Apple Posts Record $143.8 Billion Revenue for Q1 2026 as iPhone Sales Surge

Apple Inc. (NASDAQ: AAPL) announced record-breaking financial results for its fiscal 2026 first quarter on Thursday, reporting total revenue of $143.8 billion, a 16% increase from the $124.3 billion recorded in the prior-year period. The results significantly outpaced analyst consensus estimates of $138.4 billion, driven by robust holiday demand for the iPhone 17 lineup and continued expansion within the company’s Services segment.

Diluted earnings per share (EPS) reached an all-time high of $2.84, up 19% year-over-year, exceeding the $2.67 anticipated by Wall Street. Following the report, Apple shares rose approximately 1.9% in extended trading.

Segment Performance and iPhone Momentum

Revenue growth was primarily anchored by the iPhone, which generated $85.3 billion—a 23% year-over-year increase. Executives noted that demand for the iPhone 17 series remained high across all geographic regions, leading to a “supply chase” environment for advanced 3-nanometer silicon components heading into the March quarter.

The Services division also achieved a new all-time revenue record of $30.0 billion, a 14% increase from the previous year. This growth was supported by record engagement in advertising, cloud services, and payment platforms, as Apple’s total active installed base reached a milestone of 2.5 billion devices.

Segment	Q1 2026 Revenue	Q1 2025 Revenue	YoY Change
iPhone	$85.27B	$69.14B	+23.3%
Services	$30.01B	$26.34B	+13.9%
Wearables/Home	$11.49B	$11.75B	-2.2%
iPad	$8.60B	$8.09B	+6.3%
Mac	$8.39B	$8.99B	-6.7%

While iPad revenue grew 6% on the strength of M5-powered models, the Mac and Wearables segments experienced slight contractions. Mac revenue fell 6.7% due to difficult year-over-year comparisons, while Wearables were impacted by supply constraints for the AirPods Pro 3.

Margins and Regional Growth

Profitability metrics remained strong, with gross margins rising to 48.2%, up 100 basis points sequentially. This expansion was attributed to a favorable product mix weighted toward premium models and operational leverage. Net income for the quarter totaled $42.1 billion.

Regionally, Apple saw a significant recovery in Greater China, where revenue climbed 38% to $25.53 billion. The Americas remained the largest market at $58.53 billion (up 11%), followed by Europe at $38.15 billion (up 13%).

Capital Return and Outlook

Apple generated a record $53.9 billion in operating cash flow during the quarter, allowing it to return $32 billion to shareholders through dividends and share repurchases. The board declared a cash dividend of $0.26 per share, payable on February 12, 2026.

For the fiscal second quarter ending in March, Apple projected:

Revenue Growth: 13% to 16% year-over-year.

Gross Margin: Between 48% and 49%.

Operating Expenses: Between $18.4 billion and $18.7 billion.

Management warned that while component costs had a minimal impact on the December quarter, rising memory prices for RAM and NAND are expected to create a headwind in the upcoming period.

Reasons to Pass on AAPL

• Heavy reliance on iPhone cycle: iPhone accounted for nearly 60% of quarterly revenue, increasing exposure to product-cycle risk despite current strength.
• Supply constraints risk: Ongoing “supply chase” for advanced 3-nanometer components could limit near-term upside or pressure costs.
• Softness in non-core hardware segments: Mac and Wearables revenue declined year over year, indicating uneven demand across the product portfolio.
• Rising component cost headwinds: Management flagged higher RAM and NAND pricing as a margin risk in upcoming quarters.
• Valuation sensitivity after record results: Shares rose following a strong earnings beat, potentially limiting near-term upside as expectations reset higher.
• Growth normalization risk: Management guided to mid-teens revenue growth, implying moderation from the outsized iPhone-driven surge in Q1.
• Services growth deceleration risk: While Services set a revenue record, growth of 14% is slower than hardware growth, reducing its ability to offset hardware cyclicality.
• China rebound sustainability: The sharp recovery in Greater China revenue may prove volatile given historical demand swings and competitive pressures.