Apple reports $478.83 billion revenue for 2026

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For the fiscal year ended September 27 26 , 2025 2026

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0.000% Notes due 2025 — The Nasdaq Stock Market LLC

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The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of March 28, 2025, 27, 2026, the last business day of the Registrant's most recently completed second fiscal quarter, was approximately $ 3,253,431,000,000 3,647,099,000,000 . Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive officers and directors as affiliates is not necessarily a conclusive determination for any other purposes.

14,776,353,000 14,532,182,000 shares of common stock were issued and outstanding as of October 17, 2025. 23, 2026.

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Portions of the Registrant's definitive proxy statement relating to its 2026 2027 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The Registrant's definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

For the Fiscal Year Ended September 27, 2025 26, 2026

Business 21 changes

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iPhone ® is the Company's line of smartphones based on its iOS operating system. The iPhone line includes iPhone 17 Duo™, iPhone 18 Pro, iPhone Air ® , iPhone 17, iPhone 16 17e and iPhone 16e. 16.

Mac ® is the Company's line of personal computers based on its macOS ® operating system. The Mac line includes laptops MacBook Neo ® , MacBook Air ® and MacBook Pro ® , including MacBook Pro with PROLED XDR Display and Touch, as well as desktops iMac ® , Mac mini ® , Mac Studio ® and Mac Pro Studio ® .

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Wearables includes smartwatches, wireless headphones and spatial computers. The Company's line of smartwatches, based on its watchOS ® operating system, includes Apple Watch ® Series 11, 12, Apple Watch SE Ultra ® 3 4 and Apple Watch Ultra SE ® 3. The Company's line of wireless headphones includes AirPods ® , AirPods Pro ® , AirPods Max ® and Beats ® products. Apple Vision Pro ® is the Company's spatial computer based on its visionOS ® operating system.

Home includes Apple TV 4K ® , the Company's media streaming and gaming device based on its tvOS ® operating system, and HomePod ® and HomePod mini ® , high-fidelity wireless smart speakers, and Apple HomeView™, the Company's smart home display for home control, communication and entertainment.

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Apple Inc. | 2025 2026 Form 10-K | 1

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The Company's cloud services store and keep customers' content up-to-date and available across multiple Apple devices and Windows personal computers, and will provide expanded access to Apple Intelligence™ and Siri ® AI features.

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The Company's customers are primarily in the consumer, small and mid-sized business, education, enterprise and government markets. The Company sells its products and resells third-party products in most of its major markets directly to customers through its retail and online stores and its direct sales force. The Company sells its services in the same markets through its various service platforms. The Company also employs a variety of indirect distribution channels, such as third-party cellular network carriers and other resellers, for the sale of its products and certain of its services. During 2025, 2026, the Company's net sales through its direct and indirect distribution channels accounted for 40% and approximately 60% respectively, of total net sales.

The markets for the Company's products and services are highly competitive and are characterized by aggressive price competition, downward pressure on gross margins, continual improvement in product performance, and price sensitivity on the part of consumers and businesses. The markets in which the Company competes are further defined by frequent introduction of new products, and services and technologies, including artificial intelligence technologies, short product life cycles, evolving industry standards, and rapid adoption of technological advancements. by competitors. Many of the Company's competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating the Company's products and infringing on its intellectual property.

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The Company's ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and technologies. to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services. Principal competitive factors important to the Company include price, product and service features, including security features, relative price and performance, product and service quality and reliability, design and technology innovation, a strong third-party software and accessories ecosystem, marketing and distribution capability, service and support, corporate reputation, and the ability to effectively protect and enforce the Company's intellectual property rights.

The Company is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables and accessories, and services. The Company's products, and services and technologies face substantial competition from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software, and service offerings with large customer bases. In addition, the Company faces significant competition as competitors imitate the Company's product features and applications within their products to offer more competitive solutions. The Company also expects competition to intensify as competitors imitate the Company's approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions. Some of the Company's competitors have broad product lines, low-priced products, large installed bases of active devices, and large customer bases. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have the resources, experience or cost structures to provide products and services at little or no profit or even at a loss. The Company has a minority market share in the global smartphone, personal computer, tablet and wearables markets, and some of the markets in which the Company competes have from time to time experienced little to no growth or contracted overall. The Company also competes with a number of companies in the development and deployment of artificial intelligence and has made significant investments in building artificial intelligence features and related infrastructure across its products and services.

Supply of Components and Computing Resources

Although most components essential to the Company's business are generally available from multiple sources, certain components are currently obtained from single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers, tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage shortages and significant commodity pricing fluctuations. For example, the Company is experiencing supply constraints and rising costs driven by industry-wide supply-demand imbalances for key components, including advanced semiconductors, memory and storage. These constraints adversely affect the Company's ability to obtain sufficient quantities of components and products on commercially reasonable terms, or at all. The Company expects these trends to intensify for memory and storage components. Restrictions on international trade can increase the cost or limit the availability of the Company's products and the components and rare earths and other raw materials that go into them.

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The Company's business, including its artificial intelligence and machine learning offerings, also depends on access to sufficient compute capacity and storage resources. Demand for cloud compute and storage services and other artificial intelligence infrastructure has increased substantially across the technology industry, resulting in constrained supply, extended lead times, and increasing costs. In addition to its own data center infrastructure, the Company relies on third-party cloud service providers to meet these compute and storage needs. There are limited third-party providers that can reliably meet such demand, and the Company may be unable to secure sufficient capacity on commercially reasonable terms, or at all, to meet customer demand. Investment in data center capacity involves significant expenditures and long-term commitments, including for components and equipment, which increase the Company's capital expenditures, liabilities and obligations. The ability of the Company and its third-party providers to timely build, expand and operate data centers is subject to operational challenges and other external factors, including restrictions on international trade, supply chain constraints, access to financing, construction delays, the availability of power, water and land, labor shortages, public sentiment, as well as existing and evolving laws governing the permitting, zoning, operation and taxation of data centers. In addition, new or expanding environmental regulations could increase the costs associated with operating and expanding the Company's or its third-party providers' data center infrastructure or limit the ability to expand in certain jurisdictions. Data center operations are also subject to risks related to power transmission and other utility outages, telecommunications and network failures, cybersecurity attacks, and other interruptions outside the Company's control. If the Company is unable to obtain and maintain adequate compute capacity and storage resources in a timely manner or at commercially reasonable rates, this can limit the functionality and availability of the Company's products, services and features, delay the deployment of new features or offerings, or cause the Company to incur significantly higher costs to operate its business, any of which could materially adversely affect the Company's business, revenue, costs, gross margin, results of operations, financial condition and stock price. In addition, the Company may overestimate or underestimate requirements, which could result in higher-than-expected costs for the Company or an inability to fully satisfy customer demand or expectations.

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Because the industries in which the Company competes are characterized by rapid technological advances, the Company's ability to compete successfully depends heavily upon its ability to ensure a continual successfully manage frequent introductions and timely flow transitions of competitive products, services and technologies, including artificial intelligence technologies, to the marketplace. The Company continues to develop new technologies to enhance existing products hardware, software and services, and to expand the range of its offerings through research and development ("R&D"), licensing of intellectual property and technology, and acquisition of third-party businesses and technology.

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The Company regularly files patent, design, copyright and trademark applications to protect innovations arising from its hardware, software and service services research, development, design and marketing, and is currently pursuing thousands of applications around the world. Over time, the Company has accumulated a large portfolio of issued and registered intellectual property rights around the world. No single intellectual property right is solely responsible for protecting the Company's products and services. The Company believes the duration of its intellectual property rights is adequate relative to the expected lives of its products and services.

In addition to Company-owned intellectual property, many of the Company's products hardware, software and services include technology or intellectual property that must be licensed from third parties. It may be necessary in the future to seek or renew licenses relating to various aspects of the Company's products, processes hardware, software and services. While the Company has generally been able to obtain such licenses on commercially reasonable terms in the past, there is no guarantee that such licenses could be obtained in the future on commercially reasonable terms or at all. In addition, the Company's products and services have been, and may in the future be, alleged to infringe the intellectual property rights of others due to extensive existing intellectual property coverage, the rapid pace of new intellectual property rights generation, and technological changes in the industries in which the Company currently competes or may compete in the future. This risk may be exacerbated by the use of new and emerging technologies, including machine learning and artificial intelligence, which can involve, among other things, the acquisition and use of copyrighted materials for training as well as the potential reproduction of copyrighted materials in their outputs.

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The Company believes that its people play an important role in its success, and strives to attract, develop and retain the best talent. The Company operates in a highly competitive market for skilled and experienced employees, and recognizes that recruiting and retaining top talent is critical to sustaining its culture of innovation and achieving its strategic initiatives. The Company works to create a culture of collaboration, one where people with a broad range of backgrounds and perspectives can come together to innovate and do the best work of their lives. The Company is an equal opportunity employer committed that seeks to inclusion promote equal opportunities for all employees and to providing provide a workplace free of harassment or discrimination. As of September 27, 2025, 26, 2026, the Company had approximately 166,000 167,000 full-time equivalent employees.

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Risk factors 108 changes

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The Company's operations and performance depend significantly on global and regional economic conditions. and adverse economic conditions can materially adversely affect the Company's business, results of operations, financial condition and stock price.

The Company has international operations with sales outside the U.S. representing a majority of the Company's total net sales. In addition, the Company's global supply chain is large and complex and a majority of the Company's supplier facilities, including manufacturing and assembly sites, are located outside the U.S. As a result, the Company's operations and performance depend significantly on global and regional economic conditions.

Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for the Company's products and services. In addition, consumer confidence and spending can be materially adversely affected in response to by changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.

Uncertainty about, or a decline in, global or regional economic conditions can also have a significant impact on the Company's developers, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners. and developers. Potential outcomes include financial instability, inability to obtain credit, to finance business operations; and insolvency.

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Such events can make it difficult or impossible for the Company to manufacture and deliver products to its customers, create delays and inefficiencies in the Company's supply and manufacturing chain, result in slowdowns and outages to the Company's service offerings, increase the Company's costs, and negatively impact consumer spending and demand in affected areas.

Political events, trade and other international disputes, geopolitical tensions, conflict, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions can have a material adverse effect on the Company and its customers, employees, developers, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners.

The Company has a large, global business with sales outside the U.S. representing a majority of the Company's total net sales, and the Company believes that it generally benefits from growth in international trade. A significant majority of the Company's manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, in addition to sourcing from partners and facilities located in the U.S. Global supply chains can be highly concentrated, and an escalation of geopolitical tensions, conflict or instability, particularly in regions where the Company relies on single or limited sources for critical components, such as advanced semiconductors, memory and storage, or that are significant to global commodity markets such as oil, gas, rare earths, and other raw materials, could result in significant disruptions. Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology technologies, including artificial intelligence and super intelligence technologies, or data, can materially adversely affect the Company's business and supply chain, The impact can be particularly significant if these restrictive such measures apply to countries and regions where the Company derives a generates significant portion of its revenues and/or revenue or has significant supply chain operations. Restrictive These measures can increase the cost or limit the availability of the Company's products and the components, and rare earths and other raw materials that go into them; Restrictive measures can also require the Company to change suppliers or restructure business relationships and operations; require the Company to refrain from or cease offering, and distributing or cease to offer and distribute incorporating affected products, services, and third-party applications to its customers, or technologies, including artificial intelligence technologies; and cause the Company to increase the prices of its products and services. Changing the Company's business and supply chain in accordance with response to new or changed restrictions on international trade can be expensive, time-consuming and disruptive. to the Company's business and results of operations. Trade and other international disputes can also have an adverse adversely impact on the overall macroeconomic environment, and result in shifts and reductions resulting in reduced consumer spending and negative consumer sentiment for the Company's products and services. all of which can further adversely affect the Company's business and results of operations. Such restrictions can be announced with little or no advance notice, which can create creating uncertainty, and the Company may not be able to effectively mitigate any or all adverse impacts from such measures. Global supply chains can be highly concentrated, and an escalation of geopolitical tensions or conflict could result in significant disruptions. Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. ("U.S. Tariffs"), including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union ("EU"), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to the U.S. Tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive.

Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S., including additional tariffs on imports from China mainland, India, Japan, South Korea, Taiwan, Vietnam and the European Union ("EU"), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to U.S. tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. If tariffs are subsequently rescinded or revoked, the Company may not be able to successfully claim and collect tariff refunds. If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive.

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Many of the Company's operations, retail stores, data centers and other facilities, as well as critical business operations of the Company's suppliers and contract manufacturers, are in locations that are prone to earthquakes and other natural disasters. Global climate change is resulting in certain types of natural disasters and extreme weather occurring more frequently or with more intense effects. In addition, the Company's and its suppliers' operations, retail stores, data centers and other facilities are subject to the risk of interruption by fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks, labor disputes, public health issues and other events beyond the Company's control. Such events can make it difficult or impossible for the Company to manufacture and deliver products, create delays and inefficiencies in the Company's supply and manufacturing chain, result in slowdowns and outages to the Company's service offerings, increase costs, and negatively impact consumer spending and demand in affected areas.

The Company's operations are also subject to the risks of industrial accidents at its suppliers and contract manufacturers. While the Company's suppliers and contract manufacturers are required to maintain safe working environments and operations, an industrial accident could occur and could result in serious injuries or loss of life, disruption to the Company's business, and harm to the Company's reputation. Major public health issues, including pandemics, such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, the Company due to their impact on the global economy and demand for consumer products; the imposition of protective public safety measures, such as stringent employee travel restrictions and limitations on freight services and the movement of products between regions; and disruptions in the Company's operations, supply chain and sales and distribution channels, resulting in interruptions to the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.

Following any interruption to its business, the Company can require substantial recovery time, incur significant expenditures to resume operations, and lose significant sales. Because the Company relies on single or limited sources for the supply and manufacture of many critical components, a business interruption affecting such sources would exacerbate any negative consequences to the Company. While the Company maintains insurance coverage for certain types of losses, such insurance coverage it may be insufficient to cover all losses that may arise. Any of the foregoing can materially adversely affect the Company's business, results of operations, financial condition and stock price.

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The Company's products and services are offered in highly competitive global markets These markets are characterized by aggressive price competition, downward pressure on gross margins, continual improvement in product performance, and price sensitivity on the part of consumers and businesses. These markets are further defined by frequent introduction of new products and services, short product life cycles, evolving industry standards, and rapid adoption of technological advancements.

The Company's ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and technologies. to The marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services. As a result, the Company must make significant investments in R&D. These investments may not achieve expected returns, and the Company may not be able to develop and market new products, and services and technologies successfully.

The Company's ability to compete successfully also depends on the effective protection and enforcement of its intellectual property rights. Regulatory requirements, government investigations and litigation can force the Company to withdraw from, or modify its products, and services and technologies for, certain countries and limit its ability to derive value from, or to enjoin others from using, its intellectual property rights. Additionally, they may require the Company to share its innovations with competitors. Any of these outcomes can have a negative impact on adversely affect the Company's competitive advantage. and materially adversely affect its business, results of operations, financial condition and stock price.

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The Company's products, and services and technologies face substantial competition from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software and service offerings. In addition, the Company faces significant competition as competitors imitate the Company's product features and applications within their products to offer more competitive solutions. The Company also expects competition to intensify as competitors imitate the Company's approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions. Some of the Company's competitors have broad product lines, low-priced products, large installed bases of active devices, and large customer bases. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have the resources, experience or cost structures to provide products and services at little or no profit or even at a loss. The Company has a minority market share in the global smartphone, personal computer, tablet and wearables markets, and some of the markets in which the Company competes have from time to time experienced little to no growth or contracted overall.

The Company competes with a number of companies in the development and deployment of artificial intelligence and has made significant investments in building artificial intelligence features and related infrastructure across its products and services. Failure to successfully develop, deploy or differentiate artificial intelligence capabilities, or to do so as quickly or cost-effectively as competitors, could result in loss of market share, erosion of competitive positioning, and inability to attract or retain customers and talent.

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To remain competitive and stimulate customer demand, the Company must successfully manage frequent introductions and transitions of products, and services and technologies.

Due to the highly volatile and competitive nature of the markets and industries in which the Company competes, the Company must continually introduce new products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products, and services and technologies, navigate global regulatory requirements and barriers to market access, and successfully manage the transition to or adoption of these new and upgraded products, and services and technologies. The success of new product, and service and technology introductions depends on a number of factors, including the Company's ability to recruit and retain highly skilled personnel, to execute on its strategic initiatives, and the timely and successful development, introduction and market acceptance of new products, services and technologies. Success also relies on the Company's ability to manage the risks associated with new technologies and production ramp-up issues, the effective integration of third-party services and technologies into the Company's products and services, the availability, delivery and performance of application software or other third-party support for the Company's products and services, the ability of the Company to accurately predict demand across markets, the effective management of manufacturing and other purchase commitments and the management of inventory levels in line with anticipated product demand, and the availability of products in appropriate quantities and at expected costs. to meet anticipated demand. Additionally, quality issues or other defects or deficiencies can adversely affect the success of new product, and service and technology introductions and market acceptance. New products, services and technologies may replace or supersede existing offerings and may produce lower revenues revenue and lower profit margins. Furthermore, the introduction of emerging technologies, such as artificial intelligence agents that require access to personal data, creates privacy and data security concerns that could erode customer trust, diminish the perceived value of the Company's privacy protections, and undermine its competitive advantage. The Company may not be able to successfully manage future introductions and transitions of products, and services and technologies, which can materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

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Changes or additions to the Company's supply chain require considerable time and resources and involve significant risks and uncertainties, including exposure to additional regulatory and operational risks.

A significant majority of the Company's manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, in addition to sourcing from partners and facilities located in the U.S. The Company relies on single-source partners in the U.S., Asia and Europe to supply and manufacture many components, and on partners primarily located in Asia for final assembly of substantially all of the Company's hardware products. The Company has also outsourced much of its transportation and logistics management. While these arrangements can lower operating costs, they also reduce the Company's direct control over production and distribution. Such diminished control has from time to time had, and may in the future have, an adverse effect on the cost, quality or quantity of products manufactured or services provided, or adversely affect the Company's flexibility to respond to changing conditions. Although arrangements with these partners may contain provisions for product defect expense reimbursement, the Company generally remains responsible to the consumer for warranty and out-of-warranty service in the event of product defects and experiences unanticipated product defect liabilities from time to time. Additionally, while the Company relies on its partners to adhere to its supplier code of conduct, violations of the supplier code of conduct occur from time to time. Changes or additions to the Company's supply chain require considerable time and resources and involve significant risks and uncertainties, including exposure to additional regulatory and operational risks. Any of the foregoing can materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

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Future operating results depend upon the Company's ability to obtain components, compute capacity and storage resources in sufficient quantities and on commercially reasonable terms.

Because The Company currently obtains certain components from single or limited sources, the Company is subject which exposes it to significant supply and pricing risks. In addition, many components, including those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing fluctuations. that can materially adversely affect the Company's business, results of operations, financial condition and stock price. For example, the global semiconductor industry has in the past experienced high demand and shortages of Company is experiencing supply which constraints and rising costs driven by industry-wide supply-demand imbalances for key components, including advanced semiconductors, memory and storage. These constraints adversely affected affect the Company's ability to obtain sufficient quantities of components and products on commercially reasonable terms, or at all. The Company expects these trends to intensify for memory and storage components. Actions, such disruptions could occur as price increases, that have been and may in the future be taken by the Company may not effectively mitigate these negative impacts, and may also reduce demand for the Company's products.

Additionally, the Company's new products often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers' yields have matured or their manufacturing capacities have increased. The Company may not be able to extend or renew agreements for the supply of components on similar terms, or at all, and may not be successful in obtaining sufficient quantities from its suppliers in a timely manner, or in identifying and obtaining sufficient quantities from an alternative source. In addition, component suppliers may fail, be subject to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Company's requirements, further limiting the Company's ability to obtain sufficient quantities of components on commercially reasonable terms, or at all. Therefore, the Company remains subject to significant risks of supply shortages and price increases that can materially adversely affect its business, results of operations, financial condition and stock price.

The Company's business, including its artificial intelligence and machine learning offerings, also depends on access to sufficient compute capacity and storage resources. Demand for cloud compute and storage services and other artificial intelligence infrastructure has increased substantially across the technology industry, resulting in constrained supply, extended lead times, and increasing costs. In addition to its own data center infrastructure, the Company relies on third-party cloud service providers to meet these compute and storage needs. There are limited third-party providers that can reliably meet such demand, and the Company may be unable to secure sufficient capacity on commercially reasonable terms, or at all, to meet customer demand. Investment in data center capacity involves significant expenditures and long-term commitments, including for components and equipment, which increase the Company's capital expenditures, liabilities and obligations. The ability of the Company and its third-party providers to timely build, expand and operate data centers is subject to operational challenges and other external factors, including restrictions on international trade, supply chain constraints, access to financing, construction delays, the availability of power, water and land, labor shortages, public sentiment, as well as existing and evolving laws governing the permitting, zoning, operation and taxation of data centers. In addition, new or expanding environmental regulations could increase the costs associated with operating and expanding the Company's or its third-party providers' data center infrastructure or limit the ability to expand in certain jurisdictions. Data center operations are also subject to risks related to power transmission and other utility outages, telecommunications and network failures, cybersecurity attacks, and other interruptions outside the Company's control. If the Company is unable to obtain and maintain adequate compute capacity and storage resources in a timely manner or at commercially reasonable rates, this can limit the functionality and availability of the Company's products, services and features, delay the deployment of new features or offerings, or cause the Company to incur significantly higher costs. In addition, the Company may overestimate or underestimate requirements, which could result in higher-than-expected costs for the Company or an inability to fully satisfy customer demand or expectations.

Any of the foregoing can result in supply shortages and price increases that can materially adversely affect the Company's business, revenue, costs, gross margin, results of operations, financial condition and stock price.

The Company's products, and services and technologies, including artificial intelligence technologies and features, may be affected from time to time by design and manufacturing defects. that could materially adversely affect the Company's business and result in harm to the Company's reputation.

The Company offers complex hardware and software products, and services and technologies, including artificial intelligence technologies and features, that can be affected by design and manufacturing defects. Sophisticated operating system software and applications, such as those offered by the Company, often have issues that can unexpectedly interfere with the intended operation of hardware or software products and services. Defects can also exist in components and products designed by the Company or that the Company purchases from third parties. Component Defects could make the Company's products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase as the Company's products are introduced into specialized applications, including health and financial services. In addition, the Company's service offerings can have quality issues and from time to time have experienced, and may in the future experience, outages, service slowdowns, or errors or other performance issues that do not meet user expectations. Sophisticated operating system software, applications and technologies, such as a result, from time to time those offered by the Company, often have issues that can unexpectedly interfere with the intended operation. In addition, the Company's products, services have not performed as anticipated and technologies may not meet customer expectations. The introduction of also be used in unintended ways, or in a manner that its users allege is harmful. New and complex technologies, such as artificial intelligence technologies and features, can increase these and other safety risks, including potentially exposing users to harmful, inaccurate or other negative content and experiences. For example, many artificial intelligence technologies are inherently nondeterministic and may produce inconsistent, unpredictable or inaccurate outputs, making it difficult to fully anticipate, test for, or prevent unintended behaviors and harms. The use of artificial intelligence in the development and operation of operating system software, applications and services may also give rise to additional risks from errors, bugs or vulnerabilities. The Company may not be able to detect and fix all issues, and defects and failures in the hardware, software, and services and technologies it offers, which can result in widespread technical and performance issues. affecting the Company's products and services. Errors, bugs and vulnerabilities can be exploited by third parties, compromising the safety and security of a user's device. In addition, the Company can be exposed to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can adversely affect the experience for users of the Company's products and services, and result in harm to the Company's reputation, loss of competitive advantage, poor market acceptance, reduced demand for products and services, delay in new product and service introductions and lost sales.

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security of a user's device. This risk increases as artificial intelligence technologies are used to produce highly targeted phishing campaigns, generate deepfake content designed to bypass authentication protocols, and identify and exploit vulnerabilities at significant scale and at a highly accelerated pace. In addition, the Company can be exposed to regulatory scrutiny, product and other legal liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can adversely affect the experience for users of the Company's products, services and technologies, and result in harm to the Company's reputation, loss of competitive advantage, poor market acceptance, reduced demand, delays in new product, service and technology introductions, and lost sales, all of which could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

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The Company orders components for its products and builds inventory in advance of product announcements and shipments. Manufacturing purchase obligations cover the Company's forecasted component and manufacturing requirements. typically for periods up to 150 days. Because the Company's markets are volatile, competitive and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of components or products, or not fully utilize purchase commitments. The Company accrues necessary cancellation fee reserves for orders of excess products and components.

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Apple Inc. | 2025 Form 10-K | 9

The Company's products and services include technology or intellectual property that must be licensed from third parties. In addition, because of technological changes in the industries in which the Company currently competes or Company's products and services have been, and may in the future may compete, current be, alleged to infringe the intellectual property rights of others due to extensive existing intellectual property coverage, and the rapid rate pace of new intellectual property rights generation, the Company's products and services technological changes in the industries in which the Company currently competes or may be alleged to infringe existing intellectual property rights of others. compete in the future. This risk may be exacerbated by the use of new and emerging technologies, including machine learning and artificial intelligence, which can involve, among other things, the acquisition and use of copyrighted materials for training as well as the potential reproduction of copyrighted materials in their outputs . From time to time, the Company has been notified that it may be infringing certain intellectual property rights of third parties. The Company is not always able to obtain all necessary licenses to third-party intellectual property rights on commercially reasonable terms or at all. Failure to obtain the right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, can preclude the Company from selling or providing, or require the Company to modify, certain products, services or features or preclude the Company from selling certain products or services and expose the Company to significant licensing costs and litigation, all of which can materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

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The Company believes decisions by customers to purchase its hardware products depend in part on the availability of third-party software applications and services. Third-party developers may discontinue the development and maintenance of software applications and services for the Company's products, If third-party software applications and services cease to be developed and maintained for the Company's products, which could cause customers may to choose not to buy the Company's products. adversely impacting the Company's business, results of operations, financial condition and stock price.

The Company believes that third-party developer support depends on the perceived benefits of creating software and services for the Company's products compared to competitors' platforms, such as Android for smartphones, and tablets and wearables, Windows for personal computers and tablets, and PlayStation, Nintendo and Xbox for gaming platforms. This analysis may be based on factors such as the market position of the Company and its products, the anticipated revenue that may be generated, expected future growth of product sales, and the costs of developing such applications and services.

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Apple Inc. | 2026 Form 10-K | 10

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The Company distributes third-party applications through the App Store. Where applicable, the Company may retain a commission from sales of applications and sales of digital services or goods initiated within an application. If third-party developers use alternative methods of distribution and payment for their applications and digital content, including direct-to-consumer distribution models, the Company may earn a lower commission on such sales, or may not earn a commission at all.

Third-party developers may also engage in fraudulent, deceptive or illegal conduct that could harm the Company's business, customers and reputation. Despite the Company's significant investment in review processes, security measures and other controls designed to prevent abuse of its platforms, some third-party developers have engaged, and may in the future engage, in fraudulent activity or other illegal or improper behavior and the Company may not be able to timely or effectively prevent, detect or remediate such conduct. These risks may be exacerbated by the use of artificial intelligence by bad actors seeking to circumvent the Company's review processes, security measures and other controls. Any such conduct, or the perception that the Company has failed to adequately prevent, detect or respond to such risks, could damage customer trust and the Company's brand and reputation, result in a decline in customer use of the Company's products and services, and subject the Company to litigation, regulatory investigations, fines or other legal liability.

Any of the foregoing can materially adversely affect the Company's business, reputation, revenue, gross margin, results of operations, financial condition and stock price.

Failure The Company may be unable to obtain or create digital content that appeals to the Company's customers or to make such content available on commercially reasonable terms. could have a material adverse impact on the Company's business, results of operations and financial condition.

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Much of the Company's future success depends on the talents and efforts of its team members and the continued availability and service of key personnel, including its Chief Executive Officer, executive team and other highly skilled employees. Experienced personnel in the technology industry are in high demand and competition for their talents is intense, especially in Silicon Valley, where most of the Company's key personnel are located. Periods of intense competition for talent in particular fields can have led and are expected to continue to lead to increased costs as the Company seeks to offer competitive compensation to recruit and retain highly skilled employees. In addition to competition for talent, workforce dynamics are constantly evolving, and the Company must navigate changes effectively in order to achieve its strategic initiatives. Laws and regulations, including immigration, labor and employment laws and export controls, among others, can materially adversely affect the Company's ability to recruit and retain a highly skilled, global workforce. If the Company does not effectively manage changing workforce dynamics and regulatory requirements, it could materially adversely affect the Company's culture, operational flexibility, strategy and costs. all of which can materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

The Company believes that its distinctive and inclusive culture is a significant driver of its success. If the Company is unable to nurture its culture, it could materially adversely affect the Company's ability to recruit and retain the highly skilled employees who are critical to its success. and could otherwise materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

Any of the foregoing could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

Apple Inc. | 2025 2026 Form 10-K | 10 11

1 unchanged paragraph

The Company distributes its products and certain of its services through cellular network carriers and other resellers, many of which distribute products and services from competitors. Resellers offer financing, installment payment plans or subsidies for users' purchases of devices, and such plans may be discontinued or modified at any time.

The Company has invested and will continue to invest in programs to enhance reseller sales, including staffing selected resellers' stores with Company employees and contractors, improving product placement displays, and developing and making digital marketing assets available to resellers. These programs can require a substantial investment while not assuring return or incremental sales. For example, the purchasing preferences and behaviors of consumers may change, the financial condition of resellers could weaken, resellers could stop distributing the Company's products, or uncertainty regarding demand for some or all of the Company's products could cause resellers to reduce their ordering and marketing of the Company's products, all of which could materially adversely impact affect the Company's business, results of operations, financial condition and stock price.

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The Company's business also requires it to share confidential information with suppliers and other third parties. The Company relies on global suppliers that are also exposed to ransomware and other malicious attacks that can disrupt business operations. Although the Company takes steps to secure confidential information that is provided to or accessible by third parties working on the Company's behalf, such measures are not always effective and losses or unauthorized access to, or releases of, confidential information occur. Such incidents and other malicious attacks could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

The Company and its global supply chain are dependent on complex information technology systems and are exposed to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, ransomware or other cybersecurity incidents, or other events or disruptions. Additionally, the implementation of upgrades or replacements to the Company's global enterprise resource planning system may result in disruptions, cost overruns or data integrity failures that could impair the Company's ability to, among other things, process orders, manage inventory, and report accurate and timely financial results. System upgrades, redundancy and other continuity measures may be ineffective or inadequate, and the Company's or its vendors' suppliers' business continuity and disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions can adversely impact the Company's business by, among other things, preventing access to the Company's online services, interfering with customer transactions or impeding the manufacturing and shipping of the Company's products. These events could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

The Company experiences cybersecurity incidents and inadvertent losses or and unauthorized access to or releases of confidential information, including personal information. could subject the Company to significant reputational, financial, legal and operational consequences.

The Company's business requires it to use and store confidential information, including personal and sensitive health and financial information with respect to the Company's customers and employees. The Company's business also requires it to share confidential information with suppliers, service providers and other third parties. The Company relies on global suppliers that are also exposed to cybersecurity, ransomware and other malicious attacks that can disrupt business operations. The Company devotes significant resources to systems and data security, including through the use of encryption and other security measures intended to protect its systems and data, But and takes steps to secure confidential information provided to or accessible by third parties working on the Company's behalf. However, these measures cannot provide absolute security and are not always effective, and losses or unauthorized access to or releases of confidential information do occur. and could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

The Company experiences malicious attacks and other attempts to gain unauthorized access to its systems on a regular basis. These attacks target the confidentiality, integrity or availability of confidential information and may disrupt normal business operations. Attacks can impair the Company's ability to attract and retain customers, for its products and services, affect its stock price, damage commercial relationships, and expose the Company to litigation or government investigations, potentially resulting in penalties, fines or judgments. Globally, attacks are expected to continue accelerating in both frequency, scale and sophistication with increasing use by actors of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders the Company's ability to identify, investigate and recover from incidents. In addition, attacks against the Company and its customers can escalate during periods of geopolitical tensions or conflict.

The rapid advancement and widespread dissemination of artificial intelligence technologies significantly increases the risks associated with cybersecurity attacks. For example, artificial intelligence technologies are producing highly targeted phishing campaigns, automating the discovery or exploitation of vulnerabilities, generating deepfake content designed to bypass authentication protocols, and identifying and exploiting vulnerabilities at a greater scale and at a highly accelerated pace. As increasingly sophisticated and capable artificial intelligence models continue to become available, these risks are intensifying. Sophisticated and widespread cybersecurity attacks pose substantial systemic risks, such as cascading failures across interconnected systems, and potential disruptions to critical infrastructure and market stability. In addition, artificial intelligence technologies are themselves susceptible to security threats, and the development, deployment and use of artificial intelligence by the Company, its employees and its suppliers exposes the Company to additional vulnerabilities and attacks.

1 unchanged paragraph

Apple Inc. | 2025 2026 Form 10-K | 11 12

As with all companies, The security the Company has implemented may not be sufficient for cannot address all eventualities and are remains vulnerable to hacking, ransomware attacks, employee error, malfeasance, system error, faulty password management or other irregularities. For example, third parties can fraudulently induce the Company's or its suppliers' and other third parties' employees or customers into disclosing usernames, passwords or other sensitive information, which can in turn, be used for unauthorized access to the Company's or such suppliers' or third parties' systems and services. To help protect customers and the Company, the Company deploys and makes available technologies like multifactor authentication, monitors its services and systems for unusual activity and may freeze accounts under suspicious circumstances, which, among other things, can result in the delay or loss of customer orders or impede customer access to the Company's products and services. In addition, the Company deploys scanning tools in its information technology environment that are designed to identify and track known vulnerabilities, but the Company cannot guarantee that patches will be applied before such vulnerabilities can be exploited or that those patches will be successful against further attacks.

While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage it may be insufficient to cover all losses or all types of claims that may arise. Any of the foregoing can materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

Investment in new business strategies, commercial relationships and acquisitions could disrupt the Company's ongoing business and present risks not originally contemplated. and materially adversely affect the Company's business, reputation, results of operations and financial condition.

The Company has invested, and in the future may invest, in new business strategies, commercial relationships and acquisitions. Such endeavors may involve significant risks and uncertainties, including distraction diversion of management management's efforts from current operations, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capital, potential impairment of tangible and intangible assets, and significant write-offs. Some transactions, including investments and acquisitions, are exposed to additional risks, including failing to obtain required regulatory approvals on a timely basis or at all, a counterparty's failure to perform or deliver as anticipated, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise limit the Company's ability to fully realize the anticipated benefits. of a transaction. New business strategies and ventures are inherently risky, and may not be successful, The Company's business strategies and may not generate a profit. For example, the Company has made significant investments in artificial intelligence technologies, infrastructure and personnel, including commitments to secure data center capacity, components, equipment and energy resources. There are significant risks involved in developing and deploying artificial intelligence and the usage of artificial intelligence may not enhance the Company's products or services or be successful, which beneficial or profitable for its business. Any of the foregoing could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

Issues related to artificial intelligence may result in reputational, competitive and financial harm to the Company, regulatory action, legal liability, and other adverse effects to the Company's business.

Artificial intelligence technologies are increasingly integrated into the Company's products and services and its business and operations. These technologies present emerging legal, regulatory, ethical and operational risks.

For example, the Company's artificial intelligence efforts may give rise to risks related to, among other things: competition and strategy; recouping costs and returns on investments; product liability; intellectual property infringement; data privacy; cybersecurity; sanctions and export controls; unauthorized access to or inadvertent releases of confidential information or other unexpected access to or use of user information; exposing users to harmful, inaccurate or other negative content or experiences; unintended or unauthorized actions by autonomous or agentic systems; misuse of artificial intelligence by employees and other personnel; changing public sentiment; bias and discrimination; and online safety and protection of minors. While the Company is committed to developing and deploying artificial intelligence responsibly, the Company may be unsuccessful in identifying or resolving all potential issues and failures before they arise. As a result, the Company could be exposed to reputational and competitive harm, regulatory action, legal liability, and other adverse effects to its business.

In particular, artificial intelligence agents and other technologies can take actions autonomously, including interacting with internal or external systems that in some cases they may not be authorized to access, executing or altering code, sending communications, and completing transactions. Such technologies, whether developed or deployed by the Company or by third parties, may behave in unintended or unpredictable ways, including by taking actions that were not directed, instructed or authorized, exceeding permissions, defying directions or resisting instructions, circumventing the Company's or third parties' security measures and other controls, or being manipulated or compromised through malicious inputs or by bad actors. In addition, such technologies may conceal actions, hide, withhold or manipulate information, or generate inaccurate or deceptive outputs. Because many of these technologies are nondeterministic, their behavior can be difficult to anticipate, control, test and audit, and errors can compound across multistep workflows. Some consequences, such as deleting data or completing transactions, may be difficult or impossible to reverse. Moreover, the Company's ability to oversee and control third-party artificial intelligence agents and other technologies may be limited. Artificial intelligence tools may be used in ways that violate the Company's policies, contractual obligations or applicable laws, produce unintended consequences, or intentionally misuse authorized access, and the Company's policies and controls may not keep pace with rapidly advancing technologies or prevent or timely detect such misuse.

Apple Inc. | 2026 Form 10-K | 13

The divergent and rapidly evolving nature of legal and regulatory frameworks around artificial intelligence and super intelligence and increased scrutiny from lawmakers and regulators create significant uncertainty. The Company may not always be able to anticipate how courts and regulators will apply existing laws and regulations to artificial intelligence, predict how new legal and regulatory frameworks will develop to address artificial intelligence, or otherwise respond to these frameworks as they are still rapidly evolving. The Company may also have to incur significant expenditures to adapt to new legal frameworks and adjust its offerings in certain jurisdictions if the legal frameworks on artificial intelligence are not consistent across jurisdictions. The Company also cannot predict how various laws and regulations related to online services, intermediary liability, and other issues will apply to content generated by artificial intelligence. In addition, the Company is subject to the risks posed by ethical concerns and negative consumer perceptions related to automation, artificial intelligence and super intelligence, including perceived threats to safety or other societal harms or complications.

Any of the foregoing may subject the Company to litigation and could materially adversely affect its business, reputation, results of operations, financial condition and stock price.

1 unchanged paragraph

The Company's business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.

While the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

The Company is subject to the risks of adverse impacts from legal proceedings and government investigations.

The Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future. In addition, the Company enters into agreements that include indemnification provisions that can subject the Company to costs and damages in the event of a claim against an indemnified third party. The number of claims, legal proceedings and government investigations involving the Company, and the their alleged magnitude, of such claims, proceedings and government investigations, has generally increased over time and may continue to increase.

The Company has faced and continues to face a significant number of intellectual property claims, including patent claims relating to its standards-enabled products, and new claims may arise in the future, including as a result of new legal or regulatory frameworks. For example, Additionally, technology, data and other intellectual property asset–holding companies frequently assert their intellectual property rights and seek royalties and often enter into initiate litigation based on allegations of infringement or other violations of intellectual property rights, and other third parties may leverage such allegations to initiate additional litigation against the Company. The Company is vigorously defending against infringement actions and related lawsuits in courts in several U.S. jurisdictions, as well as internationally in various countries. Some of the plaintiffs in these actions frequently seek broad injunctive relief, substantial damages and other remedies. These risks, and the risks of novel claims being attempted, may be exacerbated as new and emerging technologies, including machine learning and artificial intelligence, are further integrated into the Company's products and services. For example, artificial intelligence models and tools that incorporate or are trained on publicly available information may carry additional licensing obligations or expose the Company is vigorously defending infringement actions in courts in several U.S. jurisdictions, as well as internationally in various countries. to the plaintiffs in these actions frequently seek broad injunctive relief risk of additional infringement and substantial damages. other legal claims, and may limit the Company's ability to protect its intellectual property.

The Company is involved in lawsuits, many of which claim statutory damages or seek significant changes to its business operations, and the Company anticipates that it will continue to be a target for such lawsuits in the future. Because of the scale of the Company's user, advertiser, investor and developer bases, the plaintiffs in class action cases filed against the Company typically claim monetary damages even if the alleged per-user or per-entity harm is small or nonexistent. In addition, the Company has faced, and will continue to face, additional class-action and other lawsuits based on various legal theories, including claims related to advertising, antitrust, privacy, security, biometrics, content, algorithms, copyright, user well-being, minors, employment, activities on the Company's platforms, consumer protection, unfair and deceptive trade practices, or product performance or other claims related to the use of consumer hardware and software, including artificial intelligence products, that are new and unproven. The results of any such lawsuits and claims cannot be predicted with certainty, and any negative outcome could expose the Company to substantial penalties, including monetary damages, fines, injunctive relief, or requirements to change its products, services, or business policies and practices.

The Company faces increasing risks of novel claims by private plaintiffs, consumer advocacy groups, and government authorities, including consumer-protection or product-liability claims arising from the design or perceived effects of its products, services and technologies, and claims alleging harm related to online safety and privacy or the adequacy of content moderation practices. In particular, claims relating to the safety of minors and compliance with laws and regulations on child safety and the distribution of exploitative material have resulted in significant litigation and regulatory action across the technology industry and could similarly expose the Company to litigation and substantial penalties, including monetary damages, injunctive relief, or requirements to change its products, services, or business policies and practices.

Regardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming and disruptive to the Company's operations. In recognition of these considerations, the Company may enter into agreements or other arrangements to settle litigation and resolve such challenges. However, such agreements may not always be available on acceptable terms, and litigation may still arise. Such agreements can also significantly reduce the Company's revenue and increase the Company's cost of sales and operating expenses. materially adversely affecting the Company's business, results of operations, financial condition and stock price. Additionally, such agreements may require the Company to change its business practices and limit the Company's ability to offer certain products and services.

Apple Inc. | 2025 2026 Form 10-K | 12 14

The outcome of litigation or government investigations is inherently uncertain. If one or more legal matters were resolved against the Company or an indemnified third party in a reporting period for amounts above management's expectations, the Company's business, results of operations, financial condition and stock price for that reporting period could be materially adversely affected. Further, such an outcome can result in significant penalties, including monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief. against the Company. Adverse resolution of legal matters has from time to time required, and can in the future require, the Company to change its business practices. It can also limit the Company's ability to enjoin others from using, or to derive value from, its intellectual property rights, and to develop, manufacture, use, import or offer for sale certain products and services. While the Company maintains insurance coverage for certain types of claims, it may be insufficient to cover all losses or all types of which claims that may arise. Any of the foregoing could materially adversely affect the Company's business, reputation, results of operations, financial condition and stock price.

The Company is subject to the risks and costs of complex and changing laws and regulations worldwide. which exposes the Company to potential liabilities, increased costs and other adverse effects on the Company's business.

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and 28 more changes in the filing

Properties 2 changes

Apple Inc. | 2025 Form 10-K | 17

The Company's headquarters is located in Cupertino, California. As of September 27, 2025, 26, 2026, the Company owned or leased facilities and land for corporate functions, R&D, data centers, retail and other purposes at locations throughout the U.S. and in various places outside the U.S. The Company believes its existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conduct of its business.

Legal proceedings 3 changes

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Apple Inc. | 2026 Form 10-K | 20

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Epic Games, Inc. filed a lawsuit in the U.S. District Court for the Northern District of California ("California District Court against the Company alleging violations of federal and state antitrust laws and California's unfair competition law based upon the Company's operation of its App Store. The California District Court found that certain provisions of the Company's App Review Guidelines violate California's unfair competition law and issued an injunction (the "2021 Injunction") enjoining the Company from prohibiting developers from including in their apps buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than the Company's in-app purchase system. The 2021 Injunction applies to apps On the U.S. storefronts of the iOS and iPadOS App Stores. On January 16, 2024, the Company implemented a plan to comply with the 2021 Injunction and filed a statement of compliance with the California District Court. On September 30, 2024, the Company filed a motion with the California District Court to narrow or vacate the 2021 Injunction. On April 30, 2025, the California District Court found the Company to be in violation of the 2021 Injunction and enjoined the Company from imposing any commission or any fee on purchases that consumers make outside an app; restricting, conditioning, limiting, or prohibiting how developers guide consumers to purchases outside an app; or otherwise interfering with a consumer's choice to proceed in or out of an app (the "2025 Injunction"). The Company appealed the California District Court's April 2025 decision to the Ninth Circuit Court. also denied On December 11, 2025, the Company's motion to narrow or vacate Ninth Circuit Court issued an order upholding the 2021 2025 Injunction in part and referred modifying certain aspects to allow the Company to require parity in size, form and placement between the U.S. Attorney Company's in-app purchase and any links for consumers to make purchases outside an app. The Northern District of California for a determination whether criminal contempt proceedings are appropriate. Ninth Circuit Court also held that the Company will continue to vigorously defend its actions and employees, can charge some commission on link-out purchases, and has appealed remanded to the California District Court's most recent decision Court to further amend or modify the U.S. Court of Appeals for 2025 Injunction, consistent with the Ninth Circuit ("Ninth Circuit Court"). Although the Company's request to stay Court's order. On May 21, 2026, the decision pending appeal was denied, Company filed a petition seeking Supreme Court review of the Ninth Circuit Court's opinion. On June 30, 2026, the Supreme Court has agreed to consider granted the Company's appeal on an expedited basis, with oral arguments heard in October 2025. petition to review the applicable legal standard for civil contempt.

1 unchanged paragraph

The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. The Company settled certain matters during the fourth quarter of 2025 2026 that did not individually or in the aggregate have a material impact on the Company's results of operations or financial condition. or operating results. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management's expectations, the Company's results of operations and financial condition and operating results for that reporting period could be materially adversely affected.

Mine Safety Disclosures 1 change

Apple Inc. | 2025 2026 Form 10-K | 18 21

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 changes

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As of October 17, 2025, there were 22,429 shareholders of record.

As of October 23, 2026, there were 21,458 shareholders of record.

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Share repurchase activity during the three months ended September 27, 2025, 26, 2026, was as follows (in millions, except number of shares, which are reflected in thousands, and per-share amounts):

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June 29, 2025 to August 2, 2025:

August 3, 2025 to August 30, 2025:

August 31, 2025 to September 27, 2025:

June 28, 2026 to August 1, 2026:

Open market and privately negotiated purchases 33,265 27,594 $ 210.43 33,265 317.45 27,594

August 2, 2026 to August 29, 2026:

Open market and privately negotiated purchases 28,986 26,820 $ 224.25 28,986 309.66 26,820

August 30, 2026 to September 26, 2026:

Open market and privately negotiated purchases 27,247 21,065 $ 238.56 27,247 329.22 21,065 (1) On May 2, 2024, 1, 2025, the Company announced a program to repurchase up to $110 $100 billion of the Company's common stock. During the fourth quarter As of 2025, the Company utilized the final $19.8 billion September 26, 2026, remaining availability under the May 2024 2025 program was $14.0 billion. On May 1, 2025, April 30, 2026, the Company announced an additional program to repurchase up to $100 billion of the Company's common stock. As of September 27, 2025, $221 million of the May 2025 program had been utilized. The programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

(2) In May 2026, the Company entered into accelerated share repurchase agreements ("ASRs"). Under the terms of the ASRs, financial institutions committed to deliver shares of the Company's common stock during the purchase periods in exchange for up-front payments totaling $10.0 billion. In August 2026, the purchase periods for the ASRs ended and 6 million shares were delivered and retired. In total, 33 million shares were delivered under the ASRs at an average repurchase price of $305.29 per share.

Apple Inc. | 2025 2026 Form 10-K | 19 22

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Apple Inc. $ 100 $ 132 $ 136 $ 155 $ 208 $ 234

S&P 500 Index $ 100 $ 137 $ 115 $ 136 $ 185 $ 217

The following graph shows a comparison of five-year cumulative total shareholder return, calculated on a dividend-reinvested basis, for the Company, the S&P 500 Index and the Dow Jones U.S. Technology Total Stock Market Index. The graph assumes $100 was invested in each of the Company's common stock, the S&P 500 Index and the Dow Jones U.S. Technology Total Stock Market Index as of the market close on September 25, 2020. 24, 2021. Past stock price performance is not necessarily indicative of future stock price performance.

September 2020 September 2021 September 2022 September 2023 September 2024 September 2025 September 2026

Apple Inc. $ 100 $ 103 $ 118 $ 158 $ 178 $ 238

S&P 500 Index $ 100 $ 84 $ 99 $ 135 $ 158 $ 187

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[Reserved] 1 change

Apple Inc. | 2025 2026 Form 10-K | 20 23

MD&A 97 changes

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This Item generally discusses 2025 2026 and 2024 2025 items and year-to-year comparisons between 2025 2026 and 2024. 2025. Discussions of 2023 2024 items and year-to-year comparisons between 2024 2025 and 2023 2024 are not included, and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024. 27, 2025.

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• iOS 26, macOS Tahoe 26, iPadOS 26, watchOS 26, visionOS 26 and tvOS 26

• iPhone 17, iPhone Air, iPhone 17 Pro and iPhone 17 Pro Max

The Company's fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company's fiscal quarters with calendar quarters, which occurred in the first quarter of 2023. The Company's fiscal years 2025 and 2024 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks.

The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2025 2026 included the following:

• 14-inch MacBook Pro

Second Quarter 2025: 2026:

• MacBook Neo, MacBook Air and MacBook Pro

• iOS 27, macOS 27 Golden Gate, iPadOS 27, watchOS 27, visionOS 27 and tvOS 27

Fourth Quarter 2025: 2026:

• Mac mini and Mac Studio

• iPhone Duo, iPhone 18 Pro Max and iPhone 18 Pro

• Apple Watch Series 11, Apple Watch SE 3 12 and Apple Watch Ultra 3 4

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Macroeconomic conditions, including inflation, interest rates, component pricing, supply constraints and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company's business, revenue, costs, gross margin, results of operations and financial condition.

The Company is experiencing supply constraints and rising costs driven by industry-wide supply-demand imbalances for key components, including advanced semiconductors, memory and storage. The Company expects these trends to intensify for memory and storage components. Actions, such as price increases, that have been and may in the future be taken by the Company may not effectively mitigate these negative impacts, and may also reduce demand for the Company's products.

Apple Inc. | 2025 2026 Form 10-K | 21 24

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Beginning in the second quarter of 2025, new U.S. tariffs were announced on imports to the U.S., including additional tariffs on imports from China mainland, India, Japan, South Korea, Taiwan, Vietnam and the EU, among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to On January 14, 2026, initial results were published of the U.S. Tariffs have been previously announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. The announcement of the initial results of the investigation did not impose any additional tariffs affecting the Company's products. Separately, on February 20, 2026, the Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977. The Company has applied for a refund of tariffs paid, following the processes established by U.S. Customs and Border Protection, and has recognized any refunds received as a reduction of products cost of sales. Various modifications to U.S. tariffs have been announced, including the recent imposition of tariffs under Section 301 of the Trade Act of 1974, and further changes could be made in the future, which may include additional measures under the Section 232 semiconductor sector investigation, additional sector-based tariffs, further actions under Section 301, or other measures. Tariffs and other measures that are applied to the Company's products or their components can have a material adverse impact on the Company's business, results of operations and financial condition, including impacting the Company's supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company's products and services, all of which can further adversely affect the Company's business, and results of operations and financial condition.

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Europe net sales increased during 2025 compared to 2024 primarily due to higher net sales of Services, iPhone and Mac.

Greater China net sales decreased during 2025 compared to 2024 primarily due to lower net sales of iPhone, partially offset by higher net sales of Mac.

The following table shows net sales by reportable segment for 2026, 2025 2024 and 2023 2024 (dollars in millions):

2026 Change 2025 Change 2024 Change 2023

Americas $ 198,083 11 % $ 178,353 7 % $ 167,045 3 % $ 162,560

Europe 127,604 15 % 111,032 10 % 101,328 7 % 94,294

Greater China 82,378 28 % 64,377 (4) % 66,952 (8) % 72,559

Japan 30,908 8 % 28,703 15 % 25,052 3 % 24,257

Rest of Asia Pacific 39,861 18 % 33,696 10 % 30,658 4 % 29,615

Total net sales $ 478,834 15 % $ 416,161 6 % $ 391,035 2 % $ 383,285

Japan Americas net sales increased during 2025 2026 compared to 2024 primarily 2025 due to higher net sales of iPhone, Services and iPad. Mac.

Americas Europe net sales increased during 2025 2026 compared to 2024 2025 primarily due to higher net sales of iPhone, and Services and Mac. The weakness strength in foreign currencies relative to the U.S. dollar had an unfavorable a net favorable year-over-year impact on Americas Europe net sales during 2025. 2026.

Greater China net sales increased during 2026 compared to 2025 primarily due to higher net sales of iPhone and Mac. The strength in the renminbi relative to the U.S. dollar had a favorable year-over-year impact on Greater China net sales during 2026.

Japan net sales increased during 2026 compared to 2025 due to higher net sales of iPhone. The weakness in the yen relative to the U.S. dollar had an unfavorable year-over-year impact on Japan net sales during 2026.

1 unchanged paragraph

Rest of Asia Pacific net sales increased during 2025 2026 compared to 2024 2025 primarily due to higher net sales of iPhone, Services and Mac.

Apple Inc. | 2025 2026 Form 10-K | 22 25

1 unchanged paragraph

The following table shows net sales by category for 2026, 2025 2024 and 2023 2024 (dollars in millions):

2026 Change 2025 Change 2024 Change 2023

iPhone $ 254,098 21 % $ 209,586 4 % $ 201,183 — % $ 200,583

Mac 37,929 13 % 33,708 12 % 29,984 2 % 29,357

iPad 27,929 — % 28,023 5 % 26,694 (6) % 28,300

Wearables, Home and Accessories 35,577 — % 35,686 (4) % 37,005 (7) % 39,845

Total net sales $ 478,834 15 % $ 416,161 6 % $ 391,035 2 % $ 383,285

1 unchanged paragraph

iPad net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPad Air, iPad mini and iPad, partially offset by lower net sales of iPad Pro.

iPhone net sales increased during 2025 2026 compared to 2024 2025 due to higher net sales of Pro models.

Mac net sales increased during 2025 2026 compared to 2024 primarily 2025 due to higher net sales of laptops. and desktops.

iPad net sales during 2026 compared to 2025 were relatively flat.

1 unchanged paragraph

Wearables, Home and Accessories net sales decreased during 2025 compared to 2024 primarily due to lower net sales of Accessories and Wearables.

Wearables, Home and Accessories net sales during 2026 compared to 2025 were relatively flat.

Services net sales increased during 2025 2026 compared to 2024 2025 primarily due to higher net sales from advertising the App Store and cloud services.

Apple Inc. | 2025 2026 Form 10-K | 23 26

Products and Services gross margin and gross margin percentage for 2026, 2025 2024 and 2023 2024 were as follows (dollars in millions):

Products $ 139,659 $ 112,887 $ 109,633 $ 108,803

Services 93,943 82,314 71,050 60,345

Total gross margin $ 233,602 $ 195,201 $ 180,683 $ 169,148

1 unchanged paragraph

Products 39.3 % 36.8 % 37.2 % 36.5 %

Services 76.2 % 75.4 % 73.9 % 70.8 %

Total gross margin percentage 48.8 % 46.9 % 46.2 % 44.1 %

1 unchanged paragraph

Products gross margin increased during 2025 compared to 2024 primarily due to favorable costs and a different mix of products, partially offset by tariff costs.

Products gross margin percentage decreased during 2025 compared to 2024 primarily due to a different mix of products and tariff costs, partially offset by other favorable costs.

Products gross margin and gross margin percentage increased during 2026 compared to 2025 primarily due to product mix and tariff refunds, partially offset by higher costs, including memory.

1 unchanged paragraph

Services gross margin increased during 2025 2026 compared to 2024 2025 primarily due to higher Services net sales and a different mix of services, partially offset by higher costs.

Services gross margin percentage increased during 2025 2026 compared to 2024 2025 primarily due to a different mix of services, partially offset by higher costs.

1 unchanged paragraph

Operating expenses for 2026, 2025 2024 and 2023 2024 were as follows (dollars in millions):

2026 Change 2025 Change 2024 Change 2023

Research and development $ 45,765 32 % $ 34,550 10 % $ 31,370 5 % $ 29,915

Percentage of total net sales 8 10 % 8 % 8 %

Selling, general and administrative $ 29,774 8 % $ 27,601 6 % $ 26,097 5 % $ 24,932

Percentage of total net sales 7 6 % 7 % 7 %

Total operating expenses $ 75,539 22 % $ 62,151 8 % $ 57,467 5 % $ 54,847

Percentage of total net sales 15 16 % 15 % 14 15 %

1 unchanged paragraph

The growth in R&D expense during 2025 compared to 2024 was primarily driven by increases in headcount-related expenses and infrastructure-related costs.

R&D expense increased during 2026 compared to 2025 primarily due to higher infrastructure-related costs, including investments in artificial intelligence, and headcount-related expenses.

1 unchanged paragraph

The growth in selling, general and administrative expense during 2025 compared to 2024 was primarily driven by increases in headcount-related expenses and variable selling expenses.

Selling, general and administrative expense increased during 2026 compared to 2025. The increase was driven by various factors, none of which were significant individually or in the aggregate.

Apple Inc. | 2025 2026 Form 10-K | 24 27

1 unchanged paragraph

Statutory federal income tax rate 21 % 21 % 21 %

The Company's effective tax rate for 2025 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by a change in valuation allowance and state income taxes.

Provision for income taxes effective tax rate and statutory federal income effective tax rate for 2026, 2025 2024 and 2023 2024 were as follows (dollars in millions):

Provision for income taxes $ 27,062 $ 20,719 $ 29,749 $ 16,741

Effective tax rate 17.0 % 15.6 % 24.1 % 14.7 %

The Company's effective tax rate for 2025 2026 was lower higher compared to 2024 2025 primarily due to a $10.7 billion year-over-year decrease higher effective tax rate on foreign earnings, the impact of foreign currency loss regulations issued by the U.S. Department of the Treasury in December 2024, and the provision for income taxes tax impact from foreign currency revaluations in the first quarter of 2025 related to the State Aid Decision (refer to Note 7, 8, "Income Taxes" in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K), and partially offset by the impact of changes in unrecognized tax benefits, partially offset by a change in valuation allowance. and a higher effective tax rate on foreign earnings.

1 unchanged paragraph

The Company believes its balances of cash, cash equivalents and marketable securities, which totaled $132.4 $136.9 billion as of September 27, 2025, 26, 2026, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

5 unchanged paragraphs

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

and 17 more changes in the filing

Market risk 4 changes

2 unchanged paragraphs

The following table sets forth potential impacts on the Company's investment portfolio and term debt, including the effects of any associated derivatives, that would result from a hypothetical increase in relevant interest rates as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 (dollars in millions):

3 unchanged paragraphs

100 basis points, all tenors Increase in annual interest expense $ 129 95 $ 139 129

2 unchanged paragraphs

The Company applied a value-at-risk ("VAR") model to its foreign currency derivative positions to assess the potential impact of fluctuations in exchange rates. The VAR model used a Monte Carlo simulation. The VAR is the maximum expected loss in fair value, for a given confidence interval, to the Company's foreign currency derivative positions due to adverse movements in rates. Based on the results of the model, the Company estimates, with 95% confidence, a maximum one-day loss in fair value of $590 $560 million and $538 $590 million as of September 27, 2025 26, 2026 and September 28, 2024, 27, 2025, respectively. Changes in the Company's underlying foreign currency exposures, which were excluded from the assessment, generally offset changes in the fair values of the Company's foreign currency derivatives.

Apple Inc. | 2025 2026 Form 10-K | 27 30

Financial statements 5 changes

1 unchanged paragraph

Consolidated Statements of Operations for the years ended September 26, 2026, September 27, 2025 and September 28, 2024 and September 30, 2023

Consolidated Statements of Comprehensive Income for the years ended September 26, 2026, September 27, 2025 and September 28, 2024 and September 30, 2023

Consolidated Balance Sheets as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025

Consolidated Statements of Shareholders' Equity for the years ended September 26, 2026, September 27, 2025 and September 28, 2024 and September 30, 2023

Consolidated Statements of Cash Flows for the years ended September 26, 2026, September 27, 2025 and September 28, 2024 and September 30, 2023

Note 1: Summary of Significant Accounting Policies 6 changes

1 unchanged paragraph

The consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries. The preparation of these consolidated financial statements and accompanying notes in conformity with GAAP requires the use of management estimates. Certain prior period amounts in the notes to consolidated financial statements and accompanying notes have been reclassified to conform to the current period's presentation.

The Company's fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company's fiscal quarters with calendar quarters. which occurred in The first fiscal quarter of 2023. The Company's fiscal years 2026, 2025 and 2024 spanned 52 weeks each. whereas fiscal year 2023 spanned 53 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company's fiscal years ended in September and the associated quarters, months and periods of those fiscal years.

1 unchanged paragraph

Beginning with the 2025 annual reporting period, the Company adopted the FASB's ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires the Company to disclose segment expenses that are significant and regularly provided to the Company's chief operating decision maker ("CODM"). In addition, ASU 2023-07 requires the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The Company adopted ASU 2023-07 using a retrospective transition method.

Beginning with the 2026 annual reporting period, the Company adopted the FASB's ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 also requires the Company to disaggregate its income taxes paid disclosure by federal, state and local, and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company adopted ASU 2023-09 using a prospective transition method.

10 unchanged paragraphs

Intangible assets are stated at cost.

Apple Inc. | 2025 2026 Form 10-K | 34 37

4 unchanged paragraphs

Note 2: Revenue 7 changes

3 unchanged paragraphs

The Company has identified the performance obligations regularly included in arrangements involving the sale of iPhone, Mac and iPad. The first material performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered at the time of sale. The second material performance obligation is the right to receive certain product-related bundled services, which include iCloud ® , Siri ® and Siri AI, and Maps. The Company allocates revenue and any related discounts to all of its performance obligations based on their relative SSPs. Because the Company lacks observable prices for product-related bundled services, the allocation of revenue is based on the Company's estimated SSPs. Revenue allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product is shipped. Revenue allocated to product-related bundled services is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided.

2 unchanged paragraphs

Apple Inc. | 2025 2026 Form 10-K | 35 38

The following table shows disaggregated net sales, as well as the portion of total net sales that was previously deferred, for 2026, 2025 2024 and 2023 2024 (in millions):

1 unchanged paragraph

Total net sales $ 478,834 $ 416,161 $ 391,035 $ 383,285

Portion of total net sales that was included in deferred revenue as of the beginning of the period $ 8,717 $ 8,229 $ 7,728 $ 8,169 (1) Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.

The Company's proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in (refer to Note 13, 14, "Segment Information and Geographic Data") for 2026, 2025 2024 and 2023, 2024, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales. In addition, in 2026, Services revenue represented a moderately lower proportion of net sales in Greater China.

As of September 27, 2025 26, 2026 and September 28, 2024, 27, 2025, the Company had total deferred revenue of $ 13.7 14.8 billion and $ 12.8 13.7 billion, respectively. As of September 27, 2025, 26, 2026, the Company expects 66 65 % of total deferred revenue to be realized in less than a year, 23 22 % within one-to-two years, 9 11 % within two-to-three years and 2 % in greater than three years.

Note 3: Earnings Per Share 9 changes

Approximately 24 million restricted stock units ("RSUs") were excluded from the computation of diluted earnings per share for 2023 because their effect would have been antidilutive.

The following table shows the computation of basic and diluted earnings per share for 2026, 2025 2024 and 2023 2024 (net income in millions and shares in thousands):

Net income $ 132,175 $ 112,010 $ 93,736 $ 96,995

Weighted-average basic shares outstanding 14,661,935 14,948,500 15,343,783 15,744,231

Effect of dilutive share-based awards 58,371 56,197 64,312 68,316

Weighted-average diluted shares 14,720,306 15,004,697 15,408,095 15,812,547

Basic earnings per share $ 9.01 $ 7.49 $ 6.11 $ 6.16

Diluted earnings per share $ 8.98 $ 7.46 $ 6.08 $ 6.13

Apple Inc. | 2025 2026 Form 10-K | 36 39

Note 4: Financial Instruments 40 changes

1 unchanged paragraph

The following tables show the Company's cash, cash equivalents and marketable securities by significant investment category as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 (in millions):

1 unchanged paragraph

Cash $ 32,686 $ — $ — $ 32,686 $ 32,686 $ — $ —

Money market funds 897 — — 897 897 — —

Subtotal 1,809 243 ( 4 ) 2,048 897 1,151 —

U.S. Treasury securities 19,413 1 ( 507 ) 18,907 27 4,793 14,087

U.S. agency securities 5,164 — ( 106 ) 5,058 565 2,459 2,034

Non-U.S. government securities 5,171 25 ( 504 ) 4,692 — 310 4,382

Certificates of deposit and time deposits 2,334 — — 2,334 2,030 304 —

Commercial paper 1,486 — — 1,486 — 1,486 —

Corporate debt securities 48,229 29 ( 1,323 ) 46,935 100 9,875 36,960

Mortgage- and asset-backed securities 24,678 5 ( 1,894 ) 22,789 — 39 22,750

Subtotal 106,475 60 ( 4,334 ) 102,201 2,722 19,266 80,213

Securities Non-Current

12 unchanged paragraphs

Securities Non-Current

Cash $ 27,199 $ — $ — $ 27,199 $ 27,199 $ — $ —

Money market funds 778 — — 778 778 — —

Subtotal 1,293 105 ( 3 ) 1,395 778 617 —

U.S. Treasury securities 16,150 45 ( 516 ) 15,679 212 4,087 11,380

U.S. agency securities 5,431 — ( 272 ) 5,159 155 703 4,301

Non-U.S. government securities 17,959 93 ( 484 ) 17,568 1,158 10,810 5,600

Certificates of deposit and time deposits 873 — — 873 387 478 8

Commercial paper 1,066 — — 1,066 28 1,038 —

Corporate debt securities 65,622 270 ( 1,953 ) 63,939 26 16,027 47,886

Municipal securities 412 — ( 7 ) 405 — 190 215

Mortgage- and asset-backed securities 24,595 175 ( 1,403 ) 23,367 — 1,278 22,089

Subtotal 132,108 583 ( 4,635 ) 128,056 1,966 34,611 91,479

(2) As of September 28, 2024, cash and cash equivalents included $ 2.6 billion held in escrow and restricted from general use. These restricted cash and cash equivalents were designated to settle the Company's obligation related to the State Aid Decision (refer to Note 7, "Income Taxes").

(3) As of September 28, 2024, current marketable securities included $ 13.2 billion held in escrow and restricted from general use. These restricted marketable securities were designated to settle the Company's obligation related to the State Aid Decision (refer to Note 7, "Income Taxes").

Total $ 160,600 134,711 $ 688 736 $ ( 4,638 3,027 ) $ 156,650 132,420 $ 29,943 35,934 $ 35,228 18,763 $ 91,479 77,723 (1) The valuation techniques used to measure the fair values of the Company's Level 2 financial instruments, which generally have counterparties with high credit ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.

Apple Inc. | 2025 2026 Form 10-K | 37 40

As of September 27, 2025, 80 26, 2026, 82 % of the Company's non-current marketable debt securities other than mortgage- and asset-backed securities had maturities between 1 and 5 years, 15 % between 5 and 10 years, and 5 3 % greater than 10 years. As of September 27, 2025, 13 26, 2026, 16 % of the Company's non-current mortgage- and asset-backed securities had maturities between 1 and 5 years, 14 21 % between 5 and 10 years, and 73 63 % greater than 10 years.

10 unchanged paragraphs

To protect the Company's foreign currency–denominated term debt or marketable securities from fluctuations in foreign exchange rates, the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of September 27, 2025, 26, 2026, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency transactions is 17 16 years.

2 unchanged paragraphs

Apple Inc. | 2025 2026 Form 10-K | 38 41

The notional amounts of the Company's outstanding derivative instruments as of September 27, 2025 26, 2026 and September 28, 2024, 27, 2025, were as follows (in millions):

1 unchanged paragraph

Foreign exchange contracts $ 62,647 91,774 $ 64,069 62,647

Interest rate contracts $ 12,875 9,500 $ 14,575 12,875

1 unchanged paragraph

Foreign exchange contracts $ 109,079 112,065 $ 91,493 109,079

As of September 27, 2025 26, 2026 and September 28, 2024, 27, 2025, the carrying amount of the Company's current and non-current term debt subject to fair value hedges was $ 12.6 9.2 billion and $ 13.5 12.6 billion, respectively.

As of both September 26, 2026 and September 27, 2025, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 13 % and 12 %, respectively. The Company's third-party cellular network carriers accounted for 34 33 % and 38 34 % of total trade receivables as of September 27, 2025 26, 2026 and September 28, 2024, 27, 2025, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit risk.

1 unchanged paragraph

The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. The Company does not reflect the sale of these components in products net sales. Rather, the Company recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As of September 27, 2025, 26, 2026, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 46 45 % and 23 27 %. As of September 28, 2024, 27, 2025, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 44 46 % and 23 %.

Note 5: Property, Plant and Equipment 8 changes

The following table shows the Company's gross property, plant and equipment by major asset class and accumulated depreciation as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 (in millions):

Land and buildings $ 27,337 29,413 $ 24,690 27,337

1 unchanged paragraph

Leasehold improvements 15,091 14,233

Leasehold improvements 16,143 15,091

Gross property, plant and equipment 129,935 125,848 119,128

1 unchanged paragraph

Total property, plant and equipment, net $ 49,834 52,084 $ 45,680 49,834

Depreciation expense on property, plant and equipment was $ 8.0 8.7 billion, $ 8.2 8.0 billion and $ 8.5 8.2 billion during 2026, 2025 2024 and 2023, 2024, respectively.

Apple Inc. | 2025 2026 Form 10-K | 39 42

Note 7: Consolidated Financial Statement Details 12 changes

The following tables show the Company's consolidated financial statement details as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 (in millions):

Components $ 10,447 $ 2,124

Finished goods 4,094 3,594

Total inventories $ 14,541 $ 5,718

1 unchanged paragraph

Other non-current assets 62,950 55,335

Deferred tax assets $ 20,777 20,379 $ 19,499 20,777

Other non-current assets 57,737 51,857

Total other non-current assets $ 83,727 78,116 $ 74,834 72,634

Apple Inc. | 2026 Form 10-K | 43

1 unchanged paragraph

Income taxes payable $ 13,016 5,287 $ 26,601 13,016

1 unchanged paragraph

Other current liabilities 53,843 44,452 44,024

Total other current liabilities $ 66,387 66,124 $ 78,304 66,387

Note 8: Income Taxes 72 changes

3 unchanged paragraphs

Income Before Provision for Income Taxes

Income before provision for income taxes for 2026, 2025 and 2024 consisted of the following (in millions):

Domestic $ 63,732 $ 50,722 $ 46,169

Foreign 95,505 82,007 77,316

Income before provision for income taxes

1 unchanged paragraph

Deferred ( 139 ) ( 298 ) ( 49 )

Deferred 604 347 669

Foreign pretax earnings were $ 82.0 billion, $ 77.3 billion and $ 72.9 billion in 2025, 2024 and 2023, respectively.

The provision for income taxes for 2026, 2025 2024 and 2023, 2024 consisted of the following (in millions):

Current $ 11,307 $ 11,487 $ 5,571 $ 9,445

Deferred 594 ( 1,804 ) ( 3,080 ) ( 3,644 )

Total 11,901 9,683 2,491 5,801

Current 2,409 1,680 1,726 1,570

Deferred ( 36 ) ( 139 ) ( 298 )

Total 2,373 1,541 1,428 1,521

Current 12,625 8,891 25,483 8,750

Deferred 163 604 347

Total 12,788 9,495 25,830 9,419

Provision for income taxes $ 27,062 $ 20,719 $ 29,749 $ 16,741

Apple Inc. | 2025 2026 Form 10-K | 40 44

A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate ( 21 % in 2025, 2024 and 2023) to income before provision for income taxes for 2025, 2024 and 2023 2026 is as follows (dollars in millions):

Computed statutory federal income tax $ 33,440 21.0 %

Foreign tax effects:

Tax rate difference ( 3,464 ) ( 2.2 ) %

Tax rate difference, including incentives ( 5,492 ) ( 3.4 ) %

Qualified Domestic Minimum Top-up Tax 2,510 1.6 %

Other foreign jurisdictions 2,341 1.5 %

Effect of cross-border tax laws ( 2,307 ) ( 1.5 ) %

Research and development credits ( 1,894 ) ( 1.2 ) %

Other ( 273 ) ( 0.2 ) %

Provision for income taxes $ 27,062 17.0 %

A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate ( 21 % in 2025 and 2024) to income before provision for income taxes for 2025 and 2024 is as follows (dollars in millions):

Computed expected tax $ 27,873 $ 25,932 $ 23,885

Earnings of foreign subsidiaries ( 8,120 ) ( 5,311 ) ( 5,744 )

1 unchanged paragraph

Research and development credit, net ( 1,049 ) ( 1,397 ) ( 1,212 )

1 unchanged paragraph

Other 410 279 ( 188 )

Provision for income taxes $ 20,719 $ 29,749 $ 16,741

Effective tax rate 15.6 % 24.1 % 14.7 %

Apple Inc. | 2026 Form 10-K | 45

1 unchanged paragraph

As of September 27, 2025 26, 2026 and September 28, 2024, 27, 2025, the significant components of the Company's deferred tax assets and liabilities were as follows (in millions):

1 unchanged paragraph

Capitalized research and development $ 15,041 13,656 $ 10,739 15,041

Tax credit carryforwards 10,046 8,643 8,856

Accrued liabilities and other reserves 6,678 6,154 6,114

Deferred revenue 2,797 2,953 3,413

Lease liabilities 2,643 2,577 2,410

Total deferred tax assets 39,399 38,417 34,873

Less: Valuation allowance ( 10,966 13,260 ) ( 8,866 10,966 )

Total deferred tax assets, net 26,139 27,451 26,007

1 unchanged paragraph

Depreciation 3,276 2,551

Apple Inc. | 2025 Form 10-K | 41

Depreciation 2,379 3,276

Right-of-use assets 2,331 2,300 2,125

Minimum tax on foreign earnings 1,089 1,217 1,674

Total deferred tax liabilities 6,611 7,471 6,805

Net deferred tax assets $ 19,980 19,528 $ 19,202 19,980

As of September 27, 2025, 26, 2026, the Company had $ 4.7 5.4 billion in foreign tax California R&D credit carryforwards in Ireland and $ 4.0 4.6 billion in California R&D foreign tax credit carryforwards in Ireland, both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary differences.

1 unchanged paragraph

Beginning balances $ 22,038 $ 19,454 $ 16,758

As of September 27, 2025, 26, 2026, the total amount of gross unrecognized tax benefits was $ 23.2 22.5 billion, of which $ 10.6 billion, if recognized, would impact the Company's effective tax rate. As of September 28, 2024, 27, 2025, the total amount of gross unrecognized tax benefits was $ 22.0 23.2 billion, of which $ 10.8 10.6 billion, if recognized, would have impacted the Company's effective tax rate.

The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2026, 2025 2024 and 2023 2024 is as follows (in millions):

Ending Beginning balances $ 23,242 $ 22,038 $ 19,454

Increases related to tax positions taken during a prior year 1,267 1,971 1,727 2,044

Decreases related to tax positions taken during a prior year ( 71 2,827 ) ( 386 71 ) ( 1,463 386 )

Increases related to tax positions taken during the current year 4,068 3,795 2,542 2,628

Decreases related to settlements with taxing authorities ( 2,939 264 ) ( 1,070 2,939 ) ( 19 1,070 )

Decreases related to expiration of the statute of limitations ( 1,552 2,999 ) ( 229 1,552 ) ( 494 229 )

Ending balances $ 22,487 $ 23,242 $ 22,038

The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisd ictions. Tax years 2018 and after 2021 for the U.S. federal jurisdiction, and after 2014 in certain major foreign jurisdictions, remain subject to examination. Altho ugh the timing of resolution or closure of examinations is not certain, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease as much as $ 6 billion in the next 12 months.

Apple Inc. | 2026 Form 10-K | 46

Cash Paid for Income Taxes

Cash paid for income taxes, net in 2026 consisted of the following (in millions):

State and local 1,669

Cash paid for income taxes, net was $ 43.4 billion and $ 26.1 billion in 2025 and 2024, respectively.

Note 9: Leases 24 changes

1 unchanged paragraph

Payments under the Company's lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the underlying leased assets. Lease costs associated with fixed payments on the Company's operating leases were $ 2.1 billion for both 2026 and 2025 and $ 2.0 billion for both 2024. and 2023. Lease costs associated with variable payments on the Company's leases were $ 16.1 17.7 billion, $ 13.8 16.1 billion and $ 13.9 13.8 billion for 2026, 2025 2024 and 2023, 2024, respectively.

The Company made fixed cash payments related to operating leases of $ 2.1 billion in both 2026 and 2025 and $ 1.9 billion in both 2024. and 2023. Noncash activities involving right-of-use ("ROU") assets obtained in exchange for lease liabilities were $ 2.8 2.7 billion, $ 1.0 2.8 billion and $ 2.1 1.0 billion for 2026, 2025 2024 and 2023, 2024, respectively.

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 (in millions):

Lease-Related Assets and Liabilities Financial Statement Line Items 2026 2025 2024

1 unchanged paragraph

Thereafter 5,956 801 6,757

Total undiscounted liabilities 14,725 1,579 16,304

Less: Imputed interest ( 2,235 ) ( 349 ) ( 2,584 )

Total lease liabilities $ 12,490 $ 1,230 $ 13,720

Operating leases Other non-current assets $ 11,205 11,636 $ 10,234 11,205

Finance leases Property, plant and equipment, net 1,179 1,033 1,069

Total right-of-use assets $ 12,238 12,815 $ 11,303 12,238

Operating leases Other current liabilities $ 1,579 1,554 $ 1,488 1,579

Other non-current liabilities 11,358 10,911 10,046

Finance leases Other current liabilities 700 538 144

Other non-current liabilities 756 692 752

Total lease liabilities $ 13,720 14,368 $ 12,430 13,720

Apple Inc. | 2025 2026 Form 10-K | 42 47

Lease liability maturities as of September 27, 2025, 26, 2026, are as follows (in millions):

Thereafter 6,362 764 7,126

Total undiscounted liabilities 15,343 1,786 17,129

Less: Imputed interest ( 2,431 ) ( 330 ) ( 2,761 )

Total lease liabilities $ 12,912 $ 1,456 $ 14,368

The weighted-average remaining lease term related to the Company's lease liabilities as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 was 9.8 9.7 years and 10.3 9.8 years, respectively. The discount rate related to the Company's lease liabilities as of September 27, 2025 26, 2026 and September 28, 2024 27, 2025 was 3.4 3.6 % and 3.1 3.4 %, respectively. The discount rates related to the Company's lease liabilities are generally based on estimates of the Company's incremental borrowing rate, as the discount rates implicit in the Company's leases cannot be readily determined.

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Controls and procedures 5 changes

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Notes to the financial statements 20 changes

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Form 10-K Summary 22 changes

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