Apple today announced financial results for its fiscal 2026 fourth quarter ended September 26, 2026. The Company posted quarterly revenue of $114.5 billion, up 12 percent year over year. Company gross margin was 47.9 percent, including a favorable impact of approximately 1 percentage point from tariff refunds. Diluted earnings per share was $2.10, up 14 percent year over year, and included a favorable impact of $0.05 from tariff refunds.
This was John Ternus’ first earnings call as CEO, and, as is tradition, he spent the first half of his introductory remarks reflecting on Apple’s recent releases (on iPhone Duo: “the most transformational iPhone since the original”; on Siri AI: “[it’s] the Siri we’ve always wanted”; on Mac: “[it’s] what brought me to Apple”; and, of course, on Apple: “Apple is the greatest company in the world”). He then turned to Apple’s “excellent quarter.” And it was, indeed.
Apple’s year-over-year revenue growth was 17% for iPhone, 24% for Mac (despite both suffering from “supply constraints”), and 10% for Services. Apple “generated $28 billion in operating cash flow” and returned 100% of that to shareholders via stock buybacks and dividends.
It’s quite the quarterly capper on Apple’s “best fiscal year yet”: $478.8 billion in annual revenue, up 15% from 2025, with a record earnings per share (EPS) of $8.98 (up 20% over last year).
Despite Ternus’ revelation that “we have never sold more Macs in a fiscal year than we did this time” and that iPhone “set a September quarter record for upgraders,” it remains unclear how much of that record revenue is because Apple sold more stuff or sold that stuff for more money. Regardless, Apple generated more revenue than ever. Naturally, after such a strong quarter and year, Apple’s stock is down 1.83% for the day and an additional 2.8% after hours.
One other striking number worth calling out:
Operating expenses came in at $19.2 billion, up 21% year-over-year, as we continue to make investments in R&D.
Those R&D investments represent about eighteen points of the 21% increase in operating expenses, or about $11.7 billion of the $19.2 billion. R&D grew around 32% in both this past quarter and for the year—up $11.2 billion annually, for a total of $45.765 billion in FY26.
I’m confident a significant portion of this R&D increase is attributable to AI (CFO Kevan Parekh implies as much when answering a question about increased operating expenses for the coming December quarter), but whatever it’s for, Apple is significantly outspent in R&D by Meta and Alphabet (Google): in Q3 2026 alone, each spent nearly half of what Apple did for all of FY26—and each has already surpassed Apple’s annual R&D expenses in just their first three reported quarters.
I understand Apple, Meta, and Alphabet are in very different businesses and have very different research and development needs and reporting methodologies, but I find the difference stark.
| R&D Expenses | Quarter* ($B) | YTD* ($B) |
|---|---|---|
| Apple | $11.7 | $45.8 |
| Meta | $20.1 | $59.41 |
| Alphabet | $20.6 | $55.89 |
* Quarter: Q4 for Apple; Q3 for Meta and Alphabet. YTD: Full year for Apple; nine months for Meta and Alphabet.
Despite its comparatively small R&D budget, Apple still manages to build a remarkably impressive and influential product lineup that generates an astounding amount of money every year. I’m left to wonder: what level of product excellence and innovation could Apple unleash if it were to match the R&D budgets of its tech peers?
Perhaps, with a product guy once again at the helm, we’ll soon find out.
See Also: Jason Snell’s transcript and traditional barrage of charts and graphs.










