01—Abstract
Summary
Summary of the 10-Q filed January 30, 2026. Cited figures are marked; the original filing is the authoritative source.
Apple Inc. reported strong financial results for the first fiscal quarter of 2026, ending December 27, 2025.
Total net sales grew 16% year-over-year to $143.76 billiona, driven by a significant 23% increase in iPhone sales, particularly the Pro models, and a robust 14% growth in the Services segment. Profitability also saw substantial improvement, with net income rising 16% to $42.10 billion, leading to a diluted EPS of $2.84.
The company demonstrated solid operational efficiency, with gross margin increasing to 48.2% from 46.9% in the prior year, benefiting from product mix and services growth, though partially offset by tariff costs. Apple continues its aggressive capital return program, repurchasing $25.0 billionb of stock and paying $3.9 billion in dividends, underscoring its commitment to shareholder value.
02—Key points
Key Highlights
- Total net sales increased by 16% year-over-year to $143.76 billion.
- iPhone sales surged by 23% to $85.27 billion, driven by Pro models.
- Services revenue grew by 14% to $30.01 billion, fueled by advertising, the App Store, and cloud services.
- Net income increased by 16% to $42.10 billion, with diluted EPS rising to $2.84.
- Gross margin improved to 48.2% from 46.9%, driven by product mix and services, despite tariff impacts.
- Apple returned $28.9 billion to shareholders through $25.0 billion in share repurchases and $3.9 billion in dividends.
- Research and development expenses increased by 32% to $10.89 billion, reflecting continued investment in innovation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Apple Inc. kept $0.29.
- Revenue$143.76B100.0%
- Cost of revenue−$74.53B51.8%
- Gross profit$69.23B48.2%
- Operating costs−$18.38B12.8%
- Operating income$50.85B35.4%
- Interest, other & tax−$8.76B6.1%
- Net income$42.10B29.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed January 30, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $143.76B$124.30B | +15.7% |
| Cost of Revenue | $74.53B$66.03B | +12.9% |
| Gross Profit | $69.23B$58.27B | +18.8% |
| R&D Expenses | $10.89B$8.27B | +31.7% |
| SG&A Expenses | $7.49B$7.17B | +4.4% |
| Operating Expenses | $18.38B$15.44B | +19.0% |
| Operating Income | $50.85B$42.83B | +18.7% |
| Net Income | $42.10B$36.33B | +15.9% |
| EPS (Basic) | $2.85$2.41 | +18.3% |
| EPS (Diluted) | $2.84$2.40 | +18.3% |
| Shares Outstanding (Basic) | 14.75B15.08B | −2.2% |
| Shares Outstanding (Diluted) | 14.81B15.15B | −2.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of Apple's revenue growth in this quarter?
The primary driver of Apple's revenue growth was a significant increase in iPhone sales, which grew by 23% year-over-year, particularly driven by strong performance from its Pro models. The Services segment also contributed substantially with a 14% increase in revenue.
How did Apple manage its gross margin given potential headwinds like tariffs?
Apple's gross margin improved to 48.2% from 46.9% in the prior year. This improvement was attributed to a favorable product mix and the growth in higher-margin Services. However, the company noted that tariff costs partially offset these gains.
What is Apple's strategy for returning capital to shareholders?
Apple continues its robust capital return program. In this quarter, the company repurchased $25.0 billion of its common stock and paid $3.9 billion in dividends and dividend equivalents. Apple also intends to increase its quarterly dividend annually, subject to board approval.
What are the key risks or challenges highlighted in the filing?
The filing mentions ongoing legal proceedings, including investigations related to the EU Digital Markets Act and a civil antitrust lawsuit filed by the U.S. Department of Justice. Macroeconomic conditions, such as inflation and currency fluctuations, as well as potential tariffs and trade disputes, are also noted as factors that could materially impact the company's results.
06—Continue