How does Apple make money?

Apple splits its net sales into Products and Services. Products are the devices: iPhone, Mac, iPad, and a category called Wearables, Home and Accessories that covers the Apple Watch, AirPods, Apple TV, HomePod, Beats and accessories. Services are everything sold after the device, including the App Store commission, iCloud storage, AppleCare, Apple Music, video streaming, advertising, licensing and payment services.

The two halves feed each other. Every device sold is a potential customer for services, and the services make the devices harder to leave. In fiscal 2026 Products brought in $355.5 billion and Services $123.3 billion. Net sales is the top line of the income statement; the profit comes further down.

Net sales
The revenue a company reports after returns, discounts and similar deductions. Apple uses “net sales” for its top line.
Apple Services
Apple’s non-device revenue: App Store commissions, iCloud, AppleCare, Apple Music, video streaming, advertising, licensing, payments and other subscriptions.

How much of Apple’s revenue comes from the iPhone?

More than half. These are the five categories in Apple’s 10-K for fiscal 2026, rounded to $0.1 billion, with each share of the $478.8 billion total, as in the drawing at the top of the page:

  • iPhone: $254.1 billion, about 53.1%.
  • Services: $123.3 billion, about 25.8%.
  • Mac: $37.9 billion, about 7.9%.
  • Wearables, Home and Accessories: $35.6 billion, about 7.4%.
  • iPad: $27.9 billion, about 5.8%.

Why do Apple’s Services matter so much?

Because they are far more profitable per dollar. Gross margin is what is left of sales after the direct cost of producing them. In fiscal 2026 Apple’s Products earned a gross margin of $139.7 billion on $355.5 billion of sales, about 39.3%. Services earned $93.9 billion on $123.3 billion, about 76.2%, since an extra app download or iCloud subscription costs little to deliver.

So Services were about 25.8% of net sales but about 40.2% of the company’s $233.6 billion gross margin. As Services grow faster than devices, Apple’s overall gross margin tends to rise: it was 48.8% in fiscal 2026, against 46.9% in fiscal 2025. Margins are one of the first things analysts check in a report; see how to read earnings reports.

Gross margin
Net sales minus the cost of sales, in dollars or as a percentage of sales. It shows how much each dollar of sales leaves to pay for operating costs, taxes and profit.

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Two 100% bars for Apple in fiscal 2026: share of net sales, Products 74.2% and Services 25.8%; share of gross margin, Products 59.8% and Services 40.2%. Two cards in $ billions: Products, sales 355.5 and gross margin 139.7, 39.3%; Services, sales 123.3 and gross margin 93.9, 76.2%. A note reads Services: about a quarter of sales, about two fifths of gross margin.

Which Apple products grew in fiscal 2026?

Comparing each line with the year before shows where growth came from. From fiscal 2025 to fiscal 2026, total net sales rose about 15.1%, from $416.2 billion to $478.8 billion. The iPhone did most of the work, up about 21.2%; Services rose about 13.0% and the Mac about 12.5%, while the iPad and Wearables were roughly flat, each down about 0.3%.

Apple’s reportable segments are geographic: the Americas, Europe, Greater China, Japan and the Rest of Asia Pacific. Greater China brought in $82.4 billion in fiscal 2026, about 17.2% of net sales, up about 28% on the year, so trade and regulatory news from China can matter to the stock.

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Horizontal bars of the change in Apple’s net sales from fiscal 2025 to fiscal 2026, around a zero line: iPhone +21.2% (209.6 → 254.1), Services +13.0% (109.2 → 123.3), Mac +12.5% (33.7 → 37.9), Wearables, Home and Accessories −0.3% (35.7 → 35.6), iPad −0.3% (28.0 → 27.9), and total net sales +15.1% (416.2 → 478.8), in $ billions from Apple’s 10-K.

When does Apple’s fiscal year end?

Apple’s fiscal year is 52 or 53 weeks long and ends on the last Saturday of September, so fiscal 2026 ran from late September 2025 to September 26, 2026. Its first quarter is the holiday quarter, roughly October to December, which usually brings in the most iPhone sales. Quarter names therefore run ahead of the calendar: results for “Q1 fiscal 2027” describe the 2026 holiday season.

Apple reports a few weeks after each quarter ends, after the US market close. Its fourth-quarter and full-year results for fiscal 2026 came out on November 2, 2026: September-quarter revenue of $114.5 billion, up 12% on the year, with a record for Services. Check the next date on Apple’s investor relations page.

Fiscal year
The 12-month period a company uses for its accounts, which need not match the calendar year. Apple’s ends in late September, Microsoft’s on June 30 and Nvidia’s in late January.

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A timeline of Apple’s fiscal 2026 from October 2025 to September 2026, split into Q1 (October to December, marked holiday quarter), Q2, Q3 and Q4. A red line marks the year end on September 26, 2026; past it, a dot marks Q4 and full-year results on November 2, 2026. A note reads the fiscal year ends on the last Saturday of September.

What should you read in Apple’s earnings report?

The press release and the 10-Q or 10-K give the same categories every quarter, so you can follow them over time. Apple stopped reporting how many iPhones it sells in fiscal 2019, so dollar sales are what you have. Five things are worth reading each time:

  • iPhone sales against the same quarter a year earlier, not against the previous quarter, because the holiday quarter is always the biggest.
  • Services growth and the Services gross margin, the main driver of the overall margin.
  • Total gross margin as a percentage, and the outlook management gives on the call for the next quarter.
  • Sales by region, especially Greater China.
  • Earnings per share and the cash returned through dividends and buybacks; see earnings per share and stock buybacks.