Apple (AAPL) Q4 2026 earnings: revenue beats, memory costs cut margin guidance

Apple (AAPL) reported fiscal 2026 fourth-quarter results for the period ended September 26, 2026, in an 8-K press release and earnings call on November 2, 2026. Revenue beat the company's guidance, but Apple guided December-quarter gross margin sharply lower because of memory cost inflation [1][2]. Earlier research on Apple focused on three questions: whether revenue could hold guidance while chip supply was constrained, whether gross margin could hold as memory prices rose and tariff refunds faded, and whether the Services slowdown came from currency or from App Store regulation. September-quarter revenue grew 11.7%, above the 9% to 11% range Apple gave in July [1][3]. Apple then guided December-quarter gross margin down to 45% to 46%, mainly because of memory costs, and attributed the Services slowdown mainly to currency [2]. Taken together, the results confirm revenue growth, while profit conversion weakens from the next quarter and cash generation is not yet a constraint.

Apple designs and sells iPhone, Mac, iPad, and wearables, home and accessories products to consumers, businesses and education customers. Hardware generates about 70% of revenue. The rest comes from Services such as the App Store, advertising, cloud and payments, where gross margin is about 76%, far above the product business [1][2].

Memory costs begin to compress Apple's gross margin

Memory costs already reduced gross margin on a net basis in the September quarter, and the pressure grows in the December quarter. Company gross margin was 47.9%, including a benefit of about 1 percentage point from tariff refunds, and products gross margin was 37.2% [1][2]. Management said that, excluding refunds, company and products gross margin each fell about 1 point sequentially, driven entirely by memory, with price increases and lower costs elsewhere offsetting only part of the impact. Apple said it has received the vast majority of its tariff refunds [2].

Apple's December-quarter gross margin guidance is below the prior-year level. The company guided gross margin to 45% to 46%, compared with 48.2% a year earlier, and said the decline comes mainly from memory costs, plus cloud costs and hardware revenue deferrals tied to the Siri AI rollout [2][4]. Management called memory pricing "unprecedented" and said prices keep rising beyond the December quarter [2]. The annual report also states that Apple expects memory supply-demand imbalances to intensify and that price increases may not fully offset them and may reduce demand [5].

Lower gross margin weakens how much revenue growth reaches operating profit. September-quarter operating expenses were $19.19 billion, up 20.6% year over year, and operating margin was 31.1%, below 31.6% a year earlier [1]. Apple guided December-quarter operating expenses to $20.4 billion to $20.8 billion. Applying the midpoints of Apple's guidance implies operating income of about $50.4 billion, roughly flat with $50.852 billion a year earlier [2][4]. The earlier view that product mix and price increases could absorb memory inflation no longer holds.

Revenue beat guidance despite supply constraints

Supply limits delayed demand rather than cutting September-quarter revenue. Net sales were $114.477 billion. iPhone revenue was $57.583 billion, up 17.5%; Mac revenue was $10.792 billion, up 23.7%; iPad revenue was $6.229 billion, down 10.4%; and Greater China revenue rose 21.0% [1]. The currency headwind was about 0.5 point smaller than Apple indicated in July, and revenue growth would still have exceeded 11% without that difference [2][3].

The supply constraint is shifting from chips to memory. Management said advanced-node chip constraints are easing as more products move to 2-nanometer technology, while Mac and iPad will be constrained mainly by memory in the December quarter, and the timing of supply-demand balance for iPhone Duo is unclear [2]. Manufacturing purchase obligations rose from $57.0 billion at the end of June to $89.7 billion [5]. Apple guided December-quarter revenue growth of 7% to 10%, a range that reflects constrained supply, against a prior-year base of $143.756 billion [2][4]. Price increases also lifted revenue, but their contribution cannot be quantified.

Services slowdown came mainly from currency

Services growth slowed. September-quarter Services revenue was $31.573 billion, up 9.8%, with gross margin of about 76.0% [1]. Management attributed about 4 points of the growth slowdown to currency; advertising, cloud and payments set records, but App Store revenue was flat with the prior year [2]. Apple guided December-quarter Services growth of 8% to 9%, including a new third-party licensing headwind, and said Siri AI inference costs will be recorded in Services cost of sales [2].

Conclusion

These results confirm Apple's growth engine and weaken its profit conversion. Demand exceeded supply, and the main product lines and Greater China grew at double-digit rates despite constraints [1]. Memory inflation now both compresses gross margin and limits Mac and iPad shipments, so revenue growth and profit growth are starting to diverge [2]. Fiscal 2026 operating cash flow was $145.097 billion, up 30%, which more than covered $86.390 billion of share repurchases, so cash is not yet a constraint [1]. The next tests are whether December-quarter gross margin holds at 45%, whether March-quarter margin keeps falling, and whether demand weakens after price increases. Apple has not disclosed the dollar cost of memory or of Siri AI.

Sources

[1] AAPL 8-K filed 2026-11-02 · Q4 FY2026 press release, 2026-11-02, Apple 8-K earnings press release (Exhibit 99.1), https://www.sec.gov/Archives/edgar/data/320193/000032019326000024/a8-kex991q4202609262026.htm

[2] AAPL Q4 FY2026 earnings call 2026-11-02, 2026-11-02, Apple earnings call (Drillr transcript)

[3] AAPL Q3 FY2026 earnings call 2026-07-30 · September-quarter guidance, 2026-07-30, Apple earnings call (Drillr transcript)

[4] AAPL 10-Q filed 2026-01-30 · Q1 FY2026 net sales by category and gross margin, 2026-01-30, Apple Form 10-Q

[5] AAPL 10-K filed 2026-11-03 · MD&A, 2026-11-03, Apple Form 10-K, https://www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm