Apple's advertising business set an all-time revenue record in the three months to September 26, 2026, chief financial officer Kevan Parekh told analysts on November 2, the day Apple reported that Services revenue rose 10% to $31.573 billion. Apple again published no advertising figure. Its results release does not mention advertising, and the condensed financial statements fold ads into a single Services line alongside the App Store, iCloud, Apple Pay, AppleCare, music and video. What the numbers do show is a Services business that slowed from 16% growth in the March quarter to 12% in June and 10% in September, while producing 43.7% of Apple's gross profit from 27.6% of its revenue. For the December quarter, Apple guided Services growth to between 8% and 9%, and named third-party licensing as one of the main drags - a category that Apple's own annual report counts as part of advertising.

In Short

Apple made $31.6 billion between July and September from services such as the App Store, iCloud and advertising, 10% more than a year earlier, and its finance chief said the ad business had its best quarter ever, although Apple still does not say how much money ads bring in. That matters to app developers and local businesses that buy Apple's ads in the App Store and, since August, in Apple Maps, because it shows Apple's ad unit growing while the rest of Services slows. Apple expects Services growth to drop again to 8% or 9% in the last three months of 2026, partly because of licensing deals that Apple's annual report files under advertising.

What Apple filed on November 2

Apple published three documents on November 2, 2026: a press release headed "Apple reports fourth quarter results," a set of condensed consolidated financial statements, and a Form 8-K that furnishes the release to the Securities and Exchange Commission under Item 2.02. The 8-K is signed by Parekh as senior vice president and chief financial officer. All three cover the fiscal fourth quarter ended September 26, 2026, which closed Apple's fiscal year.

Revenue for the quarter was $114.477 billion, up from $102.466 billion a year earlier. Apple rounds that to 12%; the exact figure is 11.7%. Gross margin was 47.9%, which the release says included "a favorable impact of approximately 1 percentage point from tariff refunds." Diluted earnings per share were $2.10, up 14%, including $0.05 from the same refunds. Net income reached $30.711 billion.

Chief executive John Ternus, presenting results for the first time since taking over from Tim Cook, described the quarter in the release as "a September quarter revenue record of $114.5 billion, up 12 percent from a year ago, with iPhone reaching a September quarter record and Services reaching an all-time high, capping off our best fiscal year ever." Parekh added that the quarter "capped off a strong fiscal 2026, with all-time record revenue of $479 billion and double-digit EPS growth."

Neither quote mentions advertising. Nor does any other sentence in the release. The boilerplate at the bottom lists "the App Store, Apple Music, Apple Pay, iCloud, and Apple TV" as examples of Apple's services. The financial statements split revenue into Products and Services, and Products into iPhone, Mac, iPad, and Wearables, Home and Accessories. There is no advertising row, no App Store row and no licensing row. Everything this article says about Apple's advertising performance in the quarter comes from Parekh's remarks on the conference call, held at 2:00 p.m. Pacific time on November 2, and from Apple's earlier filings.

The Services line, quarter by quarter

The Services line is the only place in Apple's accounts where advertising lives, so its arithmetic sets the outer limit of what can be said about ads.

Three months ended Sept 26, 2026 Sept 27, 2025 Change
Services revenue $31.573bn $28.750bn +9.8%
Cost of Services $7.593bn $7.106bn +6.9%
Services gross profit $23.980bn $21.644bn +10.8%
Services gross margin 76.0% 75.3% +0.7 points
Services share of revenue 27.6% 28.1% -0.5 points
Services share of gross profit 43.7% 44.8% -1.0 points

Margins, gross profit and shares in that table are PPC Land's calculations from Apple's condensed statements. Apple reports the revenue and cost lines; it does not print a Services margin in the release.

The cost of delivering Services grew more slowly than Services revenue, which is why the margin widened. On the call, according to the transcript published by Six Colors, Parekh put Services gross margin at 76%, up 40 basis points from the June quarter. That squares with the June figure: PPC Land's report on the June quarter recorded a Services gross margin of 75.6%, down 110 basis points from 76.7% in the March quarter.

Products earned a gross margin of 37.2% in the September quarter, up from 36.2% a year earlier, with the tariff refunds included. The gap between 37% on hardware and 76% on services is the reason a modest share of revenue becomes a large share of profit.

For the full fiscal year, Services revenue was $123.301 billion, up 13.0% from $109.158 billion. Services gross margin for the year was 76.2%, against 75.4% in fiscal 2025, and Services gross profit of $93.943 billion was 40.2% of Apple's total gross profit of $233.602 billion. Products revenue grew faster, at 15.8%, driven by an iPhone line that rose 21.2% over the year.

A slowing trend across fiscal 2026

Subtracting the three reported quarters from the annual total gives the first quarter. Services revenue in the December 2025 quarter was $30.013 billion, a PPC Land calculation from Apple's annual figure minus the March, June and September quarters. The sequence for the year runs:

  • December 2025 quarter: $30.013 billion
  • March 2026 quarter: $30.976 billion, up 16%
  • June 2026 quarter: $30.739 billion, up 12%
  • September 2026 quarter: $31.573 billion, up 9.8%

The September total is the highest of the four in dollars. Its growth rate is the lowest of the three quarters for which a year-ago comparison is available. Parekh said on the call that the 10% came despite more than 1.5 points of sequential headwinds from currency movements, according to the Six Colors transcript.

Advertising: a record without a number

How large is the advertising business that set the record? Apple does not say. Parekh's prepared remarks listed the parts of Services that set records. According to the Six Colors transcript, he named all-time records in video, cloud services, payment services and advertising, and a September-quarter record in music. Apple published no dollar amount for any of them.

The words "App Store" do not appear in the transcript of the prepared remarks. Three months earlier, the App Store had been on the list: PPC Land reported on August 3 that Parekh cited June-quarter records in advertising, the App Store, AppleCare, music and video. The Six Colors text ends before the analyst questions, so it cannot show whether the App Store came up later in the call. What it does show is that, in the scripted part of the call, advertising was singled out and the store where Apple Ads began was not.

That is the third quarter in a row in which Apple has said something specific about advertising. On the April 30 call, Parekh said the company had seen year-over-year growth in its advertising business, as PPC Land reported on May 1. For the June quarter, Apple described a June-quarter record, and the Form 10-Q attributed the rise in Services mainly to higher net sales from advertising and cloud services. The September quarter moved the language from a seasonal record to an all-time one. A year earlier, in July 2025, PPC Land's report on the June 2025 quarter could point only to advertising contributing to Services growth, without any record claim from Apple.

What Apple means by advertising

The word covers more than the auction-based campaigns marketers buy through Apple Ads. In its annual report for fiscal 2025, Apple describes its advertising services as including third-party licensing arrangements as well as the company's own advertising platforms. Both sit in the same bucket, and both feed the record Parekh described.

The fiscal 2025 report also gave the drivers of that year's Services growth: higher net sales from advertising, the App Store and cloud services. The equivalent explanation for fiscal 2026 will appear in the annual report on Form 10-K, which was not part of the November 2 filing. Until then, the only statement about what drove September's growth is Parekh's list of records.

That definition matters for reading the December guidance. Parekh told analysts Apple expects Services revenue to grow between 8% and 9% year over year in the December quarter, and that the forecast includes sequential headwinds driven primarily by third-party licensing and foreign exchange, according to the Six Colors transcript. He did not say which licensing arrangement he meant, or whether the headwind is a lower payment, a change in terms or a timing effect.

Apple does not name its licensees in the documents published on November 2. The arrangement most often discussed in public is Google's payment to be the default search engine in Safari: court documents in the US government's search case, reported in May 2024, showed that Google paid Apple $20 billion in 2022. Nothing in the November 2 documents or the call transcript ties the December headwind to Google, and Apple has not said so.

Maps: the newest inventory

The one advertising product Parekh named on the call was Maps. According to the Six Colors transcript, he described ads in Apple Maps as now live in the US and Canada, giving local businesses a new way to reach customers while respecting users' privacy. The sentence sat in a paragraph about expanding Services, next to the news that iCloud+ plans now include Apple TV and Apple Arcade in more than 100 countries and regions.

Maps ads had a short run inside the quarter. Parekh first confirmed them on the April 30 call, saying they would arrive in the US and Canada in the summer. Apple then opened campaign creation in both countries on August 14 with a 15% credit on spend, and the ads went live on August 21 with that credit capped at $1,000 a month. From August 21 to the quarter's close on September 26 is 36 days. Any Maps revenue in the September figure therefore covers about five weeks, and Apple gave no indication of its size.

How the format works also shapes what it can earn. Apple said in the spring, as PPC Land reported on May 1, that Maps ads would be targeted with contextual advertising signals - the search query, approximate location and the area of the map being viewed - rather than location history or behavioural profiles, and that accounts belonging to children under 13 would not see them. That puts Maps ads closer to search advertising than to the audience-based local campaigns sold elsewhere.

App Store search: more positions to sell

The App Store remains the core of Apple Ads, and the store's ad inventory grew during the fiscal year. In April 2025, Apple renamed Apple Search Ads as Apple Ads, saying the old name no longer fitted a business with placements across the store. On December 18, 2025, it told developers that more ad positions would appear in App Store search results in 2026, ending an arrangement in which a single ad slot sat at the top of results. The additional positions began rolling out on March 3, 2026, starting in the UK and then Japan, on devices running iOS and iPadOS 26.2 or later.

More slots mean more impressions to sell on the same queries, and in an auction they can also change what advertisers pay. Apple publishes no figures on the number of auctions, average cost per tap or fill rates, so the September record cannot be split into price and volume. Nor can it be split by country. Apple's regional segments - Americas, Europe, Greater China, Japan and Rest of Asia Pacific - combine hardware and services, and the release gives no Services figure for any region.

A further change came in July. Apple sent advertisers new Advertising Services Terms on July 14, effective July 28, and PPC Land reported on July 15 that the revised text widened the places where ads could run to include web applications and other platforms or properties, not only Apple's own software and devices. Apple has named no new surface, market or date since. The November 2 documents and the call transcript do not mention it.

The App Store's own trajectory has complications that bear on the developers who buy its ads. In explaining why Services growth slowed in the June quarter, Parekh pointed to currency, a tough comparison with the theatrical release of the F1 film, softness in mobile gaming, and the effects of regulatory and judicial rulings on the App Store, as PPC Land reported in August. Whether the softness in mobile gaming, a category that depends on paid app discovery, persisted into September is not addressed in the November 2 documents.

The December quarter

Parekh's guidance for the three months to late December, as recorded in the Six Colors transcript, points to slower growth across the company and lower margins.

  • Total revenue is expected to grow between 7% and 10% year over year, a range Parekh said reflects constrained supply. He also said Apple expects it to be the best quarter for revenue in the company's history.
  • Services revenue is expected to grow between 8% and 9%. Applied to the December 2025 quarter's $30.013 billion, that range implies Services revenue of roughly $32.4 billion to $32.7 billion, a PPC Land calculation.
  • Gross margin is expected to be between 45% and 46%, down from 47.9%, mainly because of higher memory costs and some costs related to the ramp of Siri AI.
  • Operating expenses are expected to be between $20.4 billion and $20.8 billion.

An 8% to 9% Services growth rate would sit below every growth rate in the fiscal 2026 sequence above. For an advertising business that Apple says is setting records, the guidance leaves open two readings. Either the ad platforms keep growing and licensing or currency pulls the total down, or the ad record itself owes something to the licensing income that Apple now describes as a headwind. Apple's documents do not allow the two to be separated.

Where the money is going

Apple's costs grew faster than its revenue in the quarter. Research and development spending was $11.730 billion, up 32.3% from $8.866 billion, and reached $45.765 billion for the year, 9.6% of revenue against 8.3% in fiscal 2025. Selling, general and administrative expenses rose 5.8% to $7.459 billion. Total operating expenses grew 20.6% while revenue grew 11.7%, so operating income rose 9.9% to $35.631 billion and operating margin slipped to 31.1% from 31.6%.

The release does not say what the extra research spending bought. Ternus pointed to the new product lineup and "the all-new Siri AI," and Parekh's guidance names the Siri AI ramp as a cost. On the call, according to Six Colors, Ternus said Siri AI launched in beta for US English in September and expanded to French, Japanese, Korean, Portuguese and Spanish in October, and that it is built so that no one can access users' data, Apple included.

Cash generation was strong. Operating cash flow for fiscal 2026 was $145.097 billion, up 30.2%. Capital expenditure fell 28.9% to $9.041 billion. Apple spent $86.390 billion on share repurchases and $15.721 billion on dividends and dividend equivalents during the year. For the quarter, Parekh said in the release: "We generated $28 billion in operating cash flow during the quarter, allowing us to return $28 billion to shareholders." The board declared a dividend of $0.27 per share, payable on November 16, 2026, to shareholders of record on November 12.

Two balance sheet lines moved sharply without explanation in the condensed statements. Inventories rose to $14.541 billion from $5.718 billion a year earlier, consistent with Parekh's reference to constrained supply and higher memory costs, though the documents do not draw that link. Intangible assets, net, rose to $20.278 billion from $11.093 billion. The statements do not say what the additional $9.2 billion of intangibles represents.

Hardware, for context

The products that create Apple's ad audience grew unevenly. iPhone revenue rose 17.5% to $57.583 billion, a September-quarter record. Mac revenue rose 23.7% to $10.792 billion. iPad fell 10.4% to $6.229 billion, and Wearables, Home and Accessories fell 7.9% to $8.300 billion.

By segment, Greater China grew fastest at 21.0%, to $17.539 billion. Europe rose 11.5% to $32.008 billion, the Americas 10.2% to $48.680 billion, and Rest of Asia Pacific 15.0% to $9.710 billion. Japan fell 1.4% to $6.540 billion.

The installed base sets the ceiling on advertising reach. Parekh said in the release that the installed base of active devices "reached a new all-time high across all major product categories and geographic segments." On the call he put it at more than 2.5 billion active devices, according to Six Colors, and said paid subscriptions exceeded 1.5 billion after growing at a double-digit rate. Apple did not say how many users see ads, how many have turned off personalised ads, or how many accounts are under 13 and excluded from Maps ads.

Why this matters for marketers

Apple sells advertising only on its own properties: App Store search and browse placements, Maps in two countries, and News and Stocks. It is a walled garden in the most literal sense, with measurement, pricing and audience data controlled by the same company that runs the operating system. The September quarter shows that business growing fast enough to set a record while the wider Services line decelerates, but every quantitative question an advertiser would ask - how big, how fast, at what price, in which country - goes unanswered in Apple's filings.

The privacy language around the ads is also deliberate. Parekh framed Maps ads as respecting privacy, and Ternus made the same point about Siri AI. Apple's own ads rely on first-party data collected inside its apps, and Apple says they need no App Tracking Transparency prompt because they do not track users across other companies' apps and websites. Third-party ad businesses on Apple devices operate under different rules. In Safari, Apple has gone further this autumn: on October 19, WebKit said Safari 27 blocks identity resolution firms that turn email addresses into tracking IDs, and PPC Land's analysis of the WebKit code found that the block also hit The Trade Desk's ad-serving domain. Publishers and ad tech vendors have asked whether those restrictions and Apple's ad growth are connected. The quarterly documents do not address the question, and no figure in them links one to the other.

For publishers and app developers, the licensing point may be the most consequential detail of the call. If third-party licensing is one of the two main reasons Services growth will slow to 8% or 9%, then a meaningful part of what Apple calls advertising depends on agreements with other companies rather than on ads Apple sells itself. Apple has not quantified that part. The fiscal 2026 Form 10-K, which was not part of the November 2 filing, is the next document likely to say more.

Timeline

Summary

Who: Apple, its chief executive John Ternus and chief financial officer Kevan Parekh, and the app developers and local businesses in the US and Canada that buy Apple Ads in the App Store and Apple Maps.

What: Apple reported fiscal fourth quarter Services revenue of $31.573 billion, up 9.8%, within total revenue of $114.477 billion. Parekh said advertising set an all-time revenue record and that Maps ads are live in the US and Canada, but Apple published no advertising figure. Apple guided December quarter Services growth to 8% to 9%, citing third-party licensing and currency, and its fiscal 2025 annual report counts third-party licensing as part of advertising.

When: The results, Form 8-K and conference call came on November 2, 2026, covering the quarter ended September 26, 2026. The guidance covers the December 2026 quarter.

Where: Apple reported from Cupertino, California. Maps ads run in the US and Canada; App Store search ads carry additional positions that began rolling out in the UK and Japan in March 2026. Apple does not disclose Services or advertising revenue by region.

Why: Services earned 43.7% of Apple's gross profit in the quarter at a 76% margin, against 37% on hardware, so advertising growth carries weight in Apple's profits even without a reported figure. Services growth slowed from 16% in March to 10% in September and is guided lower again, and the overlap between Apple's own ad platforms and its licensing income in one category leaves advertisers unable to tell how much of the record comes from ads Apple sells itself.