Apple Forecasts Lower December-Quarter Gross Margin After Record Revenue

Apple posted record September-quarter revenue of $114.477 billion but forecast a lower gross margin for the December quarter as memory and Siri AI costs weigh on its outlook.

Apple's fiscal 2026 fourth quarter covered the three months ended Sept. 26. Revenue reached $114.477 billion, up 11.7% from a year earlier, while diluted earnings per share rose 14% to $2.10. Net income totaled $30.711 billion, and gross margin was 47.9%.

Tariff refunds contributed about 1 percentage point to gross margin and $0.05 to diluted earnings per share.

For the December quarter, Apple forecast revenue growth of 7% to 10% year over year, with Services growth of 8% to 9%. Its gross-margin range was 45% to 46%, below the September quarter's 47.9%. Even at the top of its revenue-growth range, the forecast would be below the latest quarter's 11.7% gain.

The Services outlook also implies slower growth than the reported quarter's 9.8% increase. Apple discussed the outlook during its Monday, Nov. 2, earnings call at 5 p.m. ET (22:00 UTC). Chief Financial Officer Kevan Parekh tied the expected margin range to higher memory costs and expenses from ramping Siri AI.

Chief Operating Officer Sabih Khan said memory demand was expected to constrain Mac and iPad supply during the December quarter.

During the September quarter, iPhone revenue rose 17.5% to $57.583 billion, while Mac revenue climbed 23.7% to $10.792 billion. Services revenue was $31.573 billion, up 9.8%, and iPad revenue fell 10.4% to $6.229 billion. Wearables, Home and Accessories revenue declined 7.9% to $8.300 billion.

Investor Jeff Marks raised his Apple price target by $20, to $360 from $340, while keeping a 2 rating, a hold-equivalent stance. The target is Marks' investment view, separate from Apple's revenue, margin and product-supply outlook.

Preorders for the iPhone Duo began Oct. 16, and the device became available in stores Oct. 23, after the September quarter ended. It therefore falls within the December quarter covered by Apple's outlook. Khan said Monday the device was supply-constrained and Apple could not predict when supply would catch up with demand. Apple did not provide a Duo sales total.