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Apple reported Q4 earnings of $114.48 billion, beating analyst estimates despite facing supply constraints and rising memory costs due to AI development.
Apple reported fourth-quarter earnings on Monday that exceeded Wall Street expectations on both the top and bottom lines. The company reported revenue of $114.48 billion and earnings per share (EPS) of $2.10. This surpassed Bloomberg analyst consensus estimates, which had projected revenue of $113.46 billion and EPS of $2.
Apple's iPhone sales reached $57.58 billion, exceeding the estimate of $56.48 billion. However, revenue from Greater China was $17.54 billion, falling short of the $18.75 billion projection. Apple stated it saw "strong sales out of Greater China coming from the iPhone and Mac," noting that Greater China revenue was up 28% year-over-year.
Other segment results included:
Apple CFO Kevan Parekh stated that the company ended the quarter with $137 billion in cash and marketable securities and $80 billion in total debt. He also noted that the company achieved record September quarter results for net income and EPS, contributing to an all-time record revenue of $479 billion for fiscal 2026.
Apple is facing challenges regarding component availability. The company expects to see supply constraints on the Mac and iPad in the December quarter due to higher than expected demand for memory. Additionally, COO Sabih Khan stated that Apple saw supply constraints for the iPhone, Mac, and iPad related to the availability of advanced processing nodes. Khan noted it is difficult to predict when supply and demand for the iPhone Duo will be in balance.
CEO John Ternus addressed the rising costs of components, stating, "What we are seeing with memory pricing right now is unprecedented," attributing the increase to the AI build-out. Ternus expects even higher memory costs for the December quarter, which may be partly offset by product pricing and carry-in inventory.
Regarding the development of AI, Ternus stated that AI agents are "promising tools for users," but emphasized that Apple wants to ensure users are aware of what they are granting access to, saying, "We want to make sure this is done in a way that protects security and privacy."
Looking ahead to the December quarter, CFO Kevan Parekh expects total revenue to grow between 7% and 10% year-over-year. He expects it to be the "best quarter ever for the company." Parekh projected gross margins will be between 45% and 46%, citing higher memory costs associated with the ramp of Siri AI. Operating expenses are expected to be between $20.4 billion and $20.8 billion.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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