What Management Said
Read the full Q3 2026 transcript ↗Today, Apple is pleased to report $109.4 billion in revenue, up 16% from a year ago and a June quarter record. We continue to see enormous customer enthusiasm for our most popular lineup ever, with iPhone revenue growing 22% from a year ago to reach a June quarter record. We saw so much excitement around the best Mac lineup we've ever had, growing a strong 29% to achieve a June quarter revenue record. Services also set a June quarter record with $30.7 billion in revenue.
We also achieved June quarter revenue records in both developed and emerging markets and saw double-digit growth in most emerging markets. These new tools integrate guidance from leading clinical and child development research, including the American Academy of Pediatrics. iPhone revenue for the June quarter was $54.3 billion, up 22% from a year ago. We achieved June quarter records in every geographic segment and set a June quarter record for upgraders.
Mac delivered its best June quarter yet with $10.4 billion in revenue, growing an impressive 29% from a year ago despite significant supply constraints. This revenue growth was driven by the incredible strength of our latest lineup with MacBook Pro and the all-new MacBook Neo. We also set a June quarter revenue record in developed markets and an all-time record in emerging markets with particular strength in Greater China, where we had an all-time revenue record. MacBook Neo has been especially popular with its distinctive design and excellent value resonating with customers around the world, we're continuing to work hard to meet demand.
What went well
- Apple set a June-quarter revenue record of $109.4 billion, up 16% year-over-year, with double-digit growth in every geographic segment and June-quarter revenue records in the U.S., Latin America, Western Europe, India, China Mainland, Japan, and Southeast Asia.
- iPhone revenue grew 22% to a June-quarter record $54.3 billion on the iPhone 17 family, with share gains globally, a June-quarter upgrader record, and a 99% U.S. customer-satisfaction reading.
- Mac delivered its best June quarter ever at $10.4 billion, up 29%, led by MacBook Neo and MacBook Pro, with all-time records for customers new to Mac and upgraders and an all-time revenue record in Greater China.
- Services set a June-quarter record of $30.7 billion, up 12% despite significant FX headwinds, with records in every category, all-time records in cloud and payment services, and paid subscriptions surpassing 1.5 billion.
- Diluted EPS rose 29% year-over-year to $2.02 (including $0.11 from tariff refunds), net income was $29.8 billion, operating cash flow was a strong $34.4 billion, and the active install base topped 2.5 billion devices.
- Company gross margin reached 50.1% (up 80 bps sequentially, including ~2 points from tariff refunds), and Apple returned $33 billion to shareholders ($25.8 billion buybacks, $4 billion dividends) while enthusiasm built around the reimagined Siri AI in developer and public betas.
What went wrong
- Supply constraints -- driven by limited availability of the advanced nodes Apple's SoCs are produced on -- pressured Mac (and to a lesser extent iPhone and iPad) in the June quarter and are expected to increase significantly in the September quarter, affecting iPhone, Mac, and iPad.
- September-quarter revenue guidance of 9%-11% growth implies a deceleration of roughly 500 basis points from the June quarter, driven by the supply constraints plus a ~2.5-point sequential FX headwind.
- Memory-cost inflation is a major headwind Tim Cook called a '100-year flood' with exponential price increases; Apple paid significantly more for memory in the June quarter and expects even higher costs in September and beyond, only partly offset by carry-in inventory.
- iPad revenue fell 6% year-over-year to $6.2 billion on a difficult comparison against the prior-year A16-powered iPad launch.
- Services growth of 12% came in slightly below the prior guidance framework, hurt by FX, softer mobile gaming, the lack of a theatrical F1 release this year, and App Store business-model changes.
- Apple reluctantly raised prices on iPad and Mac in response to memory inflation, with price-elasticity effects still too early to assess, and gross-margin guidance of 47%-48% implies sequential compression driven overwhelmingly by memory costs.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Total company revenue growth | Q4 FY2026 (September) | 9%-11% year-over-year (supply constraints plus ~2.5-pt sequential FX headwind) |
| iPhone revenue growth | Q4 FY2026 | Mid-teens year-over-year (high demand, impacted by FX and supply constraints) |
| Services growth | Q4 FY2026 | Largely similar to June-quarter reported growth after a ~2.5-pt sequential FX headwind (~5-pt total FX headwind vs March quarter) |
| Gross margin | Q4 FY2026 | 47%-48% (includes ~1 pt tariff-refund benefit; ~46.5% midpoint excluding it, sequential decline driven by memory) |
| Operating expenses | Q4 FY2026 | $19.1B-$19.4B |
| Other income/expense | Q4 FY2026 | ~$350M (excluding minority-investment mark-to-market) |
| Tax rate | Q4 FY2026 | ~16.5% |
| Dividend | Q4 FY2026 | $0.27 per share, payable August 13, 2026 |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +16% to $109.4B | June-quarter record with double-digit growth in every geographic segment, achieved despite supply constraints and FX headwinds. |
| iPhone | +22% to $54.3B | iPhone 17 family strength, global share gains, and a June-quarter upgrader record across developed and emerging markets. |
| Mac | +29% to $10.4B | MacBook Neo and MacBook Pro drove Apple's best-ever June quarter for Mac despite significant supply constraints; records for new-to-Mac and upgraders. |
| iPad | -6% to $6.2B | Difficult comparison against the prior-year A16-powered iPad launch; install base still reached an all-time high with over half of buyers new to iPad. |
| Wearables, Home & Accessories | +6% to $7.9B | Strength in wearables and accessories with an Apple Watch June-quarter upgrader record; over half of Apple Watch buyers were new to the product. |
| Services | +12% to $30.7B | June-quarter record with records in every category and all-time records in cloud and payment services, despite significant FX headwinds and softer mobile gaming. |
| Company gross margin | 50.1% (+80 bps sequential) | Included ~2 points from tariff refunds; ex-refund would have been at the guidance midpoint, with memory costs the main sequential drag. |
| Diluted EPS | +29% to $2.02 | Net income of $29.8B, including $0.11 of favorable tariff-refund impact; a June-quarter record even excluding the refund. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| CEO transition | Tim Cook as CEO | This was Tim Cook's final earnings call; incoming CEO John Ternus joined the call, with Cook describing a seamless transition and high confidence in Ternus and the executive team. | — |
| Supply constraints from advanced SoC nodes | Advanced-node constraints flagged last quarter | Cook stressed the root cause is a demand-forecast issue, not a supplier/partner problem -- iPhone (+22%) and Mac (+29%) are far exceeding even high expectations -- with less-than-normal supply-chain flexibility; constraints expected to worsen sequentially in the September quarter across iPhone, Mac, and iPad. | — |
| Memory-cost inflation | Rising memory costs noted last quarter | Described as a '100-year flood' with exponential DRAM price increases; more than 100% of the sequential gross-margin decline is explained by memory, partly offset by carry-in inventory, lower non-memory component costs, and favorable mix; Apple is evaluating supply options given only three DRAM suppliers. | — |
| Siri AI and Apple Intelligence | Apple Intelligence rollout | The all-new, reimagined Siri AI in developer and public betas drew overwhelmingly positive feedback; built around private, personal-context, cross-platform AI running on-device and via private cloud compute, with potential iCloud+ upgrade monetization and a hybrid (own data centers plus third-party cloud) compute model. | — |
| Pricing strategy | Historically avoided disproportionate price increases | Apple reluctantly raised iPad and Mac prices due to the memory 'flood,' evaluating units, revenue, and margin together over the long term rather than a fixed formula; also launched the U.S.-only Apple Upgrade leasing program (with Klarna) leveraging high residual values. | — |
| Enterprise, education, and on-device AI | — | On-device AI is driving Mac enterprise adoption (Morgan Stanley 20,000+ iPhone 17s, Disney, Credit Agricole cutting regulatory processing time 80%+) and education wins, with about half of U.S. education MacBook Neo large purchases displacing Windows and Chromebook devices. | — |
Q&A Summary
Amit Daryanani (Evercore) asked how much of the ~500-bp September deceleration is supply constraints versus FX and what the broadening supply constraints are, plus (follow-up) whether seeking greater memory-sourcing flexibility is about supply or preserving customer value.
Kevan Parekh said the 9%-11% guide reflects a ~2.5-pt sequential FX headwind plus significantly increased supply constraints affecting iPhone, Mac, and iPad. Cook attributed June constraints mainly to Mac (less so iPhone/iPad) driven by advanced-node availability and very high demand. On memory, Cook detailed rising costs each quarter, partial offsets from carry-in inventory and lower non-memory components, and evaluating all options given three DRAM suppliers (which could help supply, uncertain on price).
Michael Ng (Goldman Sachs) asked about Apple Upgrade adoption and whether it shortens replacement cycles, and about public-beta learnings for Siri AI, demand, and compute costs.
Cook said Apple Upgrade (U.S. retail only) makes it easier to get the latest products via leasing, leveraging high Apple residual values, with positive early feedback. On Siri AI, he was 'off the charts excited,' citing overwhelmingly positive developer/public-beta feedback, and noted iCloud+ upgrade possibilities for heavy users, though compute-cost plans remain early.
Ben Reitzes (Melius) pressed on how much the supply constraints hit the December quarter and whether Apple could broaden silicon providers (e.g., an Arizona fab) to alleviate constraints.
Cook reiterated the constraint is a demand-forecast issue from an exceptionally strong iPhone and Mac cycle, not a supplier problem, and Apple has been pulling supply ahead with limits; Parekh declined to give December guidance. Cook said Apple sources over 100 million components from Arizona this year (part of its $600 billion U.S. commitment) and is pleased with that fab's ramp.
Erik Woodring (Morgan Stanley) asked about pricing philosophy (protecting gross-profit dollars vs margins, multi-year supplier LTAs) and the services deceleration.
Cook said Apple reluctantly raised prices amid a '100-year flood' in memory, weighing units, revenue, and margin together over the long term. Parekh attributed the services move from 16% (March) to 12% (June) mainly to FX, plus the absence of a theatrical F1 release, softer mobile gaming, and App Store model changes, while noting records across categories.
Wamsi Mohan (Bank of America) asked whether Siri AI changes Apple's capital intensity, and asked incoming CEO John Ternus about the evolving competitive landscape.
Cook said Apple uses a hybrid compute model (own data centers plus third-party cloud), has been growing OpEx and AI spend (including in COGS), and the balance -- along with potential iCloud+ upgrades -- remains uncertain. Ternus said there is enormous opportunity and Apple is focused on and excited about its plans.
Samik Chatterjee (JPMorgan) asked about Siri AI availability in China and the EU and the sequential gross-margin walk to the ~46.5% midpoint.
Cook said Apple is working closely with the EU commission (Mac Siri AI is available as it is not covered by the same regulations as iPhone/iPad) and received China approval to ship original Apple Intelligence features with more work ahead for Siri AI. Parekh said more than 100% of both the March-to-June and June-to-September gross-margin declines are explained by memory costs, with FX a minimal factor and partial offsets from carry-in inventory, lower non-memory components, and favorable mix.
More on Apple Inc.
Reported 2026-07-30 · figures from the Apple Inc. Q3 2026 earnings call.
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