This is Tim: Complete transcript of Apple’s Q1 2026 financial call

Every quarter after releasing financial results, Apple CEO Tim Cook and CFO Kevan Parekh hop on a conference call with analysts to detail the quarter gone by, give a peek at what’s to come, and maybe brag a little about setting an all-time record or two. This is Six Colors’s transcript of the call for January 29, 2026.

Tim Cook’s opening statement

Good afternoon, everyone, and thanks for joining the call. I am proud to say that we just had a quarter for the record books. We are reporting our best ever quarter, with $143.8 billion in revenue, up 16% from a year ago and exceeding our expectations. The demand for iPhone was simply staggering, with revenue growing 23% year-over-year and all-time records across every geographic segment.

Services set an all-time revenue record as well, up 14% from a year ago, and EPS reached an all-time record of $2.84, growing a robust 19% year-over-year. We set all-time revenue records in the Americas, Europe, Japan, and rest of Asia Pacific, and grew in the vast majority of markets we track. We continued to gain momentum in emerging markets, which includes India, where we saw strong double-digit revenue growth. Greater China also grew 38% year-over-year, driven by iPhone, which had record upgraders and double-digit growth on switchers.

Apple’s December quarter results underscore our relentless commitment to innovation, to our customers, and to our mission to build the best products and services in the world. Now I’d like to take a closer look at results from across our lineup, beginning with iPhone.

As I mentioned earlier, it was a fantastic quarter for iPhone, with an all-time revenue record of $85.3 billion, up 23% year-over-year. This is the strongest iPhone lineup we’ve ever had, and by far the most popular. Throughout the quarter, customer enthusiasm for iPhone was simply extraordinary. Users were incredibly excited about everything [it] enables them to do. iPhone 17 Pro and 17 Pro Max deliver the ultimate iPhone experience. They feature the best-ever performance and battery life on an iPhone, the most advanced camera system, and a striking design. iPhone Air, our slimmest and lightest smartphone yet, packs powerful capabilities into an ultra-slim and sleek design. An iPhone 17 is a truly fantastic upgrade at an incredible value.

Turning to Mac, revenue was $8.4 billion for the December quarter. We were pleased to see the Mac install base reach another all-time high, with nearly half of customers who purchased a Mac being new to the product. The M5-powered 14-inch MacBook Pro takes a huge leap in AI performance thanks to the next-generation GPU architecture and a faster Neural Engine. From the world’s most popular laptop for consumers and businesses in MacBook Air to the small and spectacular Mac Mini, every Mac in our lineup has something special to offer users and with the recently released Apple Creator Studio—available across Mac, iPad and iPhone—creators have more tools at their fingertips to make incredible music or turn their devices into a video production studio.

Meanwhile, iPad saw December quarter revenue of $8.6 billion, up 6% from a year ago, with an all-time record for upgraders. We are proud to have our strongest lineup ever, from iPad powered by A16, which is proving to be incredibly popular; to iPad Air, with its amazing versatility; to the unbelievably powerful M5 iPad Pro, with its remarkably thin and light design. It’s no wonder that iPad continued to be the most popular tablet in the world.

Across Wearables, Home and Accessories, revenue was $11.5 billion. With Apple Watch Ultra 3 and Apple Watch Series 11, users are tapping into a comprehensive set of health and wellness features to help them meet their health goals. In a recent survey, we see an increasing number of users telling us they’re wearing their watch to sleep, which allows them to check their sleep scores each morning and find ways to improve their sleep quality. And Apple Watch alerts are enabling important conversations between users and their doctors regarding potential signs of hypertension. These are just some of the many ways that Watch is helping people live healthier lives.

The response to AirPods Pro 3 has been amazing. Customers are raving about the rich, immersive sound quality, the unmatched level of active noise cancellation, and the noticeably improved comfort that makes them effortless to wear. Features like live translation are also changing the way people can communicate by helping users connect across languages in real time and making everyday conversations feel more natural and accessible. Together these innovations create an experience that feels both powerful and personal, and the enthusiasm we are seeing reflects just how strongly AirPods Pro 3 are resonating with customers.

Across our product categories, we are seeing very high levels of customer satisfaction, and we are proud to report that we have a new record for our installed base, with more than 2.5 billion active devices. During the quarter, we were excited to see that the majority of users on enabled iPhones are actively leveraging the power of Apple Intelligence. Since the launch of Apple Intelligence, we’ve introduced dozens of features, including Writing Tools and Clean Up, and made it available in 15 languages. These AI experiences are personal, private, integrated across our platforms, and relevant to what our users do every day. We are bringing intelligence to more of what people already love about our products, so we can make every experience even more capable and effortless.

One of our most popular features is Visual Intelligence, which helps users learn and do more than ever with the content on their iPhone screen, making it faster to search, take action, and answer questions across their apps. And as I touched on earlier, we are hearing powerful stories of people using live translation to communicate seamlessly across languages.

And these are just some of the many powerful AI features that are enabling our users to do remarkable things with our products, which are far and away the best platforms in the world for AI. That’s in no small part because of the extraordinary power and performance of Apple silicon. Building on our efforts in the AI space, we are also collaborating with Google to develop the next generation of Apple Foundation Models. This will help power future Apple Intelligence features, including a more personalized Siri coming this year. We’re incredibly excited for what’s to come with so many new experiences to unlock.

Turning to Services, we achieved an all-time revenue record of $30 billion, 14% higher from a year ago. Services also set all-time revenue records in both developed and emerging markets. Apple TV has seen fantastic momentum, with December seeing a 36% increase in viewership over the previous year. It’s no wonder, with shows like “Pluribus,” which are creating landmark cultural moments that audiences are loving. Anticipation is building for upcoming new productions like “Cape Fear” from Steven Spielberg and Martin Scorsese, and we are thrilled to announce that “Ted Lasso” will be returning for a fourth season this summer.

Six years since launch, we’re excited by the growing enthusiasm viewers have for Apple TV, and we are grateful for the accolades that have followed, most recently at the Critics’ Choice and Golden Globe Awards. To date, Apple TV productions have earned more than 650 wins and more than 3,200 nominations, including a recently announced Oscar nomination for Best Picture for F1: The Movie.

And speaking of F1, we’re also approaching the start of a new Formula 1 season, and for F1 fans in the U.S., Apple TV will be the place to watch every practice, qualifying, sprint, and Grand Prix. MLS fans will also be able to watch every regular and postseason game with their Apple TV subscription this year, and we’re looking forward to kick off in the coming weeks.

Looking back, 2025 was a fantastic year for services as we rolled out amazing new features and broke records. Apple Music climbed to all-time highs in both listenership and new subscriber growth. Apple Pay eliminated more than $1 billion in fraud for our partners last year, and we’ve made it available in more markets than ever before. And last year, we welcomed more than 850 million users every week on average to the App Store, the world’s safest and most innovative app marketplace. Developers have now earned more than $550 billion on our platform since 2008.

In retail, we continue to bring a magical experience to our customers all around the world, and we were thrilled to have our best-ever results in retail during the quarter. We were excited to open our fifth store in India in December and have plans to open another store in Mumbai soon.

Wherever we are, we see ourselves as part of a larger whole. That’s why we show up with our values in everything we do. That means working with partners in places like Vietnam to bring more clean water to rural areas. It means celebrating graduations of new classes of innovators from our developer academies in places such as Brazil, Indonesia, and South Korea. It means 3D printing titanium cases for Apple Watch using recycled materials so that they’re better for the planet without compromising quality. And so much more.

We’re especially proud of the work we’re doing to support American innovation. Last year, we committed to invest $600 billion over four years in vital industries like advanced manufacturing, silicon engineering, and artificial intelligence. As we’re building on our long-standing investments in America, we’re supporting nearly half a million jobs with thousands of suppliers across all 50 states. In the years since we made our initial commitment, we’re making great progress. Today we’re shipping servers to power Apple Intelligence from our new manufacturing facility in Houston. Through our Advanced Manufacturing Program, we’re working with Corning in Kentucky to make 100% of cover glass for iPhone and Apple Watch. We’re working with Micron, which broke ground on a new advanced chip packaging and test facility, and we continue to advance the development of an end-to-end silicon supply chain across the country, sourcing 20 billion U.S. chips in 2025.

Through our Apple Manufacturing Academy in Detroit, we’re already training American businesses and innovators on the latest smart manufacturing and artificial intelligence techniques. Six months since opening, the Academy is already making an enormously positive impact for businesses working alongside Apple engineers to drive productivity, efficiency, and quality in their supply chains.

As I said at the beginning of my remarks, this was, in so many ways, a remarkable quarter for Apple, and we’re excited for all the opportunities we’ll have in the year ahead to deliver innovations that have never been seen before and enrich the lives of users every step of the way. With so much to look forward to in the weeks and months ahead, I have every confidence that our best work is yet to come. With that, I’ll turn it over to Kevan.

Kevan Parekh’s opening remarks

Thanks Tim, and good afternoon everyone. Our revenue of $143.8 billion was up 16% year-over-year, our best quarter ever. Across the world, we set all-time revenue records in both developed and emerging markets, and we saw double-digit growth year-over-year across a majority of the markets we track, including the U.S., Latin America, Western Europe, Greater China, India, and Japan. in South Asia. Products revenue was $113.7 billion, up 16% year-over-year, driven by double-digit growth in iPhone, setting a new all-time record. And as Tim mentioned, thanks to our strong levels of customer loyalty and satisfaction, our install base of active devices has now surpassed 2.5 billion, reaching another all-time high across all product categories and geographic segments.

Services revenue was 30 billion dollars, up 14% year-over-year. This performance continues to be broad-based, with double-digit growth in almost every market we track. We also reached all-time revenue records for advertising, cloud services, music, and payment services, with December supporter records on the App Store and video.

Company gross margin was at 48.2%, above the high end of our guidance range and up 100 basis points sequentially, driven by favorable mix and leverage. Products gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage. Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix.

Operating expenses landed at $18.4 billion, up 19% year-over-year. This was within the range we provided, and driven by increased investment in R&D. Net income was $42.1 billion and diluted earnings per share was $2.84, up 19% year-over-year. Both net income and diluted EPS were all-time records, and these incredibly strong business results drove an all-time record for operating cash flow, coming in at $53.9 billion.

Now I’m going to provide some more details for each of our revenue categories.

iPhone revenue was $85.3 billion, up 23% year-over-year, driven by the iPhone 17 family. iPhone saw strength around the world, reaching all-time revenue records in many of the markets we track, including the U.S., Greater China, Latin America, Western Europe, the Middle East, Australia, and South Asia, as well as a December quarter record in India. The iPhone Active installed base grew to an all-time high and set a new all-time record for upgraders in aggregate and across many countries, including the U.S., China mainland, Japan, and India. According to a recent survey from World Panel, iPhone was a top-selling model in the U.S., urban China, the U.K., Australia, and Japan. Customers are loving the latest iPhone lineup. The latest customer satisfaction for the iPhone 17 family in the U.S. was measured at 99 percent by 451 Research.

Mac revenue was $8.4 billion, down 7 percent year over year. As we described in the last call, we faced a very difficult compare against the M4 MacBook Pro, Mac Mini, and iMac launches in the year-ago quarter. Despite this difficult compare, we continued to see growth in several emerging markets, including Brazil, India, Malaysia, Vietnam, and more. And, as Tim mentioned earlier, the Mac installed base reached another all-time high, with nearly half of the customers who purchased a Mac being new to the product. And in the U.S., customer satisfaction for Mac was measured at 97%.

iPad revenue was $8.6 billion, up up 6% year over year, driven by the M5-powered iPad Pro and the A16-powered iPad. We continued to add new users to the iPad. In fact, over half the customers who purchased an iPad during the quarter were new to the product. This helped the iPad installed base to reach an all-time high, and we also reached an all-time high for upgraders. Based on the latest reports from 451 Research, customer satisfaction was 98% in the U.S.

Wearables, Home, and Accessories revenue was $11.5 billion, down 2% year-over-year. During the quarter, we experienced constraints on the AirPods Pro 3, and we believe the overall category would have grown had it not been for these constraints. The wearables installed base reached a new all-time high, with over half of customers purchasing an Apple Watch during the quarter being new to the product. And in the U.S., customer satisfaction was recently reported at 96%. Our services revenue reached an all-time high of $30 billion, up 14% year over year. As we said earlier, we had all-time revenue records on advertising, music, payment services, and cloud services, where we saw a double-digit growth on paid subscribers. We continue to be optimistic about the future of our services business. With our installed base of over 2-1/2 billion active devices, we have an incredibly strong foundation for new growth opportunities. We saw increased customer engagement across our service offerings, with both transacting and paid accounts reaching all-time highs in the quarter. And we continue to improve the quality and expand the breadth of our services offerings, from new wallet features like Digital ID, which provides a way for users to create an ID in wallet using information from their U.S. passport, to additional ads coming to search in the App Store, which provides advertisers more ways to drive downloads from search.

Turning now to Enterprise, organizations are continuing to expand their fleet of Apple devices to drive productivity while remaining secure. Snowflake has deployed over 9,000 Mac devices company-wide, establishing Mac as a primary laptop across all business units, resulting in increased performance and a reduction in support tickets. AstraZeneca is rolling out over 5,000 M5-powered iPad Pros to its pharmaceutical sales team to take advantage of AI capabilities, including Apple Intelligence, while meeting with clinicians daily. And in Mexico, Coppell, the country’s largest domestic retailer, recently added MacBook Air in addition to a growing fleet of over 10,000 iPad devices.

Let’s turn to our cash position and capital return program. We ended the quarter with $145 billion in cash and marketable securities. We had $2.2 billion of debt maturities, and decreased commercial paper by $6 billion, resulting in $91 billion in total debt. Therefore, at the end of the quarter, net cash was $54 billion. During the quarter, we returned nearly $32 billion to shareholders. This included $3.9 billion in dividends and equivalents, and $25 billion through open-market repurchases of 93 million Apple shares.

As we move ahead into the March quarter, I’d like to review our outlook, which includes the types of forward-looking information that Suhasani referred to. Importantly, the color we’re providing assumes that global tariff rates, policies, and their application remain in effect as of this call and the global macroeconomic outlet does not worsen from today.

We expect our March quarter total company revenue to grow by 13% to 16% year-over-year. which comprehends our best estimates of constrained iPhone supply during the quarter. We expect Services revenue to grow at a year-over-year rate similar to what we’ve reported in the December quarter. We expect gross margin to be between 48% and 49%. We expect operating expenses to be between $18.4 billion and $18.7 billion, which is at a similar level to what we reported in the December quarter, and driven by higher R&D on a year-over-year basis. We expect OI&E to be around $100 million, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 17.5%.

Finally, today our Board of Directors has declared a cash dividend of 26 cents per share of common stock payable on February 12, 2026 to shareholders of record as of February 9, 2026. With that, let’s open to call the questions.

Analyst Q&A

Amit Daryanani, Evercore: You know, there’s a lot of focus on the impact of memory to a host of companies, and I’d love to kind of get your perspective. When you folks are guiding gross margins up into the March quarter, just talk about, you know, A, your comfort in securing the bids that you need for shipment, and B, how do we think about memory inflation flowing through Apple’s model over time?

Tim Cook: Yeah, Amit, hi, it’s Tim. Let me back up a bit and talk about the constraints that Kevan referred to in his remarks, and memory, and try to get both of these out at once. First of all, we were thrilled with the customer response on the latest iPhone lineup. It exceeded our expectations, to say the least, and, you know, iPhone grew 23%. What the result of that was, was that we exited the December quarter with very lean channel inventory due to that staggering level of demand, and based on that, we’re in a supply chase mode to meet the very high levels of customer demand. We are currently constrained, and at this point it’s difficult to predict when supply and demand will balance. The constraints that we have are driven by the availability of the advanced nodes that our SOCs are produced on, and at this time we’re seeing less flexibility in the supply chain than normal, partly because of our increased demand that I just spoke about.

From a memory point of view, to answer your question, memory had a minimal impact on the Q1, so the December quarter gross margin. We do expect it to be a bit more of an impact to the Q2 gross margin, and that was comprehended in the outlook of 48% to 49% that Kevan gave earlier. Beyond Q2, we don’t obviously provide outlooks beyond the current quarter, but we do continue to see market pricing for memory increasing significantly. As always, we’ll look at a range of options to deal with that. So hopefully that gives you the full view.

Amit Daryanani, Evercore: Thank you, and I appreciate all the clarity on that Tim. Maybe the second question I have for you is, maybe just touch on the China strength you folks had? I think this is very close to all-time high revenues we’ve had in China. What’s driving the strength over here and just part of the durability of the growth rate we saw in the December quarter would be helpful to understand.

Tim Cook: Sure. Greater China was up 38% year-on-year. It was driven by iPhone, where we set an all-time revenue record. So it was the best iPhone quarter in history in Greater China. It’s driven by the customer enthusiasm for the iPhone 17 lineup, and I would tell you that during the quarter, traffic in our stores in China grew by strong double digits year over year. It was a terrific quarter. Our installed base reached an all-time high in both greater China and mainland China, and we set an all-time record for the upgraders, and we saw strong double-digit growth on switchers. And according to a survey from World Panel, iPhones were the top three smartphones in urban China during the quarter. And it’s really driven primarily by the product strength and the customer response to the product strength.

We do see on non-iPhone products, that the majority of customers that are buying a Mac, an iPad, a Watch, are still new to that product. So that’s a very good sign for us, and if you look at iPad, on that same survey, iPad was the top tablet model in urban China. And according to CounterPoint, the MacBook Air was the top selling laptop model and Mac Mini was the top selling desktop model in the December quarter. So overall, great quarter in China. We could not be more happy with it.

Eric Woodring, Morgan Stanley: Tim, congrats on announcing the partnership with Google and we’re all excited to see what you bring to market later this year. When I think about your AI initiatives, it’s clear there are added costs associated with that. We’re obviously seeing that flow through an OpEx. Can you help us understand maybe what the revenue upside potential that exists with AI? I mean, many of your competitors have already integrated AI into their devices, and it’s just not clear yet what incremental monetization they’re seeing because of AI. But you’re always disciplined with investing. You obviously have a differentiated product. So how do you monetize AI, and what’s the timeline to realizing that ROI?

Tim Cook: Well, let me just say that we’re bringing intelligence to more of what people love and we’re integrating it across the operating system in a personal and private way, and I think that by doing so, it creates great value, and that opens up a range of opportunities across our products and services. And we’re very happy with the collaboration with Google as well, I should add.

Eric Woodring, Morgan Stanley: Now that you have kind of more time and data to evaluate this cycle, can you maybe help us understand what the primary factors are driving strength in the iPhone? I’m sure there’s a number of factors, but if you had to point to one or two, just what would they be and how sustainable do you think those are?

Tim Cook: I think it’s different for different cohorts of where people are coming from and the device that they have. But it’s a combination of things, always, that make the products sing. It’s the display, it’s the camera, it’s the performance, it’s the new selfie camera, it’s the design—the design is beloved—and so it’s all of these things that come together at once and are producing a very strong product cycle as witnessed by our December quarter results.

Michael Ng, Goldman Sachs It was encouraging to hear about the revenue growth outlook of 13% to 16% for the March quarter. I was just wondering if you could talk about any comps that we should be particularly aware of as we kind of think about each of the product categories. I know last year, you guys had MacBook Air with M4, the iPhone 16e, the iPad with A16, and the iPad Air with M3. So just wanted to ask if those things would create tough comps, or is it just less of an issue just given the new product outlook?

Kevan Parekh: Yeah, Mike. It’s Kevan. How are you? Thanks for the question. Yeah, I wouldn’t say there’s any particular comp issue that we’d note. As you recall, last quarter, we talked about the difficult comparison we had on Mac, but there’s nothing that rises to that kind of color that we’d outline in the outlook, and so I think it’s just continuation of the strong cycle we’re seeing, subject to the constraints that I had mentioned in the prepared remarks and that Tim alluded to a little earlier, as well.

Michael Ng, Goldman Sachs And, just on Services, advertising strong in the quarter, I wanted to ask about some of the new growth opportunities in advertising. I know you guys are doing the new ad slots in the App Store. Maybe you could just talk a little bit about that, and then any plans to do more in advertising across other products like Maps or TV.

Kevan Parekh: Sure, Michael, what I’d say just if I step back in general, I think as we outlined, we saw really good broad-based performance in our Services business. So ranging from all-time records and advertising, music, payment services, and cloud services. So I think we see really good opportunities across a lot of our service categories, and we continue to add new service offerings. We talked about what we added to the Wallet, like digital ID, and you referenced the additional ads coming in the search in the App Store, which we are excited about. It provides advertisers more ways to be discovered, and so I think we’ll continue to look for ways to expand opportunities to add value to users and also create opportunities for Apple. I think as we talked about, we crossed a really significant milestone at 2.5 billion active devices, so we really feel excited about the opportunity that provides for our services business as well.

Ben Reitzes, Mellius: Hey, guys. How are you?

Tim Cook: Hi, Ben.

Ben Reitzes, Mellius: Hey, Tim. First question is on Google partnership again. I wanted to understand how you came to that decision with regard to the AI and Siri in particular and if there’s an opportunity for you guys to share in revenue too with that partnership like you do in search.

Tim Cook: Yeah, we basically determined that Google’s AI technology would provide the most capable foundation for AFM (Apple Foundation Models), and we believe that we can unlock a lot of experiences and innovate in a key way due to the collaboration. We’ll continue to run on the device and run in Private Cloud Compute and maintain our industry-leading privacy standards in doing so. In terms of the arrangement with Google, we’re not releasing the details of that.

Ben Reitzes, Mellius: Bummer. Okay. I tried.

Tim Cook: [Laughs.] You did.

Ben Reitzes, Mellius: So, yeah, you knew it would be me.

Tim Cook: [Laughs.]

Ben Reitzes, Mellius: So, the next question is on gross margin. You know, I’m pretty shocked. I got to hand it to you, Tim, that you’re able to do 48 to 49. What’s really going on there? How are you doing that with this memory, the NAND prices? Is it due to mix that there’s less hardware and more services, and services margins are going up, how are you doing it? To keep it at 48 to 49?

Kevan Parekh: Yeah, Ben, this is Kevan. How are you doing? Well, let me start maybe by just reflecting on the Q1 gross margin. I think we talked about the fact that we landed at 48.2%. So, just above the high end of the range that we provided, you know, on the last call, and I think if you look at that performance, we were up 100 basis points sequentially. We talked about the fact that we had favorable mix. As you know, when we have a good product cycle, a strong product cycle we’re seeing for iPhone, that does lend itself to a bit more favorable opportunity on the mix and leverage side. So, we’re having a strong iPhone cycle, as Tim outlined, and so that also translated itself. We talked about products sequentially went up by 450 basis points. So I think in general, I think we’re just seeing favorable mix dynamics as well. You know, services continues to contribute as well. That business is growing double digits. So that also is a contributor. And I think we looked at our guidance,we’re providing a similar range to where we reported in December, and there’s going to be a few puts and takes. You know, we do expect to see favorable mix into services. As you know, when we move from Q1 to Q2, that tends to be the case, and that’s partly offset by seasonal loss of leverage. So there’ll be puts and takes, but, again, we feel pretty good about the guide of 48 to 49%, which is similar to the range we reported in December.

David Vogt, UBS: Maybe if we could pull out a little bit, can you help us understand how you’re thinking about the overall kind of smartphone market demand, particularly given where memory prices are headed? We’ve heard some conversations with some other OEMs as well as component providers that are worried about either the availability of components, potential market weakness in terms of demand destruction, if some of the actions to offset are higher prices. I know you don’t give out looks for the full year, but how are you thinking about all of those different vectors and what that might mean for the overall smartphone market and then ultimately what that might mean for demand for iPhones as we move through the rest of this calendar year.

Tim Cook: Yeah, on the supply side, I had made comments earlier about the constraint that we are seeing in Q2, and that’s reflected in the revenue guidance that Kevan gave earlier. The constraint, as I’d mentioned, is due to the advanced node capacity, and it’s really a result of growing so well in Q1 with the 23% and having less flexibility partly due to that in the process to increase it as much as we would like to increase it. Beyond Q2, I don’t really want to comment on supply. Supply is the function of a lot of things in the industry that move around a lot, so I wouldn’t want to comment on that. And I commented before on memory pricing, and so hopefully that answers your question. Oh, in terms of smartphone demand— You know, we believe that, based on the information that we’ve got, is we gained share in the December quarter. Obviously, the market wasn’t growing at 23%, so we feel good about doing that, but I wouldn’t want to predict how the market reacts in the future. It’s very difficult to do that.

David Vogt, UBS: Got it. At the risk of not getting this answered, I’m going to follow up with: Can you maybe help us understand… you mentioned there’s a range of options that you’re looking at. How should we think about kind of like LTAs in the marketplace, is that an option as we move through the year, or is it more spot-based on a perspective particularly around memory, just trying to get a better sense for how we should think about the dynamics in the marketplace?

Tim Cook: It’s a range, and so I don’t want to get more specific than that. They’re different levers that we can push, and who knows how successful they’ll be, but there’s just a range of options.

Wamsi Mohan, Bank of America: Tim, on Services you grew a pretty impressive 14%, and I know you said that the App Store with a record for the December quarter, but third-party data is showing a notable deceleration in App Store growth, maybe 7% of the December quarter relative to your 14% growth. I was hoping if you could maybe confirm that and secondarily, if it’s correct, what might be some of the drivers of that and what could be things that you could do to reverse that in future quarters?

Kevan Parekh: Hey, Wamsi. It’s Kevin here. Look, I think I want to reiterate the fact that during the summer quarter, we had a quarterly record on the App Store? As you know, we don’t provide specific color on how the individual services categories have done. But, again, if we step back, I think we saw, again, broad-based growth across all the different categories, also across various geographies. We had all-time records in both developed and emerging markets as well, and double-digit in both of those, too, and so I think in general, you know, we don’t provide you know the color at the detailed services level.

Wamsi Mohan, Bank of America: Okay, thanks, Kevan. I guess back to the memory price. I appreciate you have a range of options to address that. Historically, Apple’s not used a pricing lever unless FX markets got maybe very dislocated to prevent arbitrage or issues like that, but given some of these unprecedented moves in memory, would pricing be a lever that you would be willing to pull or push outside of everything else that you can do?

Tim Cook: Yeah, I wouldn’t want to speculate on that one.

Samik Chatterjee, JP Morgan: I’m just looking at your capital investment in the first quarter, which did moderate from the last one, and wondering if the partnership with Google on Gemini and sort of help collaboration to develop the next generation of Apple foundational models, does that have any near term sort of impact on your intent to use Apple Private Cloud? I know you emphasize sort of the role Apple private cloud plays in the long term, but are there any changes on that front through this collaboration? Any thoughts around that?

Kevan Parekh: I think this is Kevin here. I think in general, as Tim outlined, we weren’t going to provide any details on our arrangement and collaboration with Google. Just speaking of CapEx in general, as you know, we have a hybrid model for CapEx, and so I think that what happens is, our CapEx can be volatile, independent of kind of the volume of performance of our business. And as you know, our CapEx is made of several different line items that include tooling, our facilities, investments in our retail store, data centers, and on tooling and data centers, we leverage this hybrid model that I mentioned before, which we leverage a combination of first and third party capacity. So in general, it’s hard to read into the CapEx and draw any conclusions. So I think I would just say there’s gonna be some ebbs and flows in CapEx. Last year, remember, we did build out our Private Cloud Compute environment, and so we did have CapEx spending related to that in our results in December.

Samik Chatterjee, JP Morgan: You did mention product gross margin and the sort of drivers there for the product gross margin improvement. When you sort of highlighted mix as a driver, can you just sort of talk through what are the big differences in mix you’re seeing for iPhone 17 versus 16? And tariffs, tariffs coming in more favorable play a role at all, and what are you expecting for tariffs for the next quarter?

Kevan Parekh: Yeah, so there’s a few things to unpack there. So on the overall margin on product side, I think I mentioned that we had favorable mix of products and leverage. I think given the strong iPhone cycle we’re seeing, that was, I would say, probably a higher favorability than you might have seen in maybe other cycles, and as well, as you know, in Q1, typically we do see the impact of the cost structure of our new products that we launch. And in this case, we are seeing a more favorable offset from mix of products and leverage versus historical sequential changes from Q4 to Q1. On the tariff piece, we had outlined an amount of $1.4 billion for the December quarter, and we landed roughly in that range and at that level.

Krish Sankar, TD Cowen: Tim, I think you touched upon this earlier on the Gemini integration and Apple Foundation Model. How to think about the difference between Apple Foundation model functionality and third-party models? Does the Apple Foundation Model evolve to a different layer in the AI software stack? How to think about it as you partner with third-party frontier models?

Tim Cook: Yeah, Krish, you should think of it as a collaboration. And we’ll obviously independently continue to do some of our own stuff, but you should think of what is going to power the personalized version of Siri as a collaboration with Google.

Krish Sankar, TD Cowen: Got it. So, a quick follow up, just a lot of discussion on memory pricing. Given that the memory constraint or commodity scarcity is impacting both the smartphone and the PC markets, and Apple arguably having more purchasing power. Do you think this is a chance for you to increase your market share both in iPhone and Mac at the expense of competition who might have more constraints in getting access to memory?

Tim Cook: Yeah, I don’t really want to talk about kind of what has happened, and we do believe as I had shared that iPhone gained share in the December quarter, and if you look at Mac for the full calendar year of ’25, we also believe we gained share, and so we feel very good about our position.

Atif Malik, Citi: Tim, some of the industry pundits are comparing the iPhone 17 upgrade cycle to the 2020-2021 years, as some of the iPhone 12-13 users upgrade. Curious if you agree with that view, and also if you can layer on the impact from Apple Intelligence to the refresh rate.

Tim Cook: I think each iPhone cycle has its own unique characteristics, and so I wouldn’t compare it to a specific one. I think iPhone 17, the family of 17, is a unique product that brings several very compelling features in one product and it has done extremely well, and so we feel quite good about it.

Kevan Parekh: And I’ll just add to Tim’s comment that we talked about the fact that we have a large and diverse installed base of customers, and so this product has really resonated with multiple cohorts, whether you’re on older devices or newer iPhones as well. So we’ve seen really strong reaction to the product lineup.

Atif Malik, Citi: There was a lot of discussion on supply constraints, and I’m surprised that you guys are constrained on advanced packaging as you generally get your share at the big foundry. How long will these supply [constraints] impact your ability to ship through demand?

Tim Cook: It’s difficult to estimate demand when you haven’t met the demand. And so obviously we have internal estimates on that, but I don’t want to share those. But it’s very difficult. And just to be clear, it’s the advanced nodes, like three nanometer to be specific, where the latest SOCs are produced on, as to what is gating the Q2 supply. And it’s a direct result of the 23% growth and that far outstripping what we had internally estimated and having more limited flexibility in the supply chain for some period of time. But I don’t want to estimate when supply and demand will balance at this point.

Aaron Rakers, Wells Fargo: I’ll try and stay away from the memory question. I’m curious, and, obviously hearing a lot of focus on the China demand, but I’m curious, you also called out India, and so, can you maybe unpack some of the things that you’re seeing in the Indian market as far as iPhone traction—any kind of color on what is a very large install base in India that seems to be a good growth opportunity for Apple still?

Tim Cook: Yeah, thanks for the question. We did set a quarterly revenue record during the December quarter, and to go a little further down, we set quarterly revenue records on iPhone and Mac and iPad, and an all-time revenue record on Services. So it was a terrific quarter in India. We really like what we see there. It’s the second-largest smartphone market in the world and the fourth largest PC market. And we still have, despite very nice growth history, we have modest share there, and so we think there’s a huge opportunity for us there, and we could not be more excited about it. The other thing that I would point out is that the majority of customers that are buying iPhone and Mac and iPad and Watch are all new to that product and so it speaks very well to opportunity there.

Kevan Parekh: Yeah, and Aaron, I heard you mention the installed base. We’re seeing strong double digit growth in the install base in India as well, which is really encouraging.

Aaron Rakers, Wells Fargo: Part of this current generation iPhone cycle is, you clearly deepened some of your own internal silicon capabilities on the device. I’m curious if we should think about that as a lever and maybe a supportive factor to gross margin that might be underappreciated? Any thoughts on where we go from here as far as continual opportunities of internalizing your own silicon.

Tim Cook: Yeah, I’ll let Kevan talk about the gross margin, but in terms of the product, which is at the heart of what we think about in the user, Apple silicon has just been a incredible game changer for us, starting with iPhone, and then on iPad, and of course the Mac as of a few years ago. And so we believe it’s a game changer and a major competitive advantage.

Kevan Parekh: Yeah, and as far as impact on gross margin, we have been, as you know, investing in core technologies like our own silicon, our own modem, and certainly while those do provide opportunities for cost savings and can be reflected in margins, they also, importantly, provide the differentiation that’s really important for our products as well, and give us more control over our roadmap. So I think there’s a lot of strategic value to it, but also we are seeing investments in our core technologies impacting gross margins in a positive way.

Richard Kramer, Arete Research: Tim, when you think about how Apple might manage AI, do you see that evolving towards more edge AI or on-device services versus cloud-based AI? And are you confident you’ve reserved sufficient data center capacity to support the widespread Siri adoption, especially given that you’re not following the other hyperscalers and sharply increasing CapEx?

Tim Cook: The answer is that we see both being important, the on-device and the Private Cloud Compute, and so we don’t see it as an either/or, we see it as a both, and we believe it’s a differentiator because of our privacy approach. In terms of, do we have enough capacity? It’s hard to estimate with precision what the demand will be. But we’ve done sort of the best job that we can do, and either have or are putting capacity in for it.

Richard Kramer, Arete Research: Okay, and you mentioned the 2.5 billion active device number, but Apple Intelligence features have only been available since the 15 Pro. So can you speak at all to roughly what portion of your iPhone or overall active device install base is now AI-capable, and has this been a factor in maybe a more gradual pace of launching wider AI services?

Kevan Parekh: Yeah, Richard, this is Kevin. You know, we don’t provide that specific number, but it is a growing number, as you can imagine, in our install base, and so we’re encouraged by the amount of devices now that are capable. But we’re not going to provide a specific figure on that today.

Richard Kramer, Arete Research: Okay, well. I had to try. Thank you.

Kevan Parekh: [Laughs.]