Apple Inc.
For the period ended Dec 27, 2025. Filed Jan 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 27, 2025 · Filed Jan 30, 2026
AAPL$342.37-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-28; filed 2025-08-01.
0000320193-25-000073
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-27; filed 2026-01-30.
0000320193-26-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 77 current paragraphs.
39 unchanged; 28 reworded; 10 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
During the first quarter of 2026, the Company announced the following updated products:
Current report
•14-inch MacBook Pro®
Current report
•iPad Pro®
Current report
•Apple Vision Pro®
Current report
Americas net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and Services.
Current report
Greater China net sales increased during the first quarter of 2026 compared to the same quarter in 2025 due to higher net sales of iPhone.
Current report
Other Purchase Obligations
Current report
The Company’s other purchase obligations primarily consist of noncancelable obligations related to supplier arrangements, licensed intellectual property and content, distribution rights, and the acquisition of capital assets related to product manufacturing. As of December 27, 2025, the Company had other purchase obligations of $35.1 billion, with $9.3 billion payable within 12 months.
Current report
Internal-Use Software
Current report
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software. ASU 2025-06 removes all references to software development stages and requires capitalization of software costs when management has committed to the software project and it is probable the software will be completed and perform its intended use. ASU 2025-06 will be effective for the Company in its first quarter of 2029, and early adoption is permitted. The Company is currently evaluating the timing and method of its adoption of ASU 2025-06.
Removed paragraphs (8)
Previous report
During the third quarter of 2025, the Company announced iOS 26, macOS® Tahoe 26, iPadOS® 26, watchOS® 26, visionOS® 26 and tvOS® 26.
Previous report
Europe net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of Services and iPhone.
Previous report
Greater China net sales increased during the third quarter of 2025 compared to the third quarter of 2024 due primarily to higher net sales of iPhone and Mac. Greater China net sales decreased during the first nine months of 2025 compared to the same period in 2024 due to lower net sales of iPhone, partially offset by higher net sales of Mac.
Previous report
Products gross margin increased during the third quarter of 2025 compared to the third quarter of 2024 due primarily to a different mix of products and favorable costs, partially offset by tariffs. Products gross margin increased during the first nine months of 2025 compared to the same period in 2024 due primarily to favorable costs and a different mix of products, partially offset by tariffs and the weakness in foreign currencies relative to the U.S. dollar.
Previous report
State Aid Decision Tax Payable
Previous report
During the first nine months of 2025, the Company released from escrow €14.2 billion, or $15.4 billion, to Ireland in connection with the State Aid Decision, which fully settled the obligation.
Previous report
Segment Reporting
Previous report
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures(“ASU 2023-07”), which will require the Company to disclose segment expenses that are significant and regularly provided to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 will require the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The Company will adopt ASU 2023-07 in its fourth quarter of 2025 using a retrospective transition method.
Reworded paragraphs (28)
Previous wording
The following discussion should be read in conjunction with the 2024 Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.
Current wording
The following discussion should be read in conjunction with the 2025 Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.
Previous wording
Macroeconomic conditions, including inflation, interest rates and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company’s results of operations and financial condition.
Current wording
Macroeconomic conditions, including inflation, interest rates, component pricing and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company’s results of operations and financial condition.
Previous wording
Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. (“U.S. Tariffs”), including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union (“EU”), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to the U.S. Tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company’s products and services, all of which can further adversely affect the Company’s business and results of operations.
Current wording
Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S., including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union (“EU”), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. On January 14, 2026, initial results were published of the previously announced U.S. Department of Commerce investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. The announcement of the initial results of the investigation did not impose any additional tariffs affecting the Company’s products at this time. Various modifications to U.S. tariffs have been announced and further changes could be made in the future, which may include additional measures under the Section 232 semiconductor sector investigation, additional sector-based tariffs, or other measures. Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company’s products and services, all of which can further adversely affect the Company’s business and results of operations.
Previous wording
The following table shows net sales by reportable segment for the three- and nine-month periods ended June 28, 2025 and June 29, 2024 (dollars in millions):
Current wording
The following table shows net sales by reportable segment for the three months ended December 27, 2025 and December 28, 2024 (dollars in millions):
Previous wording
Americas net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of iPhone and Services. The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on Americas net sales during the third quarter and first nine months of 2025.
Current wording
Europe net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and Services. The strength in foreign currencies relative to the U.S. dollar had a net favorable year-over-year impact on Europe net sales during the first quarter of 2026.
Previous wording
Japan net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of iPhone and Services. The strength in the yen relative to the U.S. dollar had a favorable year-over-year impact on Japan net sales during the third quarter of 2025.
Current wording
Japan net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and iPad. The weakness in the yen relative to the U.S. dollar had an unfavorable year-over-year impact on Japan net sales during the first quarter of 2026.
Previous wording
Rest of Asia Pacific net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales of Services and iPhone.
Current wording
Rest of Asia Pacific net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and Services.
Previous wording
The following table shows net sales by category for the three- and nine-month periods ended June 28, 2025 and June 29, 2024 (dollars in millions):
Current wording
The following table shows net sales by category for the three months ended December 27, 2025 and December 28, 2024 (dollars in millions):
Previous wording
iPhone net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due to higher net sales of Pro models.
Current wording
iPhone net sales increased during the first quarter of 2026 compared to the same quarter in 2025 due to higher net sales of Pro models.
Previous wording
Mac net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due to higher net sales of both laptops and desktops.
Current wording
Mac net sales decreased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to lower net sales of laptops and desktops.
Previous wording
iPad net sales decreased during the third quarter of 2025 compared to the third quarter of 2024 due to lower net sales of iPad Pro®, partially offset by higher net sales of all other iPad models. iPad net sales increased during the first nine months of 2025 compared to the same period in 2024 due primarily to higher net sales of iPad Air®.
Current wording
iPad net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPad and iPad Pro, partially offset by lower net sales of iPad mini®.
Previous wording
Wearables, Home and Accessories net sales decreased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to lower net sales of Wearables and Accessories.
Current wording
Wearables, Home and Accessories net sales decreased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to lower net sales of Wearables.
Previous wording
Services net sales increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher net sales from advertising, the App Store® and cloud services.
Current wording
Services net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales from advertising, the App Store® and cloud services.
Previous wording
Products and Services gross margin and gross margin percentage for the three- and nine-month periods ended June 28, 2025 and June 29, 2024, were as follows (dollars in millions):
Current wording
Products and Services gross margin and gross margin percentage for the three months ended December 27, 2025 and December 28, 2024, were as follows (dollars in millions):
Previous wording
Products gross margin percentage decreased during the third quarter of 2025 compared to the third quarter of 2024 due primarily to tariffs and a different mix of products, partially offset by favorable costs. Products gross margin percentage decreased during the first nine months of 2025 compared to the same period in 2024 due primarily to a different mix of products and tariffs, partially offset by favorable costs.
Current wording
Products gross margin and gross margin percentage increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to a different mix of products, partially offset by tariff costs.
Previous wording
Services gross margin increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to higher Services net sales and a different mix of services.
Current wording
Services gross margin increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher Services net sales and a different mix of services.
Previous wording
Services gross margin percentage increased during the third quarter and first nine months of 2025 compared to the same periods in 2024 due primarily to a different mix of services, partially offset by higher costs.
Current wording
Services gross margin percentage increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to a different mix of services, partially offset by higher costs.
Previous wording
Operating expenses for the three- and nine-month periods ended June 28, 2025 and June 29, 2024, were as follows (dollars in millions):
Current wording
Operating expenses for the three months ended December 27, 2025 and December 28, 2024, were as follows (dollars in millions):
Previous wording
The growth in research and development (“R&D”) expense during the third quarter and first nine months of 2025 compared to the same periods in 2024 was driven primarily by increases in headcount-related expenses and infrastructure-related costs.
Current wording
The growth in research and development (“R&D”) expense during the first quarter of 2026 compared to the same quarter in 2025 was primarily driven by increases in infrastructure-related costs, headcount-related expenses and engineering program costs.
Previous wording
The growth in selling, general and administrative expense during the third quarter and first nine months of 2025 compared to the same periods in 2024 was driven primarily by increases in headcount-related expenses and variable selling expenses.
Current wording
The growth in selling, general and administrative expense during the first quarter of 2026 compared to the same quarter in 2025 was primarily driven by increases in headcount-related expenses and variable selling expenses.
Previous wording
Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and nine-month periods ended June 28, 2025 and June 29, 2024, were as follows (dollars in millions):
Current wording
Provision for income taxes, effective tax rate and statutory federal income tax rate for the three months ended December 27, 2025 and December 28, 2024, were as follows (dollars in millions):
Previous wording
The Company’s effective tax rate for the third quarter of 2025 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes. The Company’s effective tax rate for the first nine months of 2025 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, tax benefits from share-based compensation, and the impact of the U.S. federal R&D credit, partially offset by state income taxes.
Current wording
The Company’s effective tax rate for the first quarter of 2026 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.
Previous wording
The Company’s effective tax rate for the third quarter of 2025 was higher compared to the third quarter of 2024 due primarily to the impact from foreign currency revaluations of unrecognized tax benefits. The Company’s effective tax rate for the first nine months of 2025 was lower compared to the same period in 2024 due primarily to the impact of changes in unrecognized tax benefits, partially offset by a higher effective tax rate on foreign earnings.
Current wording
The Company’s effective tax rate for the first quarter of 2026 was higher compared to the first quarter of 2025 primarily due to the impact of foreign currency loss regulations issued by the U.S. Department of the Treasury in December 2024 and the tax impact from foreign currency revaluations in the first quarter of 2025 related to the State Aid Decision.
Previous wording
The Company’s contractual cash requirements have not changed materially since the 2024 Form 10-K, except for manufacturing purchase obligations and the State Aid Decision tax payable.
Current wording
The Company’s contractual cash requirements have not changed materially since the 2025 Form 10-K, except for manufacturing purchase obligations and other purchase obligations.
Previous wording
The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of June 28, 2025, the Company had manufacturing purchase obligations of $44.1 billion, with $43.8 billion payable within 12 months.
Current wording
The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of December 27, 2025, the Company had manufacturing purchase obligations of $44.4 billion, with $43.7 billion payable within 12 months.
Previous wording
In addition to its contractual cash requirements, the Company has authorized share repurchase programs. The programs do not obligate the Company to acquire a minimum amount of shares. As of June 28, 2025, the Company’s quarterly cash dividend was $0.26 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
Current wording
In addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to acquire a minimum amount of shares. As of December 27, 2025, the Company’s quarterly cash dividend was $0.26 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
Previous wording
During the third quarter of 2025, the Company repurchased $21.0 billion of its common stock and paid dividends and dividend equivalents of $3.9 billion.
Current wording
During the first quarter of 2026, the Company repurchased $25.0 billion of its common stock and paid dividends and dividend equivalents of $3.9 billion.
Previous wording
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. The Company will adopt ASU 2024-03 in its fourth quarter of 2028 using a prospective transition method.
Current wording
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. The Company will adopt ASU 2024-03 in its fourth quarter of 2028 using a prospective transition method.