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Apple Inc.

AAPL

10-K,fiscal year ended Sep 26, 2026,filed Nov 3, 2026,Original on SEC.gov (opens in a new tab)

3 of 3 checkable figures match the filing, 5 of 5 risk excerpts located in the filing text

Full summary
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The Print

Apple's FY2026 10-K shows total net sales of $478.8B (+15.1% YoY), net income of $132.2B and diluted EPS of $8.98, with iPhone net sales of $254.1B (+21%) and Greater China net sales of $82.4B (+28%).

Total net sales increased 15.1% to $478.8B from $416.2B. By reportable segment, management attributed the Americas increase to higher net sales of iPhone, Services and Mac; Europe primarily to higher net sales of iPhone, Services and Mac, with a net favorable year-over-year foreign currency impact; Greater China primarily to higher net sales of iPhone and Mac, with a favorable renminbi impact; Japan to higher net sales of iPhone, with an unfavorable yen impact; and Rest of Asia Pacific primarily to higher net sales of iPhone, Services and Mac. By category, iPhone net sales increased due to higher net sales of Pro models, Mac due to higher net sales of laptops, and Services primarily due to higher net sales from advertising and cloud services; iPad and Wearables, Home and Accessories were relatively flat.

  • Total net sales rose 15.1% to $478.8B from $416.2B, with iPhone net sales up 21% to $254.1B and Services up 13% to $123.3B.
  • Total gross margin percentage was 48.8% versus 46.9%; management attributed the Products gross margin increase primarily to product mix and tariff refunds, partially offset by higher costs, including memory.
  • Research and development expense rose 32% to $45.8B, which management attributed primarily to higher infrastructure-related costs, including investments in artificial intelligence, and headcount-related expenses.
  • Cash generated by operating activities was $145.1B versus $111.5B, while financing activities used $127.4B, including $86.4B of common stock repurchases and $15.7B of dividends.

Results That Matter

  • Total net sales
    Current period
    $478.8B
    Prior period
    $416.2B
    Change
    +15.1%
    Management attributes segment increases across all five reportable segments primarily to higher iPhone net sales, with Services and Mac also cited in the Americas, Europe and Rest of Asia Pacific.
  • Gross margin
    Current period
    $233.6B
    Prior period
    $195.2B
    Change
    +19.7%
    Total gross margin percentage was 48.8% versus 46.9%; management attributed the Products gross margin percentage increase primarily to product mix and tariff refunds, partially offset by higher costs, including memory.
  • Operating income
    Current period
    $158.1B
    Prior period
    $133.1B
    Change
    +18.8%
    Operating income rose alongside gross margin; total operating expenses increased 22% to $75.5B, including a 32% increase in research and development.
  • Net income
    Current period
    $132.2B
    Prior period
    $112.0B
    Change
    +18.0%
    The effective tax rate was 17.0% versus 15.6%; management attributed the higher rate primarily to a higher effective tax rate on foreign earnings, the impact of foreign currency loss regulations issued by the U.S. Department of the Treasury in December 2024, and the tax impact from foreign currency revaluations in the first quarter of 2025 related to the State Aid Decision, partially offset by the impact of changes in valuation allowance.
  • Diluted earnings per share
    Current period
    $8.98
    Prior period
    $7.46
    Change
    +20.4%
    Diluted EPS growth exceeded net income growth as weighted-average diluted shares fell to 14,720,306 thousand from 15,004,697 thousand, reflecting share repurchases.
  • Basic earnings per share
    Current period
    $9.01
    Prior period
    $7.49
    Change
    +20.3%
    Basic weighted-average shares outstanding declined to 14,661,935 thousand from 14,948,500 thousand.

What changed

Year over year, against the 10-K for the year ended Sep 27, 2025.

Prior 10-K

Revenue up 15.1%; Net income up 18.0%

  • Revenue+15.1%
    Prior $416.2B, current $478.8BFavorable
  • Net income+18.0%
    Prior $112.0B, current $132.2BFavorable
  • EPS (diluted)+20.4%
    Prior $7.46, current $8.98Favorable

▲ and ▼ show the direction of each change. Color and “Read as” show whether that direction is usually favorable for the metric.

Earnings Quality & Cash Conversion

Reported net income of $132.2B includes a provision for income taxes of $27.1B at a 17.0% effective rate. The prior-year provision of $20.7B reflected a 15.6% effective rate and included a $(486) million impact of the State Aid Decision; the fiscal 2024 provision of $29.7B included a $10.2B one-time income tax charge, net, related to the European Commission State Aid Decision. Products gross margin in 2026 was affected by tariff refunds, which the Company recognized as a reduction of products cost of sales.

Operating cash flow was 1.1x net income attributable to the parent (cash conversion); free cash flow of $136.1B (derived as operating cash flow minus the absolute selected capex cash-flow amount; not an issuer-defined or discretionary-cash measure).

Red flag

Inventories rose to $14.5B from $5.7B, with components increasing to $10.4B from $2.1B.

Red flag

Vendor non-trade receivables increased to $39.9B from $33.2B, and the cash-flow statement shows a $(6.7)B use for vendor non-trade receivables versus $(0.3)B in the prior year.

Red flag

Intangible assets, net rose to $20.3B from $11.1B, with gross licensed intangible assets increasing to $29.6B from $16.1B.

Value Drivers & Capital Allocation

Capital returned — dividends paid $15.7B (prior $15.4B), share repurchases $86.4B (prior $90.7B); capital expenditures $9.0B (prior $12.7B) (selected cash-flow amount, not necessarily total capital investment).

Financing cash flow for 2025-09-28 to 2026-09-26 was an outflow of $127,446,000,000, compared with an outflow of $120,686,000,000 for 2024-09-29 to 2025-09-27. Both periods had net outflows.

“In April 2026, the Company announced a new share repurchase program of up to $100 billion and raised its quarterly dividend from $0.26 to $0.27 per share beginning in May 2026. During 2026, the Company repurchased $85.8 billion of its common stock and paid dividends and dividend equivalents of $15.7 billion.”

Filing statement

Period net income attributable to the parent / period-end equity, not annualized: 117.9% (prior at 2025-09-27: 151.9%); period net income attributable to the parent / period-end assets, not annualized: 32.7% (prior at 2025-09-27: 31.2%).

Forward Signals

Management tone: cautious

No quantitative revenue, margin or EPS guidance is provided in the filing. Management states that it believes gross margins will be subject to volatility and downward pressure, and that it expects supply-constraint and cost trends to intensify for memory and storage components.

Known trends

  • The Company is experiencing supply constraints and rising costs driven by industry-wide supply-demand imbalances for key components, including advanced semiconductors, memory and storage, and expects these trends to intensify for memory and storage components.
  • Demand for cloud compute and storage services and other artificial intelligence infrastructure has increased substantially across the technology industry, resulting in constrained supply, extended lead times, and increasing costs.
  • The Company intends to increase its dividend on an annual basis, subject to declaration by the Board.

Subsequent events

  • Not disclosed—the filing does not identify material events occurring after September 26, 2026.

“the Company believes, in general, gross margins will be subject to volatility and downward pressure”

Apple Inc. (MD&A)

“The Company expects these trends to intensify for memory and storage components.”

Apple Inc. (MD&A)

Risks

Excerpts are the filing’s own words; each heading is the start of its excerpt. Selected excerpts are not a complete risk inventory.

  • The Company is experiencing supply constraints and rising costs driven by industry-wide…

    The Company is experiencing supply constraints and rising costs driven by industry-wide supply-demand imbalances for key components, including advanced semiconductors, memory and storage.

  • Tariffs and other measures that are applied to the Company’s products or their components…

    Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin.

  • There are limited third-party providers that can reliably meet such demand, and the Company…

    There are limited third-party providers that can reliably meet such demand, and the Company may be unable to secure sufficient capacity on commercially reasonable terms, or at all, to meet customer demand.

  • As of September 26, 2026, the total amount of gross unrecognized tax benefits was $22.5 billion…

    As of September 26, 2026, the total amount of gross unrecognized tax benefits was $22.5 billion, of which $10.6 billion, if recognized, would impact the Company’s effective tax rate.

  • Substantially all of the Company’s hardware products are manufactured by outsourcing partners…

    Substantially all of the Company’s hardware products are manufactured by outsourcing partners that are located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam.

5 of 5 excerpts located in the filing text

Segments

Segments
SegmentRevenueOperating IncomeRevenue ChangeCommentary
Americas$198.1B$86.0B+11.1%Management attributed the increase to higher net sales of iPhone, Services and Mac.
Europe$127.6B$58.1B+14.9%Management attributed the increase primarily to higher net sales of iPhone, Services and Mac, and cited a net favorable year-over-year foreign currency impact.
Greater China$82.4B$35.3B+28.0%Management attributed the increase primarily to higher net sales of iPhone and Mac, and noted iPhone represented a moderately higher proportion of net sales in the segment while Services represented a moderately lower proportion.
Rest of Asia Pacific$39.9B$18.4B+18.3%Management attributed the increase primarily to higher net sales of iPhone, Services and Mac.
Japan$30.9B$14.7B+7.7%Management attributed the increase to higher net sales of iPhone, with an unfavorable year-over-year yen impact.

Balance Sheet & Liquidity

Leverage: Identified debt as of 2026-09-26 (carrying amount): long-term debt including current maturities of $78.1B; noncurrent long-term debt of $68.2B; current portion of long-term debt of $9.9B. Not separately reported in this filing's standardized data: short-term borrowings. Total debt, net debt and debt-to-equity are therefore not stated.

Liquidity: Management states that cash, cash equivalents and marketable securities of $136.9B, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy cash requirements and the capital return program over the next 12 months and beyond.

Cash flow: Cash flow — operating $145.1B, investing $-17.3B, financing $-127.4B.

Working capital: Current assets $173.9B vs. current liabilities $169.9B (current ratio 1.02x). Prior reported balance sheet as of 2025-09-27: $148.0B vs. $165.6B (0.89x).

Maturities & covenants

  • Term debt principal totals $78.7B, with $10.0B payable within 12 months; future interest payments on the Notes total $34.4B, with $2.4B payable within 12 months.
  • Commercial paper outstanding was $2.0B, payable within 12 months, with a weighted-average interest rate of 3.80%.
  • Manufacturing purchase obligations were $89.7B, with $82.7B payable within 12 months; other purchase obligations were $27.3B, with $9.9B payable within 12 months.
  • Fixed lease payment obligations were $17.8B, with $2.8B payable within 12 months.

Notable Footnotes

Notable Footnotes
ItemImpact
European Commission State Aid DecisionFiscal 2024 included a one-time income tax charge of $10.2B, net, representing $15.8B payable to Ireland via release of escrow amounts, partially offset by a $4.8B U.S. foreign tax credit and an $823M decrease in unrecognized tax benefits.
Uncertain tax positionsGross unrecognized tax benefits were $22.5B at year end versus $23.2B a year earlier; $10.6B would impact the effective tax rate if recognized.
Intangible assetsGross licensed intangible assets rose to $29.6B from $16.1B, lifting total intangible assets to $39.5B gross and $25.7B net; expected amortization is $6.6B in 2027.
InventoriesTotal inventories rose to $14.5B from $5.7B, with components at $10.4B versus $2.1B.
Deferred revenueTotal deferred revenue was $14.8B versus $13.7B; the Company expects 65% to be realized in less than a year.

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