Apple Inc. (אפל)

Apple Inc. designs and sells personal devices — iPhone, Mac, iPad, Watch, AirPods and home products — and runs a services layer around them: the App Store, advertising, cloud storage, payments, music and video, and licensing payments from search providers. The company is headquartered in Cupertino, California, and employs more than 150,000 people. Manufacturing is largely outsourced; Apple designs the key chips in its products itself.

Revenue for the 12 months ended June 2026 was $466.8 billion. iPhone alone was about half of revenue in the latest quarter (49.6%). Services were 28.1% of revenue but 42.4% of gross profit, on a services gross margin of about 76%. In January 2026 the company reported more than 2.5 billion active devices.

On September 1, 2026, after the end of the reporting period, John Ternus, who had led hardware engineering, succeeded Tim Cook as CEO. Cook became Executive Chair of the Board. Apple has no controlling shareholder and a single class of shares.

The quarter: broad growth, and one one-time line

In the April–June 2026 quarter revenue rose 16.4% to $109.4 billion. iPhone rose 21.7% ("primarily Pro models", per the filing), Mac rose 28.7% on laptops, and Services rose 12.1%. iPad fell 5.9%. Net income rose 27.1% to $29.8 billion.

What needs to be normalized: in February 2026 the U.S. Supreme Court struck down certain tariffs imposed in 2025, and Apple applied for a refund. The first refunds were recorded this quarter as a reduction of cost of sales. According to the earnings release, they added about 2 percentage points to gross margin and $0.11 to EPS. Excluding the refunds: gross margin of about 48.3% (vs 46.5% a year earlier) and EPS of $1.91, up 21.7%. No refunds were recorded in Q1 or Q2.

The multi-year context

Over fiscal 2021–2025 revenue grew 3.3% a year on average and EPS 7.4% a year, mostly through a shrinking share count. Each of the three quarters of fiscal 2026 grew 16%–17%. In other words, the current year is unusual relative to the four years before it. R&D rose 32% in the quarter to 10.7% of revenue, which the filing attributes mainly to infrastructure costs, including investments in artificial intelligence.

* Includes a one-time $10.2 billion tax charge related to the European Commission's Ireland State Aid decision.  ** Includes the $15.8 billion tax payment to Ireland (released from escrow).

At June 27, 2026 Apple held $146.5 billion in cash and marketable securities, of which $84.1 billion were long-term securities. Financial debt: $82.3 billion of notes and $2.0 billion of commercial paper. Net cash rose from $33.8 billion in September 2025 to $62.2 billion in June 2026. Over the nine months the company repaid $8.1 billion of notes and $5.9 billion of commercial paper, and issued no new debt.

Capital return: over the nine months Apple repurchased 215 million shares for $61.8 billion (about $287 per share on average) and paid $11.8 billion in dividends. In April 2026 an additional $100 billion repurchase program was authorized, and the quarterly dividend rose 4% to $0.27. Over the last 12 months capital returned equaled 72% of free cash flow, compared with 93%–108% in each of the five prior years. The gap is concentrated in Q1 and Q2; in Q3 capital returned was back to 91% of that quarter's free cash flow. The diluted share count is down 12.7% since fiscal 2021.

Three balance-sheet changes the filing does not fully explain:

• Inventory: $11.1 billion, nearly double September 2025. Component inventory rose from $2.1 to $7.6 billion, with $4.3 billion of the increase in Q3. Manufacturing purchase obligations were $57.0 billion, vs $44.1 billion a year earlier. At the same time management describes shortages and rising prices for memory and storage chips.
• Intangible assets: $25.4 billion net, vs $13.3 billion in September 2025. The filings do not identify the source of the addition. Over the same period "other purchase obligations", which include licensed intellectual property, content and distribution rights, rose from $14.8 to $29.3 billion.
• Shareholders' equity: only $107.5 billion, after decades of buybacks. Ratios such as return on equity or debt to equity therefore do not reflect the company's financial strength here.

Apple reports five geographic segments. R&D and general and administrative expenses are not allocated to segments, so segment margins are higher than the company margin.

Americas: segment margin rose 7.3 points, far more than the other segments, even though growth there was the slowest. The tariff refunds were recorded in products cost of sales, and the filing does not show how they were split between segments. If the entire refund was recorded in the Americas, the segment margin without it would have been about 43.1% — still up about 3 points.

Greater China: growth was 37.9%, 28.1% and 22.4% in the three quarters of the year, after a decline in fiscal 2025. Per the filing, growth came mainly from iPhone, and a stronger renminbi contributed. Japan: a weaker yen weighed on revenue and margin.

The differentiation the company presents is the integration of hardware, software, chips and services into one system. Apple's six operating systems run only on its own devices, and the services are built on the installed base of active devices. As the base grows, so does the audience for the App Store, advertising and cloud. Services revenue grew from $85.2 billion in fiscal 2023 to $109.2 billion in fiscal 2025, and services gross margin rose from 70.8% to 75.4%.

Where the filings show pressure: the services layer is also where the legal proceedings concentrate. A U.S. court order in the Epic Games case bars Apple from charging a commission on purchases users make outside an app; the appeals court allowed "some commission", and in June 2026 the Supreme Court agreed to review part of the matter. In the EU, the Digital Markets Act (DMA) has already led to a €500 million fine, and a further investigation could end in a fine of up to 10% of worldwide revenue. In addition, the arrangement under which Google pays Apple for search distribution is under appeal in the antitrust case against Google. The amount of those payments is not disclosed in Apple's filings.

Apple notes in its filing that it holds a minority market share in smartphones, personal computers and tablets. This review does not include competitor data from primary sources.

Risks that emerge from the filings

• Components: shortages and rising prices for memory, storage and advanced chips. According to management, these trends will intensify, and price increases may reduce demand.
• Tariffs: the Q3 refunds are one-time. At the same time, tariffs under Section 301 were recently imposed, and the Section 232 semiconductor investigation remains open.
• App Store commissions: the Epic injunction in the U.S., Supreme Court review, and the DMA in Europe. Per the filing, a narrowed or eliminated commission could materially affect results.
• Search licensing payments: a reversal on appeal in the Google case could bar Google from paying Apple for distribution.
• U.S. antitrust: the Department of Justice suit alleging monopolization of the smartphone market, and similar civil suits.
• Concentration: one customer accounts for 18% of trade receivables; two manufacturing vendors account for 47% and 22% of vendor non-trade receivables.
• Computing capacity: reliance on third-party cloud providers for AI features, in a period of high demand and rising prices.

Items to monitor in the Q4 report (late October 2026)