Apple reported fiscal fourth-quarter financial results that surpassed Wall Street expectations, bolstered by early consumer demand for its iPhone 18 Pro lineup and targeted price increases that helped cushion the blow of escalating memory-chip expenses.
The technology giant posted quarterly sales of $114.48 billion, beating analyst estimates of $113.39 billion compiled by LSEG data. Profit came in at $2.10 per share, topping the anticipated $1.99 per share even when excluding a 5-cent-per-share contribution from tariff refunds. Despite the stronger-than-expected figures, Apple shares dipped roughly 1% in volatile after-hours trading following the announcement.
The financial report arrives as the company navigates a period of strategic transition under Chief Executive John Ternus, who assumed the role in September. Moving away from a nearly two-decade tradition of launching the majority of its new smartphones each autumn, Apple is staggering its rollouts. The iPhone Pro and Duo models shipped this year, while additional iPhone variants are scheduled for next year.
Furthermore, the company rolled out a series of non-iPhone products for the holiday shopping quarter, including its first touchscreen laptops and initial smart-home hub. Analysts note that this measured cadence of product introductions is designed to smooth out a traditionally lopsided annual revenue cycle that previously peaked during the holiday season and dwindled by late summer.
While hardware demand remains robust, the company has contended with customer reports concerning cracked screens on the iPhone Duo, its inaugural foldable phone. The device sold out online within hours of release and generated long queues at retail locations last month. In an interview, Ternus stated that a very small percentage of units had been returned for display issues and confirmed that Apple is replacing them. He added that the company is currently unable to satisfy overall consumer demand for the Duo, with no specific timeline for when supply and demand will stabilize.
“Duo is constrained as of today,” Ternus said. “The ramp is going well, and we’re working hard to get it to as many customers as quickly as possible, but at this point, we’re not able to predict when supply and demand will be in balance.”
Fourth-quarter iPhone sales reached $57.58 billion, exceeding analyst expectations of $56.54 billion. That revenue figure encompassed the iPhone 18 Pro models but did not include sales of the Duo.
The operational adjustments coincide with broader supply chain headwinds, notably an artificial intelligence-driven surge in memory-chip prices. Former CEO Tim Cook previously likened the cost spike to a 100-year flood that threatens the margin benefits Apple typically captures from storage upgrades. To counteract the pressure, Apple increased prices on iPhone 17 models by $100 alongside selective hikes on MacBook devices as it introduced the iPhone 18 Pro.
“We did see higher memory costs as compared to the June quarter, which was partially offset by the benefit of carrying inventory and lower costs on certain non-memory components,” Ternus told reporters. “These price increases provided some offset.”
Gross margins settled at 47.9%, outperforming the 47.5% consensus estimate tracked by LSEG. Another significant factor influencing operational costs is the infrastructure required to run the redesigned, AI-powered Siri, which Ternus noted now handles 2.5 billion requests daily.
“Now we have the Siri that we always wanted, which we really built from the ground up,” Ternus said.
Hardware segments showed mixed performance. Mac computer sales totaled $10.79 billion, comfortably beating estimates of $9.61 billion as the computers gained traction among tech enthusiasts hosting AI agents. Services revenue reached $31.57 billion, closely aligning with the $31.58 billion analyst consensus. However, sales for iPads and wearables fell short of expectations, recording $6.23 billion and $8.30 billion against estimates of $6.70 billion and $9.06 billion, respectively.
