Apple closed its fiscal year with a record September quarter and an unusually blunt warning about what comes next. The company reported revenue of $114.5 billion, up 12 percent from a year earlier, then told investors that memory prices and the rollout of Siri AI will push gross margin lower in the holiday quarter.
The quarter in numbers
Apple's November 2 press release puts diluted earnings per share at $2.10, up 14 percent, and gross margin at 47.9 percent. About one percentage point of that margin, and five cents of the earnings per share, came from tariff refunds. The company called out records for total revenue, iPhone revenue and EPS, and said Services reached an all-time high. Fiscal 2026 revenue came to a record $479 billion, and Apple returned $28 billion to shareholders in the quarter. It declared a dividend of $0.27 per share, payable November 16 to holders of record on November 12.
Product-level figures were not in the release text. 9to5Mac reports them from Apple's financial statements as iPhone $57.58 billion, Services $31.57 billion, Mac $10.79 billion, Wearables, Home and Accessories $8.30 billion, and iPad $6.23 billion. Net profit was $30.71 billion against $27.47 billion a year ago.
| Segment | September quarter revenue |
|---|---|
| iPhone | $57.58 billion |
| Services | $31.57 billion |
| Mac | $10.79 billion |
| Wearables, Home and Accessories | $8.30 billion |
| iPad | $6.23 billion |
iPad was the soft spot. TechCrunch notes that revenue fell 10 percent from a year earlier and missed analysts' expectation of $6.7 billion, making it the only product line that did not grow.
Margins under pressure
Gross margin fell from 50.1 percent in the June quarter to 47.9 percent, and product gross margin dropped to 37.2 percent from 40.1 percent. Excluding the tariff refunds, 9to5Mac calculates the sequential decline would have been about one point, driven mainly by memory costs.
For the holiday quarter, Apple guided gross margin to 45 to 46 percent. GSMArena reports a revenue forecast of $153.82 billion to $158.13 billion, services growth of 8 to 9 percent and operating expenses of $20.4 billion to $20.8 billion. Chief financial officer Kevan Parekh said the pressure will not ease soon. He attributed the expected decline mainly to memory costs and to Siri AI, which adds cloud costs and defers some device revenue over the life of the product, consistent with how Apple treats Maps, Siri and iCloud.
Memory is the problem
Chief executive John Ternus called the current memory pricing situation "unprecedented." He said Apple expects memory purchase costs to rise further in the December quarter and to keep increasing after that. Price increases on the Mac and iPad at the end of June and on the iPhone in September, along with lower-cost inventory already on hand and savings elsewhere, will offset part of the hit.
Apple did not say whether it will raise prices again. TechCrunch reports that chief operating officer Sabih Khan did not rule out future increases while describing a $33 billion rise in manufacturing purchase obligations between June and the end of September.
Inventory tells the same story. TechCrunch says Apple's inventory reached $14.54 billion, up 31.1 percent from the previous quarter and 154.3 percent from $5.72 billion a year earlier. The reporting does not break down what that inventory contains, so the exact cause of the jump is not established, though the report ties it to climbing memory chip costs.
Supply limits
Apple also said demand has run ahead of supply. GSMArena reports that stronger than expected demand for the Mac, iPad and iPhone Duo left inventory short, which could hold back revenue until December. TechCrunch adds that Apple called it hard to predict when iPhone Duo constraints will improve. 9to5Mac reported that the stock fell nearly 3 percent in after-hours trading following the results.
Why it matters
Apple is usually the company that shields buyers from component swings. This quarter it said the swings are now large enough to cut roughly two points from its gross margin, and that they will persist. Other makers are already passing costs on. For buyers, the practical reading is that device prices across the industry are under upward pressure, though Apple has made no commitment either way.
What to watch next
The next test is Apple's December quarter report, which should show whether the 45 to 46 percent margin guide holds and how much of the memory increase reached customers through pricing. Watch also for any change to Mac, iPad or iPhone prices before then, and for updates on iPhone Duo supply.
Published November 4, 2026. Gadgets365 will update this article as more information becomes available.
