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Apple Inc. (AAPL)

Record-high EPS

Driven by the higher-margin Services mix, better iPhone Pro mix and ASP, and continued large-scale share repurchases that reduced diluted shares outstanding.

1Q2620 nodes5 levels

Quarter Timeline

Current

1Q26

4Q25

Root Thesis

Driven by the higher-margin Services mix, better iPhone Pro mix and ASP, and continued large-scale share repurchases that reduced diluted shares outstanding.

Map Access

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FinancialLevel 1Path reader

EPS Growth

Record-high EPS

Driven by the higher-margin Services mix, better iPhone Pro mix and ASP, and continued large-scale share repurchases that reduced diluted shares outstanding.

Recent Quarters

Source

Apple 1Q26 Earnings Release

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FinancialLevel 2Path reader

Net Sales

Modest growth

Double-digit Services growth offset weakness in parts of hardware, especially Wearables, and ongoing revenue pressure in Greater China.

Recent Quarters

Source

Apple 1Q26 Earnings Release

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FinancialLevel 3Path reader

Services Revenue

Stronger-than-expected growth

A larger active installed base, record paid subscriptions, and stronger monetization across the App Store and iCloud expanded Services revenue.

Recent Quarters

Source

Apple 1Q26 Earnings Release

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OperationsLevel 4Path reader

Ecosystem Moat

Installed base expansion

Cross-device integration and Apple Intelligence features deepen hardware-software lock-in, reduce churn, and support ARPU expansion.

Source

Apple 1Q26 Prepared Remarks

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SEO Narrative

EPS Growth

Driven by the higher-margin Services mix, better iPhone Pro mix and ASP, and continued large-scale share repurchases that reduced diluted shares outstanding.

Financial

Net Sales

Modest growth

Double-digit Services growth offset weakness in parts of hardware, especially Wearables, and ongoing revenue pressure in Greater China.

Services Revenue

Stronger-than-expected growth

A larger active installed base, record paid subscriptions, and stronger monetization across the App Store and iCloud expanded Services reve…

Products Revenue

Hardware cycle rotation

iPhone remained resilient, Mac benefited from M-series refreshes, while Wearables faced tougher comparisons and a softer upgrade cycle.

Regional Divergence

Americas strong / Greater China weak

Upgrade demand remained resilient in the Americas and Europe, while Greater China stayed pressured by tougher local competition.

Financial

Gross Margin

46.2%

A more favorable business mix, with Services taking a larger share, and stronger premium-hardware mix together pushed consolidated gross margin to a historical high.

Services Gross Margin

>72%

Software and subscription services carry very low marginal cost, so scale continues to expand incremental profitability.

Products Gross Margin

>36%

Lower component cost pressure, including memory, plus a richer Pro-device mix offset part of the foreign-exchange headwind.

Financial

Opex and Operating Leverage

Disciplined cost control

Apple continued investing in AI and silicon R&D while keeping SG&A under control, allowing positive operating leverage.

AI Investment and R&D Intensity

R&D growth

The company continues to invest heavily in proprietary models, data-center infrastructure, and on-device compute capabilities.

Financial

Capital Return Program

Large buybacks

Very strong operating cash flow supports multi-billion-dollar quarterly repurchases, which remain a key reason EPS can grow faster than net income.

Free Cash Flow

Cash machine

Supply-chain scale and bargaining power support efficient working-capital turns, allowing a high conversion of profit into free cash flow.

Apple Inc. (AAPL)

Apple Inc. · AAPL

EPS Growth

Net Sales

Services Revenue

Ecosystem Moat

EPS Growth

Net Sales

Gross Margin

Opex and Operating Leverage

Capital Return Program