QUICK TAKE | Seven Things to Know About Apple’s Record Sales and Profit-Margin Warning

1. Why is Apple in the news?

Apple reported September-quarter revenue of $114.5 billion, up 12%, and earnings per share of $2.10, up 14%. The FY26 fourth-quarter results were its first under CEO John Ternus. Both revenue and earnings beat Wall Street expectations, but the outlook unsettled investors.

2. What powered the sales performance?

The iPhone remained the largest business, generating $57.6 billion, up 17% from a year earlier. Services reached a record $31.6 billion, while Mac revenue rose 24% to $10.8 billion. The picture varied across products: iPad revenue fell 10%, and Wearables, Home and Accessories declined 8%.

3. Why did the shares fall?

Investors focused on the next quarter. Apple forecast a December-quarter gross margin of 45–46%, below September’s 47.9%. Shares fell as much as 4% during the earnings call before recovering some ground. The reaction showed that beating quarterly forecasts did not settle concerns about future profitability.

4. What is squeezing margins?

Apple expects higher memory-chip costs to account for most of the sequential decline, with additional costs from expanding Siri AI. Gross margin measures revenue left after the direct cost of sales, before operating expenses. More expensive components can reduce that share even when revenue grows.

5. Have higher prices solved the problem?

They have provided a partial cushion. Apple increased prices across several products, including Macs, iPads and iPhones. Older inventory and savings on other components also helped. Ternus said memory prices were still rising, while the benefit of previously purchased inventory would diminish over time.

6. Did tariff refunds flatter the results?

Yes. Refunds added approximately one percentage point to September’s gross margin and five cents to earnings per share. Removing those benefits gives an adjusted margin of roughly 46.9% and EPS of $2.05. Apple nevertheless said net income and EPS remained September-quarter records without the refunds.

7. Where does India fit?

Apple reported an all-time revenue record in India, alongside records for Mac and Services. India also delivered a September-quarter record for iPhone upgraders. That strengthens the country’s place in Apple’s growth story, while component inflation remains a global challenge for the company’s pricing and margins.