Level 1 — Absolute Beginner

Apple makes phones and computers. On Monday it told people how much money it made in three months.

Apple sold 114.5 billion dollars of things. That is 12 percent more than last year. The iPhone and the Mac sold very well.

Not everything went up. The iPad sold less than last year. Watches and headphones also sold less.

Apple has a new boss. His name is John Ternus. He says the next three months will be the best ever for the company.

company

A business that makes or sells things.

money

What people use to buy things.

billion

One thousand million.

percent

A part of one hundred, written with the sign %.

sell

To give something for money.

boss

The person who leads a company or a team.

best

Better than all the others.

year

A period of twelve months.

Level 2 — Elementary

Apple published its results for the three months to September on Monday. Revenue reached 114.5 billion dollars, 12 percent higher than the 102.5 billion dollars it made in the same quarter a year earlier. Earnings per share came to 2.10 dollars, up 14 percent.

The iPhone brought in 57.6 billion dollars, a record for a September quarter and 17 percent more than last year. The Mac grew 24 percent to 10.8 billion dollars, even though Apple said supply was tight. Services, which include the App Store, music and iCloud, reached an all-time high of 31.6 billion dollars.

Two parts of the business got smaller. iPad revenue fell 10 percent to 6.2 billion dollars, and the group that contains watches, headphones and home devices fell 8 percent to 8.3 billion dollars. Apple said both were being compared with very strong quarters a year ago.

These were the first results presented by John Ternus, who became chief executive on 1 September after Tim Cook stepped down. The chief financial officer, Kevan Parekh, told analysts that Apple expects revenue to grow between 7 and 10 percent in the December quarter, which would make it the biggest quarter in the company's history. The share price hardly moved after the announcement.

results

The figures a company publishes showing how it has performed.

revenue

The total money a company receives from selling things.

quarter

A period of three months in a company's financial year.

earnings per share

The company's profit divided by the number of its shares.

record

The highest figure ever reached.

supply

The amount of a product that is available to sell.

chief executive

The most senior manager of a company.

analyst

A person whose job is to study companies and markets.

Level 3 — Intermediate

Apple closed its 2026 financial year on Monday with a September quarter that beat its own records and a promise that the next three months will beat them again. Revenue of 114.5 billion dollars was 12 percent ahead of the 102.5 billion dollars reported a year earlier, diluted earnings per share rose 14 percent to 2.10 dollars, and the gross margin edged up to 47.9 percent from 47.2 percent. For the full year, revenue reached 478.8 billion dollars, up 15 percent, with earnings per share of 8.98 dollars.

The composition of the growth is more interesting than the headline. iPhone revenue of 57.6 billion dollars, up 17 percent, set a September quarter record, and Mac revenue grew 24 percent to 10.8 billion dollars despite what the company called supply constraints. Services, the high margin software and subscription business, hit an all-time high of 31.6 billion dollars with a gross margin of 76 percent, against 37.2 percent for hardware. Greater China revenue rose 21 percent, the strongest of any region.

Two categories went backwards. iPad fell 10 percent to 6.2 billion dollars and the wearables, home and accessories group fell 8 percent to 8.3 billion dollars, in both cases measured against unusually strong launch quarters a year earlier. Chief financial officer Kevan Parekh also noted that refunds of tariffs already paid added about a percentage point to margins and five cents to earnings per share, and that the great majority of those refunds have now been received, which removes a tailwind from future quarters.

This was John Ternus's first earnings call since taking over from Tim Cook on 1 September, and he opened it by calling the moment a privilege. The guidance he and Parekh gave was confident: revenue growth of 7 to 10 percent in the December quarter, which Parekh said would make it the best quarter for revenue in the company's history, and a gross margin of 45 to 46 percent that absorbs higher memory prices and the cost of ramping up the new Siri. Investors were unmoved, with the shares down about 1.8 percent in regular trading and roughly flat afterwards.

diluted earnings per share

Profit per share calculated as if all possible shares existed.

gross margin

The share of revenue left after the direct cost of making a product.

composition

What something is made up of, and in what proportions.

supply constraint

A limit on how much a company can make or obtain.

subscription

A regular payment that gives you continuing access to a service.

tariff

A tax a government charges on goods coming into a country.

tailwind

Something that pushes results higher without extra effort.

guidance

A company's own forecast of its coming results.

Level 4 — Advanced

Succession at a company of Apple's scale is usually tested not by the handover itself but by the first quarter in which the new chief executive must defend somebody else's numbers as his own. John Ternus, who replaced Tim Cook on 1 September, cleared that bar comfortably. Revenue for the September quarter reached 114.5 billion dollars, up 12 percent from 102.5 billion dollars; diluted earnings per share rose 14 percent to 2.10 dollars; the gross margin firmed to 47.9 percent from 47.2 percent. The full financial year closed at 478.8 billion dollars of revenue, 15 percent higher, with earnings per share of 8.98 dollars.

Beneath the aggregate, the mix tells the strategic story. The iPhone, at 57.6 billion dollars and 17 percent growth, remains the engine, and the Mac's 24 percent rise arrived in spite of acknowledged supply constraints. But the quarter's most consequential line is Services, which set an all-time record of 31.6 billion dollars on a gross margin of 76 percent, against 37.2 percent for hardware. An installed base above 2.5 billion active devices and more than 1.5 billion paid subscriptions is, in effect, an annuity: it converts yesterday's hardware sales into recurring, high margin revenue that is far less cyclical than the product cycle itself.

Two cautions sit inside the release. iPad, down 10 percent, and the wearables and home group, down 8 percent, were lapping unusually strong launch quarters, which is a benign explanation but not a costless one. More materially, chief financial officer Kevan Parekh disclosed that refunds of previously paid tariffs contributed roughly a percentage point of margin and five cents of earnings per share, and that the vast majority of those refunds have now landed. Strip that out and margins would have fallen about a point sequentially on higher memory costs, which is the honest baseline against which the December guidance of 45 to 46 percent should be read.

That guidance is nonetheless bullish: revenue growth of 7 to 10 percent, which Parekh said would deliver the best revenue quarter in the company's history, with operating expenses of 20.4 to 20.8 billion dollars and the cost of ramping the new Siri explicitly absorbed. Apple returned 28 billion dollars to shareholders in the quarter, 24 billion of it in buybacks, and declared a dividend of 27 cents payable on 16 November. The market's verdict was a shrug: the shares had slipped about 1.8 percent during the session and moved barely at all afterwards, which suggests that a record quarter is now simply the expected baseline rather than news.

succession

The process by which one leader replaces another.

aggregate

The total, considered as a single figure.

installed base

The total number of a company's products currently in use.

annuity

An arrangement that pays out a steady income over time.

cyclical

Rising and falling in a regular pattern, often with the economy.