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Apple Inc. (AAPL)

TTM Quarterly Earnings Analysis Report
Generated: February 7, 2026

Key Financials

Mar '24
Q2 FY24
Jun '24
Q3 FY24
Sep '24
Q4 FY24
Dec '24
Q1 FY25
Mar '25
Q2 FY25
Jun '25
Q3 FY25
Sep '25
Q4 FY25
Dec '25
Q1 FY26
Mar '26 (E)
Q2 FY26
Stock Price $171 $210 $232 $250 $222 $205 $255 $272 $278
Stock QoQ -11% +23% +11% +8% -11% -8% +24% +7% +2%
Revenue YoY -4% +5% +6% +4% +5% +10% +8% +16% +16%
Op Margin 31% 30% 31% 34% 31% 30% 32% 35% 32%
SUM=RevYoY + OM 26% 34% 37% 38% 36% 40% 40% 51% 48%
TTM Op Profit ($M) $129,443 $132,049 $134,904 $137,652 $139,603 $142,752 $145,913 $154,241 $160,343
TTM OP QoQ 0% +2% +2% +2% +1% +2% +2% +6% +4%
TTM FCF/OP 79% 79% 81% 71% 71% 67% 68% 80% N/A
Debt/EBITDA 0.8x 0.8x 0.9x 0.7x 0.7x 0.7x 0.7x 0.6x N/A

(E) = Expected/Estimated | Apple FYE = September

Trend Analysis

  • Stock vs TTM OP (8 Quarters): Over 8 quarters (Mar '24 to Dec '25), AAPL stock rose ~59% ($171 to $272) while TTM OP grew ~19% ($129.4B to $154.2B). The stock significantly outperformed TTM OP growth, reflecting substantial multiple expansion. This is driven by the market pricing in the iPhone 17 super-cycle, accelerating Services monetization, and AI/Apple Intelligence narrative commanding a premium valuation.
  • Stock QoQ Drivers: Stock QoQ most closely tracks SUM (RevYoY + OM) acceleration. When SUM accelerated from 40% to 51% in Dec '25, stock rose +7%. When SUM decelerated from 38% to 36% in Mar '25, stock fell -11%. TTM OP QoQ acceleration from +2% to +6% in Dec '25 also correlated with positive stock movement. The TTM FCF/OP recovery from 68% to 80% in Dec '25 provided additional support.
  • Next Quarter Outlook: Management guides Q2 FY26 revenue growth of 13-16% YoY with gross margin of 48-49%. SUM is expected to moderate slightly (48% vs 51%) as operating margin normalizes from the holiday peak. TTM OP QoQ is expected to decelerate from +6% to ~+4% as the base effect normalizes. However, TTM OP continues its upward trajectory ($160B+). Mildly bullish — revenue acceleration persists above trend, and guidance beat analyst expectations ($107.8-110.7B vs consensus $104.8B).

Management Guidance Summary

Short-Term (Q2 FY2026, Jan-Mar 2026)

  • Revenue: $107.8-110.7B (+13-16% YoY), well above consensus of $104.8B
  • Gross Margin: 48-49% (stable to slightly improving)
  • Operating Expenses: $18.4-18.7B (elevated due to AI R&D)
  • Tax Rate: ~17.5%
  • Key commentary: iPhone supply remains constrained; "difficult to predict when supply and demand will balance" (Cook). Memory costs expected to pressure margins more in Q2.

Long-Term (Full Year / Multi-Year)

  • Revenue trajectory: Double-digit growth driven by iPhone 17 cycle, Services momentum, and emerging market expansion
  • Margin trajectory: Stable to expanding; Services mix shift supports gross margin; tariff headwinds partially offset
  • Capex: Significant increases for AI/private cloud compute infrastructure; $500B US investment commitment over 4 years
  • Strategic priorities: Apple Intelligence expansion, Google partnership for next-gen foundation models, enhanced Siri launching in 2026, private cloud compute buildout
  • Installed base: 2.5 billion active devices, providing long-term Services monetization runway

Opportunities & Challenges

Opportunities

  • iPhone 17 super-cycle with record upgraders and switchers globally
  • China revenue surging +38% YoY with strong switcher momentum
  • Services hitting $30B/quarter with 76.5% gross margin
  • Apple Intelligence driving new upgrade cycles and engagement
  • India market expansion with majority of buyers new to Apple ecosystem
  • 2.5B installed base providing massive monetization runway

Challenges

  • Advanced node (3nm) supply constraints limiting iPhone production
  • Rising memory component costs pressuring near-term margins
  • Mac revenue -7% YoY facing tough M4 launch comps
  • Wearables/Home segment declining -2.2% with AirPods Pro 3 supply issues
  • Elevated R&D/opex from AI infrastructure investments
  • Tariff headwinds (~$1.4B/quarter impact on gross margin)

Upside to Earnings & Multiples

Near-Term (0-6 months)

Q2 FY26 guidance of $107.8-110.7B significantly exceeds consensus ($104.8B), suggesting another beat is likely. iPhone supply constraints imply pent-up demand that could extend the cycle. Services at a $120B+ annual run-rate with 76.5% gross margins provides earnings stability. Memory cost headwinds appear manageable given strong pricing power. Near-term EPS upside of 5-10% vs consensus is plausible.

Medium-Term (6-18 months)

iPhone 17 cycle has further legs as supply constraints ease and pent-up demand converts. Apple Intelligence features launching throughout 2026 (enhanced Siri, Google partnership models) could drive a second wave of upgrades. Services revenue trajectory toward $130B+ annually with expanding margins. China recovery appears durable with 38% growth and record store traffic. Operating leverage from the $500B US investment program begins to materialize.

Long-Term (18+ months)

AI-driven ecosystem lock-in strengthens the installed base moat (2.5B devices). On-device AI and private cloud compute create differentiated capabilities competitors cannot easily replicate. India represents a massive underpenetrated market with majority of buyers new to Apple. Services TAM expansion through financial services, advertising, and health. Potential for new product categories leveraging the AI platform (AR/VR, automotive).

Market Pricing

Stock is up ~9% over the past 3 months ($255 in Sep '25 to $278 in Mar '26 estimate). At $4.1T market cap, AAPL trades at roughly 26x TTM operating income ($154B), reflecting premium but not excessive valuation for a company accelerating to +16% revenue growth. The market appears to be appropriately pricing the iPhone 17 super-cycle but may be under-appreciating the durability of the China recovery (+38% YoY) and the multi-year AI upgrade cycle. If TTM OP reaches $175B+ by FY26 end (currently trending at $160B+), the current stock price implies only modest multiple expansion is needed for further upside.

Previous 3 Qtrs Analysis

Q4 FY2025 (Jul-Sep 2025) — Reported Oct 30, 2025

Metric Reported YoY vs Consensus Next Q Guidance
Revenue $102.5B +8% Beat ~1.3% +10-12% YoY (Dec qtr)
EPS $1.85 +13% (adj) Beat
Gross Margin 47.2% +100bps 47-48%
Net Income $27.5B +16% (adj)
Stock Reaction +3.5% (after hours)

Opportunities

  • Record fiscal year 2025 revenue of $416B and net income of $112B
  • Services surpassed $100B annual revenue milestone (+15% YoY to $28.8B)
  • iPhone 17 launched as "strongest lineup ever" with immediate supply constraints from demand
  • Dec quarter guided for 10-12% growth ("best quarter ever")

Challenges

  • Greater China revenue declined -3.6% YoY, a lingering weak spot
  • Wearables/Home flat YoY at $9.0B despite strong Watch/AirPods offset by accessories
  • Tariff costs estimated at $1.4B for the December quarter
  • Mac faces very difficult comp against prior-year M4 launches in Dec quarter

Q3 FY2025 (Apr-Jun 2025) — Reported Jul 31, 2025

Metric Reported YoY vs Consensus Next Q Guidance
Revenue $94.0B +10% Beat 5.7% ($88.9B est) Mid-to-high single-digit YoY
EPS $1.57 +12% Beat 10.6% ($1.42 est)
Gross Margin 46.5% +20bps 46-47%
Net Income $23.4B +9%
Stock Reaction +2% (after hours)

Opportunities

  • iPhone revenue $44.6B (+13.5% YoY), record upgraders with strong emerging market growth
  • Mac revenue $8.0B (+14.8% YoY) driven by M4 MacBook Air momentum
  • Revenue records set in 25+ countries including India, Middle East, Latin America
  • 1 billion+ paid subscriptions across Services platform

Challenges

  • Tariff costs of ~$800M in Q3, with $1.1B estimated for Q4
  • iPad revenue declined -8.1% YoY to $6.6B (tough iPad Pro/Air comp)
  • Wearables/Home down -8.6% YoY due to product launch timing
  • Guidance assumes macro outlook "does not worsen" and Google revenue share continues

Q2 FY2025 (Jan-Mar 2025) — Reported Apr 30, 2025

Metric Reported YoY vs Consensus Next Q Guidance
Revenue $95.4B +5% Beat ~0.8% (~$94.6B est) Mid-to-high single-digit YoY
EPS $1.65 +8% Beat ~2% (~$1.62 est)
Gross Margin 47.1% +180bps
Net Income $24.8B +5%
Stock Reaction -2% (after hours)

Opportunities

  • iPhone revenue $46.8B (+2% YoY) with strong upgrade momentum
  • Services reached all-time record of $26.6B (+12% YoY)
  • Mac revenue $7.9B (+7% YoY) driven by M4 lineup
  • India revenue set all-time record with majority of buyers new to Apple

Challenges

  • iPad revenue flat at $6.4B amid product cycle gap
  • Wearables/Home declined -5% to $7.5B
  • Tariff uncertainty; management guided $900M impact for Jun quarter
  • Greater China revenue -2% YoY on competitive pressures

Data Sources

Disclaimer: This analysis is generated from publicly available earnings materials and is for informational purposes only. It does not constitute investment advice. Always verify information with official company filings and consult a financial professional before making investment decisions.