Apple generated $114.5 billion in revenue and $30.71 billion in net income for its fiscal fourth quarter ended September 26, 2026, beating market estimates even as tightening memory hardware supplies weighed on its outlook. Diluted earnings per share reached $2.10, topping expectations of $1.99 with help from a five-cent boost tied to tariff refunds.
For consumers and investors, the earnings milestone highlights growing supply chain pressure across personal technology. While hardware sales expanded, rising global memory prices mean holiday shoppers face tighter inventories and higher retail prices after recent iPhone adjustments.
Fourth-quarter gross margin landed at 47.9%, down from 50.1% in the prior quarter. For the upcoming holiday quarter, Chief Financial Officer Kevan Parekh projected gross margin between 45% and 46%, falling behind the analyst consensus of 46.3% and marking the lowest midpoint since late 2023. Apple shares dropped roughly 4% in premarket trading following the guidance.
Company leaders attributed the margin compression to surging prices for memory parts and initial ramp costs for Siri AI. "This includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI," Parekh said.
Component Costs Drive Supply Obligations
Chief Executive John Ternus, who took leadership of Apple on September 1, warned that memory procurement expenses will not ease quickly. "Looking beyond the December quarter, we see the pricing for memory purchases continuing to increase," Ternus said. The warning follows a $100 price increase on iPhones introduced in September.
To secure component availability amid heavy server demand from artificial intelligence firms, Apple increased its supply purchase obligations by $33 billion between the June and September quarters. Chief Operating Officer Sabih Khan said the company is experiencing less flexibility across component channels than normal.
Despite the component headwinds, fourth-quarter iPhone sales climbed 17% year over year to a September-quarter record of $57.58 billion. Mac revenue jumped 24% to $10.79 billion, while services revenue grew nearly 10% to an all-time record of $31.57 billion. Conversely, iPad sales dropped 10% to $6.23 billion, and the wearables division declined 8% to $8.3 billion.
For the holiday quarter, Apple expects total revenue to rise between 7% and 10% year over year, surpassing analyst projections of 6.1%.
