Apple Posts Record $114.5 Billion Quarter in John Ternus’ First Report as CEO

Apple posted a record $114.5 billion in revenue for its fiscal fourth quarter, topping Wall Street forecasts in the first earnings report since John Ternus succeeded Tim Cook as chief executive.

Revenue rose 12% for the quarter ended Sept. 26, and diluted earnings climbed 14% to $2.10 a share, the company said Monday. The results included both a September-quarter iPhone record and an all-time high for services.

Tariff refunds helped. Apple said they added 5 cents to per-share earnings and about 1 percentage point to its 47.9% gross margin.

“Today, Apple is proud to report a September quarter revenue record of $114.5 billion, up 12 percent from a year ago, with iPhone reaching a September quarter record and Services reaching an all-time high, capping off our best fiscal year ever,” Ternus said in a statement.

Chief Financial Officer Kevan Parekh said fiscal 2026 revenue reached a record $479 billion. “We generated $28 billion in operating cash flow during the quarter, allowing us to return $28 billion to shareholders,” he said.

The board declared a dividend of 27 cents a share, payable Nov. 16 to shareholders of record as of Nov. 12.

Net income rose to $30.7 billion from $27.5 billion a year earlier, when revenue was $102.5 billion, MacRumors noted. Ternus took over from Cook on Sept. 1.

Analysts surveyed by LSEG had expected $113.39 billion in revenue, CNBC reported. iPhone sales came in at $57.58 billion, ahead of the $56.54 billion forecast, even though the quarter included only eight days of iPhone 18 Pro sales.

Mac revenue jumped nearly 24% to $10.79 billion, well above estimates. iPad sales fell more than 10% to about $6.2 billion, and the wearables, home and accessories category dropped nearly 8% to $8.3 billion.

Services revenue of $31.57 billion grew less than 10%, the slowest pace since 2022. Sales in Greater China rose 21% to $17.53 billion.

Price Hikes and Memory Costs

Apple raised prices in June, including $100 on iPhones. Ternus said the company did so “reluctantly” as component costs climbed.

“We saw higher memory costs as compared to the June quarter, and that was partly offset by the benefit of carrying inventory and lower costs on non-memory components,” he told CNBC.

Apple also kept a lid on spending. Capital expenditures were $2.24 billion, well below the $3.33 billion analysts expected, at a time when rival tech giants are pouring money into artificial intelligence.

Apple shares slipped about 2% in Monday’s regular session and were little changed after hours. Apple and Nvidia are running neck and neck as the world’s most valuable companies, at about $4.91 trillion each.

“I think at this point, with everything we’ve achieved, it just feels like we’ve never been more confident that the best is yet to come,” Ternus said.

Not every analyst is convinced. Barclays, which rates the stock underweight, said it would “remain cautious on the stock given iPhone uncertainties this cycle, limited monetization of AI, and renewed fears on the App Store.”

Others see Apple’s restraint as a strength. “Once criticized for its lack of AI spending, Apple is now being rewarded for its restraint,” Jay Woods of Freedom Capital Markets told Axios. The stock is up about 25% this year.

“There’s nothing broken in this quarter, but there wasn’t enough here to move the story forward either,” said Jake Behan of Direxion.

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