Apple 1Q26 Earnings Review: Let’s Talk About iPhone Results
Happy Tuesday. We are going to continue our Apple 1Q26 earnings review. Today’s update took a bit longer than expected to finalize.
Last Friday, we went over my initial thoughts regarding Apple’s results and how the numbers compared to my estimates. 1Q26 earnings and 2Q26 guidance were very strong. For this week, we will take a closer look at specific earnings-related topics. Today’s update will be focused on the iPhone.
Apple 1Q26 Earnings Review: Let’s Talk About the iPhone
Based on Apple’s earnings releases and conference call with analysts, here’s what we know about the latest iPhone results:
iPhone revenue: $85.3B (up 23%).
The $85.3B of revenue was constrained a bit by supply (advanced node 3nm capacity for SoCs). This supply shortage materialized via “very lean channel inventory” as management could not put as many iPhones into the channel as they wanted.
Apple said they sold a record number of iPhones in China in 1Q26 (Greater China revenue was up 38%). Records were put in for number of upgraders and strong double-digit growth on switchers. Recall how Apple’s 4Q25 iPhone results were hit by iPhone shortages in China.
As shown in the exhibit below, Apple is experiencing a step-up in iPhone revenue from approximately $200B/year to
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Reading Between the Lines of Apple’s 2Q25 Earnings Q&A With Analysts
Hello everyone. Today’s update will continue our Apple earnings review.
Here’s a recap of where things stand:
Last Friday: Overview / Apple’s results vs. my expectations.
Yesterday: Three sub-themes / charts arising from 2Q25 earnings.
Today: Reviewing the Q&A from Apple’s earnings call.
After recapping each question-and-answer exchange that occurred on the call between Apple and sell-side analysts, we will go over my response to the exchange. Let’s go beyond what was talked about on the call with the 14th installment of reading between the lines of Apple's earnings Q&A with analysts.
NOTE: The following earnings call questions (“Q (Sell-Side Firm)”) and answers (“Cook” or “Parekh”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, Insider Monkey offers a written transcript here.
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Apple 1Q25 Earnings Review
Today's Above Avalon Daily email contains the following story:
Apple 1Q25 Earnings Review
Welcome to a special Friday edition of the Above Avalon Daily. Here is our game plan for tackling Apple’s 1Q25 earnings:
Today: Discuss big picture takeaways.
Monday: Discuss takeaways from Apple’s earnings conference call.
Tuesday: Catch basin edition where we cover leftover items / dive into a few follow-ups.
My Apple earnings model has been updated for both 1Q25 and 2Q25 guidance. My estimates for FY25 and FY26 have also been revised. The updated model has already been uploaded to the "Digital Package" tab within the Above Avalon Payer Portal (accessible to members who have attached the Financial Models add-on to their membership). This is the quickest turnaround in my earnings model being made accessible to others following earnings. The plan is to spend some time updating my iPhone, iPad, and Apple Watch installed base models over the weekend. We received a number of new data points that need to be incorporated into the models.
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My Notes from Apple’s 2024 10-K
Hello everyone. Today’s update will conclude our Apple 4Q24 earnings review. We will go over Apple’s 10-K filing for 2024. There are a few remaining comments to go over regarding Apple’s share buyback. We can do that tomorrow.
Published at the end of the fiscal year (Apple's fiscal year ends in September), 10-K filings include a more in-depth examination into Apple’s financials and business versus the 10-Q filings published at the end of 1Q, 2Q, and 3Q. Said another way, 10-Ks are a treasure trove of granular financial data. We will also use this opportunity to recap some of Apple’s financial totals for FY2024 and how they compared to prior years.
My Notes from Apple’s 2024 10-K
Quarterly Cash Dividends. Regarding Apple's quarterly cash dividend (a 0.4% dividend yield given Apple's current stock price), Apple's share repurchases have led to a declining share count which makes it less costly to pay the same amount of cash dividends. Despite the quarterly cash dividend increasing by 164% since being reinstated in 2012, Apple's dividend expense has increased by just 54%.
Here is Apple's annual dividend expense:
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Inside Apple’s Record Mac Quarter, What’s Going On With iPad Sales?, Charting Apple’s Ecosystem Growth (Daily Update)
In today's update, we will continue our Apple 4Q22 earnings review with a few granular takeaways. In particular, we look beyond the Mac and iPad numbers. Tomorrow, our focus will be geared toward everything that was discussed on management's earnings call.
Inside Apple’s Record Mac Quarter
Apple reported $11.5B of Mac revenue in 4Q22. It was a quarterly record that exceeded my estimate by a significant $1.5B. Prior to 4Q22, the previous Mac revenue record was $10.9B (in 1Q22).
Diving deeper into 4Q22 Mac results, things become more complicated. We may be seeing something equivalent to a near-term plateau, or growth air pocket, for Mac sales.
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