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Net sales increased 15.7% year over year to $143.77 billion and beat the Zacks Consensus Estimate by 4.3%. Overall, product sales (79.1% of sales) increased 16.1% year over year to $113.74 billion. Services revenues grew 14% year over year to $30.01 billion and accounted for 20.9% of sales. The figure beat the consensus mark by 1.68%.
iPhone sales jumped 23.3% year over year to $85.27 billion and accounted for 59.3% of net sales. iPhone sales missed the Zacks Consensus Estimate by 9.28%. iPhone sales benefited from strong shipments of the iPhone 17 family.
iPad sales of $8.6 billion increased 6.3% year over year and accounted for 6% of net sales. The figure beat the Zacks Consensus Estimate by 1.28%.
Mac sales of $8.39 billion decreased 6.7% year over year and accounted for 5.8% of net sales. The figure missed the Zacks Consensus Estimate by 7.54%.
Wearables, Home and Accessories sales decreased 2.2% year over year to $11.49 billion and accounted for 8% of net sales. The figure lagged the consensus mark by 5.72%.
Apple’s Q1 Rides on Strong Greater China Sales
Greater China sales jumped 38% year over year to $25.53 billion and accounted for 17.8% of sales. Rest of Asia Pacific sales increased 18% year over year to $12.14 billion and contributed 8.4% of total sales. The company saw double-digit growth in India.
Europe’s sales grew 12.7% year over year to $38.15 billion in the reported quarter and accounted for 26.5% of net sales.
Americas’ sales were $58.53 billion, up 11.2% year over year and accounted for 40.7% of sales. Japan sales increased 4.7% year over year to $9.41 billion and accounted for 6.5% of sales.
Apple’s Gross & Operating Margins Expand Y/Y
The gross margin of 48.2% expanded 130 basis points (bps) on a year-over-year basis. The gross margin expanded 100 bps sequentially, driven by a favorable mix.
Products’ gross margin expanded 450 bps sequentially to 40.7% due to a favorable mix. Services’ gross margin was 76.5%, up 120 bps sequentially.
Operating expenses rose 19% year over year to $18.38 billion due to a 31.7% increase in research & development expenses and 4.4% growth in selling, general & administrative expenses.
Operating margin expanded 90 bps on a year-over-year basis to 35.4%.
Apple’s Balance Sheet Remains Strong
As of Dec. 27, 2025, cash & marketable securities were $144.8 billion compared with term debt of $88.51 billion. Apple had cash & marketable securities worth $132.42 billion compared with term debt of $90.68 billion as of Sept. 27, 2025.
Including commercial paper of $2 billion, total debt was $90.51 billion as of Dec. 27, 2025.
Apple returned nearly $32 billion in the reported quarter through dividend payouts ($3.9 billion) and share repurchases ($25 billion).
Apple Offers Positive Q2 Guidance
Apple expects the March quarter’s (second-quarter fiscal 2026) net sales to grow between 13% and 16% on a year-over-year basis. Services are expected to grow at the same rate reported in the first quarter of fiscal 2026.
Gross margin is expected to be 48-49% in the second quarter of fiscal 2026. Operating expenses are expected to be between $18.4 billion and $18.7 billion.
Amkor, Microchip and MKS are set to report their respective quarterly results on Feb. 9, Feb. 5 and Feb. 17. In the trailing 12-month period, shares of Amkor, Microchip and MKS have jumped 100.9%, 43.2% and 115.6%, respectively.
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Apple Q1 Earnings Beat Estimates, iPhone Drives Top-Line Growth
Key Takeaways
Apple (AAPL - Free Report) reported first-quarter fiscal 2026 GAAP earnings of $2.84 per share, which beat the Zacks Consensus Estimate by 7.17%.
Net sales increased 15.7% year over year to $143.77 billion and beat the Zacks Consensus Estimate by 4.3%. Overall, product sales (79.1% of sales) increased 16.1% year over year to $113.74 billion. Services revenues grew 14% year over year to $30.01 billion and accounted for 20.9% of sales. The figure beat the consensus mark by 1.68%.
Apple Inc. Price, Consensus and EPS Surprise
Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. Quote
Apple’s Top Line Rides on Strong iPhone Sales
iPhone sales jumped 23.3% year over year to $85.27 billion and accounted for 59.3% of net sales. iPhone sales missed the Zacks Consensus Estimate by 9.28%. iPhone sales benefited from strong shipments of the iPhone 17 family.
iPad sales of $8.6 billion increased 6.3% year over year and accounted for 6% of net sales. The figure beat the Zacks Consensus Estimate by 1.28%.
Mac sales of $8.39 billion decreased 6.7% year over year and accounted for 5.8% of net sales. The figure missed the Zacks Consensus Estimate by 7.54%.
Wearables, Home and Accessories sales decreased 2.2% year over year to $11.49 billion and accounted for 8% of net sales. The figure lagged the consensus mark by 5.72%.
Apple’s Q1 Rides on Strong Greater China Sales
Greater China sales jumped 38% year over year to $25.53 billion and accounted for 17.8% of sales. Rest of Asia Pacific sales increased 18% year over year to $12.14 billion and contributed 8.4% of total sales. The company saw double-digit growth in India.
Europe’s sales grew 12.7% year over year to $38.15 billion in the reported quarter and accounted for 26.5% of net sales.
Americas’ sales were $58.53 billion, up 11.2% year over year and accounted for 40.7% of sales. Japan sales increased 4.7% year over year to $9.41 billion and accounted for 6.5% of sales.
Apple’s Gross & Operating Margins Expand Y/Y
The gross margin of 48.2% expanded 130 basis points (bps) on a year-over-year basis. The gross margin expanded 100 bps sequentially, driven by a favorable mix.
Products’ gross margin expanded 450 bps sequentially to 40.7% due to a favorable mix. Services’ gross margin was 76.5%, up 120 bps sequentially.
Operating expenses rose 19% year over year to $18.38 billion due to a 31.7% increase in research & development expenses and 4.4% growth in selling, general & administrative expenses.
Operating margin expanded 90 bps on a year-over-year basis to 35.4%.
Apple’s Balance Sheet Remains Strong
As of Dec. 27, 2025, cash & marketable securities were $144.8 billion compared with term debt of $88.51 billion. Apple had cash & marketable securities worth $132.42 billion compared with term debt of $90.68 billion as of Sept. 27, 2025.
Including commercial paper of $2 billion, total debt was $90.51 billion as of Dec. 27, 2025.
Apple returned nearly $32 billion in the reported quarter through dividend payouts ($3.9 billion) and share repurchases ($25 billion).
Apple Offers Positive Q2 Guidance
Apple expects the March quarter’s (second-quarter fiscal 2026) net sales to grow between 13% and 16% on a year-over-year basis. Services are expected to grow at the same rate reported in the first quarter of fiscal 2026.
Gross margin is expected to be 48-49% in the second quarter of fiscal 2026. Operating expenses are expected to be between $18.4 billion and $18.7 billion.
Zacks Rank & Stocks to Consider
Currently, Apple carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Amkor Technology (AMKR - Free Report) , Microchip Technology (MCHP - Free Report) and MKS (MKSI - Free Report) . Each of the three stocks sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amkor, Microchip and MKS are set to report their respective quarterly results on Feb. 9, Feb. 5 and Feb. 17. In the trailing 12-month period, shares of Amkor, Microchip and MKS have jumped 100.9%, 43.2% and 115.6%, respectively.