Apple Q4 2026 Earnings: Record iPhone Sales, but Memory Costs Squeeze the Outlook
Apple reported record September-quarter results on Monday, November 2, then warned that surging memory costs will weigh on its holiday-quarter profit margin. It was John Ternus’s first earnings call as CEO, MacRumors notes, after he took over from Tim Cook on September 1.
The stock fell on the news. Quartz reports that shares dropped about 4% in premarket trading on Tuesday.
The Headline Numbers
For the quarter ended September 26, Apple’s filing with the US Securities and Exchange Commission shows revenue of $114.5 billion, up 12% from a year earlier. Gross margin was 47.9%, including a benefit of about one percentage point from tariff refunds. Net income was $30.7 billion, or $2.10 per share, up from $1.85.
iPhone revenue reached $57.6 billion, up 17% and a September-quarter record, despite supply constraints. Services hit an all-time high of $31.6 billion. For the full fiscal year, revenue was a record $478.8 billion, up 15%.
Revenue and earnings per share both beat analysts’ forecasts of $113.39 billion and $1.99, according to Quartz, citing The Next Web.
Where Apple Fell Short
Not every line grew. MacRumors reports that iPad revenue fell to $6.2 billion from $7 billion, which Apple blamed on supply constraints and a tough comparison with last year’s iPad launch. Wearables, Home and Accessories revenue was $8.3 billion, down 8%.
Mac revenue rose to $10.8 billion from $8.7 billion, and Greater China revenue grew 21% to a quarterly record. Apple says it now has more than 2.5 billion active devices.
The Memory Cost Warning
The outlook worried investors. Apple expects December-quarter revenue to grow 7% to 10%, which would be its best quarter ever. But it forecast a gross margin of 45% to 46%, which Quartz says is below the 46.3% analysts expected. At the midpoint, that would be Apple’s weakest margin since the fiscal fourth quarter of 2023.
Ternus called the memory situation unprecedented and said Apple expects even higher memory costs in the December quarter. He said the price increases Apple has made on Macs, iPads and iPhones offset part of the cost. Apple also expects memory prices to keep rising beyond December, and it expects Mac and iPad constraints because demand has been higher than expected.
Apple’s margin guidance also reflects the cost of ramping Siri AI, according to MacRumors.
iPhone Duo Shortages
After the report, Ternus told Reuters that Apple cannot meet demand for the iPhone Duo, and there is no timeline for supply and demand to balance. COO Sabih Khan said it is hard to predict when they will be in balance. Ternus also acknowledged display issues and said a very small percentage of units have been returned, according to MacRumors.
For background on the phone, see our guide to everything Apple announced in September. Our report on the change of Apple CEO covers the leadership shift.
Siri AI and Your iCloud Plan
Ternus repeated that Apple plans to add usage limits for server-side AI features such as Siri AI and photo editing. Users who need more will be able to buy extra access through iCloud+. Apple has not published pricing or limits yet.
CFO Kevan Parekh said it is very early days for judging how much of the work will happen on-device and how much in the cloud. On-device processing is very efficient, he said, while the server side carries inference costs. Read our report on iOS 27 extensions and Siri for more on where Siri is heading.
What It Means for Buyers
This section is our own view, not part of the reporting, and it is not investment advice.
Apple has already raised prices on several products this year, and its own forecast points to more cost pressure. If you plan to buy a Mac or iPad, expect tight supply and limited discounts. If you want an iPhone Duo, expect a wait.
Check Apple’s current prices and delivery times before you order, and compare them with trade-in offers from your carrier.
