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    AAPL
    Earnings call· Jun 2026(Q3 FY26)

    Apple Q3 FY26 earnings call AAPL

    Jul 30, 2026 Source

    Executive summary

    Apple Q3 FY26 — Record Revenue Driven by iPhone and Mac, Strong Siri AI Reception

    Apple delivered record Q3 FY26 revenue of $109.4 billion, fueled by exceptional demand for iPhone and Mac, and strong Services growth. The company is highly enthusiastic about the initial reception and future potential of Siri AI. However, significant supply constraints and foreign exchange headwinds are anticipated to impact the September quarter, alongside rising memory costs. This call also marked Tim Cook's final earnings appearance as CEO, with John Ternus set to take the helm.

    Highlights

    5

    • Total revenue reached a June quarter record of $109.4 billion, up 16% year-over-year.

    • iPhone revenue grew 22% year-over-year to $54.3 billion, setting a June quarter record.

    • Mac revenue increased 29% year-over-year to $10.4 billion, achieving a June quarter record.

    • Services revenue set a June quarter record of $30.7 billion, up 12% year-over-year.

    • The installed base of active devices reached an all-time high of over 2.5 billion.

    Concerns

    5

    • Supply constraints are expected to increase significantly sequentially in the September quarter, impacting iPhone, Mac, and iPad.

    • Foreign exchange is anticipated to be a sequential headwind of approximately 2.5 percentage points to total company growth in the September quarter.

    • Memory costs are expected to be even higher in the September quarter, with decreasing benefit from carry-in inventory beyond that period.

    • iPad revenue declined 6% year-over-year to $6.2 billion due to a difficult prior-year comparable.

    • Services growth was impacted by sequential FX headwinds and softness in mobile gaming.

    Guidance & targets

    7
    CategoryTargetConfidence
    Total company revenue growth
    between 9% and 11% year-over-year
    high materiality
    High
    iPhone revenue growth
    mid-teens year-over-year
    medium materiality
    High
    Services revenue growth
    largely similar to what we reported in the June quarter
    medium materiality
    High
    Gross margin
    between 47% and 48%
    high materiality
    High
    Operating expenses
    between $19.1 billion and $19.4 billion
    medium materiality
    High
    Other Income & Expense (OI&E)
    around $350 million
    low materiality
    High
    Tax rate
    around 16.5%
    low materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Total Company
    June quarter revenue record, with strong performance globally and double-digit growth in every geographic segment despite supply constraints.
    		$109.4B16%——
    Products
    Driven by double-digit growth in iPhone and Mac, both of which set new June quarter records.
    		$78.7B18%——
    Services
    June quarter revenue record, despite significant sequential FX headwinds. Set revenue records in every services category, including all-time records in cloud services and payment services.
    		$30.7B12%——
    iPhone
    Driven by the iPhone 17 family, with double-digit growth in the vast majority of markets and June quarter records across developed and emerging markets.
    June quarter records in every geographic segmentJune quarter record for upgradersGained share globally (IDC)Top-selling model in U.S., Urban China, U.K., France, Australia, Japan (Worldpanel)Customer satisfaction in U.S.: 99% (451 Research)
    		$54.3B22%——
    Mac
    Driven by the strength of MacBook Neo and MacBook Pro, with strong double-digit growth in Latin America, India, and Southeast Asia.
    Best June quarter yetGained share globally (IDC)June quarter revenue record in developed marketsAll-time revenue record in emerging markets (particular strength in Greater China)All-time records for upgraders and customers new to MacCustomer satisfaction in U.S.: 95%
    		$10.4B29%——
    iPad
    Driven by the continued difficult compare against the launch of the A16-powered iPad in the prior year.
    Installed base reached new all-time highOver half of customers new to the productCustomer satisfaction in U.S.: 98% (451 Research)
    		$6.2B-6%——
    Wearables, Home and Accessories
    Driven by strength in wearables and accessories, with growth in both developed and emerging markets.
    Grew in every geographic segmentJune quarter record for upgraders for Apple WatchWearables installed base reached new all-time highOver half of Apple Watch purchasers new to the productApple Watch customer satisfaction in U.S.: 95%
    		$7.9B6%——

    Operational metrics

    22
    Company gross margin (reported)
    50.1%up 80 basis points sequentially
    June quarter

    Includes a benefit from tariff refunds, which had a favorable impact of approximately 2 percentage points.

    Company gross margin (adjusted for tariff refunds)
    48.1%
    June quarter

    This would have been at the midpoint of the guidance range provided last quarter, removing the 2 percentage point favorable impact from tariff refunds.

    Products gross margin (reported)
    40.1%up 140 basis points sequentially
    June quarter

    Includes a benefit from tariff refunds, which had a favorable impact of over 2.5 percentage points.

    Products gross margin (adjusted for tariff refunds)
    37.6%
    June quarter

    Removing the over 2.5 percentage point favorable impact from tariff refunds.

    Services gross margin
    75.6%down 110 basis points sequentially
    June quarter

    Driven by a different mix.

    Operating expenses
    $19.1Bup 23% year-over-year
    June quarter

    Driven by investments in R&D.

    Net income
    $29.8B
    June quarter

    Set a June quarter record even when excluding the tariff refund benefit.

    Diluted earnings per share
    $2.02up 29% year-over-year
    June quarter

    Included $0.11 of favorable impact from tariff refunds. Set a June quarter record even when excluding the tariff refund benefit.

    Cash and marketable securities balance
    $147B
    June quarter

    Balance at the end of the quarter.

    Total debt
    $84B
    June quarter

    Balance at the end of the quarter.

    Capital returned to shareholders
    $33B
    June quarter

    Returned during the quarter.

    Dividends and equivalents
    $4B
    June quarter

    Part of capital returned to shareholders.

    Share repurchases
    $25.8B
    June quarter

    Part of capital returned to shareholders.

    Installed base of active devices
    over 2.5 billionall-time high
    current

    Across all major product categories and geographic segments.

    Paid subscriptions
    over 1.5 billion
    current

    Surpassed this milestone.

    Transacting and paid accounts
    new all-time highsdouble-digit growth
    June quarter

    Reached new all-time highs with double-digit growth in emerging markets.

    Foreign exchange headwind (total company)
    about 2.5 percentage pointssequential
    September quarter

    Expected impact on the year-over-year total company growth rate from the June quarter to the September quarter.

    Foreign exchange headwind (Services, March to September)
    about 5 percentage pointsequential
    March to September quarter

    Expected impact on the year-on-year growth rate for Services.

    Foreign exchange headwind (Services, June to September)
    another 2.5 percentage pointsequential
    June to September quarter

    Expected impact on the year-on-year growth rate for Services.

    Memory cost impact on gross margin (March to June)
    >100%of 120 basis point change
    March to June quarter

    More than 100% of the 120 basis point sequential change in gross margin was explained by memory cost changes. Partially offset by carry-in inventory, lower non-memory component costs, and favorable mix.

    Memory cost impact on gross margin (June to September guide)
    >100%of 160 basis point change
    June to September quarter

    More than 100% of the 160 basis point sequential change in gross margin (from 48.1% to 46.5% midpoint without tariff refunds) is explained by memory cost changes. Partially offset by carry-in inventory, lower non-memory component costs, and favorable mix.

    Cash dividend per share
    $0.27
    Q3 FY26

    Declared by the Board of Directors.

    Industry KPIs

    9
    MetricValueDetails
    Capital return FCF$33BUSD
    Unit shipments ASP—
    Gross margin drivers50.1%%
    Services peripheral attach$30.7BUSD
    Long term supply agreementsexpected to exceed $30BUSD
    Component supply constraints—
    Installed base refresh runwayover 2.5 billionactive devices
    Ai server orders revenue backlog—
    Revenue mix by end market segment$109.4BUSD

    Product announcements

    4
    ProductTypeDetails
    Siri AIlaunch
    New child safety featureslaunch
    Apple Upgradelaunch
    New intelligent accessibility capabilitiesupdate

    Deals & partnerships

    2
    BroadcomMultiyear agreement to design and produce custom silicon components and cutting-edge wireless connectivity technologies.expected to exceed $30Bmultiyear

    Part of Apple's American Manufacturing program, aimed at building an end-to-end silicon supply chain in the U.S.

    KlarnaPartnership for the new Apple Upgrade hardware leasing program.

    The Apple Upgrade program is currently offered in Apple's retail stores in the U.S.

    Capital programs

    2
    American Manufacturing program (Broadcom agreement)new agreementexpected to exceed $30B

    Benefit: custom silicon components and cutting-edge wireless connectivity technologies

    This new multiyear agreement with Broadcom is part of Apple's American Manufacturing program and marks its largest ever commitment. It's an important step towards building an end-to-end silicon supply chain in the U.S.

    Apple Advanced Manufacturing Centerupcoming opening

    Benefit: assembly of advanced AI servers and Mac mini

    Located in Houston, in a facility where advanced AI servers are currently assembled. Later this year, Mac mini will also be made there. The center aims to teach innovative processes and strengthen the advanced manufacturing ecosystem in the U.S.

    Risks & headwinds

    5
    Supply ConstraintsSeptember quarter

    Expected to increase significantly sequentially

    Mitigation: Pulling supply ahead; evaluating all options for memory sourcing. Constraints are primarily due to advanced SoC nodes, driven by demand exceeding expectations for iPhone and Mac.

    Foreign Exchange HeadwindsSeptember quarter

    Sequential headwind of about 2.5 percentage points to total company growth rate (June to Sept); about 5 percentage points to Services growth rate (March to Sept); another 2.5 percentage points to Services growth rate (June to Sept)

    Memory Cost InflationSeptember quarter and beyond

    Expected to be even higher in September quarter; market pricing for memory continuing to increase beyond September

    Mitigation: Partially offset by carry-in inventory, lower cost on certain non-memory components, and favorable mix. Evaluating all sourcing options due to the DRAM market having only 3 suppliers.

    Softness in Mobile GamingJune quarter

    Contributed to Services growth being a bit below expectations

    App Store Business Model Changes and Court RulingJune quarter

    Impacted performance in certain countries and U.S. link-out transactions

    Mitigation: Supreme Court will hear Apple's appeal regarding the U.S. court ruling.

    What to watch in Q4 FY26

    5

    Supply constraint impact on iPhone, Mac, iPad

    Q4 FY26
    CurrentExpected to increase significantly sequentially in Q4 FY26
    TargetReduction in impact or improved flexibility

    Why it matters

    Supply constraints are directly limiting revenue growth for key product categories.

    we expect the impact from supply constraints to increase significantly sequentially. The projected supply constraints in the September quarter affect iPhone, Mac and iPad.

    Q&A highlights

    7

    How much of the September quarter growth deceleration (9-11% vs. June's 16%) is due to supply constraints versus FX, and what are the specific supply constraints impacting iPhone, Mac, and iPad?

    Kevan explained the deceleration is due to a 2.5 percentage point sequential FX headwind and significantly increasing supply constraints. Tim clarified that constraints are primarily on advanced SoC nodes, driven by demand for iPhone and Mac exceeding expectations, not a regular supply issue.

    “The projected supply constraints in the September quarter, as Kevan said, affect iPhone, Mac and iPad. And so we're seeing some very significant constraints currently with limited flexibility in the supply chain to remedy it.”

    asked by Amit Daryanani · answered by Timothy Cook

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Product Performance and Market Share Gains

    Apple reported record June quarter revenues for iPhone ($54.3 billion, up 22% YoY) and Mac ($10.4 billion, up 29% YoY), driven by strong demand for their latest lineups. iPhone gained global share and set a record for upgraders, with 99% customer satisfaction in the U.S. Mac achieved all-time records in emerging markets, particularly Greater China, and for new customers and upgraders, with 95% U.S. customer satisfaction. iPad revenue was $6.2 billion, down 6% YoY due to a tough prior-year comparable, but its installed base reached an all-time high with over half of new purchasers being new to the product.

    02

    Siri AI and Apple Intelligence Excitement

    The company expressed tremendous excitement for the all-new Siri AI, unveiled at WWDC, highlighting its profoundly capable, deeply personal, and integrated nature across platforms. Early feedback from developer and public betas has been overwhelmingly positive, reinforcing Apple's philosophy of building private AI based on personal context. Apple believes its unique hardware, with massive unified memory bandwidth and power-efficient performance, provides the world's best platform for AI experiences, including Siri AI and third-party offerings.

    03

    Supply Chain Challenges and Memory Cost Inflation

    Despite record demand, Apple faced significant supply constraints in the June quarter, primarily affecting Mac and to a lesser extent iPhone and iPad, due to the availability of advanced SoC nodes. These constraints are expected to increase significantly in the September quarter. The company also noted exponential increases in memory prices, paying significantly more in the June quarter than March, and expecting even higher costs in September. This inflation has led to reluctant price increases on some products, with the company evaluating all sourcing options.

    04

    Services Growth Amidst Headwinds

    Services revenue reached a June quarter record of $30.7 billion, up 12% YoY, with all-time records in cloud and payment services and over 1.5 billion paid subscriptions. However, growth was impacted by significant sequential foreign exchange headwinds🌐 and softness in mobile gaming. Further FX headwinds🌐 are anticipated for the September quarter, expected to be a 2.5 percentage point sequential headwind to Services growth.

    05

    Strategic Investments in U.S. Manufacturing and Accessibility

    Apple reaffirmed its $600 billion commitment to the U.S. over four years, including reinvesting tariff refunds. A new multiyear agreement with Broadcom, exceeding $30 billion, was announced for custom silicon components, marking Apple's largest American manufacturing program commitment. The upcoming Apple Advanced Manufacturing Center in Houston will assemble AI servers and Mac mini, strengthening the domestic supply chain. The company also unveiled new accessibility features and child safety tools, emphasizing its commitment to inclusive technology.

    06

    Leadership Transition and Future Outlook

    Tim Cook announced that this would be his final earnings call, with John Ternus stepping into the CEO role. Cook expressed immense confidence in Ternus's leadership and the executive team, highlighting Apple's phenomenal roadmap and optimistic future. The transition is described as seamless, with a continued focus on building innovative products and services that enrich users' lives.

    AI-generated summary of the company’s earnings call. Not investment advice.