Issue 001 · AAPL · FY2026
Apple
Hardware still prints the larger dollar. Services keeps more of each dollar that arrives.
40.2%
Services’ share of FY2026 gross profit, against a 25.8% share of net sales. The gap is the issue.
Figure 01
Net sales by category
iPhone Other products (Mac, iPad, Wearables) Services USD billions. Zero baseline.
| Series | FY22 | FY23 | FY24 | FY25 | FY26 |
|---|---|---|---|---|---|
| iPhone | $205.5B | $200.6B | $201.2B | $209.6B | $254.1B |
| Other products (Mac, iPad, Wearables) | $110.7B | $97.5B | $93.7B | $97.4B | $101.4B |
| Services | $78.1B | $85.2B | $96.2B | $109.2B | $123.3B |
Other products is the sum of Mac, iPad, and Wearables, Home and Accessories. Total net sales were $478.8B in FY2026. iPhone is 53.1% of that stack. Services grew 57.8% from FY2022 to FY2026 (four annual intervals, not a five-year CAGR). Its share of sales rose through FY2025, then eased in FY2026 as iPhone accelerated. Do not read a straight climb.
Source: Form 10-K, FY2026 Note 2, Revenue, disaggregation of net sales; FY2022–FY2023 from FY2024 10-K. Comparative filing: https://www.sec.gov/Archives/edgar/data/320193/000032019324000123/aapl-20240928.htm www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm
Figure 02
Share of sales versus share of gross profit
Services Percent. Derived from reported dollars.
| Series | Share of net sales | Share of gross profit |
|---|---|---|
| Services | 25.8% | 40.2% |
Gross profit here is Apple’s “gross margin” in dollars, not net income. Products still contribute the larger dollar of profit ($139.7B versus $93.9B). Services simply keeps more of the revenue it books.
Source: Form 10-K, FY2026 Item 7, Gross Margin, and Consolidated Statements of Operations. www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm
Figure 03
Gross margin rates
Gross margin % Percent, as reported.
| Series | Products | Services | Total |
|---|---|---|---|
| Gross margin % | 39.3% | 76.2% | 48.8% |
On each revenue dollar, Services keeps 76.2¢ and Products 39.3¢ before operating costs and tax. Those rates are Apple’s reported gross-margin percentages, not an allocation of net income.
Source: Form 10-K, FY2026 Item 7, Gross Margin. www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm
Figure 04
Geographic net sales, FY2026
USD billions. Apple’s segments, not continents.
| Category | Value |
|---|---|
| Americas | $198.1B |
| Europe | $127.6B |
| Greater China | $82.4B |
| Rest of Asia Pacific | $39.9B |
| Japan | $30.9B |
Americas is North and South America. Europe, in Apple’s definition, includes India, the Middle East and Africa. Greater China is mainland China, Hong Kong and Taiwan.
Source: Form 10-K, FY2026 Item 7, Segment Operating Performance, Net sales. www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm
Figure 05
Cash returned and net income
Repurchases of common stock Dividends and equivalents Net income USD billions. Cash outflows shown as positive magnitudes.
| Series | FY24 | FY25 | FY26 |
|---|---|---|---|
| Repurchases of common stock | $94.9B | $90.7B | $86.4B |
| Dividends and equivalents | $15.2B | $15.4B | $15.7B |
| Net income | $93.7B | $112.0B | $132.2B |
Cash returned (buybacks plus dividends) was $110.2B in FY2024, $106.1B in FY2025, and $102.1B in FY2026 — 77.3% of that year’s net income. These are cash-flow payments, not authorizations, and not a forecast.
Source: Form 10-K, FY2026 Consolidated Statements of Cash Flows (FY2024–FY2026 columns). www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm
No share price, no target, no recommendation. Issue 001 is a reading of the filing.