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Apple reports fiscal Q4 results today, Ternus's first as CEO: what to watch as memory costs squeeze margins
Apple reports fiscal Q4 results after the US close on 2 November, its first under CEO John Ternus. Analysts expect revenue of about $113.4 billion, up 10.7%, and EPS of $1.99, with memory-chip costs pushing gross margin guidance to 47–48%. Services growth could be the slowest in over three years.
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Apple reports its fiscal fourth-quarter results after the US market close on Monday, 2 November, with a call at 5 pm Eastern time, which is around 3:30 am on Tuesday in India. It is the first earnings report under chief executive John Ternus, who succeeded Tim Cook. The focus is on how much rising memory-chip costs eat into margins.
The consensus is for revenue of about $113.4 billion, up 10.7% from a year earlier, and earnings per share of $1.99, up 7.6%. Apple's own guidance was for revenue growth of 9% to 11%, or roughly $111.7 billion to $113.7 billion. Another preview expects the quarter's profit growth to be the weakest in six quarters. For the next quarter, estimates are for revenue of about $153 billion and earnings of about $2.93 a share.
iPhone revenue is expected at about $56.5 billion, up roughly 15%, compared with about 22% growth in the previous quarter. The quarter covers July to September, so the iPhone 18 Pro contributes only about nine days of sales, and the iPhone Duo, which went on sale on 23 October, falls outside it. Services revenue is expected at about $31.6 billion, up nearly 10%, which could be the slowest growth in more than three years.
The memory-cost squeeze
The previous quarter's gross margin was 50.1%, including about two points from tariff refunds, or about 48.1% without them. For this quarter Apple guided to 47% to 48%, including about one point of tariff-refund benefit, which implies a core margin of roughly 46% to 47%. Apple said rising memory costs account for more than the whole drop from 48.1% to the guidance midpoint of about 46.5%, and that lower non-memory component costs, inventory buffers and the product mix only partly offset it.
Demand from AI data centres is tightening supplies of DRAM and NAND memory, and higher-priced memory may feed into cost of goods in later quarters. One report puts the flash memory behind a typical iPhone storage upgrade at $66 for Apple, up from $15.
Investors want to know whether iPhone demand and price increases hold up, what Apple guides for the holiday quarter, and whether services growth stays steady. They also want Ternus's views on product cycles and strategy, progress on AI including the upgraded Siri, and whether Apple can earn App Store revenue from third-party AI services.
Apple closed at $344.63 in the previous session, down 1.2%, while the Nasdaq Composite fell 2.9%. Of 27 analysts covering the stock, 13 rate it a buy, 10 a hold and four a sell, and the average 12-month price target is $337.77. The results were not out at the time of writing.
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