HCA Red Flag: Apple beats its own guidance once again, but the holiday quarter will be decisive (AI)
HC Andersen Capital
Summary
- Apple's Q4 revenue of 114.5 BUSD exceeded expectations of 113.4 BUSD, but the holiday quarter guidance remains crucial for future direction.
- Inventories increased by 31% to 14.5 BUSD, raising concerns as operating cash flow of 28.1 BUSD was lower than the profit of 30.7 BUSD.
- The tax rate was lower than guided, boosting earnings per share by ~0.04 USD, while growth in Services slowed to 9.8%, impacting earnings.
- iPhone sales set a September record at 57.6 BUSD, surpassing estimates, and gross margin exceeded guidance, providing a strong base for future margin expectations.
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Automatic translation: Originally published in Danish 02/11/2026, 21:40 GMT. Give feedback here.
Red Flag · First read of the financial statements · AI-generated content
HCA Red Flag: Apple beats its own guidance once again, but the holiday quarter will be decisive (AI)
Apple (AAPL) · Q4 2025/26 · November 2
| Overall assessment | Balanced |
| Positive assessment | Balanced | Negative assessment |
Revenue of 114.5 BUSD vs. the expected 113.4 BUSD is Apple's usual small surprise and does not give the share a new direction ahead of this evening's guidance for the holiday quarter. A lower tax rate contributed ~0.04 USD of the 2.10 USD earnings per share, meaning that earnings also beat expectations only as normal.
Red flags in the financial statements
Inventories rise 31% in a single quarter to 14.5 BUSD
14.5 BUSD · June 11.1 BUSD · A year ago 5.7 BUSD
Inventories grew by 3.4 BUSD since June, and the financial statements do not explain why. Operating cash flow of 28.1 BUSD was lower than the profit of 30.7 BUSD, meaning more capital is tied up ahead of the holiday quarter.
Lower tax rate flatters earnings per share
Tax rate 15.0% · Guidance 16.5%
Taxes accounted for 15.0% of profit before tax vs. the 16.5% Apple had guided, lifting earnings per share by ~USD 0.04. With the guided rate, it was USD 2.06, within Apple's usual surprise.
Growth in Services slows to 9.8%, the lowest of the year
Actual USD 31.6 billion · Est. USD 31.5 to 31.7 billion
Services, Apple's App Store and subscription business, grew 9.8% vs. 16% in the March quarter, as Apple's currency warning suggested. With a gross margin of 76.0%, every lost percentage point of growth weighs on earnings.
Green flags in the financial statements
Revenue beats the top end of Apple's own guidance once again
Actual USD 114.5 billion · Est. USD 113.4 billion · Top of guidance USD 113.7 billion
Growth of 11.7% beat Apple's guidance of 9% to 11% despite the chip shortage the company expected to take hold, and Mac grew 24%. When demand exceeds supply, it creates room in the guidance for the holiday quarter.
iPhone sets September record at USD 57.6 billion
Actual USD 57.6 billion · Est. USD 56.5 billion
iPhone sales rose 17.5% vs. the ~15% Apple had guided, even though the iPhone 18 Pro was only on sale for nine days. This reinforces the main reason to own the share ahead of the foldable iPhone Duo's first holiday season.
Gross margin beats guidance, even without tariff refunds
Actual 47.9% · Without refunds of around 46.9% · Est. 47.5%
The gross margin, the share of revenue remaining after production costs, was ~0.4 percentage points above Apple's midpoint of 46.5% excluding tariff refunds, despite more expensive memory. This raises the starting point for the December margin guidance.
Disclaimer: This is an HCA AI-generated research commentary based solely on the company's published financial statements. The commentary does not constitute investment consulting and should not be the sole basis for investment decisions. Investing in shares involves the risk of loss. Seek professional consulting. /HC Andersen Capital, 10:39 PM, November 2, 2026