Apple Inventory Rises as Annual Operating Cash Flow Climbs

Apple (AAPL ) announced its fiscal fourth-quarter results on November 2, 2026, reporting a much larger inventory balance alongside higher sales and earnings. The accompanying financial statements put inventories at $14.541 billion on September 26, compared with $5.718 billion a year earlier.

The balance stood at $11.092 billion on June 27, Apple’s prior-quarter statements show. The September figure therefore represents increases of approximately 154% year over year and 31% sequentially, each calculated from the reported balances. Inventory changes used $8.905 billion of cash during fiscal 2026, after providing $1.4 billion in fiscal 2025. That swing appears within operating activities, connecting the build directly to the year’s cash generation. The statements do not break inventory down by product or component, so they do not establish what caused the increase.

Revenue and Earnings Increase

Quarterly revenue increased to $114.477 billion from $102.466 billion a year earlier, while net income rose to $30.711 billion from $27.466 billion. Diluted earnings per share increased 14% to $2.10. Operating income reached $35.631 billion, compared with $32.427 billion.

Reported gross margin was 47.9%, including an approximately one-percentage-point benefit from tariff refunds, while diluted EPS included a $0.05 refund benefit. The preceding quarter’s release reported a 50.1% gross margin with an approximately two-percentage-point refund benefit. The sequential comparison therefore spans different levels of tariff-refund support, an important qualification when assessing the change in reported profitability.

iPhone revenue rose to $57.583 billion from $49.025 billion, while Services revenue increased to $31.573 billion from $28.750 billion. Mac revenue climbed to $10.792 billion from $8.726 billion. iPad revenue declined to $6.229 billion from $6.952 billion, and Wearables, Home and Accessories fell to $8.300 billion from $9.013 billion, leaving growth uneven across Apple’s sales categories.

Cash Generation Rises Despite Inventory Use

For fiscal 2026 as a whole, revenue totaled $478.834 billion, up from $416.161 billion. Operating cash flow rose to $145.097 billion from $111.482 billion, even as inventory changes absorbed cash. That is a $33.615 billion increase, calculated as the difference between the two reported annual totals. The annual result is important context for the balance-sheet increase: Apple ended the year with far more inventory but also generated substantially more cash from its operations.

Chief financial officer Kevan Parekh said Apple generated $28 billion in operating cash flow during the September quarter and returned the same amount to shareholders.

The results leave a clear question for the coming quarters: how quickly the larger inventory balance converts into sales. Fiscal 2026 demonstrates that Apple could absorb the build while increasing annual operating cash flow; subsequent balance sheets will show whether inventory continues to tie up cash at the same scale as the latest hardware lineup reaches holiday-season customers.