Apple earnings: September 2026 quarter

The quarter in brief

Apple's sales rose about 12% on a year ago to $114.5 billion in the three months to September, a record for a September quarter.¹ The iPhone led, the Mac grew faster still, and Greater China was the region that grew quickest.¹

Profit grew, but more slowly than sales. Operating profit rose about 10% to $35.6 billion.¹ Net income, the profit after everything, one-offs included, rose about 12% to $30.7 billion.¹

Earnings per share, net income divided by the number of shares, rose 14% to $2.10.¹ That is faster than net income because there are fewer Apple shares than a year ago, after the company spent $86.4 billion over the year buying back its own stock.¹

Cash was plentiful. Over the full year the business brought in $145.1 billion from its operations. After $9.0 billion spent on buildings and equipment, about $136.1 billion of free cash flow was left, meaning the cash remaining after running the business and investing in it.¹

The figures, as the company printed them

Against what analysts expected

Earnings per share came in at $2.10, against an average forecast of $1.98 from seven analysts.² Of that $2.10, $0.05 came from the tariff refunds.¹ Even with that one-off set aside, the figure would still have been above what the analysts had forecast. So the result does not depend on the refund to come out ahead.¹²

What the company expects

Apple gave no figures for the next quarter or the coming year. There was no range for sales, no growth rate, and nothing on its margin or its spending.¹ Its previous results gave none either.³ That means nothing can be described as raised, cut or kept, because there was no earlier number to move.

The only look ahead is a general remark from the chief executive: he expects the new product lineup to carry the company into the holiday season.¹

For that view to hold, the products launched in the autumn have to keep selling through the busiest shopping months of the year. With the iPhone about half of all sales, its sales over those months matter most.

The strong points

Services, which cover things like the App Store, iCloud storage and subscriptions, reached an all-time high, growing about 10% to $31.6 billion.¹ The growth was also broad: every region except Japan sold more than a year ago, so the rise did not rest on a single market.¹ The Americas, the biggest region, grew about 10%, Europe about 11.5% and the rest of Asia Pacific about 15%.¹ For a company of Apple's size, growth that widespread is not routine.

iPhone sales rose about 17.5% to $57.6 billion, and Mac sales rose about 24% to $10.8 billion, the fastest of any product line.¹ The iPhone matters most because it brings in about half of all Apple's sales, so a strong iPhone quarter lifts everything else. Our figures do not show how much of the rise came from selling more phones and how much from higher prices.

Greater China was the fastest-growing region, with sales up about 21% on a year ago.¹ Over the full year it grew faster still, by about 28%.¹ That matters because China is a fiercely competitive smartphone market, with strong local rivals. Growth at this pace there suggests Apple's products found buyers where Apple has to fight hardest for them.

The weak points

Gross margin is what is left of each dollar of sales after the direct cost of making the products. It was 47.9%, but about one percentage point of that came from refunds of tariffs, the duties charged on imported goods.¹ Without them, gross margin would have been below last year's level of about 47.2%.¹ So what looks like an improvement would, stripped of the one-off, have been a slight fall. For a company that sells a lot of hardware, this measure shows whether its products are getting more or less costly to make relative to their price.

Spending on research and development jumped about 32% to $11.7 billion, far faster than sales, which rose about 12%, and total operating costs rose about 21%.¹ As a result, operating profit, the profit from running the business before interest and tax, rose only about 10%, to $35.6 billion.¹ When costs grow faster than sales, each extra dollar of sales adds less profit, which is why profit trailed a record sales figure.

Two product lines sold less than a year ago. iPad sales fell about 10% to $6.2 billion, and the wearables, home and accessories line, which includes the Apple Watch and AirPods, fell about 8% to $8.3 billion.¹ These were the only lines to shrink. Their fall shows that the record quarter rested on the iPhone, the Mac and services, while other hardware went backwards.

What to watch

The open question is whether iPhone demand, especially in Greater China, holds through the holiday season, or whether this quarter's jump was a rush of buyers in the weeks after launch.

Two signals will show which, well before Apple reports again. The first is the monthly figures on smartphone shipments in China. A launch rush fades within a few months, while lasting demand keeps showing up in shipments month after month.

The second is how long buyers have to wait for the new iPhones. Long waits that persist past the launch weeks suggest demand is still running ahead of supply. Waits that shrink quickly suggest the early buyers have been served and demand is settling.

Apple's own inventories are worth keeping in view alongside these. They more than doubled over the year, from $5.7 billion to $14.5 billion.¹ Goods on hand clear quickly if sales hold, and linger if they do not.

Decisions on tariffs also matter. Refunds flattered this quarter's gross margin, so any change in the duties Apple pays on imported products is a risk to that margin from here.¹ The next results will then be a check on whether these trends held.

Our verdict on the quarter

In all, a strong report. Profit per share came in above what analysts expected, and sales reached a record for a September quarter, led by the iPhone, the Mac and Greater China. The blemishes were costs running ahead of sales and a gross margin that owed its rise to a one-off, which leaves the underlying business sound but its profit growth less impressive than its sales growth.

Notes

1. Apple's results release, 2 November 2026: sec.gov. ↩
2. Nasdaq's earnings calendar, 2 November 2026. ↩
3. Apple's previous results release, 30 July 2026: sec.gov. ↩