Bullbear Buffett : A summary and discussion of Apple’s income statements (2021 through Q2 2026)

Saturday, 6 June 2026

A summary and discussion of Apple’s income statements (2021 through Q2 2026)

This is a summary and discussion of Apple’s last five annual income statements (fiscal years 2021–2025) and its most recent five quarterly income statements (Q1 2025 through Q2 2026), based on the provided data. Apple’s fiscal year ends in September, and all figures are in USD millions.

**Five‑year annual income statement discussion (2021–2025)**

Over the five‑year period, Apple demonstrated resilience and profitability, even as revenue growth moderated. Total sales increased from $365.8 billion in 2021 to $416.2 billion in 2025, representing a compound annual growth rate of roughly 3.3%. The growth path was uneven: a strong 7.8% rise in 2022 was followed by a 2.8% decline in 2023, then a rebound to 2.0% growth in 2024 and 6.4% in 2025. More impressive than top‑line expansion was the consistent improvement in profitability. Gross profit margin climbed from 41.8% in 2021 to 46.9% in 2025, reflecting better product mix, cost control, and the growing contribution of high‑margin services. Operating expenses increased, particularly research and development, which rose from $21.9 billion to $34.6 billion over the five years – a 58% jump – signaling Apple’s commitment to innovation (e.g., silicon, AR/VR, AI). EBIT grew from $108.9 billion to $133.1 billion, with EBIT margin widening from 29.8% to 32.0%. Net income reached $112.0 billion in 2025, up 18% from 2021, although it dipped in 2023 and 2024 due to a combination of revenue softness and a sharp increase in income tax expense in 2024 (from $16.7 billion in 2023 to $29.7 billion in 2024). The effective tax rate in 2024 spiked to around 24%, likely because of deferred tax adjustments or foreign provisions, but normalized to roughly 15.6% in 2025. Diluted earnings per share rose from $5.61 to $7.46, a 33% increase that outpaced net income growth thanks to aggressive share repurchases – basic shares outstanding fell from 16.7 billion to 14.9 billion over the five years. By 2025, Apple’s net margin stood at 26.9%, and EBITDA margin at 34.8%, underscoring its ability to convert revenue into cash flow efficiently.

**Five‑quarter income statement discussion (Q1 2025 – Q2 2026)**

The quarterly data reveal strong seasonality and accelerating year‑over‑year growth in the most recent periods. Apple’s fiscal first quarter (ending December) is typically its largest, driven by holiday sales. In Q1 2026 (December 2025 quarter), revenue reached $143.8 billion, up 40.3% from the previous quarter (Q4 2025) and representing a significant jump. The following quarter, Q2 2026 (March 2026), saw revenue decline sequentially to $111.2 billion (‑22.7%), which is normal seasonal pattern. However, comparing Q2 2026 to the same quarter a year earlier (Q2 2025), revenue grew by 16.6% from $95.4 billion, and net income increased by 19.4% from $24.8 billion to $29.6 billion. Diluted EPS in Q2 2026 was $2.01, up 21.8% year‑over‑year from $1.65. This indicates that Apple’s underlying business momentum improved considerably as 2025 progressed into 2026. Gross profit margin remained exceptionally stable at 46.9% across all five quarters, demonstrating pricing power and operational consistency. Operating leverage is visible: SG&A expense as a percentage of revenue stayed low, while R&D (not separately shown quarterly) likely continued at elevated levels. The tax rate in the latest quarters normalized to around 17‑18% of pretax income, a sharp contrast to the anomalous 24% in full‑year 2024. Quarterly EBITDA margins held at 34.8%, reinforcing the durability of Apple’s profitability even through seasonal dips.

**Overall conclusions**

Apple has evolved into a mature, highly profitable company where margin expansion and capital return drive shareholder value more than rapid revenue growth. The annual data show a clear upward trend in gross, operating, and net margins, supported by disciplined cost management and a shift toward recurring services. The quarterly snapshot confirms that recent year‑over‑year growth has re‑accelerated, with double‑digit increases in revenue, net income, and EPS in the March 2026 quarter. While the company still faces risks – including modest top‑line CAGR, reliance on holiday quarter sales, and potential tax volatility – its financial fundamentals remain robust. Investors should watch for continued progress in R&D‑driven new categories and the sustainability of gross margins above 46%.

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My 18 points guide to Successfully compounding your money in Stocks

Be a good stock picker.
Think as a business owner.
Always look at value rather than the price. Do the homework.
Buy and hold is alright for selected stocks.
Compounding is your friend, get this to work its magic.
Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
Always buy a lot when the price is low.
Never buy when the stock is overpriced.
It is alright to buy when the selected stock is at a fair price.
Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the price is still obviously too high.
Do not time the market for such or any stocks.
By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
The downside risk is protected through only buying when the price is low or fairly priced.
Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.
Sell urgently when the company business fundamental has deteriorated irreversibly.
You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 16, you can do so leisurely.
In conclusion, a critical key to successful investing is in your stock picking ability.

http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html

11 Lessons From Peter Lynch

Peter Lynch taught me:

1. Behind every stock is a company. Find out what it’s doing.
2. Never invest in any idea you can’t illustrate with a crayon.
3. Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.
4. Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.
5. Time is on your side when you own shares of superior companies.
6. Owning stock is like having children. Don’t get involved with more than you can handle.
7. When the insiders are buying, it’s a good sign.
8. Unless you’re a short seller, it never pays to be pessimistic.
9. A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.
10. Everyone has the brainpower to make money in stocks. Not everyone has the stomach.
11. Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market. Success is about researching companies to identify those that are likely to report positive surprises.

Capital Expenditure

A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:
- fixed assets such as equipment, property, or industrial buildings
- fixing problems with an asset
- preparing an asset to be used in business
- restoring property
- starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%.

A great company with a Durable Competitive Advantage will have a ratio of less than 25%.

Less is better.

Benjamin Graham's 113 Wise Words

The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

Bullbear Buffett

Saturday, 6 June 2026

A summary and discussion of Apple’s income statements (2021 through Q2 2026)

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All equity security investments present a risk of loss of capital

The Ultimate Hold-versus-Sell Test

Some thoughts on Analysing Stocks (KISS)

Benjamin Graham

Sell the losers, let the winners run.

Investment Style

Warren Buffett

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