Hey everyone, Hirokichi here. Apple reported its fiscal Q3 2026 earnings (for the quarter ended June 27) on July 30, 2026. Revenue and profit both came in at record levels for a June quarter, but the guidance for the September quarter fell short of expectations, and the stock slipped in after-hours trading. Let’s go through the key numbers and what to watch next.
- Revenue up 16% year over year to a record 109.4B dollars
- iPhone and Mac shine, while iPad and China lag
- Services grew 12%, but still fell short of expectations
- Behind the 50.1% gross margin: rising memory costs and price hikes
- Shares fell as much as 6% in after-hours trading
- What’s next: supply constraints and Apple’s AI strategy
Revenue up 16% year over year to a record 109.4B dollars
Let’s start with the big picture. Revenue came in at $109.4 billion, up 16% year over year, beating Wall Street estimates (around $108.7-$109.0 billion) and marking a record for a June quarter.
Net income was $29.8 billion, and diluted EPS (earnings per share) came in at $2.02, up 29% year over year. Gross margin (gross profit as a share of revenue) was 50.1%, a big improvement from 46.5% a year earlier.
iPhone and Mac shine, while iPad and China lag
Let’s take a look at the segment breakdown.
What this chart shows is that iPhone and Mac both grew strongly from a year ago, while iPad actually declined.
iPhone, Apple’s top earner, brought in $54.25 billion, up 21.7% year over year, and Mac revenue reached $10.35 billion, up 28.7%. Both marked June-quarter records. The number of active Apple devices worldwide has now topped 2.5 billion, which says a lot about how sticky demand for iPhone and Mac remains.
On the other hand, iPad revenue fell 5.9% to $6.19 billion, missing estimates. Wearables (Apple Watch, AirPods, and the like) came in at $7.88 billion, up 6.5%, slightly ahead of estimates.
By region, Greater China revenue landed at $18.8 billion, below the roughly $19.5 billion analysts had expected. Competition in the Chinese market remains a real challenge for Apple.
Services grew 12%, but still fell short of expectations
Services (App Store, Apple Music, iCloud, and more), Apple’s high-margin business, brought in $30.73 billion, up 12.7% year over year and a new record. Paid subscriptions have now surpassed 1.5 billion. That said, it missed the roughly $31.3 billion analysts were expecting, and looks to be one of the reasons the stock came under pressure after earnings.
Behind the 50.1% gross margin: rising memory costs and price hikes
One number that stood out this quarter was that 50.1% gross margin. CEO Tim Cook explained that it’s tied to constraints in “advanced node” chip supply. Demand for iPhone and Mac has grown faster than expected, and chip manufacturing capacity hasn’t kept pace.
Apple also revealed that a sharp jump in memory chip prices forced it to raise prices on some products. The company said it didn’t want to raise prices but had to pass along the higher costs. It’s worth keeping an eye on how rising component costs continue to show up as price increases for consumers.
Shares fell as much as 6% in after-hours trading
Despite the strong headline numbers, Apple’s stock fell in after-hours trading following the earnings report. Reports vary, but declines in the 4%-6% range were seen at some points. The drivers appear to be Services and Greater China missing estimates, on top of September-quarter guidance that came in below what the market was hoping for.
What’s next: supply constraints and Apple’s AI strategy
Alongside the earnings, the company laid out its outlook for what’s ahead.
(1) September-quarter revenue growth is expected to slow to roughly 9%-11%, below the ~12% analysts had modeled. Apple cited supply constraints affecting iPhone, Mac, and iPad, along with a roughly 2.5-point foreign-exchange headwind, as the main drags.
(2) Gross margin is guided to roughly 47%-48%, which includes about a 1-point benefit from tariff refunds. Until the supply constraints ease, gross margin could stay a bit choppy, which is worth watching.
(3) The rollout of Siri’s major overhaul, which underpins Apple Intelligence, is expected to be delayed in the EU and China due to regulatory hurdles. While rivals like Google and Meta keep pouring huge sums into AI infrastructure, Apple has kept a relatively measured capital-spending stance, and some are questioning whether it’s falling behind on AI (related: Meta’s Q2 2026 earnings tell a contrasting story, with free cash flow crushed 91% by its AI spending spree).
As an investor, I’ll be watching three things going forward: (1) when the chip supply constraints start to ease, (2) how quickly Apple Intelligence, including Siri, gets rolled out, and (3) whether Apple’s share in China can recover. Apple also signaled plans to expand its manufacturing investment in the US, so it’ll be worth seeing how supply chain shifts affect the stock going forward.
Let’s keep at it, slow and steady. See you next time!
* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.
(This article was written based on reporting from MacRumors, 9to5Mac, AppleInsider, and others.)
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