Citi: Apple’s revenue for the quarter ended in September beats expectations as iPhone and Mac offset weakness in other hardware

What benchmarks did results for the quarter ended in September exceed?

Apple’s revenue for the quarter ended in September was 114.5 billion dollars, up 11.7% year over year, above its prior growth guidance of 9%–11% and market expectations of 113.4 billion dollars.
Earnings per share were 2.10 dollars, above the market expectation of 1.99 dollars compiled by FactSet, and included a 0.05-dollar gain from tariff refunds.
The company’s overall gross margin was 47.9%, above the market expectation of 47.5%; the services gross margin was 76.0% and the products gross margin was 37.2%.

iPhone revenue was 57.6 billion dollars, up 17.5% year over year and above market expectations of 56.6 billion dollars; Mac revenue was 10.8 billion dollars, up 23.7% year over year and also above market expectations of 9.8 billion dollars.
Hardware growth was uneven: iPad revenue was 6.2 billion dollars, down 10.4% year over year and below market expectations of 7 billion dollars; wearables revenue was 8.3 billion dollars, down 7.9% year over year and below market expectations of 9 billion dollars.
By region, Greater China revenue rose 21.0% year over year, while the Americas grew 10.2%. Services revenue was 31.6 billion dollars, up 9.8% year over year, slightly above the company’s growth guidance of about 9.5% and in line with market expectations.

Citi rates Apple a buy with a 365-dollar price target, applying a price-to-earnings multiple of 33 times its earnings-per-share forecast for fiscal 2028, a premium of about 20% to Apple’s historical level.
Citi believes the premium is supported by gross margin expansion excluding the impact of tariffs, a rising share of services revenue, gradual adoption of Apple Intelligence and a solid balance sheet. The services business had a substantially higher gross margin than the products business this quarter, so changes in its revenue share are relevant to overall profitability.
The earnings call had not yet taken place when the report was published. Citi is watching headwinds from memory costs and Apple’s strategy for mitigating gross margin pressure, as well as iPhone and Mac supply chain conditions and the impact of recent price increases on market share.