Breaking Records: Gemini AI Powers $143.8B in Revenue

Today, Apple announced its Q1 2026 “holiday quarter” earnings, once again shattering records — and blowing away Wall Street expectations — by posting the largest year-over-year increase since the COVID-19 pandemic in 2021.

Apple’s revenue for its fiscal 2026 first quarter, which ended on December 27, 2025, was a staggering $143.8 billion, up 16 percent from Q1 2025.

As we anticipated when Apple crossed the $100 billion mark for a fourth quarter last year, that was indeed just the tip of the iceberg. Apple’s Q4 ends in September, not long after the new iPhone models launch each year. In this case, Apple only had the preorders and a week of in-store sales to bolster its Q4 2025 numbers.

However, that quarter ended with incredible momentum — and Apple struggling to keep up with demand — suggesting that the holiday quarter that followed between October and December was going to be a big one — and it was.

The Numbers

Apple’s fiscal year ends in September, which is why the final calendar quarter of the year is actually Q1 2026. This time around, the company posted quarterly revenue of $143.76 billion — it’s highest by a long shot — with diluted earnings per share (EPS) of $2.84, up an even higher 19 percent from the year-ago quarter.

It’s no surprise that this driven by the iPhone, which accounted for just over 59% of overall revenue. As usual, Services was in second place marking its own milestone as it crossed the $30 billion threshold, leaving Apple’s remaining three categories coming in as distant runners-up. Here’s the breakdown.

The iPhone Carries the Day

With its September launch schedule, the iPhone always makes up over half of Apple’s sales each holiday quarter, and while it captured a 3% larger share than last year’s iPhone 16 lineup, which came in at slightly under 56%, this year’s number is more in line with previous quarters, which have otherwise averaged 58.9% since Q1 2019.

During the earnings call that followed, Tim Cook credited much of the iPhone’s sales performance to China, where it did much better than Apple anticipated. While iPhone sales grew 23.3% globally over last year’s holiday quarter, the spike in China was much higher at 38%, creating what Cook declared “the best iPhone quarter in history in Greater China.”

There may have also been some pent-up demand in China, as the iPhone Air failed to launch there until October due to delays in getting the eSIM technology cleared by Chinese regulators. However, when it finally did launch, Apple couldn’t make them fast enough to keep up with demand.

That’s a problem Apple is still facing. Cook mentioned several times during the call that Apple has been constrained on the supply side and hasn’t been able meet consumer demand for the new models. When one analyst asked how long he expected supply challenges to impact Apple’s ability to “ship to true demand,” Cook candidly replied that “It is difficult to estimate demand when you have not met the demand,” as it effectively leaves Apple chasing a moving target.

Services Dominate the Rest of the Landscape

Apple had surprisingly little to say about its Services business this year, considering that it just grew by another 13.9%, reaching an all-time high of $30 billion.

To put that in perspective, the iPhone and Services together accounted for just over 80% of Apple’s revenue in the last quarter, dwarfing the other three product categories.

That’s not to say that the Mac, iPad, and Wearables aren’t doing well, as they still collectively accounted for $28.5 billion in revenue, but it’s also notable that the only one of those categories to grow was the iPad, and its 6.3% increase, while still quite respectable, was dwarfed by the double-digit growth in iPhone and Services.

Still, it’s worth keeping in mind that Apple only released a single new iPad during the quarter, the high-end M5 iPad Pro, so it’s likely most of the growth came from its older tablet lineup.