Despite raising prices on multiple popular devices, Apple reported record September-quarter revenue and earnings per share Monday, driven by strong iPhone and Mac sales in the first earnings report under new CEO John Ternus.
Revenue jumped a better-than-expected 12% from a year earlier to $114.5 billion, while earnings per share rose 14% to $2.10, both topping Wall Street estimates. The results capped Apple’s best fiscal year ever, with revenue rising 15% to $478.8 billion.
The three months ended in September included just eight days of iPhone 18 Pro sales. Ternus said Apple was “thrilled with the customer response” to the new lineup, even as questions linger over whether the iPhone 18 can match the success of its predecessor. Analysts at JPMorgan, Wedbush and Evercore have pointed to the iPhone 17’s exceptionally strong upgrade cycle, setting a difficult comparison for this year’s models. iPhone revenue nevertheless grew 17% to $57.6 billion in the September quarter.
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Meanwhile, Apple’s first foldable iPhone, the Duo, remains in short supply, with delivery estimates on some orders stretching into 2027 and customers reporting difficulty finding the device in stores.
“The Duo is constrained as of today,” Ternus said in an interview. “The ramp is going well, and we’re working really hard to get it into customers’ hands as quickly as possible.” He said Apple could not yet predict when supply would catch up with demand.
Ternus, who succeeded Tim Cook on Sept. 1, said the stronger-than-expected September-quarter results came despite “supply constraints and FX headwinds.” The quarter was his first earnings report at the helm of the company.
One of the biggest challenges is surging memory-chip prices, driven in part by the AI buildout. Some flash-memory prices have climbed more than 500% from 2023 levels, according to a Wall Street Journal report. Ternus described the disruption as “absolutely unprecedented.” Yet Apple’s gross margin, a closely watched measure of profitability, came in broadly in line with expectations at 47.9%.
“As we said earlier in the September quarter, we did see higher memory costs compared to the June quarter,” Ternus said. He said carry-in inventory and lower prices for certain non-memory components provided some relief. “We changed the price on many of our products, including Mac and iPad at the end of June and iPhone in September,” he said, adding that the increases helped offset higher costs.
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But the AI boom is not just increasing Apple’s costs. Ternus also attributed stronger demand for Mac computers to what he described as the Mac’s “AI moment.” Mac revenue surged 24% to $10.8 billion in the September quarter, powered by the MacBook Neo and MacBook Pro despite significant supply constraints.
“We have never sold more Macs in a fiscal year than we did in fiscal ’26,” he said, marking an all-time record for annual unit sales.
Apple has also launched its new iPhone 18 Pro lineup alongside a revamped, AI-powered Siri.
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“We’re super happy with the initial reviews, but we’re also seeing a lot of exciting advancements more broadly in the space,” Ternus said. “And we think our products are the best platform for AI.” He said Apple’s users make more than 2.5 billion Siri requests a day.
Apple has outperformed other members of the Magnificent Seven this year, including Microsoft and Nvidia, adding more than $1 trillion in market value since July. Investors have embraced Apple’s relatively restrained approach to AI spending: unlike some Silicon Valley rivals, it has declined to pour hundreds of billions of dollars into building AI data centers. The stock is trading at a historically elevated valuation, around 35 times expected earnings.
Apple also benefited from tariff refunds, which boosted gross margin by approximately one percentage point and added about 5 cents to quarterly earnings per share.
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Since taking over, Ternus has presided over an unusually busy run of product introductions, including Apple’s push into smart-home products and accessories such as connected locks and doorbells, as well as its first touch-enabled MacBook Pro.
Greater China revenue rose 21% to more than $17.5 billion, a September-quarter record, although sales in the region fell short of analysts’ estimates. Ternus said iPhone revenue in Greater China also reached a September-quarter record, while Mac sales in the region posted strong double-digit growth.
Before becoming CEO, Ternus led Apple’s hardware engineering group. He joined the company in 2001 and has spent more than two decades there.
Apple first closed above $5 trillion in market capitalization on Oct. 14, becoming only the second company to reach the milestone after Nvidia. It briefly overtook Nvidia again at the end of last week to reclaim the title of the world’s most valuable publicly traded company.
