Apple Inc. (AAPL) — Fundamental Analysis

Snapshot & Big Picture

Apple Inc. is one of the world's largest companies by market capitalization, designing and selling consumer electronics, software, and services. Its product ecosystem — anchored by the iPhone but increasingly supported by services such as the App Store, Apple Music, and iCloud — has driven steady revenue and margin expansion over the past several years. The most recent full fiscal year (ending September 27, 2025) reported revenue of $416.2 billion, with an EBITDA of $144.7 billion, representing another step up from the prior year's $391.0 billion in revenue. The numbers below draw on annual 10-K filings going back to fiscal year 2019, as well as the most recent quarterly 10-Q for the period ending March 28, 2026.

Latest Quarter Snapshot (Q2 FY2026, period ending March 28, 2026)

The most recent data available — and the most current picture of Apple's business — comes from the 10-Q filed May 1, 2026, covering the quarter ended March 28, 2026. This is more current than the annual figures and reflects conditions after the fiscal year 2025 close.

The quarterly gross margin of 49.3% is the highest figure in this dataset, suggesting Apple's services mix and pricing power continue to lift margins above prior annual averages. The debt-to-equity ratio of 0.78 is notably lower than recent annual readings, indicating ongoing debt reduction or equity growth. The current ratio of 1.07 has also recovered above 1.0, a slight improvement over recent annual figures.

Profitability

Apple's profitability metrics have shown a clear and consistent upward trend across the multi-year period covered in the annual filings.

Gross margin has expanded from 38.2% in FY2020 to 46.9% in FY2025 — a gain of nearly 9 percentage points over five years. This reflects the growing contribution of Apple's higher-margin Services segment relative to hardware. Operating margin followed a similar path, rising from 24.1% to 32.0% over the same period, with a slight dip in FY2023 likely tied to softer iPhone demand and macro headwinds. Net margin dipped modestly in FY2024 to 24.0% before recovering to 26.9% in FY2025. The quarterly data (49.3% gross margin, 32.3% operating margin, 26.6% net margin for Q2 FY2026) suggests this upward trajectory is continuing into the current fiscal year.

Financial Health

Apple's balance sheet reflects a company with significant leverage relative to book equity, though its cash generation is strong enough to comfortably service that debt. The current ratio has generally remained below 1.0 on an annual basis in recent years — meaning current liabilities exceed current assets — which is common for large companies that efficiently deploy cash through buybacks and dividends rather than holding excess liquidity.

Leverage: Debt-to-equity peaked at 2.17 in FY2022 and has declined meaningfully since, reaching 1.23 in FY2025 and a notably low 0.78 in the most recent quarter. This suggests Apple has been actively reducing net debt or growing its equity base, which is a positive signal for balance sheet health.

Capital Expenditures: Annual CapEx has ranged from $7.3 billion (FY2020) to $12.7 billion (FY2025), while the CapEx-to-revenue ratio has remained tightly contained in a band of roughly 2.4% to 3.1% across all annual periods. The FY2025 figure of $12.7 billion (3.1% of revenue) is the highest absolute dollar amount in the dataset, though the ratio is not unusually elevated. The quarterly CapEx-to-revenue of 2.1% for Q2 FY2026 is at the lower end of the historical range. Overall, Apple's capital intensity is low and relatively stable, consistent with a business model that relies more on intellectual property, software ecosystems, and outsourced manufacturing than on heavy physical infrastructure. This means Apple can generate substantial free cash flow relative to earnings — a structural advantage that supports ongoing buybacks and dividend payments.

Growth

The table below shows Apple's trailing revenue CAGR over three, five, and ten fiscal years, as pre-calculated from the annual filing data.

The stark contrast between the 3-year CAGR of 1.8% and the 5-year CAGR of 8.7% highlights that Apple's revenue growth slowed considerably in the FY2022–FY2025 window, a period that included a revenue contraction in FY2023 and only modest recovery in FY2024. The 10-year CAGR of 22.7% is elevated in part because the start period (June 2019) captures a single quarter rather than a full fiscal year, which creates a lower base. Still, the broad trajectory confirms that Apple compounded revenue at a strong pace over the longer arc, even as near-term growth has moderated toward low single digits.

Plain English Summary

Apple is a highly profitable, cash-generative business with improving margins and a gradually strengthening balance sheet. Its gross margin has expanded by nearly 9 percentage points over five years — largely because software and services carry higher margins than iPhones and MacBooks — and the latest quarterly data suggests that trend is still intact, with gross margins pushing close to 50%. Revenue growth, however, has cooled sharply in the most recent three-year window, coming in at just 1.8% annualized as the company works through a period of market saturation in its core hardware categories. Capital spending is low relative to revenue (consistently around 2–3%), which means Apple converts a large share of its profits into free cash flow rather than needing to reinvest heavily in factories or infrastructure. Leverage has been declining from its peak, and the most recent quarter shows a debt-to-equity ratio well below 1.0 — a notable improvement. In short, Apple looks financially healthy and increasingly profitable, but investors focused on growth will note that the company's top-line expansion has slowed meaningfully, and future re-acceleration likely depends on new product categories or continued Services growth.

Source Filings

• Form 10-Q — Filed May 1, 2026 (Period ending March 28, 2026)
• Form 10-Q — Filed January 30, 2026 (Period ending December 27, 2025)