After the U.S. market close on Thursday Eastern Time, Apple Inc. (AAPL) released its financial results for the first quarter of fiscal year 2026 (ended December 27, 2025). Fueled by the strong demand for the iPhone 17 series, the company’s holiday quarter revenue and profit both reached all-time highs. Apple also provided second-quarter revenue guidance that exceeded expectations, significantly alleviating previous market concerns about its hardware growth peaking.
The earnings report shows that Apple’s total revenue for the first quarter reached $143.8 billion, a 16% year-over-year increase, far exceeding the market’s average expectation of $138.4 billion and the company’s own previous growth guidance. Diluted earnings per share were $2.84, above the market expectation of $2.68.
As the core business, iPhone revenue surged 23% year-over-year this quarter to $85.3 billion, setting a record for the best quarterly performance and significantly surpassing analyst expectations. Apple CEO Tim Cook stated that the market demand for the iPhone 17 series is “extremely robust” and “unprecedented,” achieving sales records in all regions globally, with high-end models being particularly popular. This strong performance helped Apple recently regain its position as the global leader in smartphone market sales. Cook also revealed that Apple’s global active device installed base has reached 2.5 billion units.
The Greater China region was the standout highlight of this quarter’s report, with revenue reaching $25.5 billion, a substantial 38% year-over-year increase, far exceeding market expectations. Cook noted that the iPhone set sales records in the region and drove a double-digit percentage conversion rate of Android users to the Apple ecosystem.
Additionally, the Services business (including Apple Music, iCloud, App Store, etc.) revenue reached $30 billion, a 14% year-over-year increase, hitting a new historical high and largely in line with market expectations.
Despite the overall strong performance, some businesses faced pressure. Mac revenue was $8.39 billion, below market expectations; Wearables, Home, and Accessories revenue was $11.5 billion, a slight 2.2% year-over-year decline, also missing expectations. Cook explained that the new AirPods Pro 3 experienced supply shortages due to demand exceeding expectations; otherwise, this segment would have achieved year-over-year growth. iPad revenue was $8.6 billion, a 6.3% year-over-year increase, exceeding expectations.
Looking ahead, Apple expects second-quarter revenue to grow 13% to 16% year-over-year, higher than Wall Street’s general expectation of approximately 10%. The company’s first-quarter gross margin reached 48.2%, surpassing market expectations.
Regarding its Artificial Intelligence (AI) strategy, Apple has been active recently. Besides announcing a collaboration with Google (GOOGL) to integrate the Gemini model, it also announced the acquisition of AI startup Q.ai on the same day as the earnings release. These moves aim to enhance its AI capabilities.
Following the earnings announcement, Apple’s stock price rose in after-hours trading. Although its stock performance has lagged behind some other major tech stocks over the past year, this record quarterly performance demonstrates the continued pull of its core products.
