Apple Reports Record June Quarter Revenue and EPS, Guides September Growth Key metrics - Revenue: USD 109B vs consensus USD 109B (+0.4%) - EBITDA: USD 39.0B vs consensus USD 37.0B (+5.4%) - EBIT: USD 35.7B vs consensus USD 33.3B (+7.2%) - EPS: USD 2.02 vs consensus USD 1.89 (+6.7%) Executive summary - Apple reported Q3 2026 total net sales of $109.4 billion, up 16% year over year, a June quarter record. - Diluted EPS was $2.02, up 29% year over year, including a favorable $0.11 impact from tariff refunds. - Company gross margin was 50.1%, including a favorable impact of approximately 2 percentage points from tariff refunds. - iPhone and Mac revenue grew 22% and 29% year over year, respectively, both setting June quarter records. - Services revenue grew 12% year over year to $30.7 billion, a June quarter record. - Operating cash flow was $34.4 billion for the quarter, a June quarter record. Financial performance Total net sales for Q3 2026 were $109.4 billion, up 16% year over year. Products net sales were $78.7 billion, up 18%, and Services net sales were $30.7 billion, up 12%. Net income was $29.8 billion, up from $23.4 billion in the prior year quarter. Operating income was $35.7 billion, up from $28.2 billion. Company gross margin was 50.1%, up 80 basis points sequentially, including a favorable impact of approximately 2 percentage points from tariff refunds. Products gross margin was 40.1%, up 140 basis points sequentially, and Services gross margin was 75.6%, down 110 basis points sequentially. Operating expenses were $19.1 billion, up 23% year over year, driven by investments in R&D. R&D expense was $11.7 billion, up 32%, and SG&A was $7.3 billion, up 10%. The effective tax rate was 17.9%, compared to 16.4% in the prior year quarter. For the nine months ended June 27, 2026, total net sales were $364.4 billion, up 16% year over year, and net income was $101.5 billion, up from $84.5 billion. Operating cash flow was $117.0 billion, up from $81.8 billion. Outlook and guidance For the September quarter, Apple expects total company revenue to grow between 9% and 11% year over year, including a sequential foreign exchange headwind of about 2.5 percentage points and a significant sequential increase in supply constraints affecting iPhone, Mac, and iPad. iPhone revenue is expected to grow at a mid-teens rate year over year. Services revenue growth is expected to be largely similar to the June quarter after removing the negative sequential impact of about 2.5 percentage points from foreign exchange. Gross margin is expected to be between 47% and 48%, including an expected benefit of approximately one percentage point related to tariff refunds. Operating expenses are expected to be between $19.1 billion and $19.4 billion. Other income/expense is expected to be around $350 million, and the tax rate around 16.5%. Management commentary CEO Tim Cook said: 'Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment.' CFO Kevan Parekh said: 'We are very pleased with our record business performance during the quarter, which set new June quarter records for both EPS and operating cash flow.' Tim Cook announced this would be his final earnings call, with John Ternus to lead future calls. Tim Cook described memory pricing as a '100-year flood' with exponential increases, leading to reluctant price increases on iPad and Mac. Segment performance All geographic segments grew double digits year over year. Americas net sales were $45.8 billion, up 11%; Europe $29.4 billion, up 22%; Greater China $18.8 billion, up 22%; Japan $6.6 billion, up 13%; and Rest of Asia Pacific $8.9 billion, up 16%. iPhone revenue was $54.3 billion, up 22% year over year, a June quarter record. Mac revenue was $10.4 billion, up 29%, a June quarter record. iPad revenue was $6.2 billion, down 6% due to a difficult compare. Wearables, Home and Accessories revenue was $7.9 billion, up 6%. Services revenue was $30.7 billion, up 12%. Capital allocation During the quarter, Apple returned $33 billion to shareholders, including $4 billion in dividends and equivalents and $25.8 billion in share repurchases. For the nine months ended June 27, 2026, share repurchases totaled $62.1 billion and dividends paid were $11.8 billion. The board declared a cash dividend of $0.27 per share payable on August 13, 2026. On April 30, 2026, Apple announced an additional $100 billion share repurchase program. As of June 27, 2026, remaining availability under the May 2025 program was $38.0 billion. Strategic priorities At WWDC26, Apple introduced the all-new Siri AI, alongside software updates and new child safety features. Apple is investing in AI capabilities with a hybrid model using third-party cloud and own data centers. Apple announced Apple Upgrade, a hardware leasing program in partnership with Klarna, available in the U.S. Apple also announced a new multi-year agreement with Broadcom expected to exceed $30 billion as part of its American Manufacturing Program. Risks and uncertainties Apple is experiencing a period of supply constraints and increasing costs for components, including advanced semiconductors, storage (NAND) and memory (DRAM), which may materially adversely impact revenue, costs, gross margin, results of operations and financial condition. Tariffs and other measures applied to Apple's products or components can have a material adverse impact on the business. The ultimate impact of tariffs remains uncertain and depends on several factors. Apple faces risks from global and regional economic conditions, including government policies, trade disputes, geopolitical tensions, conflict, terrorism, natural disasters, and public health issues. Apple is subject to antitrust investigations and litigation in various jurisdictions, including the DOJ lawsuit and Epic Games case, which could have a material adverse impact on its business. Q&A highlights Kevan Parekh explained that the sequential decline in gross margin from March to June was primarily due to memory costs, with FX having minimal impact. Tim Cook stated that the supply constraints are due to demand exceeding expectations, not a supplier issue, and that Apple sources over 100 million components from Arizona. Kevan Parekh noted that services growth deceleration was mainly due to foreign exchange, with some impact from mobile gaming softness and changes to the App Store business model.