Apple, Inc. (AAPL.O) 10-Q Tidbits

First-page research excerpt

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31 Jul 2026 09:33:24 ET │ 11 pages

Apple, Inc. (AAPL.O)

10-Q Tidbits

CITI'S TAKE

We took a detailed look into Apple’s Jun quarter results and summarize

our key takeaways. For more detailed analysis on the results and model

update, please see our earnings notes.

iPhone: Revenue increased 22% Y/Y, driven by higher sales of Pro models. iPhone

remained the primary growth driver across all major geographies.

By region: Growth was broad-based, with Europe (+22%) and Greater China (+22%)

leading major markets. The filing cited stronger iPhone demand across regions, and

services strength in US and Europe, with favorable FX in the first 9months of the

fiscal year in Europe, Greater China and Rest of Asia Pacific partially offset by yen

weakness in Japan.

Buy

Price (30 Jul 26 16:00)

US$333.43

Target price

US$365.00

Expected share price

9.5%

return

Expected dividend yield

0.3%

Expected total return

9.8%

Market Cap

US$4,897,205M

Asiya Merchant, CFA

Atif MalikAC

Services: Revenue increased 12% Y/Y and the growth in first 9 months of the fiscal

year was driven primarily by advertising and cloud services. We note that App Store

is no included as a growth driver here vs last 10-Q and management mentioned

weakness in mobile gaming during the call.

Elizabeth Sun, CFA

Gross margin: Total gross margin expanded 360bps Y/Y to 50.1%, while product

gross margin expanded 560bps Y/Y to 40.1%, driven by a more favorable product

mix and tariff refunds, partially offset by higher costs, including memory.

R&D: R&D increased 32% Y/Y, reaching 11% of revenue versus 9% a year ago, driven

by increase to infrastructure spending, including artificial intelligence investments,

and higher headcount-related expenses.

Inventory, Vendor Non-Trade Receivables and Purchase obligations were all up

meaningfully Y/Y and well above seasonal, suggesting Apple is proactively securing

supply for strong demand and getting prepared for the upcoming products launch.

Notably, inventory was up 87% Y/Y and 64% Q/Q vs -3% 3-year average, driven by

more than 200% Y/Y growth in components, which we believe is related to rising

memory cost, stocking ahead of further pricing hike and for upcoming new

products.