Apple Inc. 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Consolidated Statements of Operations for the years ended September 27, 2025, September 28, 2024 and September 30, 2023 29 Consolidated Statements of Comprehensive Income for the years ended September 27, 2025, September 28, 2024 and September 30, 2023 30 Consolidated Balance Sheets as of September 27, 2025 and September 28, 2024 31 Consolidated Statements of Shareholders’ Equity for the years ended September 27, 2025, September 28, 2024 and September 30, 2023 32 Consolidated Statements of Cash Flows for the years ended September 27, 2025, September 28, 2024 and September 30, 2023 33 Notes to Consolidated Financial Statements 34 Reports of Independent Registered Public Accounting Firm 49 All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes. Apple Inc. | 2025 Form 10-K | 28 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares, which are reflected in thousands, and per-share amounts) Years ended September 27, 2025 September 28, 2024 September 30, 2023 Net sales: Products $ 307,003 $ 294,866 $ 298,085 Services 109,158 96,169 85,200 Total net sales 416,161 391,035 383,285 Cost of sales: Products 194,116 185,233 189,282 Services 26,844 25,119 24,855 Total cost of sales 220,960 210,352 214,137 Gross margin 195,201 180,683 169,148 Operating expenses: Research and development 34,550 31,370 29,915 Selling, general and administrative 27,601 26,097 24,932 Total operating expenses 62,151 57,467 54,847 Operating income 133,050 123,216 114,301 Other income/(expense), net ( 321 ) 269 ( 565 ) Income before provision for income taxes 132,729 123,485 113,736 Provision for income taxes 20,719 29,749 16,741 Net income $ 112,010 $ 93,736 $ 96,995 Earnings per share: Basic $ 7.49 $ 6.11 $ 6.16 Diluted $ 7.46 $ 6.08 $ 6.13 Shares used in computing earnings per share: Basic 14,948,500 15,343,783 15,744,231 Diluted 15,004,697 15,408,095 15,812,547 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2025 Form 10-K | 29 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 27, 2025 September 28, 2024 September 30, 2023 Net income $ 112,010 $ 93,736 $ 96,995 Other comprehensive income/(loss): Change in foreign currency translation, net of tax ( 267 ) 395 ( 765 ) Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivative instruments 849 ( 832 ) 323 Adjustment for net (gains)/losses realized and included in net income ( 212 ) ( 1,337 ) ( 1,717 ) Total change in unrealized gains/losses on derivative instruments 637 ( 2,169 ) ( 1,394 ) Change in unrealized gains/losses on marketable debt securities, net of tax: Change in fair value of marketable debt securities 817 5,850 1,563 Adjustment for net (gains)/losses realized and included in net income 414 204 253 Total change in unrealized gains/losses on marketable debt securities 1,231 6,054 1,816 Total other comprehensive income/(loss) 1,601 4,280 ( 343 ) Total comprehensive income $ 113,611 $ 98,016 $ 96,652 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2025 Form 10-K | 30 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares, which are reflected in thousands, and par value) September 27, 2025 September 28, 2024 ASSETS: Current assets: Cash and cash equivalents $ 35,934 $ 29,943 Marketable securities 18,763 35,228 Accounts receivable, net 39,777 33,410 Vendor non-trade receivables 33,180 32,833 Inventories 5,718 7,286 Other current assets 14,585 14,287 Total current assets 147,957 152,987 Non-current assets: Marketable securities 77,723 91,479 Property, plant and equipment, net 49,834 45,680 Other non-current assets 83,727 74,834 Total non-current assets 211,284 211,993 Total assets $ 359,241 $ 364,980 LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts payable $ 69,860 $ 68,960 Other current liabilities 66,387 78,304 Deferred revenue 9,055 8,249 Commercial paper 7,979 9,967 Term debt 12,350 10,912 Total current liabilities 165,631 176,392 Non-current liabilities: Term debt 78,328 85,750 Other non-current liabilities 41,549 45,888 Total non-current liabilities 119,877 131,638 Total liabilities 285,508 308,030 Commitments and contingencies Shareholders’ equity: Common stock and additional paid-in capital, $ 0.00001 par value: 50,400,000 shares authorized; 14,773,260 and 15,116,786 shares issued and outstanding, respectively 93,568 83,276 Accumulated deficit ( 14,264 ) ( 19,154 ) Accumulated other comprehensive loss ( 5,571 ) ( 7,172 ) Total shareholders’ equity 73,733 56,950 Total liabilities and shareholders’ equity $ 359,241 $ 364,980 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2025 Form 10-K | 31 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In millions, except per-share amounts) Years ended September 27, 2025 September 28, 2024 September 30, 2023 Total shareholders’ equity, beginning balances $ 56,950 $ 62,146 $ 50,672 Common stock and additional paid-in capital: Beginning balances 83,276 73,812 64,849 Common stock issued 1,498 1,423 1,346 Common stock withheld related to net share settlement of equity awards ( 4,452 ) ( 3,993 ) ( 3,521 ) Share-based compensation 13,246 12,034 11,138 Ending balances 93,568 83,276 73,812 Accumulated deficit: Beginning balances ( 19,154 ) ( 214 ) ( 3,068 ) Net income 112,010 93,736 96,995 Dividends and dividend equivalents declared ( 15,413 ) ( 15,218 ) ( 14,996 ) Common stock withheld related to net share settlement of equity awards ( 1,655 ) ( 1,612 ) ( 2,099 ) Common stock repurchased ( 90,052 ) ( 95,846 ) ( 77,046 ) Ending balances ( 14,264 ) ( 19,154 ) ( 214 ) Accumulated other comprehensive loss: Beginning balances ( 7,172 ) ( 11,452 ) ( 11,109 ) Other comprehensive income/(loss) 1,601 4,280 ( 343 ) Ending balances ( 5,571 ) ( 7,172 ) ( 11,452 ) Total shareholders’ equity, ending balances $ 73,733 $ 56,950 $ 62,146 Dividends and dividend equivalents declared per share or RSU $ 1.02 $ 0.98 $ 0.94 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2025 Form 10-K | 32 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 27, 2025 September 28, 2024 September 30, 2023 Cash, cash equivalents, and restricted cash and cash equivalents, beginning balances $ 29,943 $ 30,737 $ 24,977 Operating activities: Net income 112,010 93,736 96,995 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 11,698 11,445 11,519 Share-based compensation expense 12,863 11,688 10,833 Other ( 89 ) ( 2,266 ) ( 2,227 ) Changes in operating assets and liabilities: Accounts receivable, net ( 6,682 ) ( 3,788 ) ( 1,688 ) Vendor non-trade receivables ( 347 ) ( 1,356 ) 1,271 Inventories 1,400 ( 1,046 ) ( 1,618 ) Other current and non-current assets ( 9,197 ) ( 11,731 ) ( 5,684 ) Accounts payable 902 6,020 ( 1,889 ) Other current and non-current liabilities ( 11,076 ) 15,552 3,031 Cash generated by operating activities 111,482 118,254 110,543 Investing activities: Purchases of marketable securities ( 24,407 ) ( 48,656 ) ( 29,513 ) Proceeds from maturities of marketable securities 40,907 51,211 39,686 Proceeds from sales of marketable securities 12,890 11,135 5,828 Payments for acquisition of property, plant and equipment ( 12,715 ) ( 9,447 ) ( 10,959 ) Other ( 1,480 ) ( 1,308 ) ( 1,337 ) Cash generated by investing activities 15,195 2,935 3,705 Financing activities: Payments for taxes related to net share settlement of equity awards ( 5,960 ) ( 5,441 ) ( 5,431 ) Payments for dividends and dividend equivalents ( 15,421 ) ( 15,234 ) ( 15,025 ) Repurchases of common stock ( 90,711 ) ( 94,949 ) ( 77,550 ) Proceeds from issuance of term debt, net 4,481 — 5,228 Repayments of term debt ( 10,932 ) ( 9,958 ) ( 11,151 ) Proceeds from/(Repayments of) commercial paper, net ( 2,032 ) 3,960 ( 3,978 ) Other ( 111 ) ( 361 ) ( 581 ) Cash used in financing activities ( 120,686 ) ( 121,983 ) ( 108,488 ) Increase/(Decrease) in cash, cash equivalents, and restricted cash and cash equivalents 5,991 ( 794 ) 5,760 Cash, cash equivalents, and restricted cash and cash equivalents, ending balances $ 35,934 $ 29,943 $ 30,737 Supplemental cash flow disclosure: Cash paid for income taxes, net $ 43,369 $ 26,102 $ 18,679 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2025 Form 10-K | 33 Apple Inc. Notes to Consolidated Financial Statements Note 1 – Summary of Significant Accounting Policies Basis of Presentation and Preparation The consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries. The preparation of these consolidated financial statements and accompanying notes in conformity with GAAP requires the use of management estimates. Certain prior period amounts in the notes to consolidated financial statements have been reclassified to conform to the current period’s presentation. The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first fiscal quarter of 2023. The Company’s fiscal years 2025 and 2024 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Recently Adopted Accounting Pronouncements Segment Reporting Beginning with the 2025 annual reporting period, the Company adopted the FASB’s ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires the Company to disclose segment expenses that are significant and regularly provided to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 requires the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The Company adopted ASU 2023-07 using a retrospective transition method. Revenue The Company records revenue net of taxes collected from customers that are remitted to governmental authorities. Share-Based Compensation The Company recognizes share-based compensation expense on a straight-line basis for its estimate of equity awards that will ultimately vest. Cash Equivalents All highly liquid investments with maturities of three months or less at the date of purchase are treated as cash equivalents. Trade Receivables Trade receivables are stated at transaction price. Marketable Securities The cost of securities sold is determined using the specific identification method. Inventories Inventories are measured using the first-in, first-out method. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation on property, plant and equipment is recognized on a straight-line basis. Apple Inc. | 2025 Form 10-K | 34 Derivative Instruments The Company presents derivative assets and liabilities at their gross fair values in the Consolidated Balance Sheets. Income Taxes The Company records certain deferred tax assets and liabilities in connection with the minimum tax on certain foreign earnings created by the TCJA. Leases The Company combines and accounts for lease and nonlease components as a single lease component for leases of corporate and retail facilities. Note 2 – Revenue The Company recognizes revenue at the amount to which it expects to be entitled when control of products or services is transferred to its customers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company’s Products net sales, control transfers when products are shipped. For the Company’s Services net sales, control transfers over time as services are delivered. Payment for Products and Services net sales is collected within a short period following transfer of control or commencement of delivery of services, as applicable. The Company records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the Company’s expectations and historical experience. For arrangements with multiple performance obligations, which represent promises within an arrangement that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). When available, the Company uses observable prices to determine SSPs. When observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, where applicable, prices charged by the Company for similar offerings, market trends in the pricing for similar offerings, product-specific business objectives and the estimated cost to provide the performance obligation. The Company has identified the performance obligations regularly included in arrangements involving the sale of iPhone, Mac and iPad. The first material performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered at the time of sale. The second material performance obligation is the right to receive certain product-related bundled services, which include iCloud ® , Siri ® and Maps. The Company allocates revenue and any related discounts to all of its performance obligations based on their relative SSPs. Because the Company lacks observable prices for product-related bundled services, the allocation of revenue is based on the Company’s estimated SSPs. Revenue allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product is shipped. Revenue allocated to product-related bundled services is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided. For certain long-term service arrangements, the Company has performance obligations for services it has not yet delivered. For these arrangements, the Company does not have a right to bill for the undelivered services. The Company has determined that any unbilled consideration relates entirely to the value of the undelivered services. Accordingly, the Company has not recognized revenue, and does not disclose amounts, related to these undelivered services. For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. For third-party applications sold through the App Store, the Company does not obtain control of the product before transferring it to the customer. Therefore, the Company accounts for all third-party application–related sales on a net basis by recognizing in Services net sales only the commission it retains. Apple Inc. | 2025 Form 10-K | 35 The following table shows disaggregated net sales, as well as the portion of total net sales that was previously deferred, for 2025, 2024 and 2023 (in millions): 2025 2024 2023 iPhone $ 209,586 $ 201,183 $ 200,583 Mac 33,708 29,984 29,357 iPad 28,023 26,694 28,300 Wearables, Home and Accessories 35,686 37,005 39,845 Services (1) 109,158 96,169 85,200 Total net sales $ 416,161 $ 391,035 $ 383,285 Portion of total net sales that was included in deferred revenue as of the beginning of the period $ 8,229 $ 7,728 $ 8,169 (1) Services net sales include amortization of the deferred value of services bundled in the sales price of certain products. The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 13, “Segment Information and Geographic Data” for 2025, 2024 and 2023, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales. As of September 27, 2025 and September 28, 2024, the Company had total deferred revenue of $ 13.7 billion and $ 12.8 billion, respectively. As of September 27, 2025, the Company expects 66 % of total deferred revenue to be realized in less than a year, 23 % within one-to-two years, 9 % within two-to-three years and 2 % in greater than three years. Note 3 – Earnings Per Share The following table shows the computation of basic and diluted earnings per share for 2025, 2024 and 2023 (net income in millions and shares in thousands): 2025 2024 2023 Numerator: Net income $ 112,010 $ 93,736 $ 96,995 Denominator: Weighted-average basic shares outstanding 14,948,500 15,343,783 15,744,231 Effect of dilutive share-based awards 56,197 64,312 68,316 Weighted-average diluted shares 15,004,697 15,408,095 15,812,547 Basic earnings per share $ 7.49 $ 6.11 $ 6.16 Diluted earnings per share $ 7.46 $ 6.08 $ 6.13 Approximately 24 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for 2023 because their effect would have been antidilutive. Apple Inc. | 2025 Form 10-K | 36 Note 4 – Financial Instruments Cash, Cash Equivalents and Marketable Securities The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of September 27, 2025 and September 28, 2024 (in millions): 2025 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Current Marketable Securities Non-Current Marketable Securities Cash $ 28,267 $ — $ — $ 28,267 $ 28,267 $ — $ — Level 1: Money market funds 5,272 — — 5,272 5,272 — — Mutual funds 679 177 ( 2 ) 854 — 854 — Subtotal 5,951 177 ( 2 ) 6,126 5,272 854 — Level 2 (1) : U.S. Treasury securities 16,074 56 ( 282 ) 15,848 1,190 3,712 10,946 U.S. agency securities 5,269 — ( 149 ) 5,120 251 2,456 2,413 Non-U.S. government securities 6,586 111 ( 424 ) 6,273 — 855 5,418 Certificates of deposit and time deposits 917 — — 917 904 — 13 Commercial paper 100 — — 100 50 50 — Corporate debt securities 47,210 266 ( 916 ) 46,560 — 10,623 35,937 Municipal securities 207 — ( 2 ) 205 — 119 86 Mortgage- and asset-backed securities 24,130 126 ( 1,252 ) 23,004 — 94 22,910 Subtotal 100,493 559 ( 3,025 ) 98,027 2,395 17,909 77,723 Total $ 134,711 $ 736 $ ( 3,027 ) $ 132,420 $ 35,934 $ 18,763 $ 77,723 2024 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Current Marketable Securities Non-Current Marketable Securities Cash $ 27,199 $ — $ — $ 27,199 $ 27,199 $ — $ — Level 1: Money market funds 778 — — 778 778 — — Mutual funds 515 105 ( 3 ) 617 — 617 — Subtotal 1,293 105 ( 3 ) 1,395 778 617 — Level 2 (1) : U.S. Treasury securities 16,150 45 ( 516 ) 15,679 212 4,087 11,380 U.S. agency securities 5,431 — ( 272 ) 5,159 155 703 4,301 Non-U.S. government securities 17,959 93 ( 484 ) 17,568 1,158 10,810 5,600 Certificates of deposit and time deposits 873 — — 873 387 478 8 Commercial paper 1,066 — — 1,066 28 1,038 — Corporate debt securities 65,622 270 ( 1,953 ) 63,939 26 16,027 47,886 Municipal securities 412 — ( 7 ) 405 — 190 215 Mortgage- and asset-backed securities 24,595 175 ( 1,403 ) 23,367 — 1,278 22,089 Subtotal 132,108 583 ( 4,635 ) 128,056 1,966 34,611 91,479 Total (2)(3) $ 160,600 $ 688 $ ( 4,638 ) $ 156,650 $ 29,943 $ 35,228 $ 91,479 (1) The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments, which generally have counterparties with high credit ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. (2) As of September 28, 2024, cash and cash equivalents included $ 2.6 billion held in escrow and restricted from general use. These restricted cash and cash equivalents were designated to settle the Company’s obligation related to the State Aid Decision (refer to Note 7, “Income Taxes”). (3) As of September 28, 2024, current marketable securities included $ 13.2 billion held in escrow and restricted from general use. These restricted marketable securities were designated to settle the Company’s obligation related to the State Aid Decision (refer to Note 7, “Income Taxes”). Apple Inc. | 2025 Form 10-K | 37 As of September 27, 2025, 80 % of the Company’s non-current marketable debt securities other than mortgage- and asset-backed securities had maturities between 1 and 5 years, 15 % between 5 and 10 years, and 5 % greater than 10 years. As of September 27, 2025, 13 % of the Company’s non-current mortgage- and asset-backed securities had maturities between 1 and 5 years, 14 % between 5 and 10 years, and 73 % greater than 10 years. The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies marketable debt securities as either current or non-current based on each instrument’s underlying maturity. Derivative Instruments and Hedging The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates. All derivative instruments are recorded in the Consolidated Balance Sheets at fair value. The accounting treatment for derivative gains and losses is based on intended use and hedge designation. Gains and losses arising from amounts that are included in the assessment of cash flow hedge effectiveness are initially deferred in accumulated other comprehensive income/(loss) and subsequently reclassified into earnings when the hedged transaction affects earnings, and in the same line item in the Consolidated Statements of Operations. Gains and losses arising from amounts that are included in the assessment of fair value hedge effectiveness are recognized in the Consolidated Statements of Operations line item to which the hedge relates along with offsetting losses and gains related to the change in value of the hedged item. For derivative instruments designated as cash flow and fair value hedges, amounts excluded from the assessment of hedge effectiveness are recognized on a straight-line basis over the life of the hedge in the Consolidated Statements of Operations line item to which the hedge relates. Changes in the fair value of amounts excluded from the assessment of hedge effectiveness are recognized in other comprehensive income/(loss). Gains and losses arising from changes in the fair values of derivative instruments that are not designated as accounting hedges are recognized in the Consolidated Statements of Operations. The Company classifies cash flows related to derivative instruments in the same section of the Consolidated Statements of Cash Flows as the items being hedged, which are generally classified as operating activities. Foreign Exchange Rate Risk To protect gross margins from fluctuations in foreign exchange rates, the Company may use forwards, options or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months. To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign exchange rates, the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of September 27, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency transactions is 17 years. The Company may also use derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies. Interest Rate Risk To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may use interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges. Apple Inc. | 2025 Form 10-K | 38 The notional amounts of the Company’s outstanding derivative instruments as of September 27, 2025 and September 28, 2024, were as follows (in millions): 2025 2024 Derivative instruments designated as accounting hedges: Foreign exchange contracts $ 62,647 $ 64,069 Interest rate contracts $ 12,875 $ 14,575 Derivative instruments not designated as accounting hedges: Foreign exchange contracts $ 109,079 $ 91,493 As of September 27, 2025 and September 28, 2024, the carrying amount of the Company’s current and non-current term debt subject to fair value hedges was $ 12.6 billion and $ 13.5 billion, respectively. Accounts Receivable Trade Receivables As of September 27, 2025, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 12 %. The Company’s third-party cellular network carriers accounted for 34 % and 38 % of total trade receivables as of September 27, 2025 and September 28, 2024, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit risk. Vendor Non-Trade Receivables The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. The Company does not reflect the sale of these components in products net sales. Rather, the Company recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As of September 27, 2025, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 46 % and 23 %. As of September 28, 2024, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 44 % and 23 %. Note 5 – Property, Plant and Equipment The following table shows the Company’s gross property, plant and equipment by major asset class and accumulated depreciation as of September 27, 2025 and September 28, 2024 (in millions): 2025 2024 Land and buildings $ 27,337 $ 24,690 Machinery, equipment and internal-use software 83,420 80,205 Leasehold improvements 15,091 14,233 Gross property, plant and equipment 125,848 119,128 Accumulated depreciation ( 76,014 ) ( 73,448 ) Total property, plant and equipment, net $ 49,834 $ 45,680 Depreciation expense on property, plant and equipment was $ 8.0 billion, $ 8.2 billion and $ 8.5 billion during 2025, 2024 and 2023, respectively. Apple Inc. | 2025 Form 10-K | 39 Note 6 – Consolidated Financial Statement Details The following tables show the Company’s consolidated financial statement details as of September 27, 2025 and September 28, 2024 (in millions): Other Non-Current Assets 2025 2024 Deferred tax assets $ 20,777 $ 19,499 Other non-current assets 62,950 55,335 Total other non-current assets $ 83,727 $ 74,834 Other Current Liabilities 2025 2024 Income taxes payable $ 13,016 $ 26,601 Accrued distribution and marketing 8,919 7,679 Other current liabilities 44,452 44,024 Total other current liabilities $ 66,387 $ 78,304 Note 7 – Income Taxes European Commission State Aid Decision On August 30, 2016, the Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (“State Aid Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward. The Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (“General Court”). On July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the Commission appealed the General Court’s decision to the European Court of Justice (“ECJ”). On September 10, 2024, the ECJ announced that it had set aside the 2020 judgment of the General Court and confirmed the Commission’s 2016 State Aid Decision. As a result, during the fourth quarter of 2024 the Company recorded a one-time income tax charge of $ 10.2 billion, net, which represented $ 15.8 billion payable to Ireland via release of amounts held in escrow, partially offset by a U.S. foreign tax credit of $ 4.8 billion and a decrease in unrecognized tax benefits of $ 823 million. Provision for Income Taxes and Effective Tax Rate The provision for income taxes for 2025, 2024 and 2023, consisted of the following (in millions): 2025 2024 2023 Federal: Current $ 11,487 $ 5,571 $ 9,445 Deferred ( 1,804 ) ( 3,080 ) ( 3,644 ) Total 9,683 2,491 5,801 State: Current 1,680 1,726 1,570 Deferred ( 139 ) ( 298 ) ( 49 ) Total 1,541 1,428 1,521 Foreign: Current 8,891 25,483 8,750 Deferred 604 347 669 Total 9,495 25,830 9,419 Provision for income taxes $ 20,719 $ 29,749 $ 16,741 Foreign pretax earnings were $ 82.0 billion, $ 77.3 billion and $ 72.9 billion in 2025, 2024 and 2023, respectively. Apple Inc. | 2025 Form 10-K | 40 A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate ( 21 % in 2025, 2024 and 2023) to income before provision for income taxes for 2025, 2024 and 2023 is as follows (dollars in millions): 2025 2024 2023 Computed expected tax $ 27,873 $ 25,932 $ 23,885 Earnings of foreign subsidiaries ( 8,120 ) ( 5,311 ) ( 5,744 ) Change in valuation allowance 2,091 — — Research and development credit, net ( 1,049 ) ( 1,397 ) ( 1,212 ) Impact of the State Aid Decision ( 486 ) 10,246 — Other 410 279 ( 188 ) Provision for income taxes $ 20,719 $ 29,749 $ 16,741 Effective tax rate 15.6 % 24.1 % 14.7 % Deferred Tax Assets and Liabilities As of September 27, 2025 and September 28, 2024, the significant components of the Company’s deferred tax assets and liabilities were as follows (in millions): 2025 2024 Deferred tax assets: Capitalized research and development $ 15,041 $ 10,739 Tax credit carryforwards 8,643 8,856 Accrued liabilities and other reserves 6,154 6,114 Deferred revenue 2,953 3,413 Lease liabilities 2,577 2,410 Other 3,049 3,341 Total deferred tax assets 38,417 34,873 Less: Valuation allowance ( 10,966 ) ( 8,866 ) Total deferred tax assets, net 27,451 26,007 Deferred tax liabilities: Depreciation 3,276 2,551 Right-of-use assets 2,300 2,125 Minimum tax on foreign earnings 1,217 1,674 Other 678 455 Total deferred tax liabilities 7,471 6,805 Net deferred tax assets $ 19,980 $ 19,202 As of September 27, 2025, the Company had $ 4.7 billion in foreign tax credit carryforwards in Ireland and $ 4.0 billion in California R&D credit carryforwards, both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary differences. Apple Inc. | 2025 Form 10-K | 41 Uncertain Tax Positions As of September 27, 2025, the total amount of gross unrecognized tax benefits was $ 23.2 billion, of which $ 10.6 billion, if recognized, would impact the Company’s effective tax rate. As of September 28, 2024, the total amount of gross unrecognized tax benefits was $ 22.0 billion, of which $ 10.8 billion, if recognized, would have impacted the Company’s effective tax rate. The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2025, 2024 and 2023 is as follows (in millions): 2025 2024 2023 Beginning balances $ 22,038 $ 19,454 $ 16,758 Increases related to tax positions taken during a prior year 1,971 1,727 2,044 Decreases related to tax positions taken during a prior year ( 71 ) ( 386 ) ( 1,463 ) Increases related to tax positions taken during the current year 3,795 2,542 2,628 Decreases related to settlements with taxing authorities ( 2,939 ) ( 1,070 ) ( 19 ) Decreases related to expiration of the statute of limitations ( 1,552 ) ( 229 ) ( 494 ) Ending balances $ 23,242 $ 22,038 $ 19,454 The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisd ictions. Tax years 2018 and after 2021 for the U.S. federal jurisdiction, and after 2014 in certain major foreign jurisdictions, remain subject to examination. Altho ugh the timing of resolution or closure of examinations is not certain, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease as much as $ 6 billion in the next 12 months. Note 8 – Leases The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases typically have original terms not exceeding 10 years and generally contain multiyear renewal options, some of which are reasonably certain of exercise. Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the underlying leased assets. Lease costs associated with fixed payments on the Company’s operating leases were $ 2.1 billion for 2025 and $ 2.0 billion for both 2024 and 2023. Lease costs associated with variable payments on the Company’s leases were $ 16.1 billion, $ 13.8 billion and $ 13.9 billion for 2025, 2024 and 2023, respectively. The Company made fixed cash payments related to operating leases of $ 2.1 billion in 2025 and $ 1.9 billion in both 2024 and 2023. Noncash activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $ 2.8 billion, $ 1.0 billion and $ 2.1 billion for 2025, 2024 and 2023, respectively. The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 27, 2025 and September 28, 2024 (in millions): Lease-Related Assets and Liabilities Financial Statement Line Items 2025 2024 Right-of-use assets: Operating leases Other non-current assets $ 11,205 $ 10,234 Finance leases Property, plant and equipment, net 1,033 1,069 Total right-of-use assets $ 12,238 $ 11,303 Lease liabilities: Operating leases Other current liabilities $ 1,579 $ 1,488 Other non-current liabilities 10,911 10,046 Finance leases Other current liabilities 538 144 Other non-current liabilities 692 752 Total lease liabilities $ 13,720 $ 12,430 Apple Inc. | 2025 Form 10-K | 42 Lease liability maturities as of September 27, 2025, are as follows (in millions): Operating Leases Finance Leases Total 2026 $ 1,967 $ 563 $ 2,530 2027 1,988 73 2,061 2028 1,848 51 1,899 2029 1,585 48 1,633 2030 1,381 43 1,424 Thereafter 5,956 801 6,757 Total undiscounted liabilities 14,725 1,579 16,304 Less: Imputed interest ( 2,235 ) ( 349 ) ( 2,584 ) Total lease liabilities $ 12,490 $ 1,230 $ 13,720 The weighted-average remaining lease term related to the Company’s lease liabilities as of September 27, 2025 and September 28, 2024 was 9.8 years and 10.3 years, respectively. The discount rate related to the Company’s lease liabilities as of September 27, 2025 and September 28, 2024 was 3.4 % and 3.1 %, respectively. The discount rates related to the Company’s lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined. As of September 27, 2025, the Company had $ 523 million of fixed payment obligations under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases are expected to commence between 2026 and 2027, with lease terms ranging from 1 year to 21 years. Note 9 – Debt Commercial Paper The Company issues unsecured short-term promissory notes pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of September 27, 2025 and September 28, 2024, the Company had $ 8.0 billion and $ 10.0 billion of commercial paper outstanding, respectively, with maturities generally less than nine months . The weighted-average interest rate of the Company’s commercial paper was 4.19 % and 5.00 % as of September 27, 2025 and September 28, 2024, respectively. The following table provides a summary of cash flows associated with commercial paper for 2025, 2024 and 2023 (in millions): 2025 2024 2023 Maturities 90 days or less: Proceeds from/(Repayments of) commercial paper, net $ ( 5,820 ) $ 3,960 $ ( 1,333 ) Maturities greater than 90 days: Proceeds from commercial paper 5,836 — — Repayments of commercial paper ( 2,048 ) — ( 2,645 ) Proceeds from/(Repayments of) commercial paper, net 3,788 — ( 2,645 ) Total proceeds from/(repayments of) commercial paper, net $ ( 2,032 ) $ 3,960 $ ( 3,978 ) Apple Inc. | 2025 Form 10-K | 43 Term Debt The Company has outstanding Notes, which are senior unsecured obligations with interest payable in arrears. The following table provides a summary of the Company’s term debt as of September 27, 2025 and September 28, 2024: Maturities (calendar year) 2025 2024 Amount (in millions) Effective Interest Rate Amount (in millions) Effective Interest Rate 2013 – 2023 debt issuances: Fixed-rate 0.000 % – 4.850 % notes 2025 – 2062 $ 86,781 0.03 % – 5.75 % $ 97,341 0.03 % – 6.65 % 2025 debt issuance: Fixed-rate 4.000 % – 4.750 % notes 2028 – 2035 4,500 4.07 % – 4.83 % — Total term debt principal 91,281 97,341 Unamortized premium/(discount) and issuance costs, net ( 309 ) ( 321 ) Hedge accounting fair value adjustments ( 294 ) ( 358 ) Total term debt 90,678 96,662 Less: Current portion of term debt ( 12,350 ) ( 10,912 ) Total non-current portion of term debt $ 78,328 $ 85,750 To manage interest rate risk on certain of its U.S. dollar–denominated fixed-rate notes, the Company uses interest rate swaps to effectively convert the fixed interest rates to floating interest rates on a portion of these notes. Additionally, to manage foreign exchange rate risk on certain of its foreign currency–denominated notes, the Company uses cross-currency swaps to effectively convert these notes to U.S. dollar–denominated notes. The effective interest rates for the Notes include the interest on the Notes, amortization of the discount or premium and, if applicable, adjustments related to hedging. The future principal payments for the Company’s Notes as of September 27, 2025, are as follows (in millions): 2026 $ 12,393 2027 10,078 2028 9,300 2029 5,235 2030 4,972 Thereafter 49,303 Total term debt principal $ 91,281 As of September 27, 2025 and September 28, 2024, the fair value of the Company’s Notes, based on Level 2 inputs, was $ 80.4 billion and $ 88.4 billion, respectively. Note 10 – Shareholders’ Equity Share Repurchase Program During 2025, the Company repurchased 402 million shares of its common stock for $ 89.3 billion. The Company’s share repurchase programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. Apple Inc. | 2025 Form 10-K | 44 Shares of Common Stock The following table shows the changes in shares of common stock for 2025, 2024 and 2023 (in thousands): 2025 2024 2023 Common stock outstanding, beginning balances 15,116,786 15,550,061 15,943,425 Common stock repurchased ( 401,672 ) ( 499,372 ) ( 471,419 ) Common stock issued, net of shares withheld for employee taxes 58,146 66,097 78,055 Common stock outstanding, ending balances 14,773,260 15,116,786 15,550,061 Note 11 – Share-Based Compensation 2022 Employee Stock Plan The Apple Inc. 2022 Employee Stock Plan (“2022 Plan”) is a shareholder-approved plan that provides for broad-based equity grants to employees, including executive officers, and permits the granting of RSUs, stock grants, performance-based awards, stock options and stock appreciation rights. RSUs granted under the 2022 Plan generally vest over four years , based on continued employment, and are settled upon vesting in shares of the Company’s common stock on a one -for-one basis. All RSUs granted under the 2022 Plan have dividend equivalent rights, which entitle holders of RSUs to the same dividend value per share as holders of common stock. A maximum of approximately 1.3 billion shares were authorized for issuance pursuant to 2022 Plan awards at the time the plan was approved on March 4, 2022. Restricted Stock Units A summary of the Company’s RSU activity and related information for 2025 is as follows: Number of RSUs (in thousands) Weighted-Average Grant-Date Fair Value Per RSU Balance as of September 28, 2024 163,326 $ 158.73 RSUs granted 73,466 $ 226.68 RSUs vested ( 76,845 ) $ 159.85 RSUs forfeited ( 8,373 ) $ 183.03 Balance as of September 27, 2025 151,574 $ 189.75 The weighted-average grant-date fair value of RSUs granted in 2024 and 2023 was $ 173.78 and $ 150.87 , respectively. The Company estimates the grant-date fair value of RSUs based on the closing price of the Company’s common stock on the date of grant. The total vesting-date fair value of RSUs was $ 17.1 billion, $ 15.8 billion and $ 15.9 billion for 2025, 2024 and 2023, respectively. The majority of RSUs that vested in 2025, 2024 and 2023 were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes, and remitted cash to the appropriate taxing authorities. Total payments to taxing authorities for employees’ tax obligations were $ 6.1 billion in 2025 and $ 5.6 billion in both 2024 and 2023. Share-Based Compensation The following table shows share-based compensation expense and the related income tax benefit included in the Consolidated Statements of Operations for 2025, 2024 and 2023 (in millions): 2025 2024 2023 Share-based compensation expense $ 12,863 $ 11,688 $ 10,833 Income tax benefit related to share-based compensation expense $ ( 3,602 ) $ ( 3,350 ) $ ( 3,421 ) As of September 27, 2025, the total unrecognized compensation cost related to outstanding RSUs was $ 21.8 billion, which the Company expects to recognize over a weighted-average period of 2.5 years. Apple Inc. | 2025 Form 10-K | 45 Note 12 – Commitments, Contingencies and Supply Concentrations Unconditional Purchase Obligations The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, licensed intellectual property and content, and distribution rights. Future payments under unconditional purchase obligations with a remaining term in excess of one year as of September 27, 2025, are as follows (in millions): 2026 $ 4,752 2027 3,708 2028 1,981 2029 1,306 2030 788 Thereafter 773 Total $ 13,308 Contingencies The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims. Concentrations in the Available Sources of Supply of Materials and Product Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers, tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage and significant commodity pricing fluctuations. Restrictions on international trade can increase the cost or limit the availability of the Company’s products and the components and rare earths and other raw materials that go into them. The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers’ yields have matured or their manufacturing capacities have increased. The Company has entered into agreements for the supply of many components; however, the Company may not be able to extend or renew agreements for the supply of components on similar terms, or at all, and may not be successful in obtaining sufficient quantities from its suppliers or in a timely manner, or in identifying and obtaining sufficient quantities from an alternative source. In addition, component suppliers may fail, be subject to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Company’s requirements, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms, or at all. Substantially all of the Company’s hardware products are manufactured by outsourcing partners that are located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam. Apple Inc. | 2025 Form 10-K | 46 Note 13 – Segment Information and Geographic Data The Company manages its business primarily on a geographic basis. The Company’s CEO is its CODM. The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia, New Zealand and those Asian countries not included in the Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic region. The CODM uses segment net sales and operating income information to make certain decisions, such as product and service pricing, and to decide how to allocate resources related to sales activities and marketing investments. Net sales for geographic segments are generally based on the location of customers and sales through the Company’s retail stores located in those geographic locations. Operating income for each segment consists of net sales to third parties, related cost of sales, and operating expenses directly attributable to the segment. The information provided to the CODM for purposes of making decisions and assessing segment performance excludes asset information. The following tables show information by reportable segment for 2025, 2024 and 2023 (in millions): 2025 Americas Europe Greater China Japan Rest of Asia Pacific Corporate Total Net sales $ 178,353 $ 111,032 $ 64,377 $ 28,703 $ 33,696 $ — $ 416,161 Cost of sales ( 95,699 ) ( 58,617 ) ( 35,141 ) ( 13,779 ) ( 17,724 ) — ( 220,960 ) Research and development — — — — — ( 34,550 ) ( 34,550 ) Selling and marketing ( 10,174 ) ( 4,676 ) ( 2,319 ) ( 969 ) ( 1,386 ) — ( 19,524 ) General and administrative — — — — — ( 8,077 ) ( 8,077 ) Operating income/(loss) $ 72,480 $ 47,739 $ 26,917 $ 13,955 $ 14,586 $ ( 42,627 ) $ 133,050 2024 Americas Europe Greater China Japan Rest of Asia Pacific Corporate Total Net sales $ 167,045 $ 101,328 $ 66,952 $ 25,052 $ 30,658 $ — $ 391,035 Cost of sales ( 89,587 ) ( 55,197 ) ( 37,519 ) ( 11,744 ) ( 16,305 ) — ( 210,352 ) Research and development — — — — — ( 31,370 ) ( 31,370 ) Selling and marketing ( 9,802 ) ( 4,341 ) ( 2,351 ) ( 854 ) ( 1,291 ) — ( 18,639 ) General and administrative — — — — — ( 7,458 ) ( 7,458 ) Operating income/(loss) $ 67,656 $ 41,790 $ 27,082 $ 12,454 $ 13,062 $ ( 38,828 ) $ 123,216 2023 Americas Europe Greater China Japan Rest of Asia Pacific Corporate Total Net sales $ 162,560 $ 94,294 $ 72,559 $ 24,257 $ 29,615 $ — $ 383,285 Cost of sales ( 92,394 ) ( 54,101 ) ( 39,787 ) ( 11,542 ) ( 16,313 ) — ( 214,137 ) Research and development — — — — — ( 29,915 ) ( 29,915 ) Selling and marketing ( 9,658 ) ( 4,095 ) ( 2,444 ) ( 827 ) ( 1,236 ) — ( 18,260 ) General and administrative — — — — — ( 6,672 ) ( 6,672 ) Operating income/(loss) $ 60,508 $ 36,098 $ 30,328 $ 11,888 $ 12,066 $ ( 36,587 ) $ 114,301 Apple Inc. | 2025 Form 10-K | 47 The following tables show net sales for 2025, 2024 and 2023 and long-lived assets as of September 27, 2025 and September 28, 2024 for countries that individually accounted for 10% or more of the respective totals, as well as aggregate amounts for the remaining countries (in millions): 2025 2024 2023 Net sales: U.S. $ 151,790 $ 142,196 $ 138,573 China (1) 64,377 66,952 72,559 Other countries 199,994 181,887 172,153 Total net sales $ 416,161 $ 391,035 $ 383,285 2025 2024 Long-lived assets: U.S. $ 40,274 $ 35,664 China (1) 3,617 4,797 Other countries 5,943 5,219 Total long-lived assets $ 49,834 $ 45,680 (1) China includes Hong Kong and Taiwan. Apple Inc. | 2025 Form 10-K | 48 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Apple Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Apple Inc. (the “Company”) as of September 27, 2025 and September 28, 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended September 27, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at September 27, 2025 and September 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 27, 2025, in conformity with U.S. generally accepted accounting principles (“GAAP”). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of September 27, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated October 31, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Uncertain Tax Positions Description of the Matter As discussed in Note 7 to the financial statements, the Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. As of September 27, 2025, the total amount of gross unrecognized tax benefits was $23.2 billion, of which $10.6 billion, if recognized, would impact the Company’s effective tax rate. In accounting for some of the uncertain tax positions, the Company uses significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws. Auditing management’s evaluation of whether an uncertain tax position is more likely than not to be sustained and the measurement of the benefit of various tax positions can be complex, involves significant judgment, and is based on interpretations of tax laws. Apple Inc. | 2025 Form 10-K | 49 How We Addressed the Matter in Our Audit We tested controls relating to the evaluation of uncertain tax positions, including controls over management’s assessment as to whether tax positions are more likely than not to be sustained, management’s process to measure the benefit of its tax positions that qualify for recognition, and the related disclosures. We evaluated the Company’s assessment of which tax positions are more likely than not to be sustained and the related measurement of the amount of tax benefit that qualifies for recognition. Our audit procedures included, among others, reading and evaluating management’s assumptions and analysis, and, as applicable, the Company’s communications with taxing authorities, that detailed the basis and technical merits of the uncertain tax positions. We involved our tax subject matter resources in assessing the technical merits of certain of the Company’s tax positions based on our knowledge of relevant tax laws and experience with related taxing authorities. In addition, we evaluated the Company’s disclosure in relation to these matters included in Note 7 to the financial statements. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2009. San Jose, California October 31, 2025 Apple Inc. | 2025 Form 10-K | 50 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Apple Inc. Opinion on Internal Control Over Financial Reporting We have audited Apple Inc.’s internal control over financial reporting as of September 27, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”). In our opinion, Apple Inc. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of September 27, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of September 27, 2025 and September 28, 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended September 27, 2025, and the related notes and our report dated October 31, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP San Jose, California October 31, 2025 Apple Inc. | 2025 Form 10-K | 51 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.