Apple Manufacturing Purchase Obligations Rise About $33 Billion

Apple’s manufacturing purchase obligations rose about $33 billion between the June and September quarters, expanding its commitments for future supply as higher memory costs weigh on its holiday-quarter margin outlook.

Apple CEO John Ternus disclosed the increase Nov. 2. As of June 27, Apple had $57.0 billion in manufacturing purchase obligations, including $56.2 billion payable within 12 months. The obligations cover future purchases from manufacturing partners and component suppliers.

The increase measures a change in commitments, not spending already recorded. Apple did not disclose what made up the increase, leaving no basis to assign any portion of it to memory purchases. Ternus gave the change as an approximate figure, which does not establish an exact September balance.

Apple’s December-quarter gross margin forecast is 45% to 46%, compared with 47.9% in the September quarter. Tariff refunds added about one percentage point to the September margin. Apple Chief Financial Officer Kevan Parekh said higher memory costs would account for most of the sequential decline after removing that refund benefit from the comparison.

“What we’re seeing with memory pricing right now is unprecedented,” Ternus said.

Apple recorded $114.5 billion in revenue for its fiscal quarter ended Sept. 26, up 12% from a year earlier. It expects revenue to grow 7% to 10% year over year in the December quarter, alongside the lower gross margin forecast.

Apple shares traded at $324.17 as of 9:30 a.m. ET (14:30 UTC) Nov. 3.