Apple beat Q1 expectations on a big iPhone quarter and a Greater China upside surprise, while services held steady and cash flow stayed strong.
Summary:
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Apple delivered a clear beat on EPS and revenue, led by a standout iPhone quarter (“staggering demand”).
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iPhone revenue materially outperformed expectations, driving a strong products result overall.
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Services was essentially in line, holding the narrative of steady, high-quality recurring revenue.
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Greater China surprised to the upside versus expectations, a key swing factor for sentiment.
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Cash generation remained powerful (operating cash flow ~US$54bn) and Apple declared a US$0.26 dividend.
Apple Tim Cook:
“iPhone had its best-ever quarter driven by unprecedented demand, with all-time records across every geographic segment, and Services also achieved an all-time revenue record, up 14 percent from a year ago. We are also excited to announce that our installed base now has more than 2.5 billion active devices, which is a testament to incredible customer satisfaction for the very best products and services in the world.”
Apple posted a strong set of first-quarter FY2026 results, beating expectations on both earnings and revenue as iPhone demand carried the holiday-period quarter.
EPS came in at $2.84 versus $2.68 expected, while revenue printed at $143.76 billion versus $138.40 billion expected. The numbers point to a better-than-feared mix and margin outcome, even as operating expenses were a touch higher than consensus at $18.38 billion (vs $18.18 billion expected).
The key driver was iPhone. iPhone revenue reached $85.27 billion, well above the $78.31 billion estimate, lifting total products revenue to $113.74 billion (also ahead). By contrast, services revenue of $30.01 billion was essentially unchanged versus expectations, reinforcing the picture of steadier growth rather than a fresh upside surprise. iPad revenue beat estimates ($8.60 billion vs $8.18 billion), while Mac revenue missed ($8.39 billion vs $9.13 billion). Wearables, home and accessories also ran softer than expected at $11.49 billion.
Regionally, the Americas came in close to forecasts, but Greater China was the notable upside surprise at $25.53 billion versus $21.82 billion expected — likely to be one of the most discussed line items given recent investor sensitivity to China demand trends.
Apple also flagged ongoing scale in its ecosystem: the installed base surpassed 2.5 billion active devices. Cash generation stayed robust with operating cash flow around $54 billion, supporting continued capital returns, including a declared cash dividend of $0.26 per share.
Bottom line: this was an iPhone-led beat with steady services, a China upside surprise, and continued balance-sheet firepower — a combination that should keep the market focused on sustainability into the next quarters. (Apple’s fiscal Q1 results are discussed on its investor relations channels and earnings call schedule.)
This article was written by Eamonn Sheridan at investinglive.com.