What happened
Apple Inc. (NASDAQ: AAPL) reported fiscal fourth-quarter revenue of $114.5 billion, up 12% from a year earlier. Services hit an all-time high.
Diluted earnings per share were $2.10, up 14%. Net income was $30.71 billion, against $27.47 billion in the quarter that ended Sept. 27, 2025. CFO Kevan Parekh said the quarter capped a fiscal 2026 with record revenue of $479 billion.
OptimistFi calculates that quarterly net sales rose $12.01 billion, or 11.7%, from $102.47 billion a year earlier. That matches the reported growth. Two questions remain: which products drove it, and how much profit came from a one-time item.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Quarterly revenue | $114.5 billion | from $102.47 billion, +11.7% | SEC 8-K Exhibit 99.1 |
| Diluted EPS | $2.10 | from $1.85, +14% | SEC 8-K Exhibit 99.1 |
| Services revenue | $31.57 billion | from $28.75 billion, +9.8% | Calculated from SEC 8-K |
| Gross margin (includes tariff refund benefit) | 47.9% | from 47.2%, +0.7 percentage points | Calculated from SEC 8-K |
| Operating income | $35.63 billion | from $32.43 billion, +9.9% | Calculated from SEC 8-K |
| Operating cash flow, quarter | $28 billion | SEC 8-K Exhibit 99.1 |
Read more: Apple (AAPL) company research
Where the growth came from
iPhone and Mac led. iPhone revenue rose 17.5% to $57.58 billion and Mac rose 23.7% to $10.79 billion. iPad fell 10.4% to $6.23 billion. Wearables, Home and Accessories fell 7.9% to $8.30 billion. All figures compare with the year-earlier quarter.
Greater China sales rose 21.0% to $17.54 billion. That was the fastest growth of the five reportable segments.
Services revenue rose 9.8% to $31.57 billion from $28.75 billion. That trailed the company as a whole, so Services slipped to 27.6% of revenue from 28.1% a year earlier.
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Why it matters
OptimistFi has argued that Apple turns its installed base and integrated ecosystem into high-margin recurring services and cash flow. Apple said its installed base of active devices hit an all-time high across all major product categories and geographic segments. That strengthens the view.
Services still carries the profit. By OptimistFi's calculation from the filing, Services earned a 76.0% gross margin in the quarter, up from 75.3%. It produced 43.7% of the company's total gross margin from a little over a quarter of its revenue.
Operating income rose 9.9% to $35.63 billion, slower than revenue. Research and development spending jumped 32.3% to $11.73 billion from $8.87 billion.
What the tariff refunds changed
Tariff refunds helped the quarter's margin and EPS. Gross margin was 47.9%, including a boost of about 1 percentage point from the refunds. The refunds also added $0.05 to diluted EPS.
OptimistFi calculates a year-earlier gross margin of 47.2% from the filing's figures. The 0.7 point gain is smaller than the roughly 1 point the refunds added. Without the refunds, margin and EPS would both be lower.
Cash returned and the balance sheet
Apple generated $28 billion in operating cash flow in the quarter and returned $28 billion to shareholders. For fiscal 2026, operating cash flow was $145.10 billion, up 30.2% from $111.48 billion.
Buybacks totaled $86.39 billion for the year, against $90.71 billion the year before. Dividends were $15.72 billion. Shares outstanding fell to 14.53 billion from 14.77 billion, a 1.6% decline.
Inventories stood at $14.54 billion at quarter end, up from $5.72 billion a year earlier. The cash flow statement shows inventories used $8.9 billion of cash during fiscal 2026.
What's next
Apple's board declared a cash dividend of $0.27 per share. It is payable Nov. 16 to shareholders of record at the close of business Nov. 12.
CEO John Ternus pointed to the holiday season lineup. It includes the iPhone Duo, iPhone 18 Pro and iPhone 18 Pro Max, new home hardware, Touch on Mac and the all-new Siri AI.
The next quarterly report will test the case in three places. Watch Services growth against total revenue growth. Watch gross margin against this quarter's refund-aided level. Watch operating income growth against research and development spending.
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Sources
- Apple Inc. Form 8-K Exhibit 99.1, press release dated Nov. 2, 2026 — Fiscal 2026 fourth-quarter results, financial statements and dividend declaration.
- Apple Inc. Form 8-K, Item 2.02, dated Nov. 2, 2026 — Cover filing that furnishes the earnings press release.
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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
