The Annex: Apple's warehouse holds $14.5 billion, two and a half times last year's

The document. Apple’s results for the fiscal quarter to 26 September came out on Monday at 22:30 our time: revenue of $114.5 billion, up 12% on a year earlier, and earnings per share of $2.10¹. The press release has the quotes. The three pages of condensed statements attached to it have the more useful lines².

The line. Inventories stood at $14.54 billion on 26 September, against $5.72 billion a year earlier². Desk arithmetic: that is about 2.5 times as much, an extra $8.8 billion of components and finished goods. On the call, chief executive John Ternus said memory pricing was “unprecedented”⁴, and told CNBC that higher memory costs were “partly offset by the benefit of carrying inventory and lower costs on non-memory components”³. Apple does not say in these pages what the warehouse holds. The two statements fit together, and we leave it there.

The lines around it. Spending on research and development was $11.73 billion in the quarter, against $8.87 billion a year earlier². Desk arithmetic: up 32%, much faster than revenue. Capital expenditure was $2.24 billion, below the $3.33 billion analysts had expected, CNBC reports, a long way from the hyperscalers’ bills³. Greater China sales rose to $17.54 billion from $14.49 billion, up 21%, even though they came in below analysts’ estimates^2,3,4. Services grew to $31.57 billion; desk arithmetic: up 9.8%, which CNBC calls the slowest growth since 2022^2,3.

What it means for the next quarter. Gross margin was 47.9%, including about one point from tariff refunds¹. For the December quarter, Apple guided to a margin of 45% to 46% and revenue growth of 7% to 10%³. The shares fell about 3% in extended trading³. Prices had already risen: Apple raised them across the board in June, iPhones by $100³.

The constructive reading. In a component squeeze, the company with the balance sheet to buy early is buying time as well as parts. Stock runs down, though, and the gross-margin guidance shows where the price of the next batch turns up. Nothing here is investment advice.