Apple beat on revenue in Ternus's first quarter as CEO. The margin outlook is the real story

In brief

Apple reported fiscal fourth-quarter revenue of $114.5 billion for the three months to 26 September 2026, up 12% year on year, with diluted earnings per share of $2.10, up 14%. It was the first quarter reported under John Ternus, who succeeded Tim Cook as chief executive on 1 September.

The beat was overshadowed by guidance. On the earnings call, chief financial officer Kevan Parekh forecast December-quarter gross margin of 45% to 46%, down from 47.9%, mainly because of higher memory costs. CNBC reported that analysts polled by LSEG expected 46.3%, and that the shares fell 3% in extended trading.

What Apple reported

• Revenue and earnings. Revenue was $114,477 million against $102,466 million a year earlier. CNBC put the LSEG consensus at $113.39 billion and $1.99 a share.
• iPhone. Revenue was $57.6 billion, up 17%. According to CNBC, that included only eight days of iPhone 18 Pro sales, and the iPhone Duo went on sale after the quarter closed.
• Services. Revenue reached an all-time high of $31.6 billion, up 10%.
• Mac, iPad, wearables. Mac rose 24% to $10.8 billion, helped by the MacBook Neo and MacBook Pro. iPad fell 10% to $6.2 billion and Wearables, Home and Accessories fell 8% to $8.3 billion.
• Margin. Gross margin of 47.9% included a favourable impact of about 1 percentage point from tariff refunds, which also added $0.05 to EPS. Parekh said Apple has now received "the vast majority" of those refunds.
• Full year. Fiscal 2026 revenue was $478.8 billion, up 15%, with EPS of $8.98.

Why the outlook matters

Parekh guided December-quarter revenue growth of 7% to 10%, above the 6.1% LSEG consensus cited by CNBC, and services growth of 8% to 9%. Without the one-off tariff benefit, September's margin was nearer 47%, so the guide implies further compression. Apple attributed most of that to memory, plus costs of ramping Siri AI.

Ternus called memory pricing "unprecedented" and said it is still rising beyond December. Apple raised Mac and iPad prices at the end of June and iPhone prices in September. Chief operating officer Sabih Khan said the iPhone Duo "is constrained as of today" and that Mac and iPad will be supply-constrained in the December quarter.

ByteNib's reading: Apple can grow revenue through higher prices and a new form factor, but it is absorbing part of the component shock rather than passing all of it on.

What IT buyers should do

1. Budget at current prices. Asked whether pricing could move higher, Parekh would not say, only that Apple weighs units, revenue and margin when it sets prices. Plan 2027 refreshes assuming list prices hold or rise.
2. Order Macs and iPads early. Apple itself expects constraints this quarter. Khan's Mac constraint may cover the new touchscreen MacBook Pro too.
3. Watch memory across every vendor. Amazon, per WIRED, blamed a memory shortage for raising prices on existing devices this summer, before its Alexa+ Echo line.

Sources and scope

Reported figures are from Apple's press release and its condensed consolidated financial statements (2 November 2026). Guidance, segment growth rates and executive quotes are from the earnings call as transcribed by Benzinga and reported by CNBC; Apple does not publish guidance in its release. Amazon's summer price rises are from WIRED (28 October 2026). Consensus estimates (LSEG), the after-hours share move and the eight-day iPhone 18 Pro window are single-sourced to CNBC. The "about 47%" ex-tariff margin and the buyer guidance are ByteNib editorial analysis.

Drafted with AI assistance and reviewed by the editor before publication.

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