AAPL 10-K filed 2026-11-03 | Key takeaways
AAPL filed its 10-K; the most relevant disclosure change is expanded Research and development expense: R&D expense increased 32% to $45.765 billion during 2026 compared to 2025, driven by higher infrastructure-related costs including investments in artificial intelligence, and headcount-related expenses. Customer concentration: Customer One (unnamed) represented 13% of accounts_receivable; Cellular network carriers represented 33% of accounts_receivable.
Key takeaways
Revenue: Full-year net sales of $478.834 billion, up 15% year-over-year, with iPhone sales of $254.098 billion (+21%), Services at $123.301 billion (+13%), and Mac at $37.929 billion (+13%).
R&D investment: R&D expense increased 32% to $45.765 billion, driven by higher infrastructure-related costs including AI investments, and headcount-related expenses.
Capital return: The company repurchased $85.8 billion of common stock and paid dividends of $15.7 billion during FY2026; a new $100 billion repurchase program was announced in April 2026.
Legal developments: EU Commission fined Apple €500 million for DMA noncompliance; Epic Games injunction upheld in part by Ninth Circuit with Supreme Court review granted; DOJ antitrust lawsuit ongoing.
Customer concentration: One customer represented 13% of trade receivables (vs 12% prior year); cellular network carriers accounted for 33% of trade receivables.
Vendor concentration: Two vendors accounted for 45% and 27% of vendor non-trade receivables as of September 26, 2026 (vs 46% and 23% prior year).
Key metrics
Customer concentration
Disclosure changes
- Research and development expense
R&D expense increased 32% to $45.765 billion during 2026 compared to 2025, driven by higher infrastructure-related costs including investments in artificial intelligence, and headcount-related expenses.
The 32% increase in R&D spending reflects Apple's significant investment in AI infrastructure and capabilities, which may impact future product differentiation and competitive positioning. - EU Digital Markets Act compliance
On April 23, 2025, the European Commission fined Apple €500 million in the Article 5(4) Investigation and issued a cease and desist order requiring removal of technical and commercial restrictions preventing developers from steering users to alternative distribution channels. The company has appealed and continues to make changes to its DMA compliance plan.
The €500 million fine and ongoing DMA compliance requirements may impact Apple's App Store business model and revenue from European developers. - Epic Games litigation
Ninth Circuit upheld the 2025 Injunction in part in December 2025, allowing Apple to require parity in size, form and placement between in-app purchase and external links, and permitting some commission on link-out purchases. Apple filed Supreme Court petition in May 2026; Supreme Court granted petition in June 2026 to review the applicable legal standard for civil contempt.
Continued litigation uncertainty around App Store payment policies in the U.S. could affect services revenue if restrictive remedies are ultimately imposed. - Tariff refunds
Apple applied for refund of tariffs paid following Supreme Court ruling striking down certain tariffs under IEEPA in February 2026, and recognized refunds received as a reduction of products cost of sales, positively impacting gross margin.
Tariff refunds contributed to improved products gross margin in FY2026; future refund eligibility remains uncertain. - Share repurchase programs
In April 2026, Apple announced a new $100 billion share repurchase program. During FY2026, the company repurchased $85.8 billion of common stock, including $10 billion ASR in May 2026 that delivered 33 million shares at average price of $305.29. Remaining availability under May 2025 program was $14.0 billion.
Aggressive share repurchase activity continues to reduce share count and support EPS growth. - Supply chain and component constraints
Apple disclosed experiencing supply constraints and rising costs driven by industry-wide supply-demand imbalances for key components including advanced semiconductors, memory and storage, with expectations that these trends will intensify. The company also disclosed dependency on third-party cloud providers for AI compute and storage capacity, noting limited provider options and constrained supply.
Escalating component costs and AI infrastructure constraints could pressure gross margins and limit product availability.
Primary source
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