Apple Inc. Q1 FY2026 earnings call

• Tim Cook emphasized the best-ever quarter with $143.8 billion revenue, strong iPhone demand (23% growth), services setting an all-time revenue record (14% growth), and an installed base over 2.5 billion active devices. - Kevan Parekh detailed revenue categories, noting products revenue $113.7 billion up 16% y/y, services revenue $30 billion up 14% y/y, gross margin 48.2%, operating expenses $18.4 billion up 19% y/y, and net income and EPS at all-time records. - Highlights included AI collaboration with Google for future Apple intelligence features, strong retail performance in India with new store openings, and enterprise adoption of Apple devices by companies like Snowflake, AstraZeneca, and Copel.

Product segments: iPhone revenue was $85.3 billion, up 23% year over year, setting an all-time record. Mac revenue was $8.4 billion, down 7% year over year. iPad revenue was $8.6 billion, up 6% year over year. Wearables, home, and accessories revenue was $11.5 billion, down 2% year over year. Services revenue was $30 billion, up 14% year over year. Installed base of active devices surpassed 2.5 billion.

• Expected March quarter total company revenue to grow 13% to 16% year over year. - Gross margin expected to be between 48-49%. - Operating expenses expected to be between $18.4 billion and $18.7 billion. - Tax rate expected to be around 17.5%. - Board declared a cash dividend of $0.26 per share payable on 02/12/2026.

• Constraints in advanced node supply for SoCs affecting iPhone supply, with difficulty predicting when supply and demand will balance. - Memory pricing expected to have a more significant impact on Q2 gross margin, with market pricing for memory increasing significantly.

Q: Impact of memory on gross margin and supply constraints for iPhone A: Tim Cook said iPhone demand was staggering, leading to lean channel inventory, supply chase mode, constraints from advanced node availability, and memory having minimal impact on Q1 gross margin but expected to affect Q2, with market memory pricing increasing significantly.

Q: China strength in revenue A: Timothy D. Cook said Greater China was up 38% y/y, driven by iPhone 17 lineup, strong store traffic, all-time high installed base, and record upgraders and switchers.

Q: AI revenue upside and monetization A: Timothy D. Cook said AI brings value and opportunities across products and services, collaborating with Google for future Apple intelligence features but didn't detail specific revenue upside timeline.

Q: March quarter comps and services advertising A: Kevan Parekh said no particular comp issue noted for March quarter, and services advertising had strong performance with new ad slots in App Store and plans to expand opportunities.

Q: Google partnership details and memory pricing lever A: Timothy D. Cook discussed collaboration with Google on Apple foundational models but didn't share partnership details, and wouldn't speculate on memory pricing as a lever.

Q: Smartphone market demand and memory impact A: Timothy D. Cook mentioned supply constraints due to advanced node capacity and market demand gain for iPhone, but wouldn't predict future smartphone market reaction or memory LTA details.

Q: Services App Store growth and memory pricing lever A: Kevan Parekh reiterated broad-based services growth, and Timothy D. Cook wouldn't speculate on memory pricing as a lever.

Q: Google partnership impact on Apple private cloud and CapEx A: Kevan Parekh said hard to draw conclusions on CapEx from collaboration, and Apple has a hybrid CapEx model. - Q: India market traction and internal silicon impact A: Timothy D. Cook and Kevan Parekh highlighted strong growth in India with new store openings, high new customer adoption, and internal silicon as a game-changer for products and gross margin.

Q: AI deployment and active device AI capability A: Timothy D. Cook said both edge and cloud AI are important, and Kevan Parekh said they don't provide specific number of AI-capable active devices but it's a growing number.