Apple CEO John Ternus Reports Revenue Growth Amid Rising Memory Chip Costs

Apple CEO John Ternus reported revenue growth in his first earnings call on Monday, even as the technology giant faces significant financial pressure from surging memory chip costs and supply chain constraints.

The company posted fiscal fourth-quarter revenue of $114.5 billion, surpassing analyst estimates of $113.46 billion, while earnings per share reached $2.10, according to data from LSEG.

Despite the overall revenue beat, Apple reported a decline in iPad sales and missed revenue targets in China, while its gross margin forecast for the upcoming quarter trailed analyst expectations.

These results arrive as the company navigates a volatile market for computer components, which has already forced price increases across its hardware lineup earlier this year.

"What we’re seeing with memory pricing right now is unprecedented," said John Ternus, the Apple CEO who succeeded Tim Cook in September.

Ternus told investors that the company expects memory costs to continue rising through the December quarter, a trend that will likely impact future profitability despite recent price adjustments.

Apple’s inventory of components grew to $14.54 billion during the quarter, a 31.1 percent increase from the previous three-month period, as the company stockpiles parts to secure its supply chain.

The company’s services business, which includes the App Store and iCloud, grew by less than 10 percent, marking the slowest expansion for the division since 2022.

While iPhone revenue climbed 17 percent, the quarterly results included only eight days of sales for the new iPhone 18 Pro, and the foldable iPhone Duo did not launch until October.

Some users have reported cracks and lines on the inner display of the new iPhone Duo, which starts at $1,999, according to reports cited by The Hindu.

Apple has begun offering replacements for the affected devices, though IDC analyst Nabila Popal said she expects demand for the foldable phone to continue exceeding supply.

Looking ahead, Apple executives provided a revenue growth forecast of 7 percent to 10 percent for the December quarter, signaling that the company remains confident in its holiday product lineup.

"I think at this point, with everything we've achieved, it just feels like we've never been more confident that the best is yet to come," said Ternus.

The primary question for investors remains whether Apple can successfully pass rising production costs to consumers without dampening demand for its new flagship devices and services.