Apple posted US$114.5 billion in quarterly revenue but warned memory and Siri AI costs will squeeze holiday margins
Record September-quarter iPhone sales gave new CEO John Ternus a strong first earnings report, but Apple expects holiday margins to fall
CUPERTINO, Calif. — TECH BUSINESS – Apple reported fiscal fourth-quarter revenue of US$114.5 billion, up 12 per cent from a year earlier, as iPhone and services sales helped the company exceed analysts’ expectations.
Net income for the quarter ended Sept. 26 reached US$30.71 billion, compared with US$27.47 billion a year earlier. Diluted earnings were US$2.10 per share, including five cents attributed to tariff refunds.
The results were Apple’s first under CEO John Ternus, who took over in September.
iPhone and Mac lead product growth
Quarterly iPhone revenue rose to US$57.58 billion from US$49.03 billion. Mac revenue increased to US$10.79 billion from US$8.73 billion, while services revenue climbed to a record US$31.57 billion.
This is revenue recorded before the release of the iPhone Duo which sold out in its initial order cycle. Consumers ordering online are now expecting delivery in early 2027.
Not every category advanced. iPad revenue fell to US$6.23 billion from US$6.95 billion, while wearables, home and accessories revenue declined to US$8.3 billion from US$9.01 billion.
Apple reported US$478.83 billion in revenue for the full fiscal year, up from US$416.16 billion. Annual research and development spending climbed sharply to US$45.77 billion from US$34.55 billion.
The Americas segment, which includes Canada, generated US$48.68 billion during the quarter. Apple does not publish separate Canadian sales figures.
Holiday-quarter pressure
Apple said its 47.9 per cent fourth-quarter gross margin benefited by roughly one percentage point from tariff refunds. Management expects that margin to decline to between 45 and 46 per cent in the December quarter, primarily because of higher memory prices and costs associated with Siri AI.
That forecast provides an important counterweight to the record revenue. More expensive memory can affect both Apple’s margins and the retail pricing or specifications of future devices.
Apple’s new M6 Macs and touch-screen MacBook Pro models reach stores Friday. Their reception will provide an early test of demand for the company’s expanded holiday lineup and its effort to make AI capabilities a larger part of the Mac upgrade cycle.
Sources: Apple’s earnings release; Apple’s consolidated financial statements
