Apple Inc. (AAPL) reported fiscal fourth-quarter results on Nov. 2 that beat on both top and bottom line, with total revenue of $114.48 billion, up 12 percent, and earnings per share of $2.10, up 14 percent. Consensus had called for $113.39 billion in sales and $1.99 EPS. Adjusted EPS, excluding a $0.05 tariff rebate, stood at $2.05.
The headline driver: iPhone sales surged 17 percent to $57.58 billion, a September quarter record and materially above the $56.54 billion consensus. The company saw double-digit iPhone growth in both the U.S. and Greater China and set a worldwide record for upgraders. Apple's new iPhone 18 Pro was available for only eight days during the quarter, meaning the cycle has further runway.
Mac revenue climbed 24 percent year over year to $10.79 billion, handily beating analyst expectations of $9.61 billion. This is not noise—Apple set a September quarter record for new Mac customers, driven by strength in emerging markets.
Weakness appeared elsewhere: iPad sales fell 10 percent to $6.23 billion, and wearables declined 8 percent to $8.3 billion. New products in both categories—an iPad mini with OLED and Apple HomeView—may reignite growth, but near-term momentum is clearly in phones and computers.
Services revenue rose 10 percent to $31.57 billion, marking a deceleration from 12 percent growth in fiscal Q3 and 16 percent in fiscal Q2. This is the slowest quarterly growth since 2022, and it warranted the initial selloff. However, services margin expanded 40 basis points sequentially to 76 percent, suggesting the business remains profitable and pricing power is intact.
Overall gross margin reached 47.9 percent, beating the 47.5 percent consensus. Product gross margin was 37.2 percent, down 100 basis points sequentially excluding tariff refunds, as higher memory prices compressed costs. This is a legitimate headwind but appears priced into current multiples.
China delivered $17.54 billion in revenue, up 21 percent, proving that geopolitical and competitive concerns have not derailed the world's most important iPhone market.
The stock initially traded lower on margin compression and services deceleration worries, with AAPL having gained nearly 25 percent year-to-date heading into earnings. Shares have since rebounded to $349.51, up 5.3 percent from the post-earnings lows. Investors are correctly parsing this: the iPhone upgrade cycle is in full force, Mac momentum is accelerating, and gross margin pressure is temporary. Services growth may have peaked, but the 10 percent rate is not alarming for a $31.57 billion business with 76 percent margins.
Buy the dip on this print. The core narrative—strong hardware demand, record upgraders, emerging market traction—is intact.
