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AAPL · Q4 2025
AAPL · Q2 2026

AAPL · Q1 2026 Earnings

Bullish

Apple

Reported January 29, 2026

30-second summary

Apple printed its best quarter ever at $143.76B revenue (+16% YoY), comfortably clearing the +10–12% December guide that was already the most aggressive forward Apple had given in years, with iPhone +23.3%, Services at an all-time high of $30.0B (+14%), and Greater China snapping back to +38% YoY after last quarter's −3.6% supply-constrained print. Gross margin landed at 48.2% — 20bps above the high end of the 47–48% guide despite the $1.4B tariff bill — and management followed with a March-quarter guide of +13–16% YoY revenue growth, an acceleration off this print, framed as conditional on tariffs and macro holding. The signal: the supply-vs-demand attribution Apple used to explain last quarter's China weakness was correct, AI investment is now annualizing into the opex base ($18.4–18.7B March guide), and the records-and-superlatives cadence flagged as a risk last quarter has been validated by the numbers.

Headline numbers

EPS

Q1 FY2026

$2.84

Revenue

Q1 FY2026

$143.76B

+16.0% YoY

Gross margin

Q1 FY2026

48.2%

Free cash flow

Q1 FY2026

$51.55B

Operating margin

Q1 FY2026

35.4%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$143.76B+16.0%$102.47B+40.3%
EPS$2.84—$1.85+53.5%
Gross margin48.2%—47.2%+100bps
Operating margin35.4%—31.7%+370bps
Free cash flow$51.55B———

Guidance

Apple decisively beat December quarter guidance across revenue, iPhone, and margin, with revenue growth of 16% YoY far exceeding the 10–12% guide, while March quarter guidance shows resilience but assumes tariff policies and macroeconomic conditions remain stable.

Guidance is issued one quarter forward. The Prior-guide column references the guide issued last quarter for the period just reported; the New-guide column is for next quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Revenue YoY growthQ1 FY202610% to 12% YoY16% YoY+4 to 6 points above guideBeat
iPhone revenue growthQ1 FY2026Double-digit YoY growth23.3% YoY+13 points above guide minimumBeat
Services revenue growthQ1 FY2026Similar to FY2025 rate (14% YoY)14% YoYin-lineMet
Gross marginQ1 FY202647% to 48%48.2%+0.2 points above guideBeat
Operating expensesQ1 FY2026$18.1 billion to $18.5 billionwithin guided rangein-lineMet
Tax rateQ1 FY2026Around 17%consistent with guidancein-lineMet

New guidance

MetricPeriodGuideYoY
Revenue YoY growthQ2 FY202613% to 16% YoY13% to 16% YoY
Services revenue YoY growthQ2 FY2026Similar to December quarter (14%)~14% YoY
Gross marginQ2 FY202648% to 49%—
Operating expensesQ2 FY2026$18.4 billion to $18.7 billion—
Other income/expenseQ2 FY2026~$100 million—
Tax rateQ2 FY2026~17.5%—

Product revenue

Q1 FY2026
SegmentQ1 FY2026YoY
iPhone$85.269B+23.3%
Services$30.013B+14.0%
iPad$8.595B+6.3%
Wearables, Home and Accessories$11.493B-2.2%
Mac$8.386B-6.7%

Geographic mix

Q1 FY2026
SegmentQ1 FY2026YoY
Americas$58.529B+11.1%
Europe$38.146B+12.6%
Greater China$25.526B+38.0%
Japan$9.413B+4.7%
Rest of Asia Pacific$12.142B+18.0%

Management tone

Q4-2024 anchor → Q1-2025 anchor → Q3-2025 anchor → Q4-2025 anchor → Q1-2026 anchor: AI as future opportunity → Apple Intelligence shipping (20+ features) → AI deeply integrated, tariffs quantified → AI as P&L line item, records as operating mode → Records validated, China snap-back delivered

The records-and-superlatives cadence flagged as a risk last quarter — "the highest bar Apple has set itself in recent memory, with limited room to disappoint" — has now been validated by the print. Last quarter's "best quarter ever" and "best iPhone quarter ever" forward language could have been embarrassing if revenue had landed at the bottom of the +10–12% guide; instead Apple cleared the high end by 400bps with iPhone at +23.3%. Cook's opening: "I am proud to say that we just had a quarter for the record books. We are reporting our best ever quarter with $143.8 billion in revenue, up 16% from a year ago and exceeding our expectations." This signals Apple is now operating with confidence that the previously-unusual superlative cadence is structurally underwritten by demand, not aspirational positioning.

Apple Intelligence has crossed from feature-count narrative to user-engagement claim. Q3 FY2025's framing was "20+ features shipped"; Q4 FY2025 reframed it as a $2.5B opex line item; this quarter Cook claims actual usage: "The majority of users on enabled iPhones are actively leveraging the power of Apple intelligence." This is the first quarter Apple has made an adoption claim — rather than a shipping claim — about Apple Intelligence. Combined with the Google partnership disclosure (Google selected as foundation model for Apple Foundation models, terms undisclosed), Apple is signaling AI has moved from build to monetize, even as monetization itself was the most evasive topic in Q&A.

China has gone from supply-constrained risk to accelerating growth engine in a single quarter. Three quarters ago Greater China was a +4.4% government-subsidy recovery; last quarter it was −3.6% with management asserting supply was the issue; this quarter it is +38% with all-time iPhone revenue records and record upgraders. The cleanness of the snap-back validates last quarter's supply-vs-demand attribution that some investors had to take on faith.

The wearables story has flipped from declining-but-narrowing to constrained-but-strong. Cook: "We believe the overall category would have grown had it not been for these constraints." This is a more confident framing than last quarter's "narrowing decline" — management is now claiming underlying demand is positive and only supply is gating revenue. Worth watching whether AirPods Pro 3 supply normalizes in March.

The conditional language around tariffs has hardened rather than relaxed. The March guide carries an explicit assumption that tariff rates and macro hold from "today" — a reminder that Apple is operating with limited forward visibility on the policy environment despite a structurally improving demand picture. This is the one place tone remains genuinely defensive.

Recurring themes management leaned on this quarter:

Record-breaking installed base reaching 2.5B active devicesApple Intelligence driving measurable user engagement and adoptionServices ecosystem expansion with all-time highs across multiple verticalsNew customer cohorts penetration across all major product categoriesGeographic diversification with emerging market strength (India, Greater China)U.S. domestic manufacturing investment ($600B commitment) supporting supply chain resilience

Risks management surfaced:

Macroeconomic conditions and potential worseningTariffs and other trade measures impacting operationsLegal and regulatory proceedingsSupply constraints (specifically AirPods Pro 3 during quarter)iPhone supply constraints expected in March quarter

Q&A highlights

Amit Daryani · Evercore

Two questions: (1) Impact of memory costs on gross margin guidance and Apple's comfort securing bits for shipment; (2) China strength and durability of growth given near all-time high revenues.

Tim addressed memory constraints and supply chain constraints on advanced nodes (3nm). Memory had minimal Q1 impact but expects more impact in Q2 (comprehended in 48-49% margin guidance). Beyond Q2, memory pricing expected to rise significantly with multiple mitigation options available. On China: 38% YoY growth driven by iPhone 17, all-time iPhone revenue record in Greater China, strong store traffic (double-digit growth), all-time high installed base, record upgraders, double-digit switcher growth. Top three smartphones in urban China per World Panel. iPad top tablet, MacBook Air top laptop, Mac Mini top desktop.

iPhone growth of 23% in December quarterGreater China up 38% YoYAll-time iPhone revenue record in Greater ChinaGross margin guidance 48-49% for Q2

Eric Woodring · Morgan Stanley

Two questions: (1) AI monetization potential and ROI timeline given increased OpEx spending and lack of clear competitor monetization; (2) Primary factors driving iPhone strength and sustainability.

Tim emphasized bringing intelligence across OS in personal, private way creating value and opening opportunities across products and services. Noted Google partnership collaboration. On iPhone drivers: combination of factors including display, camera, performance, new selfie camera, and design. All elements work together to drive strong product cycle. Sustainability varies by customer cohort and their prior devices.

Integration across operating system in personal and private wayGoogle partnership collaboration announcedMultiple product feature drivers: display, camera, performance, selfie camera, design

Ben Ritzes · Melius

Two questions: (1) Google partnership decision rationale for AI/Siri and revenue sharing details; (2) Gross margin maintenance at 48-49% given memory/NAND price increases.

Tim explained Google's AI technology selected as most capable foundation for Apple Foundation models, enabling unlocking of experiences while maintaining industry-leading privacy standards. Partnership details not being disclosed. Kevin addressed gross margin: Q1 landed at 48.2% (up 100 bps sequentially) driven by favorable mix (strong iPhone cycle), products margin up 450 bps, services double-digit growth contribution. Q2 guidance 48-49% with favorable services mix offset by seasonal leverage loss.

Q1 gross margin 48.2% (100 bps sequential improvement)Q2 gross margin guidance 48-49%Products margin up 450 bps sequentiallyServices growing double digits

Michael Eng · Goldman Sachs

Two questions: (1) Comparable product launches in prior year and impact on March quarter outlook; (2) Services growth opportunities, particularly advertising expansion in App Store and other products.

Kevin noted no particular comp issues rising to level requiring specific color in guidance, continuation of strong cycle subject to mentioned constraints. Kevin addressed services: broad-based performance with all-time records in advertising, music, payment services, cloud services. New App Store search ads providing advertisers more discovery options. 2.5 billion active devices milestone supports services opportunity. Continue exploring ways to add value to users and create Apple opportunities.

Revenue growth outlook 13-16% for March quarterAll-time records in advertising, music, payment services, cloud services2.5 billion active devicesNew App Store search ads capability added

David Locke · UBS

Two questions: (1) Smartphone market demand outlook given memory pricing and component availability concerns; (2) Long-term agreements (LTAs) versus spot pricing for memory procurement.

Tim noted supply constraint in Q2 due to advanced node capacity, result of 23% Q1 growth and limited flexibility in supply chain. Won't comment on supply beyond Q2 as it depends on multiple industry factors. On demand: gained share in December quarter despite market not growing at 23%. Believes gained share on iPhone and Mac in 2025. On memory pricing lever: noted range of options without specifics; different levers available with uncertain success. Declined to specify LTA vs. spot approach.

iPhone gained share in December quarterMac gained share in calendar year 2025Advanced node (3nm specifically) capacity is gating constraint23% growth in Q1 outstripped internal estimates

Answers to last quarter's watch list

Does December revenue land at +12% or above? Decisively yes — +16% YoY, 400bps above the high end of the guide, with iPhone at +23.3%. The highest bar Apple had set itself in years was cleared comfortably. Status: Resolved positively.
Gross margin defense at 47–48% while absorbing $1.4B tariff cost. 48.2% reported — 20bps above the high end of guide. Two consecutive quarters of beating the gross-margin guide high end establishes a clear track record. The Services-mix-offsets-tariffs thesis is now structurally entrenched. Status: Resolved positively.
Greater China actual return to growth. Decisively yes — +38% YoY, all-time iPhone revenue record in Greater China, record upgraders, double-digit switcher and store-traffic growth. Last quarter's supply-vs-demand attribution is now retrospectively validated. The single biggest possible crack in the bull narrative has closed cleanly. Status: Resolved positively.
Opex landing inside $18.1–18.5B, and whether incremental AI spend is annualizing. Q1 opex landed within guide. The March guide of $18.4–18.7B confirms the $2.5B sequential AI-driven step-up is annualizing as a new run-rate floor, not a one-time infrastructure spike. Investors who assumed AI opex would normalize down have been answered. Status: Resolved negatively (the spend is sticky, not transient).
Services growth — does it hold near 14% or decelerate further? Held — 14.0% printed, exactly at guide, with March guided to ~14% again. Records across advertising, music, payments, and cloud services. The cleanest line on the P&L is holding its growth rate, not decelerating. Status: Resolved positively.
Hypertension notification rollout and Apple Watch ASP impact. Wearables printed −2.2% — narrowed further from Q4's −0.3% trajectory but did not return to growth. Cook attributed the shortfall to AirPods Pro 3 supply constraints, claiming the category would have grown absent the constraint. Management cited Watch alerts enabling hypertension conversations with doctors but did not quantify users notified vs. last quarter's "more than a million" framing. Status: Continue monitoring.

What to watch into next quarter

Does March revenue land at +16% or above? Apple guided +13–16% YoY off a $95.4B prior-year quarter — anything below +13% would be the first guidance miss in the recent run. A print at or above +16% would extend the acceleration trajectory and validate the conditional-tariff framing as conservative cushioning.

Gross margin defense at 48.5% or above. Q1 cleared the high end by 20bps; another beat above 48.5% would entrench the Services-and-mix margin structure. A print at or below 48% would signal memory inflation is starting to bite ahead of management's "post-Q2" framing.

Does Greater China sustain +20%+ growth in March? The +38% Q1 print was iPhone-17-launch-driven. The durability test is whether the upgrade cycle and switcher momentum hold in a non-launch quarter. Below +15% would suggest the bounce was substantially a supply catch-up.

AirPods Pro 3 supply normalization and Wearables return to growth. Management explicitly claimed Wearables would have grown absent AirPods Pro 3 constraints. If Wearables stays negative in March without a supply explanation, the underlying category story weakens.

OpEx landing at the high end ($18.7B) versus the low end ($18.4B). The high end would confirm AI investment is still scaling beyond the December step-up; the low end would suggest the step-up has plateaued. This is the cleanest tell on Apple's AI investment trajectory.

Any concrete disclosure on Google partnership economics or AI monetization timing. Management explicitly declined to quantify either this quarter. The next call is the first natural opportunity for incremental disclosure; continued silence would extend the "AI monetization" overhang that was the most evasive Q&A topic.

Sources

  1. Apple Q1 FY2026 Press Release (Form 8-K, Exhibit 99.1), filed January 29, 2026 — https://www.sec.gov/Archives/edgar/data/320193/000032019326000005/a8-kex991q1202612272025.htm
  2. Apple Q1 FY2026 earnings call extraction inputs (transcript-sourced quotes for guidance, tone, and Q&A analysis)

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