What Management Said
Read the full Q1 2026 transcript ↗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 continue 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. 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.
Meanwhile, iPad saw December quarter revenue of $8.6 billion, up 6% from a year ago, with an all-time record for upgraders. 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.
What went well
- Best-ever quarter with record revenue of $143.8B, up 16% YoY, exceeding expectations
- iPhone set an all-time revenue record of $85.3B, up 23% YoY, with all-time records across every geographic segment
- Greater China grew 38% YoY, driven by iPhone (best-ever China iPhone quarter), with record upgraders and double-digit growth on switchers
- Services set an all-time record of $30B, up 14% YoY, with all-time records in advertising, cloud services, music and payment services
- Company gross margin of 48.2% was above the high end of guidance, up 100bps sequentially, with products gross margin up 450bps to 40.7%
- All-time records for net income ($42.1B), diluted EPS ($2.84, up 19% YoY) and operating cash flow ($53.9B)
- Installed base surpassed 2.5 billion active devices, an all-time high across all product categories and geographies
- iPad revenue of $8.6B, up 6% YoY, with an all-time record for upgraders; India set a quarterly revenue record with strong double-digit installed-base growth
What went wrong
- Mac revenue was $8.4B, down 7% YoY, against a very difficult compare versus prior-year M4 MacBook Pro, Mac Mini and iMac launches
- Wearables, home and accessories revenue was $11.5B, down 2% YoY, due to constraints on AirPods Pro 3 (category would otherwise have grown)
- Company is in supply-chase mode and currently constrained, driven by availability of advanced-node (3nm) capacity for its SoCs, with less supply-chain flexibility than normal
- Rising memory market pricing expected to be a bit more of a headwind to the March-quarter gross margin (and increasing significantly beyond)
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Total company revenue growth | Q2 FY2026 (March quarter) | 13%-16% YoY, comprehending constrained iPhone supply |
| Services revenue growth | Q2 FY2026 (March quarter) | similar YoY rate to December quarter |
| Gross margin | Q2 FY2026 (March quarter) | 48%-49%, with a bit more memory-cost impact |
| Operating expenses | Q2 FY2026 (March quarter) | $18.4B-$18.7B, similar to December, higher R&D YoY |
| OI&E | Q2 FY2026 (March quarter) | around $100M, excluding mark-to-market of minority investments |
| Tax rate | Q2 FY2026 (March quarter) | around 17.5% |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| iPhone revenue | +23% | iPhone 17 family strength (display, camera, new selfie camera, performance, design); all-time records across every geographic segment and a new all-time upgrader record; exited quarter with very lean channel inventory |
| Mac revenue | -7% | Very difficult compare against prior-year M4 MacBook Pro, Mac Mini and iMac launches, despite growth in several emerging markets |
| iPad revenue | +6% | M5-powered iPad Pro and A16-powered iPad; all-time record for upgraders and over half of buyers new to the product |
| Wearables, home and accessories revenue | -2% | Constraints on AirPods Pro 3; management believes the category would have grown absent the constraints |
| Services revenue | +14% | Broad-based double-digit growth in almost every market; all-time records in advertising, cloud services, music and payment services; App Store and video December-quarter records |
| Greater China revenue | +38% | iPhone-driven, best-ever China iPhone quarter, record upgraders and double-digit switcher growth; store traffic up strong double digits |
| Company gross margin | 48.2% (up 100bps sequentially) | Favorable mix and leverage from the strong iPhone cycle; products gross margin up 450bps to 40.7%; memory had minimal Q1 impact |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Supply constraints | Constrained on several iPhone 16/17 models (prior quarter) | In supply-chase mode; currently constrained by advanced-node (3nm) SoC capacity due to 23% iPhone growth outstripping internal estimates; hard to predict when supply and demand balance | — |
| Memory costs | Minimal impact in December quarter | Expected to be a bit more of an impact to March-quarter gross margin (in the 48%-49% guide); market pricing rising significantly beyond Q2; will look at a range of options | — |
| AI strategy / Google partnership | Building own foundation models; personalized Siri expected next year | Collaborating with Google to develop next-generation Apple Foundation Models to power a more personalized Siri coming this year; will still run on-device and in Private Cloud Compute; deal terms undisclosed | — |
| China | Return to growth expected | +38% YoY, best-ever China iPhone quarter, record install base and upgraders, strong double-digit switcher growth | — |
| Installed base | All-time high (prior quarter) | Surpassed 2.5 billion active devices; majority of enabled iPhone users actively using Apple Intelligence (15 languages) | — |
| U.S. investment / CapEx | $600B four-year U.S. commitment; Private Cloud Compute buildout | Q1 CapEx moderated sequentially; hybrid model retained; shipping Apple Intelligence servers from Houston; Corning Kentucky making 100% of iPhone/Watch cover glass | — |
| Tariffs | Guided ~$1.4B for December quarter | Landed roughly at ~$1.4B for the December quarter | — |
Q&A Summary
Comfort securing memory bits into the March guide and how memory inflation flows through the model; what is driving China strength (Amit Daryanani, Evercore)?
Cook: exited December with very lean channel inventory on staggering demand, now in supply-chase mode constrained by advanced-node SoC capacity; memory had minimal Q1 impact, a bit more expected in Q2 (in the 48%-49% guide), with pricing rising significantly beyond. China up 38% on iPhone 17 enthusiasm, record install base and upgraders, strong switcher growth.
What is the revenue-upside/monetization and ROI timeline for AI, and what are the one or two primary iPhone-strength drivers (Erik Woodring, Morgan Stanley)?
Cook: Apple is weaving intelligence across the OS in a personal, private way, creating value and opening opportunities across products and services; happy with the Google collaboration. iPhone strength is a combination of display, camera, performance, new selfie camera and beloved design driving a strong cycle.
Which product-category comps should we watch in the 13%-16% March guide, and what are the new advertising growth opportunities (Michael Ng, Goldman Sachs)?
Parekh: no particular comp issue to note (unlike the prior Mac compare); continuation of the strong cycle subject to constraints. On ads, broad-based records across advertising, music, payment and cloud; new App Store search ad slots and continued expansion, leveraging the 2.5B installed base.
How was the Google partnership decision made, and is there a search-like revenue-share opportunity (Ben Reitzes, Melius); and how is gross margin held at 48%-49% amid NAND inflation?
Cook: determined Google's AI technology offers the most capable foundation for Apple Foundation Models; will keep running on-device and in Private Cloud Compute with industry-leading privacy; deal terms not disclosed. Parekh: Q1 gross margin 48.2% up 100bps on favorable mix and leverage from the strong iPhone cycle (products +450bps); services double-digit growth also contributes.
How do you see overall smartphone demand given memory prices, and are long-term agreements (LTAs) vs spot an option (David Vogt, UBS)?
Cook: Q2 constraint is advanced-node capacity, not memory; won't comment on supply beyond Q2; believes iPhone gained share in December though the market wasn't growing at 23%; on sourcing options for memory it is 'a range' of levers, declining to be more specific.
Third-party data shows App Store decelerating (~7%) vs 14% services growth; and would Apple use price as a lever on memory (Wamsi Mohan, Bank of America)?
Parekh: App Store set a December-quarter record; Apple doesn't give per-category color; growth broad-based with all-time records in developed and emerging markets. Cook: would not speculate on using pricing as a lever.
Does the Google/Gemini collaboration change near-term Private Cloud Compute intent, and what drove the product gross-margin mix improvement / tariffs (Samik Chatterjee, JPMorgan)?
Parekh: won't detail the Google arrangement; CapEx is hybrid and volatile independent of volume (tooling, facilities, retail, data centers); 2025 included Private Cloud Compute buildout. Product mix favorability was higher than prior cycles given the strong iPhone cycle; tariffs landed roughly at the ~$1.4B December estimate.
How to think about Apple Foundation Model vs third-party models, and could memory scarcity be a share-gain chance in iPhone and Mac (Krish Sankar, TD Cowen)?
Cook: think of it as a collaboration with Google powering the personalized Siri, while Apple continues its own work; believes iPhone gained share in December and Mac gained share for full-year 2025.
Is iPhone 17 comparable to the 2020-2021 (iPhone 12/13) upgrade cycle plus Apple Intelligence impact, and how long will supply constraints last (Aatif Malik, Citi)?
Cook: each cycle is unique; the iPhone 17 family bundles compelling features and has done extremely well; constraint is specifically the 3nm advanced nodes for the latest SoCs, a direct result of 23% growth outstripping estimates; won't estimate when supply and demand balance. Parekh: large diverse installed base resonating across cohorts.
Unpack India traction, and is deepening internal silicon an underappreciated gross-margin lever (Aaron Rakers, Wells Fargo)?
Cook: India set a quarterly revenue record with records on iPhone/Mac/iPad and an all-time services record; second-largest smartphone and fourth-largest PC market with still-modest share and strong double-digit installed-base growth; Apple Silicon is a game changer and major competitive advantage. Parekh: core technologies like silicon and modem provide cost savings, differentiation and roadmap control, positively impacting gross margin.
Is AI evolving toward edge vs cloud, is there enough data-center capacity for Siri, and what share of the installed base is AI-capable (Richard Kramer, Arete)?
Cook: both on-device and Private Cloud Compute are important (a differentiator via privacy); has done its best to put capacity in place though demand is hard to estimate precisely. Parekh: won't disclose the specific AI-capable device share, but it is a growing portion of the installed base.
More on Apple Inc.
Reported 2026-01-29 · figures from the Apple Inc. Q1 2026 earnings call.
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