Apple said tariff refunds added $0.05 to its diluted earnings per share of $2.10 in the quarter ended 26 September, after adding $0.11 in the June quarter, according to the fourth-quarter results it filed with the SEC on 2 November. That is $0.16 a share across the two quarters. Multiplying each figure by that quarter’s diluted share count, the refunds were worth about $2.35 billion of net income, our arithmetic.
Apple put company gross margin at 47.9%, “including a favorable impact of approximately 1 percentage point from tariff refunds”. Without that point, margin was about 46.9%, by our arithmetic, against about 48.1% on the same basis in the June quarter and 49.3% in the March quarter, for which Apple’s release reported no refund impact. A year earlier, in the September 2025 quarter, gross margin was 47.2%.
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The key insight: By our arithmetic, tariff refunds accounted for about $0.16 of the $1.52 rise in Apple’s fiscal 2026 diluted earnings per share, from $7.46 to $8.98, roughly a tenth of the increase.
Update, 2 Nov: Apple says it has received the vast majority of its tariff refunds. Parekh said on the call: “As of the September quarter, we have received the vast majority of the refunds related to tariffs paid.” He also said that “when you remove the tariff refunds from both the June and September quarter, both company and product’s gross margin would be down about one point sequentially, primarily driven by higher memory costs”, per the Six Colors transcript. For the December quarter he guided gross margin to 45% to 46%, which he said “includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI”; he said the outlook assumes that global tariff rates, policies and their application remain in effect as of the call. Our piece on the outlook.
Apple’s 10-Q for the June quarter explains the source. It says that on 20 February 2026 the U.S. Supreme Court “issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977”.
The same filing says Apple “has applied for a refund of tariffs paid, following the processes established by U.S. Customs and Border Protection, and has recognized any refunds received as a reduction of products cost of sales”. That is why the refunds show up in gross margin rather than as a separate line.
In its March-quarter 10-Q, filed in May, the wording was that Apple “is applying for a refund of tariffs paid”, with no refund impact in that quarter’s release. The June-quarter release was the first of Apple’s fiscal 2026 releases to state one.
Both 10-Qs also list newer tariff measures: the March filing mentions “the imposition of tariffs under Section 122 of the Trade Act of 1974”, and the June filing “the recent imposition of tariffs under Section 301 of the Trade Act of 1974”.
Apple’s gross margin as a share of revenue, September 2025 quarter to September 2026 quarter: as reported, and excluding the approximate tariff refund impact Apple stated in its releases (about 2 percentage points in the June quarter and 1 point in the September quarter). Reported figures from Apple’s 10-Q filings and, for the September quarters, our arithmetic from its statements; the ex-refund line is our arithmetic and approximate.Animated: Apple’s gross margin excluding the tariff refund impact it stated, September 2025 quarter to September 2026 quarter. The ex-refund figures for the June and September 2026 quarters are our arithmetic and approximate, because Apple gives the refund effect as approximately 2 and 1 percentage points.
The Margin Without the Refunds
In the June quarter Apple reported gross margin of 50.1%, “including a favorable impact of approximately 2 percentage points from tariff refunds”. Taking those points out gives about 48.1%. In the September quarter the same step gives about 46.9%, our arithmetic.
On that basis margin fell in each of the last two quarters, from 49.3% in March, while the reported figure rose to 50.1% and then fell to 47.9%. Because Apple gives the refund effect only as “approximately” 1 or 2 points, the ex-refund figures are approximate.
The June-quarter 10-Q says products gross margin rose “primarily due to a different mix of products and tariff refunds, partially offset by higher costs, including memory”. Apple’s 10-K for fiscal 2026 had not been filed when we read the release.
Earnings Growth With and Without the Refunds
Apple reported September-quarter diluted earnings per share of $2.10, up 14% from $1.85. Excluding the $0.05 refund impact, earnings per share were $2.05, up 11%, our arithmetic.
In the June quarter Apple reported $2.02, up 29% from $1.57. Excluding the $0.11 refund impact, the figure was $1.91, up 22%, our arithmetic.
For fiscal 2026 Apple reported diluted earnings per share of $8.98, against $7.46. Subtracting the two quarterly refund impacts gives about $8.82, up 18% rather than 20%, our arithmetic. Apple’s release does not give a full-year refund figure.
What Apple Said About Tariffs Before the Refunds
Before the refunds, Apple’s filings described tariffs as a cost. Its 10-K for fiscal 2025 says products gross margin percentage decreased “primarily due to a different mix of products and tariff costs, partially offset by other favorable costs”.
Its 10-Q for the December 2025 quarter says products gross margin rose “primarily due to a different mix of products, partially offset by tariff costs”. In the four filings we searched, the fiscal 2025 10-K and the three fiscal 2026 10-Qs, tariffs are described in words, with no dollar figure attached, by our reading.
As we read it, the refunds moved Apple’s reported margin in the opposite direction to the underlying one in the June quarter: reported margin rose to 50.1% while the ex-refund figure, about 48.1% by our arithmetic, was below the March quarter’s 49.3%.
As we read it, the refund effect roughly halved between the two quarters, from about 2 points of margin and $0.11 a share to about 1 point and $0.05, according to Apple’s releases; the releases do not say why.
As we read it, the accounting choice matters for how the numbers look: Apple books the refunds as a reduction of products cost of sales, so they sit inside gross margin rather than below it, according to its June-quarter 10-Q.
Apple Q4 FY2026 earnings release, 2 November 2026
“Company gross margin was 47.9 percent, including a favorable impact of approximately 1 percentage point from tariff refunds”
Three Implications
FOR READERS OF APPLE’S MARGINS Apple reported 47.9% gross margin for the September quarter; excluding the refund point it states, the figure is about 46.9%, by our arithmetic.
FOR READERS OF APPLE’S EARNINGS GROWTH Diluted earnings per share rose 14%, according to Apple; excluding the $0.05 refund impact the rise was 11%, by our arithmetic.
FOR TRACKING THE TARIFF FILE Apple’s June-quarter 10-Q says it has applied for refunds of tariffs struck down by the Supreme Court on 20 February 2026 and lists newer tariffs under Section 301 of the Trade Act of 1974.
The framework puts it this way: “Memory is becoming the new compute”.
As we read it, Apple’s June-quarter 10-Q puts memory on the cost side of the same products margin where the tariff refunds land: margin rose “primarily due to a different mix of products and tariff refunds, partially offset by higher costs, including memory”. The framework was published in December 2025 and does not discuss Apple’s results.
Apple’s release gives the refund effect only as approximately 1 percentage point of margin and $0.05 a share. It does not give a dollar amount, say how much Apple has applied for, or say whether further refunds are pending. Apple’s call with analysts was scheduled for 2:00 p.m. Pacific time on 2 November; we had not heard it when this was written, and this piece covers the filings only.
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Apple’s own releases put the tariff refund effect at $0.11 a share in the June quarter and $0.05 in the September quarter, $0.16 in all. Excluding the refunds, gross margin was about 46.9% in the September quarter, by our arithmetic, down from 49.3% in March.
A note on sourcing. Apple’s refund figures come from its quarterly earnings releases, filed with the SEC as Exhibit 99.1 to its 8-K reports of 30 July and 2 November 2026; the refund mechanism and earlier tariff wording come from its 10-Q filings for the December 2025, March 2026 and June 2026 quarters and its fiscal 2025 10-K, read on EDGAR on 2 November. Ex-refund margins and earnings, growth rates and the net-income equivalent are our arithmetic. We did not contact Apple.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
