Apple Q3 FY2026 earnings: record revenue, but guidance and services fall short
Apple posted its strongest June quarter ever, but revenue and profit came in just shy of Wall Street's targets, and weak guidance tied to rising memory-chip costs unsettled investors.
| Q2 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $1.91 | $1.93 | -0.9% |
| Revenue | $109.42B | $110.82B | -1.3% |
Key takeaways
- Revenue grew about 16% from a year earlier, Apple’s best June-quarter result on record, but came in a bit below what analysts had penciled in, and per-share profit landed just under the average estimate as well.
- iPhone sales were the standout, up roughly 22% year over year and above expectations, helped by demand for newer models — the strongest part of an otherwise mixed product lineup.
- Mac sales also beat expectations, but iPad revenue fell short, and Services — the App Store, subscriptions, and other software revenue — hit a new all-time high in dollar terms yet still missed what analysts were expecting.
- Sales in Greater China improved from the declines that had weighed on results over the past year, a recovery Apple has linked to expanding manufacturing in India, though the region’s total still came in below analyst projections.
- Underlying profitability stayed high: Apple converts roughly 49 cents of every revenue dollar into gross profit and around 33 cents into operating profit over the trailing year, margins that have held up even as the company absorbs higher component costs.
- The very high trailing return on equity mainly reflects Apple’s large share buybacks, which shrink the equity base, rather than a change in the underlying business.
- Management gave cautious guidance for the current quarter, pointing to supply constraints and rising memory-chip prices that have pushed component costs higher for three quarters running, with further increases expected.
- This was Tim Cook’s final earnings call as CEO; he said the leadership transition to John Ternus, who becomes CEO on September 1 while Cook moves to executive chairman, is going smoothly.
- Shares fell in after-hours trading following the report, as investors weighed the softer guidance and services shortfall against the strong iPhone performance.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 48.6% | Trailing 12 months |
| Operating margin | 33.2% | Trailing 12 months |
| Net profit margin | 27.6% | Trailing 12 months |
| Pretax margin | 33.4% | Trailing 12 months |
| EPS | $8.72 | Trailing 12 months |
| Revenue growth (YoY) | 14.2% | Trailing 12 months |
| EPS growth (YoY) | 32.6% | Trailing 12 months |
| Return on equity | 137.2% | Trailing 12 months |
Apple Inc. financial history: revenue, margins, and cash flow →
Sources: company report · 9to5Mac / MacRumors · Yahoo Finance / 9to5Mac · 9to5Mac · CNBC · MacRumors / 9to5Mac · CNBC / MacRumors