2026-01-31 01:00:09
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2026-01-30 12:08:00
As was foretold (in last quarter’s corporate guidance), on Thursday Apple reported its biggest quarter ever. The holiday quarters are always Apple’s biggest, and this was no exception. It offered the most revenue ($143.8B) and most iPhone revenue ($85.3B) of any financial quarter in Apple’s history.
Suffice it to say that the iPhone 17 family is a hit.
“This is the strongest iPhone lineup we’ve ever had, and by far the most popular,” Apple CEO Tim Cook said during his conference call with analysts. As for the quarter itself? “It exceeded our expectations, to say the least.” Spoken like a man whose most popular product, the one vital to his company’s existence, grew 23% from the year-ago quarter.
Even more interesting, though, is Apple’s suggestion that it’s still selling the iPhone 17 about as fast as it can make them—or to be more specific, about as fast as TSMC can make cutting-edge 3nm chips to power them, per Cook:
We exited the December quarter with very lean channel inventory due to that staggering level of demand, and based on that, we’re in a supply chase mode to meet the very high levels of customer demand. We are currently constrained, and at this point, it’s difficult to predict when supply and demand will balance. The constraints that we have are driven by the availability of the advanced nodes that our SOCs are produced on, and at this time, we’re seeing less flexibility in the supply chain than normal, partly because of our increased demand that I just spoke about.
Those details are really interesting. Back during the height of the pandemic, sales were constrained because Apple lacked access to “legacy nodes”—chips made on older processes for stuff like Wi-Fi and Bluetooth. That is definitely not the case now, when it’s the “advanced nodes” of 3nm chips at TSMC that are just not being built fast enough because demand was much higher than Apple expected.
This also extends a long-standing story that the Chinese market really likes a new-looking iPhone. Overall, Apple’s revenue was up 38% in China. Cook said that traffic in Chinese Apple Stores grew by “strong double digits,” and cited surveys that said the iPad was the top-selling tablet in urban China and the MacBook Air and Mac mini were the top-selling laptop and desktop in the last quarter in urban China. Cook, a longtime proponent of Apple’s business in China, seems thrilled.
Mac revenue was down 7% in the quarter, the poorest performance of all Apple’s categories. But it’s hard to be that down about the results, because not only did the Mac still generate $8.4B in revenue and reach an all-time high in its overall installed base, but this was all happening in a quarter that is the proverbial “tough compare”—since Apple released the M4 MacBook Pro, Mac mini, and iMac in the year-ago quarter, and only the low-end M5 MacBook Pro in this quarter.
Full credit to analyst Michael Ng of Goldman Sachs for the most creative way possible of trying to get Apple to reveal its future product strategies: Ng asked Apple CFO Kevan Parekh if there would be any tough comparisons due in the upcoming quarter, to which Parekh replied, “There’s nothing that rises to that kind of color that we’d outline in the outlook.”
Let me translate this for you: Ng is wondering if, perhaps, Apple is going to release some nice new Macs this quarter that will mean that it’s not a “tough compare” versus Q2 of 2025. Parekh replied by essentially pointing at his previous statement and saying that the dog did not, in fact, bark.
Look, we know there will be new MacBook Pros eventually, and probably pretty soon. Maybe they’ll help with Q2 Mac sales, though at this point they’d only be able to contribute for about half of the quarter. Still, a gold star to Ng for trying to logic his way into getting Parekh to reveal things about future product releases.
Apple posted a company gross margin of 48.2%, based on a 40.7% products margin and an astounding 76.5% margin on services. This was actually above the high end of Apple’s previous guidance on margin. This fact left several analysts on the call flabbergasted, none more so than Ben Reitzes of Mellius:
You know, I’m pretty shocked. I got to hand it to you, Tim, that you’re able to do 48% to 49%. What’s really going on there? How are you doing that with… the [memory] prices?
Parekh’s answer was basically that Apple tended to sell more of its high-margin products than its lower-margin ones during the quarter, which pushed margin up. What really impressed the analysts was his insistence that even this upcoming quarter, where memory price issues are expected to become even more serious, Apple says it feels “pretty good” about its guidance to another 48% to 49% margin quarter.
Looking more broadly at Apple’s forecast, the company says the second quarter should offer 13% to 16% growth versus the year-ago quarter. Considering that the Q2 2025 revenue number was $95.4B, this means Apple expects to generate somewhere between $108B and $111B in revenue next quarter. That’s just a staggering number, because it suggests that even Apple’s boring quarters are going to routinely generate more than $100B in revenue. (For the record, last year’s fourth quarter was the first non-holiday quarter with more than $100B in Apple revenue. This would be the second. There may be no going back.)
A few other notes about the numbers and call before I wrap it up:
The iPad, bolstered by the A16 base iPad and the M5 iPad Pro, was up 6%.
Wearables was down 2%, marking 10 straight quarters of year-over-year decline. (I suspect the softness in this category is why Apple is reportedly planning on launching several new home-based products, including a screen-based controller and a security camera.) However, here’s an interesting tidbit: Apple said it couldn’t make AirPods Pro 3 fast enough to meet demand, and that it believes the category would have grown had it not been for that supply constraint.
Forget profits and revenues. “This quarter set an all-time record for operating cash flow, coming in at $53.9 billion,” Parekh reported. Accounting nerds, this is your stand up and cheer moment. The cash must flow!
Everyone wants to know more about Apple’s AI deal with Google, but Apple’s not talking. “We aren’t going to provide any details on our arrangement and collaboration with Google,” Parekh said. Cook emphasized that it should be thought of “as a collaboration,” rather than Google just riding in and saving Apple’s bacon. When Ben Reitzes of Mellius tried to get more out of Cook, only to be stonewalled, he replied: “Bummer. Okay, I tried,” he said. “You did,” the CEO replied through a squall of laughter.
2026-01-30 10:00:06
I got a chance to watch Apple’s new “Top Dogs” immersive documentary this week before its release Friday. It’s about 30 minutes total split into two 15-minute episodes, and takes you behind the scenes (and out on the main floor) at the world-famous Crufts dog show.
It’s a pretty good example of all the issue that creators of immersive video are still working out. There are some amazing moments in “Top Dogs,” mostly when you’re watching a dog and their handler close up, or when you’re in the arena in Birmingham, England, watching the dog show. Unfortunately, there are also a bunch of pretty shaky moments: distracting quick cuts, some veritgo-generating dramatic camera moves, and a reliance (albeit understandable) on non-immersive footage in order to make the narrative make sense despite the lack of the right immersive camera angle.
The more I watch immersive content, the more I realize that it requires patience to help immerse you in the scene. “Top Dogs” lacks patience, even when it pads the main dog-show narrative with side quests to Flyball and agility competitions. I found myself wanting to watch Flyball or agility for a while, just to understand how it worked, but the documentary isn’t really interested in lingering on anything.
So, does “Top Dogs” have some fun fluffy dog action? Yes! I enjoyed watching some remarkable speciments of various dog breeds, even if there was not a single Boxer in sight. But as an immersive project, I found it more representative of a style that’s probably not the right way forward for this style of video.
2026-01-30 06:18:40
Every quarter after releasing financial results, Apple CEO Tim Cook and CFO Kevan Parekh hop on a conference call with analysts to detail the quarter gone by, give a peek at what’s to come, and maybe brag a little about setting an all-time record or two. This is Six Colors’s transcript of the call for January 29, 2026.
Good afternoon, everyone, and thanks for joining the call. 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. The demand for iPhone was simply staggering, with revenue growing 23% year-over-year and all-time records across every geographic segment.
Services set an all-time revenue record as well, up 14% from a year ago, and EPS reached an all-time record of $2.84, growing a robust 19% year-over-year. We set all-time revenue records in the Americas, Europe, Japan, and rest of Asia Pacific, and grew in the vast majority of markets we track. We continued to gain momentum in emerging markets, which includes India, where we saw strong double-digit revenue growth. Greater China also grew 38% year-over-year, driven by iPhone, which had record upgraders and double-digit growth on switchers.
Apple’s December quarter results underscore our relentless commitment to innovation, to our customers, and to our mission to build the best products and services in the world. Now I’d like to take a closer look at results from across our lineup, beginning with iPhone.
As I mentioned earlier, it was a fantastic quarter for iPhone, with an all-time revenue record of $85.3 billion, up 23% year-over-year. This is the strongest iPhone lineup we’ve ever had, and by far the most popular. Throughout the quarter, customer enthusiasm for iPhone was simply extraordinary. Users were incredibly excited about everything [it] enables them to do. iPhone 17 Pro and 17 Pro Max deliver the ultimate iPhone experience. They feature the best-ever performance and battery life on an iPhone, the most advanced camera system, and a striking design. iPhone Air, our slimmest and lightest smartphone yet, packs powerful capabilities into an ultra-slim and sleek design. An iPhone 17 is a truly fantastic upgrade at an incredible value.
Turning to Mac, revenue was $8.4 billion for the December quarter. We were pleased to see the Mac install base reach another all-time high, with nearly half of customers who purchased a Mac being new to the product. The M5-powered 14-inch MacBook Pro takes a huge leap in AI performance thanks to the next-generation GPU architecture and a faster Neural Engine. From the world’s most popular laptop for consumers and businesses in MacBook Air to the small and spectacular Mac Mini, every Mac in our lineup has something special to offer users and with the recently released Apple Creator Studio—available across Mac, iPad and iPhone—creators have more tools at their fingertips to make incredible music or turn their devices into a video production studio.
Meanwhile, iPad saw December quarter revenue of $8.6 billion, up 6% from a year ago, with an all-time record for upgraders. We are proud to have our strongest lineup ever, from iPad powered by A16, which is proving to be incredibly popular; to iPad Air, with its amazing versatility; to the unbelievably powerful M5 iPad Pro, with its remarkably thin and light design. It’s no wonder that iPad continued to be the most popular tablet in the world.
Across Wearables, Home and Accessories, revenue was $11.5 billion. With Apple Watch Ultra 3 and Apple Watch Series 11, users are tapping into a comprehensive set of health and wellness features to help them meet their health goals. In a recent survey, we see an increasing number of users telling us they’re wearing their watch to sleep, which allows them to check their sleep scores each morning and find ways to improve their sleep quality. And Apple Watch alerts are enabling important conversations between users and their doctors regarding potential signs of hypertension. These are just some of the many ways that Watch is helping people live healthier lives.
The response to AirPods Pro 3 has been amazing. Customers are raving about the rich, immersive sound quality, the unmatched level of active noise cancellation, and the noticeably improved comfort that makes them effortless to wear. Features like live translation are also changing the way people can communicate by helping users connect across languages in real time and making everyday conversations feel more natural and accessible. Together these innovations create an experience that feels both powerful and personal, and the enthusiasm we are seeing reflects just how strongly AirPods Pro 3 are resonating with customers.
Across our product categories, we are seeing very high levels of customer satisfaction, and we are proud to report that we have a new record for our installed base, with more than 2.5 billion active devices. During the quarter, we were excited to see that the majority of users on enabled iPhones are actively leveraging the power of Apple Intelligence. Since the launch of Apple Intelligence, we’ve introduced dozens of features, including Writing Tools and Clean Up, and made it available in 15 languages. These AI experiences are personal, private, integrated across our platforms, and relevant to what our users do every day. We are bringing intelligence to more of what people already love about our products, so we can make every experience even more capable and effortless.
One of our most popular features is Visual Intelligence, which helps users learn and do more than ever with the content on their iPhone screen, making it faster to search, take action, and answer questions across their apps. And as I touched on earlier, we are hearing powerful stories of people using live translation to communicate seamlessly across languages.
And these are just some of the many powerful AI features that are enabling our users to do remarkable things with our products, which are far and away the best platforms in the world for AI. That’s in no small part because of the extraordinary power and performance of Apple silicon. Building on our efforts in the AI space, we are also collaborating with Google to develop the next generation of Apple Foundation Models. This will help power future Apple Intelligence features, including a more personalized Siri coming this year. We’re incredibly excited for what’s to come with so many new experiences to unlock.
Turning to Services, we achieved an all-time revenue record of $30 billion, 14% higher from a year ago. Services also set all-time revenue records in both developed and emerging markets. Apple TV has seen fantastic momentum, with December seeing a 36% increase in viewership over the previous year. It’s no wonder, with shows like “Pluribus,” which are creating landmark cultural moments that audiences are loving. Anticipation is building for upcoming new productions like “Cape Fear” from Steven Spielberg and Martin Scorsese, and we are thrilled to announce that “Ted Lasso” will be returning for a fourth season this summer.
Six years since launch, we’re excited by the growing enthusiasm viewers have for Apple TV, and we are grateful for the accolades that have followed, most recently at the Critics’ Choice and Golden Globe Awards. To date, Apple TV productions have earned more than 650 wins and more than 3,200 nominations, including a recently announced Oscar nomination for Best Picture for F1: The Movie.
And speaking of F1, we’re also approaching the start of a new Formula 1 season, and for F1 fans in the U.S., Apple TV will be the place to watch every practice, qualifying, sprint, and Grand Prix. MLS fans will also be able to watch every regular and postseason game with their Apple TV subscription this year, and we’re looking forward to kick off in the coming weeks.
Looking back, 2025 was a fantastic year for services as we rolled out amazing new features and broke records. Apple Music climbed to all-time highs in both listenership and new subscriber growth. Apple Pay eliminated more than $1 billion in fraud for our partners last year, and we’ve made it available in more markets than ever before. And last year, we welcomed more than 850 million users every week on average to the App Store, the world’s safest and most innovative app marketplace. Developers have now earned more than $550 billion on our platform since 2008.
In retail, we continue to bring a magical experience to our customers all around the world, and we were thrilled to have our best-ever results in retail during the quarter. We were excited to open our fifth store in India in December and have plans to open another store in Mumbai soon.
Wherever we are, we see ourselves as part of a larger whole. That’s why we show up with our values in everything we do. That means working with partners in places like Vietnam to bring more clean water to rural areas. It means celebrating graduations of new classes of innovators from our developer academies in places such as Brazil, Indonesia, and South Korea. It means 3D printing titanium cases for Apple Watch using recycled materials so that they’re better for the planet without compromising quality. And so much more.
We’re especially proud of the work we’re doing to support American innovation. Last year, we committed to invest $600 billion over four years in vital industries like advanced manufacturing, silicon engineering, and artificial intelligence. As we’re building on our long-standing investments in America, we’re supporting nearly half a million jobs with thousands of suppliers across all 50 states. In the years since we made our initial commitment, we’re making great progress. Today we’re shipping servers to power Apple Intelligence from our new manufacturing facility in Houston. Through our Advanced Manufacturing Program, we’re working with Corning in Kentucky to make 100% of cover glass for iPhone and Apple Watch. We’re working with Micron, which broke ground on a new advanced chip packaging and test facility, and we continue to advance the development of an end-to-end silicon supply chain across the country, sourcing 20 billion U.S. chips in 2025.
Through our Apple Manufacturing Academy in Detroit, we’re already training American businesses and innovators on the latest smart manufacturing and artificial intelligence techniques. Six months since opening, the Academy is already making an enormously positive impact for businesses working alongside Apple engineers to drive productivity, efficiency, and quality in their supply chains.
As I said at the beginning of my remarks, this was, in so many ways, a remarkable quarter for Apple, and we’re excited for all the opportunities we’ll have in the year ahead to deliver innovations that have never been seen before and enrich the lives of users every step of the way. With so much to look forward to in the weeks and months ahead, I have every confidence that our best work is yet to come. With that, I’ll turn it over to Kevan.
Thanks Tim, and good afternoon everyone. Our revenue of $143.8 billion was up 16% year-over-year, our best quarter ever. Across the world, we set all-time revenue records in both developed and emerging markets, and we saw double-digit growth year-over-year across a majority of the markets we track, including the U.S., Latin America, Western Europe, Greater China, India, and Japan. in South Asia. Products revenue was $113.7 billion, up 16% year-over-year, driven by double-digit growth in iPhone, setting a new all-time record. And as Tim mentioned, thanks to our strong levels of customer loyalty and satisfaction, our install base of active devices has now surpassed 2.5 billion, reaching another all-time high across all product categories and geographic segments.
Services revenue was 30 billion dollars, up 14% year-over-year. This performance continues to be broad-based, with double-digit growth in almost every market we track. We also reached all-time revenue records for advertising, cloud services, music, and payment services, with December supporter records on the App Store and video.
Company gross margin was at 48.2%, above the high end of our guidance range and up 100 basis points sequentially, driven by favorable mix and leverage. Products gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage. Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix.
Operating expenses landed at $18.4 billion, up 19% year-over-year. This was within the range we provided, and driven by increased investment in R&D. Net income was $42.1 billion and diluted earnings per share was $2.84, up 19% year-over-year. Both net income and diluted EPS were all-time records, and these incredibly strong business results drove an all-time record for operating cash flow, coming in at $53.9 billion.
Now I’m going to provide some more details for each of our revenue categories.
iPhone revenue was $85.3 billion, up 23% year-over-year, driven by the iPhone 17 family. iPhone saw strength around the world, reaching all-time revenue records in many of the markets we track, including the U.S., Greater China, Latin America, Western Europe, the Middle East, Australia, and South Asia, as well as a December quarter record in India. The iPhone Active installed base grew to an all-time high and set a new all-time record for upgraders in aggregate and across many countries, including the U.S., China mainland, Japan, and India. According to a recent survey from World Panel, iPhone was a top-selling model in the U.S., urban China, the U.K., Australia, and Japan. Customers are loving the latest iPhone lineup. The latest customer satisfaction for the iPhone 17 family in the U.S. was measured at 99 percent by 451 Research.
Mac revenue was $8.4 billion, down 7 percent year over year. As we described in the last call, we faced a very difficult compare against the M4 MacBook Pro, Mac Mini, and iMac launches in the year-ago quarter. Despite this difficult compare, we continued to see growth in several emerging markets, including Brazil, India, Malaysia, Vietnam, and more. And, as Tim mentioned earlier, the Mac installed base reached another all-time high, with nearly half of the customers who purchased a Mac being new to the product. And in the U.S., customer satisfaction for Mac was measured at 97%.
iPad revenue was $8.6 billion, up up 6% year over year, driven by the M5-powered iPad Pro and the A16-powered iPad. We continued to add new users to the iPad. In fact, over half the customers who purchased an iPad during the quarter were new to the product. This helped the iPad installed base to reach an all-time high, and we also reached an all-time high for upgraders. Based on the latest reports from 451 Research, customer satisfaction was 98% in the U.S.
Wearables, Home, and Accessories revenue was $11.5 billion, down 2% year-over-year. During the quarter, we experienced constraints on the AirPods Pro 3, and we believe the overall category would have grown had it not been for these constraints. The wearables installed base reached a new all-time high, with over half of customers purchasing an Apple Watch during the quarter being new to the product. And in the U.S., customer satisfaction was recently reported at 96%. Our services revenue reached an all-time high of $30 billion, up 14% year over year. As we said earlier, we had all-time revenue records on advertising, music, payment services, and cloud services, where we saw a double-digit growth on paid subscribers. We continue to be optimistic about the future of our services business. With our installed base of over 2-1/2 billion active devices, we have an incredibly strong foundation for new growth opportunities. We saw increased customer engagement across our service offerings, with both transacting and paid accounts reaching all-time highs in the quarter. And we continue to improve the quality and expand the breadth of our services offerings, from new wallet features like Digital ID, which provides a way for users to create an ID in wallet using information from their U.S. passport, to additional ads coming to search in the App Store, which provides advertisers more ways to drive downloads from search.
Turning now to Enterprise, organizations are continuing to expand their fleet of Apple devices to drive productivity while remaining secure. Snowflake has deployed over 9,000 Mac devices company-wide, establishing Mac as a primary laptop across all business units, resulting in increased performance and a reduction in support tickets. AstraZeneca is rolling out over 5,000 M5-powered iPad Pros to its pharmaceutical sales team to take advantage of AI capabilities, including Apple Intelligence, while meeting with clinicians daily. And in Mexico, Coppell, the country’s largest domestic retailer, recently added MacBook Air in addition to a growing fleet of over 10,000 iPad devices.
Let’s turn to our cash position and capital return program. We ended the quarter with $145 billion in cash and marketable securities. We had $2.2 billion of debt maturities, and decreased commercial paper by $6 billion, resulting in $91 billion in total debt. Therefore, at the end of the quarter, net cash was $54 billion. During the quarter, we returned nearly $32 billion to shareholders. This included $3.9 billion in dividends and equivalents, and $25 billion through open-market repurchases of 93 million Apple shares.
As we move ahead into the March quarter, I’d like to review our outlook, which includes the types of forward-looking information that Suhasani referred to. Importantly, the color we’re providing assumes that global tariff rates, policies, and their application remain in effect as of this call and the global macroeconomic outlet does not worsen from today.
We expect our March quarter total company revenue to grow by 13% to 16% year-over-year. which comprehends our best estimates of constrained iPhone supply during the quarter. We expect Services revenue to grow at a year-over-year rate similar to what we’ve reported in the December quarter. We expect gross margin to be between 48% and 49%. We expect operating expenses to be between $18.4 billion and $18.7 billion, which is at a similar level to what we reported in the December quarter, and driven by higher R&D on a year-over-year basis. We expect OI&E to be around $100 million, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 17.5%.
Finally, today our Board of Directors has declared a cash dividend of 26 cents per share of common stock payable on February 12, 2026 to shareholders of record as of February 9, 2026. With that, let’s open to call the questions.
To be continued…
2026-01-30 05:34:47
On Thursday Apple did what it forecast three months ago: annoucned an all-time record for a quarter in the company’s near 50-year history.
Company revenue was up 16% versus the year-ago quarter. iPhone and Services revenue also set all-time records. China growth was up 38% after four years of flat-to-down growth. iPad revenue was up 6% while Mac revenue was down 7% in a quiet quarter.
At 2pm Pacific/5pm Eastern, Apple will spend an hour on the phone with financial industry analysts. We’ll have our usual live transcript, followed at 5pm Pacific/8pm Eastern by our own live analysis on YouTube:
And now, to help you visualize what Apple just announced, here is our traditional barrage of charts and graphs:
2026-01-30 02:45:13
Apple confirmed to Reuters today that it has acquired an Israeli startup called Q.ai, which uses artificial intelligence technology to analyze audio:
Apple did not disclose terms of the deal or what Q.ai’s technology will be used for, but said the startup has worked on new applications of machine learning to help devices understand whispered speech and to enhance audio in challenging environments. In a statement, [CEO Aviad] Maizels said “joining Apple opens extraordinary possibilities for pushing boundaries and realizing the full potential of what we’ve created, and we’re thrilled to bring these experiences to people everywhere.”
Maizels was also the founder of PrimeSense, which Apple acquired back in 2013 and used as part of the basis for Face ID. Two of Q.ai’s co-founders will be joining the company as well. Though Apple didn’t confirm the price tag, the Financial Times has reported (paywalled) that the deal was worth almost $2 billion, which would make it the company’s second biggest acquisition after the 2014 purchase of Beats for $3 billion.1
There were lots of rumors in the last year that Apple might purchase an AI company to offset the challenges it’s had in the market; in the end, Apple opted to partner with Google to provide foundation models for its technology.
Overall, this feels more like a traditional Apple acquisition: a smaller company, more targeted in its use case, with talented staff that it can bring onboard. Apple’s already done plenty with machine learning around audio (including the translation features of the AirPods Pro and different audio modes in videos shot on the iPhone), and this would set them up well for improving everything from microphone performance to perhaps some of its live captioning features—perhaps in a future smart glasses product, for example.
