Over the past few quarters, Apple has been reporting pretty average earnings results with no massive beat on analyst expectations. Today, Apple announced results for its Q1 FY26 quarter ended December 27, 2025. The company posted record quarterly revenue of $143.8 billion, which is up 16 percent year over year. And the net income rose to a record $42.09 billion.
This record-breaking quarterly result was mainly driven by increasing demand for the iPhone worldwide. In fact, the iPhone had its best-ever quarter with all-time records across every geographic segment. Especially in China, iPhone sales grew 38% to $25.5 billion. Overall, iPhone revenue was $85.2 billion, up from $69.13 billion YoY. Mac business revenue was down 7%, iPad revenue was up a marginal 6%, while the wearables revenue was down 2%.
Apple CEO Tim Cook highlighted that Apple"s installed base now has more than 2.5 billion active devices. This massive installed base led to an all-time Services business revenue record of $30 billion, up from $26.3 billion YoY.
Kevan Parekh, Apple’s CFO, said:
“During the December quarter, our record business performance and strong margins led to EPS growth of 19 percent, setting a new all-time EPS record. These exceptionally strong results generated nearly $54 billion in operating cash flow, allowing us to return almost $32 billion to shareholders.”
Apple also announced a cash dividend of $0.26 per share, which will be payable on February 12, 2026, to shareholders.
During the earnings call, when asked about rising memory costs, Tim Cook responded that memory had a minimal impact on the Q1, and therefore the December quarter gross margin. But Apple expects it to be a bit more of an impact on the Q2 gross margin as memory pricing is increasing significantly.
On the upcoming quarter guidance, Apple expects revenue growth of 13-16% and gross margins of 48-49%. Despite this massive beat in expectations and positive guidance on the upcoming quarter, Apple"s stock remained muted after hours.