EARNINGS REVIEW
Apple, FY26 Q1 Earnings Results
Historical quarterly report · Results and outlook reflect information available at the time of that release. Actual results from later quarters have not been incorporated into the outlook.
Record iPhone and Services revenue lifted earnings and cash flow. The effect of the year-end peak season should be distinguished from the durability of regional demand recovery.
Assessment · Revenue, operating income and cash generation all improved this quarter. However, year-end peak-season results should not be annualized; assess the durability of iPhone replacement demand and Services growth alongside the regional mix and capital returns.
Key management and company statements
Earnings release · Excerpt from the original“These exceptionally strong results generated nearly $54 billion in operating cash flow”Meaning · Very strong results generated approximately 54 B$ of operating cash flow.
Context · This is the CFO’s earnings-release statement; quarterly OCF was 53.925 B$.
Original statement ↗01 Revenue, operating income and results versus expectations
Year over year · revenue 124.300 → 143.756 B$ (+15.7% · +19.456 B$), operating income 42.832 → 50.852 B$ (+18.7% · +8.020 B$).
Quarter over quarter · revenue 102.466 → 143.756 B$ (+40.3% · +41.290 B$), operating income 32.427 → 50.852 B$ (+56.8% · +18.425 B$), operating margin 31.6% → 35.4% (+3.7%p).
iPhone revenue was 85.269 B$, up 16.131 B$ year over year, and Services also grew. Greater China revenue rose from 18.513 → 25.526 B$, an increase of 7.013 B$.
02 Earnings sustainability · From operating income to net income
Revenue of 143.756 B$ and operating income of 50.852 B$ both increased year over year. iPhone demand and Services growth demonstrate core operating performance, while changes in the product and regional mix also affect profitability.
- Operating income
- 50.852 B$
- Net non-operating income
- 0.150 B$
- Income tax expense
- −8.905 B$
- Consolidated net income
- 42.097 B$
Net income of 42.097 B$ in the existing quarterly dataset is on a consolidated basis.
03 Cash flow quality · Net income → OCF → FCF
FCF was 51.552 B$, calculated by subtracting CapEx of 2.373 B$ from OCF of 53.925 B$. The company said it returned approximately 32.000 B$ to shareholders during the quarter. FCF and shareholder returns are different measures.
- Consolidated net income
- 42.097 B$
- Total net adjustments for noncash items, working capital and other items¹
- 11.828 B$
- Operating cash flow
- 53.925 B$
- Cash CapEx
- −2.373 B$
- FCF
- 51.552 B$
¹ Total net adjustments calculated as OCF−net income. This is not a single disclosed line item; it combines noncash items, working capital, classification differences and other adjustments.
FCF versus previous quarter · 26.486 → 51.552 B$, 25.066 B$ improvement.
04 Financial capacity · Net debt and payment obligations
Previous-quarter net cash · 2025-09-27
Cash and current investments 54.697 / Debt 98.657 B$
Current-quarter net cash · 2025-12-27
Cash and current investments 66.907 / Debt 90.509 B$
Net debt improved by 20.358 B$ from the previous quarter. The carrying amount of current debt is 13.824 B$. It may differ from the principal maturity schedule.
Current investments, commercial paper, and current and noncurrent borrowings are included. The net cash figure below should be distinguished from the company’s broader cash holdings that also include noncurrent marketable securities.
Common definition · Cash and current investments = cash equivalents + current investments and deposits. Debt = carrying amount of interest-bearing borrowings (current + noncurrent), excluding separately reported lease liabilities. This differs from total liabilities of 291.107 B$. Restricted cash, noncurrent securities and noncurrent deposits are excluded from cash and current investments.
05 Investment, capital allocation and cash returns
Earnings converted strongly into cash, but Q1 is the year-end peak selling season. Assess annual cash availability while considering supply-chain purchase commitments, dividends and share repurchases.
This quarter, cash CapEx/revenue is 1.7% and FCF/revenue is 35.9%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.
Quarterly results · CY-aligned presentation
Amounts in B$. Based on the CY-aligned year of this report, the table shows all 4 quarters of the preceding year and the current year to date. Each fiscal quarter is assigned to the CY quarter with the greatest overlap in actual reporting dates, alongside its original FY/CY quarter and start/end dates. Amounts have not been recalculated into actual calendar quarters.
| CY alignment | 2024 · 4 quarters | 2025 · 4 quarters | Change this quarter | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Metric | 2024 total4-quarter totalBalances are period-end | 1QFY24 Q223-12-31 ~24-03-30 | 2QFY24 Q324-03-31 ~24-06-29 | 3QFY24 Q424-06-30 ~24-09-28 | 4QFY25 Q124-09-29 ~24-12-28 | 2025 total4-quarter totalBalances are period-end | 1QFY25 Q224-12-29 ~25-03-29 | 2QFY25 Q325-03-30 ~25-06-28 | 3QFY25 Q425-06-29 ~25-09-27 | 4QFY26 Q125-09-28 ~25-12-27 | QoQvs FY25 Q4 | YoYvs FY25 Q1 |
| Revenue | 395.760 | 90.753 | 85.777 | 94.930 | 124.300 | 435.617 | 95.359 | 94.036 | 102.466 | 143.756 | +40.3%+41.290 B$ | +15.7%+19.456 B$ |
| Operating income | 125.675 | 27.900 | 25.352 | 29.591 | 42.832 | 141.070 | 29.589 | 28.202 | 32.427 | 50.852 | +56.8%+18.425 B$ | +18.7%+8.020 B$ |
| Operating margin | 31.8% | 30.7% | 29.6% | 31.2% | 34.5% | 32.4% | 31.0% | 30.0% | 31.6% | 35.4% | +3.7%p | +0.9%p |
| FCF | 98.299 | 20.694 | 26.707 | 23.903 | 26.995 | 123.324 | 20.881 | 24.405 | 26.486 | 51.552 | +25.066 B$ | +24.557 B$ |
| Operating cash flow | 108.294 | 22.690 | 28.858 | 26.811 | 29.935 | 135.472 | 23.952 | 27.867 | 29.728 | 53.925 | +81.4%+24.197 B$ | +80.1%+23.990 B$ |
| Cash CapEx | 9.995 | 1.996 | 2.151 | 2.908 | 2.940 | 12.148 | 3.071 | 3.462 | 3.242 | 2.373 | −26.8%−0.869 B$ | −19.3%−0.567 B$ |
| Net cash | −43.024 | −37.440 | −39.503 | −41.458 | −43.024 | −23.602 | −49.688 | −46.326 | −43.960 | −23.602 | +20.358 B$ | +19.422 B$ |
| Cash and current investments | 53.775 | 67.150 | 61.801 | 65.171 | 53.775 | 66.907 | 48.498 | 55.372 | 54.697 | 66.907 | +22.3%+12.210 B$ | +24.4%+13.132 B$ |
| Debt | 96.799 | 104.590 | 101.304 | 106.629 | 96.799 | 90.509 | 98.186 | 101.698 | 98.657 | 90.509 | −8.3%−8.148 B$ | −6.5%−6.290 B$ |
Indented rows are components or reference items for the parent metric. Net cash = cash and current investments − debt. Depending on the company definition, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.
Annual totals and year-to-date totals appear before each year’s quarters. Revenue, earnings and cash flow are sums of quarterly figures; margin is total operating income ÷ total revenue; net cash, cash and debt are balances at the end of the last quarter. Do not treat totals covering different lengths of time as directly comparable annual figures.
Net cash = cash and current investments − debt. A negative figure indicates net debt. Changes in FCF and net cash are shown as absolute amounts in B$. Quarterly figures have not been adjusted to force reconciliation with disclosed annual totals.
Comparison bases, calculation methods and quarterly sources
Calculation and presentation · Amounts in B$. Figures disclosed in millions of US dollars are divided by 1,000 without altering the source values. Where only cumulative cash flows are available, the previous cumulative period within the same fiscal year is deducted. YoY, QoQ and margins are calculated using amounts before display rounding. Earnings changes from negative or 0 bases are expressed as profit/loss transitions and absolute amounts.
Opinions and outlook · Management quotations include original excerpts and their translations. Quotations not identified as earnings-call transcripts come from earnings releases. Interpretations and implications are the author’s judgments. No numerical probability of achieving a target is assigned without quantitative verification.