Apple Reports Record Revenue Amid Surging Memory Costs
Apple reported record quarterly revenue of $114.5 billion, though shares fell as CEO John Ternus warned of unprecedented memory-chip costs squeezing future profit margins.
Apple Inc. reported fiscal fourth-quarter revenue of $114.5 billion and a profit of $30.7 billion, exceeding Wall Street expectations with 12% year-over-year growth. This marked the first earnings report under CEO John Ternus, who succeeded Tim Cook in September. The results contributed to a record fiscal year with total revenue of $479 billion, driven by record September performance in iPhone sales and an all-time high for Services. The company also achieved all-time revenue records in India across its iPhone, Mac, and Services businesses.
Despite the revenue beat, Apple shares fell in after-hours trading as the company issued a cautious outlook for the December quarter. Management forecast gross margins to decline to between 45% and 46%, down from 47.9% in the September quarter. This contraction is attributed to unprecedented surges in memory and storage chip costs driven by AI demand, as well as expenses related to the rollout of the overhauled Siri AI.
To offset these costs, Apple implemented price increases on iPhones, Macs, and iPads. The company also accelerated its product cycle, launching the iPhone Duo foldable phone, a touch-screen MacBook Pro, and the HomeView smart display. While demand for the iPhone Duo has been extraordinary, the device has faced supply constraints and reports of screen durability issues, prompting Apple to offer replacements and deepen its partnership with US titanium producer Perryman.
Geographically, Apple saw strong growth in the Americas and Europe, though revenue in Greater China missed analyst estimates despite reaching a quarterly record of $17.54 billion. Additionally, the company is managing regulatory pressures in the European Union and the United States regarding App Store fees.
