Apple reports $114.48 billion in quarterly revenue, up 12%

Memory costs and the holiday outlook

Chief Financial Officer Kevan Parekh said tariff refunds added about 1 percentage point to both company and product gross margins in September. Without refunds in either quarter, both margins would have fallen about 1 percentage point from June, primarily because of higher memory costs.

Ternus said lower-cost inventory, savings on some other components and price increases partly offset higher memory costs. Apple raised iPad and MacBook prices in June and iPhone prices in September, including a $100 increase for iPhone 17 models. He expects the benefit of cheaper memory inventory to diminish over time.

BBC reported that Apple had raised prices on nearly all its hardware products by around 20%. AJ Bell head of markets Dan Coatsworth said Ternus’s comments implied Apple products would become more expensive, while Apple had not said in an earlier report whether it expected to raise product prices again.

Apple also expects the rollout of Siri AI to weigh on margins. Parekh said it would raise cloud costs and require Apple to recognize some revenue from devices with the bundled service over their lifetimes rather than entirely at sale. The company plans to raise iCloud+ subscription charges to offset superintelligence (SI) costs, but has not set out specific prices.

Apple forecasts December-quarter revenue growth of 7%–10%, taking constrained supply into account, above the 6.1% analysts expected. It forecasts services growth of 8%–9%, below the 10.7% analyst estimate; Parekh cited third-party licensing and foreign exchange as the main pressures. The outlook assumes tariff rates and policies remain as they were at the earnings call and the global economic outlook does not worsen.

A filing showed that Apple’s manufacturing purchase obligations—orders placed with suppliers and contract manufacturers—increased by $33 billion to $89.7 billion as of 26 September. Chief Operating Officer Sabih Khan said Apple was working closely with memory suppliers but did not directly confirm a long-term supply agreement when asked.

Shares and supply

Apple shares fell as much as 4.43% below the regular-session close during the November 2 earnings call, before ending after-hours trading at $328.81, down 2.81%. The shares later fell about 4% during regular trading on 3 November; that intraday move was not a closing result.

In an interview with Reuters, Ternus said a very small percentage of iPhone Duo units had been returned for display problems and Apple was replacing them. He said Apple could not meet demand or predict when supply would catch up.

TECHnalysis Research chief analyst Bob O’Donnell said Apple needed to resolve the Duo’s screen glitches and increase manufacturing output before it could significantly affect the bottom line.

Khan expects supply constraints to continue into 2027, particularly for iPads and Macs, partly because Apple is having difficulty obtaining enough microprocessors made using advanced nodes. Apple is also spacing out iPhone releases: Pro and Duo models shipped in 2026, with other models expected in 2027.