlier, as well as a continued difficult compare against the launch of the A16-powered iPad in the prior year. The iPad install base reached an all-time high during the quarter, and over half of the customers who purchase an iPad were new to the product."
2:23 pm: "Wearables, Home and Accessories revenue was $8.3 billion, down 8% year-over-year as we face a difficult compare against the launch of the Watch SE 3 and the AirPods Pro 3 in the prior year. The wearables install base reached a new all-time high in over half of customers who bought an Apple Watch in the quarter were new to the product."
2:24 pm: "Services revenue set an all-time record of $31.6 billion, up 10%. year over year, despite over one and a half points of sequential FX headwinds. We set all-time revenue records in the majority of markets we track, including several emerging markets like Latin America and India. We are optimistic about the long-term future of our services business, with our large install base of over two and a half billion active devices, we have an incredibly strong foundation for growth opportunities."
2:24 pm: "Our services continue to attract more customers, and both transacting and paid accounts reached new all-time highs in the quarter. We also have over one and a half billion paid subscriptions, which grew double digits during the quarter, reaching an all-time high."
2:26 pm: "Let's turn to our cash position and capital return program. We ended the quarter with $137 billion in cash and marketable securities and $80 billion in total debt. During the quarter, we returned $28 billion to shareholders. This included $3.9 billion in dividends and equivalents, and $24 billion in share repurchases."
2:26 pm: "We expect our December quarter total company revenue to grow between seven and 10% year over year, which reflects. which reflects our best view of constrained supply. We expect this to be the best quarter for revenue in the history of the company."
2:27 pm: "We expect services revenue to grow between eight and 9% year over year in the December quarter. This contemplates sequential headwinds, primarily driven by third-party licensing and foreign exchange. 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."
2:27 pm: "We expect operating expenses to be between $20.4 billion and $20.8 billion. We expect OINE to be around $300 million, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 17 percent."
2:28 pm: John is introducing Apple COO Sabih Khan. "Many of you know Sabih from his work with worldwide operations and supply chain, leading many important functions at Apple, including manufacturing, AppleCare, environmental efforts, and supplier partnerships around the world. Sabih and his team are the reason we're able to build and deliver products at a scale and a and of a caliber unlike anyone else out there. I've asked Sabih to join Kevin and me on these calls as we take your questions."
2:29 pm: Q: On the iPhone 18, the standard model was left out of the September lineup. I was just wondering if you could share some of the reasons why, whether there were some supply constraints and component-related things that led to that decision, or if it had to do with the launch of the Duo, any color there would be helpful.
A: We were thrilled to introduce the iPhone Duo and 18 Pro earlier this year in September, and we have iPhone 17, iPhone Air, and 17e continuing to kind of round out this incredibly strong lineup for the holidays. So obviously, we don't make any comments about future roadmap, but we're excited about where we're at.
2:31 pm: Q: My second question is just around iCloud+. It seems like it's becoming a more strategic product, just given the tie-in with home security as well as the potential monetization opportunity for Apple Intelligence. So I was just wondering, what are you seeing on iCloud Plus? Are there any tailwinds in terms of attach rates? You know, just particularly given the the rising cost for increased storage options on iPhone and the company's push into home products.
A: I think you know we just in the September quarter had an all-time record for our cloud services for revenue, and you know you mentioned iCloud Plus. This is something we're very excited about. We have these iCloud Plus plans that now include Apple TV and Apple Arcade in more than 100 countries and regions where we think we can really reach you know new potential subscribers, and then as you mentioned, you know we think there's good opportunities on Apple Intelligence. You know there's going to be some usage limits on features that rely on server-side models, which include Siri AI and intelligent photo editing, some other things like that, and so anyone who needs greater capacity will be able to purchase expanded access in the future. So kind of to your point, in the beginning, iCloud tiers are largely about storage, but we've been you know adding more capabilities and features to it.
2:32 pm: Q: As the world of AI evolves from chatbots to consumer agents, it seems like there are growing opportunities for Apple. It also seems like there are risks. And John, I'd just love to get your perspective on what role you want Apple in Siri AI to play in kind of this consumer agentic AI landscape, and just how you look at any potential risks of some of these agents trying to encroach in your services.
A: First and foremost we're incredibly excited to launch Siri AI alongside you know the the latest generation of Apple Intelligence features. Siri has long been popular with our users with more than two and a half billion requests every day, and with Siri AI we really have the kind of the Siri that we we always wanted. You know it's primarily request-based today, but as we talked about at WWDC, it's built on a modern orchestrator-driven architecture that gives us real room to expand its capabilities over time. As far as agentic capabilities, you know, we think these are promising tools for users. We just want to make sure that users are aware of what they're giving access to. We want to make sure this is done in a way that protects security and privacy. So, you know, we're pushing really hard on on that with Siri AI, but we're also really encouraged the fact that Apple devices we think are the best places to use all forms of AI.
2:35 pm: Q: How should we think about the durability of services growth. Just you know, I realized that was 10% in the September quarter. We're a little bit below that in the December quarter. You know, as certain things like search evolves and regulatory changes impact app store monetization, are there new services that we should be looking towards that you believe can become a more sizable offset to maybe take some pressure off these historically important revenue streams?
A: We talked about during the September quarter, services grew by 10% year over year, and we look at that relative to the June quarter. You know, foreign exchange was the main driver in that change on year-on-year growth rate sequentially, you know we saw we continue to see strong performance in September in many of our service categories: all-time records in video, cloud services, payment services, and advertising, including our first-party Apple ads, and September quarter record in music. But I think it's important to kind of step back also and look at the progression of what we've seen in our services business over the last several quarters, I think it's an important backdrop, and so we spoke about in the last call. You know, we expected foreign exchange to be the largest driver of the change in the year-on-year growth rate from the March to September quarter. This ended up being a significant headwind of about four percentage points, and we expect additional sequential headwind of about another half of a percentage point for the services business as we go into the December quarter. We've also seen some factors that impacted the performance of the App Store. And during the September quarter, the performance on the App Store was similar to the prior year, and we had a record number of paid subscriptions with double-digit growth for third-party apps on the App Store. At the same time, we did see some headwinds in mobile gaming that we've talked about before, and expect to see those continue into the December quarter. And keep in mind, we also made some changes to the App Store business model in certain countries, and in the U.S. we continue to operate under a court ruling impacting the link out transactions.
As we move ahead, we expect services growth to to be between 8 to 9%, as I mentioned in the prepared remarks in the December quarter. And this outlook contemplates our best estimates on sequential headwinds, primarily from you know third-party licensing and the additional half percentage point of foreign exchange I just mentioned.
I think you know fundamentally we feel really good about the long-term opportunity that we have in our services business. You know we see continued growth in the install base of over 2.5 billion active devices, which is fundamentally the foundation for future growth, as more customers are able to experience our products and services. You know, example of this during the September quarter, App Store saw a record number of nearly a billion average weekly visitors, and we saw growth in the number of users who are paying for at least one service, reaching an all-time high. Another good example of this in India, we recently launched Apple Pay with Access Bank, bringing you know the seamless, safe, secure way to pay to one of the biggest markets in the world, and then on top of all this, as we talked about, we think you know intelligence is going to be another opportunity as well. So overall, we're feeling really good about about where we're headed in the long term.
2:37 pm: Q: You sort of described the iPhone as an intelligent personal hub in your opening comments, and you know, as personal AI agents become more prominent, do you see the potential for the primary customer relationship to shift from the device to the agent over time? And really, given Apple's integration of you know silicon hardware and software, where do you see the greatest opportunity to combine things like personal context and on-screen awareness into an agent that that can perhaps move beyond answering questions? And how far along do you think Siri is in bringing those pieces together right now?
A: We really do think of the the iPhone as the intelligent personal hub. I mean, if you think about it, so much of your personal data is on your iPhone. You know, whether it's your your contacts, your communications, health data, financial data, all of that, and Siri can tap into that and help you access it in a way that's very secure and private, and and that nobody else has access to. Even Apple doesn't have access to it, and so we think that is a a core kind of differentiator that that we're excited about, and we're going to continue to to push on that. And so I think this is an area that we feel really really good about.
2:40 pm: Q: The December quarter gross margin. I'm wondering if you'd spend a bit of time on that. I think if I exclude all the tariff refunds, you started implying gross margin would be down about 140 basis points sequentially, at least. Can you separate how much of this is maybe commodity memory inflation versus mix versus you called out Siri AI RAM costs as well? Can you just talk about what the different moving parts are as you think about the sequential.
A: We talked about a gross margin you know outlook between 45 and 46%. As you said, when you remove the benefit of the tariff free funds in September, the midpoint of the ranges it declined sequentially in the magnitude you mentioned. We expect most of that decline to be driven by higher memory costs.
Let me give you an overall view on memory. What we're seeing with memory pricing right now is is unprecedented, and as we said earlier in the September quarter, we did see higher memory costs as compared to the June quarter, which were partly offset by the benefit of carrying inventory and lower costs on certain non-memory components. Now, for the December quarter, we expect even higher memory costs, partly offset by a few factors. So, as you know, we changed the price on many of our products, including Mac and iPad, at the end of June and iPhone in September, and these price increases provided some offset. We also expect to see some benefit from carry-in inventory in the December quarter as well, as well as lower costs on certain non-memory components. 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.
And there's one more thing I wanted to add. As we work to improve supply, our manufacturing purchase obligations have increased by $33 billion from June to the September quarter, which you'll see in our annual filing when it comes out tomorrow.
As we continue to roll out Siri AI to more customers, the associated cloud costs will be recognized through services cost to sales. And consistent with how we've always accounted for Map, Siri, and iCloud for the devices we sell that include these bundled services, we defer a portion of the revenue and recognize it over the life of the device. So, our hardware deferrals as of the December quarter will reflect the addition of Siri AI. Both of these items will have an impact to the gross margin. But as always, we you know we look to continue to make the investments necessary to support the business, and we also see a you know wide range of ways that AI can contribute to revenue growth over time. So on the product side, you know we feel AI offers a compelling reason for customers to upgrade and switch in order to get the latest capabilities, and we also feel those opportunities across third-party apps and partnerships as well as first-party opportunities, as John highlighted earlier, with the expanded access to you know server-side features of Siri AI and Apple intelligence features as well.
2:42 pm: Q: I wanted to ask you about your cash neutral policy. On one of the previous calls, you guys said that you weren't going to focus on that anymore, and that that that was not no longer the policy. What do you how under your leadership? What do you mean by that? Do you do you mean like you may go to net debt to buy back stock or do some M and A or go go the opposite way and hoard some cash again? Your thoughts on that would be welcome.
A: We did talk about the fact that we we're no longer using net cash neutral as a target. I think as we we explained on the last call or the last time we talked about that was the fact that we think it makes sense to evaluate our cash and debt position independently, and making sure we can optimize that and giving us the right flexibility. We remain committed to our capital allocation philosophy, which is we're going to invest everything we need to put in, you know, invest in our business and return excess cash to shareholders. And so we continue to maintain that discipline, and we do think this removal of net cash neutral just gives us flexibility to optimize so we can make the right investments with the company.
2:43 pm: Q: I realize you only guide one quarter at a time, but you know, from the 8 to 9%, when you think long term, I was wondering if you're willing to say you think whether it can accelerate from there and and whether AI could help you launch new services we haven't thought of yet that are accretive to the growth rate there.
A: I think you heard John talk about a lot of the long-term attributes that really you know feel give us optimism about the long-term opportunity in our services business. Again, we talked about things like the install base of over two and a half billion active devices. You know, we obviously saw you know a record number of weekly visitors in the App Store in September quarter. We also continue to see growth in users who are paying for at least a service, reaching all-time high in both, you know, transacting and paid accounts. We're excited about emerging markets. We talked about the launch of Apple Pay in India, but we continue to see good momentum in emerging markets in our services business, where we had double-digit growth. And so, we continue to feel really bullish about, you know, all the different elements as we as we look at the longer arc of time. And I think, as John mentioned, we are continuing to improve the features and reach of existing and new services as well. You know the example was the expansion of iCloud plans to include Apple TV and Arcade, obviously reaching you know you know a lot of new potential subscribers. AppleCare One Families another example of that. And so you know we continue to look for opportunities you know to grow our services business.
2:45 pm: Q: You're now competing for memory more so versus historically from pretty well capitalized companies who are signing long term agreements. So my question is: Is Apple changing anything in the way that you are procuring memory? How do you think about the progression of memory over time, and if it continues to be a headwind, is pricing also going to remain dynamic and potentially move higher?
A: We have worked with many of our suppliers for decades, and we deeply value their partnership over the years. We know our products would simply not be possible without them, and we look forward to continuing our work together. We're always working hard to improve supply, and as John said earlier, we our manufacturing purchase obligations have increased by $33 billion from the June to the September quarter.
We're trying to manage through this with a number of actions. You were just talking about the fact we're continuing to pursue lower costs and non-memory components. John mentioned the fact that we have some benefit of care in inventory, and you know we did reluctantly make the decision to change pricing on a number of our products, right? Starting with the iPad and Mac in the June timeframe, and then iPhone more recently in September. I think what we try to do is evaluate and doing all that we evaluate the unit's revenue and margin, and we're really being thoughtful and deliberate at evaluating kind of the short term and long term considerations. And we really believe we're balancing this well.
2:46 pm: Q: It's the early days of launching this, can you give us some sense of how the token consumption associated with Siri AI is being done on-device versus private cloud compute versus GCP? And have you started to see any acceleration of usage? And if it does accelerate really fast globally, would it change your outlook on what you need to spend for compute?
A: We do envision, you know, Siri AI to kind of, you know, have queries that kind of are managed on device and also in the private cloud compute environment that we've outlined. The mix of that is still very early days, and so it's hard to predict exactly what the mix of those costs are going to look like. Obviously, on device, you know, it's very very efficient, no real costs associated with that. But on on the server side, you know, we would have some inference costs, and that's really the connection of the Siri AI related costs that I mentioned that would be you know recognized with services cost to sales. But I think again, we've just recently launched it and made it available to more users. And so in very very early stages of understanding the kind of mix of those costs, as well as any you know further requirements we might have on the compute side.
2:48 pm: Q: On the duo, can I just ask, in terms of maybe your thoughts in terms of or learnings from the launch of the duo and the demand that you've seen on that front, and what are the sort of supply chain related issues that you're facing right now that you probably need to iron out if you're trying to meet
demand on that front? Any more visibility there in one when you reach supply demand balance?
A: We're thrilled with the initial response on the iPhone Duo. iPhone Duo is constrained as of today. The ramp is going well, and we're working hard to get this revolutionary new product into the hands of our customers as quickly as possible. But at this time, it's really hard to predict when supply and demand will be in balance.
2:49 pm: Q: You have mentioned supply chain constraints impacting September quarter and going into December, but any way to sort of help us think about whether those are getting overall for the company, are those increasing in terms of magnitude relative to serve the impact on revenue? And if you are willing to sort of quantify those impacts for September and December?
A: During the September quarter, we experienced supply constraints on iPhone, Mac, and iPad, and this was driven by the high levels of demand. And as we've said before, we're seeing less flexibility in the supply chain than normal. The Q4 constraints were primarily driven by the availability of the advanced nodes our SOCs are produced on, but as we've transitioned more of our line up to the latest two nanometer technology nodes, constraints on advanced nodes are easing.
For the December quarter, we expect constraints on Mac and iPad, primarily driven by memory, as demand has been higher than what we expected.
2:50 pm: Q: I understand the memory price inflation. Kevin, it seems like it's probably like one to one and a half or two percentage points. Is this true and is there a availability issue with memory? Are you signing LTAs with memory suppliers so that availability not not an issue, even though pricing could still be an issue down the road?
A: So as we said earlier, you know we are continuing to work to improve supply, and and you'll see that our manufacturing purchase obligations have increased by $33 billion from the June to the September quarter.
2:51 pm: Q: Any comments on the margin impact to think about going forward?
A: So when we look at the the margin change from the June quarter to the September quarter, and you remove the impact of the tariffs from both the June quarter and September quarter. We saw about a one-point sequential change in margin, and that was driven entirely by memory impacts. Now we did have some offsets because the gross memory impact was larger than that, but we had some offsets that John talked about earlier, driven by you know the benefit of care and inventory, some offsets from non-memory costs, as well as you know some of the benefits of pricing, and so as as we talked about, we expect the you know the memory costs to continue to you know be a challenge for us as we look in the December quarter, and our guide contemplates that right now. If you look at the the midpoint, most of this central decline we're expecting for the December quarter we expect to be driven by higher memory costs.
2:52 pm: Q: It seems like consumer AI agent space is seeing increasing competition with several app-based options. I'm just wondering, you know, when you look at the agent capability of Siri built into the OS class platform versus AI agents that are confined within an app architecture. How do you see that evolving?
A: Siri right now is primarily request-based, and as we talked about before, it is built on a modern orchestrator-driven architecture. So we see you know opportunity to expand its capabilities over time. We think fundamentally, you know what's most important to us is that we're giving people these capabilities that are private and secure, and we're really focused on protecting people's data.
2:53 pm: Q: Can you help us understand sort of the difference or maybe the delta of quantity versus price across sort of the product lineup? Because it certainly looks like you know you're looking at double digit growth across the iPhone and the Mac business, and we all know I think in the industry that there's been pretty strong price inflation across the PC Mac ecosystem and. And you guys mentioned that you've reluctantly taken price as well. So can you help us understand kind of what's the driving dynamics in that market?
A: We don't normally provide that level of detail or color as we look at the outlook, other than to say, again, we we did guide to the 7 to 10% year on year, and again, just as a reminder, that is on top of a phenomenal December quarter last year, where revenue grew 16%. And so, you know, we don't provide the level of detail, but I would say it's early to really read price elasticity at this point in time. You know, the iPad and Mac were constrained since you know kind of we made those adjustments, and again, we just recently. recently just adjusted the price on iPhone, so it's really early to really assess any elasticity impact at this stage.
2:54 pm: Q: Going back to the investment cycle, whether it's agentic, Siri-related, you know, it looks like you guys had you're coming off of a year of you know very aggressive investments in R & D to you know to fund the business going forward and to grow the business. You know, if I just think about kind of the commentary on Q1 of fiscal 27, certainly sounds like that spending is moderating a little bit. Can you maybe walk through some of the puts and takes in terms of what's driving that moderation in spend across the operating line items?
A: Here we don't break out you know, detail on our outlook, but but I would you know reiterate the fact that for the December quarter, we do expect OpEx to grow between 11 and 13 percent year over year, which is driven by increased you know and continued investment in R&D, in particular AI. This growth rate is coming down, as you alluded from the levels of growth we had in FY '26. But you know, as we said before, we continue to significantly increase our overall investments in AI while continue to invest. in the product roadmap, and you know our December guide is a continued reflection of that. We feel confident that we're in spending what we need to spend to achieve our roadmap.
2:56 pm: Q: Your latest MacBook Pros included more iOS features like Touch and Dynamic Island, as well as obviously Siri AI. Should we anticipate further close linking of macOS and iOS features? Maybe even pointing at some point to a single unified OS, either for simplicity or to reduce costs?
A: We are very proud of both the Mac and the iPad, and and I think what you've seen over the years is we've really enjoyed the ability to bring features and capabilities across the ecosystem and and create you know really compelling features that span you know things between handoff between iPhone and Mac and iPad. And so when we when we design the product, we're looking at how can we make the best version of each and every product. And if you look at what we just did last week with the MacBook Pro, we took a huge leap forward. These these MacBook Pros are better in every way than the the ones that came before them, and we're really proud of that. And so we don't we don't have any fundamentally different changes that we're planning right now. Nor would we talk about it anyway.
2:57 pm: Q: We saw two years of declines in China sales, and then this year, Apple obviously grew a very healthy 28% in FY 26. Can you talk through to what you attribute that recovery, and whether you think Greater China can sustain these sort of elevated levels of growth, which are really leading the company regionally now?
A: Let me give you some color on China. We were very pleased with the performance in Greater China. Right, revenue was up 21% during the September quarter, which was a quarterly record. The performance was primarily driven by iPhone, where we set a September quarter record, and by Mac, where we saw very strong double-digit growth. And taking a step back, Greater China was up 28% for the full year. You know, Tim and Sabih were just in China meeting with customers and developers and partners, and it has been wonderful to see the customer reaction to our latest lineup of products, including iPhone Duo. Our installed base of active devices has reached an all-time high, and we had a record year for iPhone upgraders in mainland China. According to a survey from World Panel, iPhone models were the top three selling smartphones in urban China, and we think we gained share on iPhone and Mac.
A couple other really compelling things on Mac. We had a record year for both upgraders and customers new to the product, and according to Counterpoint, MacBook Air and MacBook Neo were the top two selling laptop models, and Mac Mini was the top selling desktop model in the September quarter. So I guess to answer your question, we think the success comes from having really great products.
2:59 pm: Q: I'm interested in your thoughts with higher device prices. How you think about the environment around affordability programs and the importance to to volumes with respect to trade-ins, subsidies, and other options. And you know what Apple can do to encourage more of that independently of funding it yourself?
A: When we're building products and then when we're pricing them, we're always focused on you know building the best products and services in the world and delivering incredible value to our customers. Obviously, as we talked about, you know, these these memory prices are unprecedented, and so that has put pressure on our prices. But it's been great to see the success of the products, and you know, we have been investing in programs like the Apple Upgrade Program, which is a great way to help affordability, and so. And so these afford affordability programs are definitely an important important factor.
2:59 pm: The call is complete.
