Apple continued to see sales in its flagship iPhone family balloon, while the tech giant’s services business hit a new all-time high, in the first earnings report under CEO John Ternus.

Apple’s Services segment revenue of $31.57 billion — a new record — was up 9.8%. But that’s slower growth than in the first two quarters of 2026 (which saw 16.3% and 12.4% year-over-year increases) and the September 2025 quarter (15% growth). In addition, Apple said services revenue is projected to rise 8%-9% in the year-end 2026 quarter, indicating further deceleration. The Services segment includes the App Store, Apple TV, Apple Music, Apple Pay, AppleCare, iCloud and advertising.

”Apple’s 12-quarter streak of double-digit Services growth ended in September, and growth will slow further in the December quarter,” LightShed Partners analysts Walter Piecyk and Joe Galone wrote in a research note Monday. Investors hoped that Siri AI would get customers to spend more on Services without Apple having to match its peers’ AI capex. Ternus suggested Apple could charge for expanded access to “server-side features of Siri AI and Apple Intelligence.” But while Apple’s massive installed base gives Siri “a good shot at being the first assistant people try” if they haven’t already settled on another AI, the analysts questioned why consumers would “pay for it let alone use it if the alternatives work better.”

For the September quarter, Apple posted total quarterly revenue of $114.5 billion, up 12% year over year. Overall gross margin was 47.9 percent, including a favorable impact of approximately one percentage point from tariff refunds, after the Supreme Court invalidated Trump’s tariffs. Diluted earnings per share came in at $2.10, up 14% year over year, and included a favorable impact of $0.05 from tariff refunds. The financial results were for Apple’s fiscal 2026 fourth quarter ended Sept. 26, 2026.

Sales of iPhone reached a September-quarter record and Services hit an all-time high, “capping off our best fiscal year ever,” Ternus said in a statement. Total iPhone revenue of $57.58 billion increased 17%.

Ternus was Apple’s head of hardware before taking over the CEO role from Tim Cook as of Sept. 1. He said the tech giant is “closing the year with our most ambitious lineup yet,” citing the foldable iPhone Duo, alongside iPhone 18 Pro and iPhone 18 Pro Max. “We also just introduced a whole new generation of hardware for the home and brought Touch to Mac for the first time. Together with the all-new Siri AI, it’s an incredible lineup to carry us into the holiday season,” Ternus said.

Apple CFO Kevan Parekh said on the earnings call that it expects total revenue for the December 2026 quarter to increase 7%-10% on a year-over-year basis — lower than analyst forecasts.