Summary created by Smart Answers AI
In summary:
- Macworld reports Apple achieved record June quarter revenue of $109.4 billion, with iPhone sales growing 22% and Mac revenue surging 29% year-over-year.
- Despite strong overall performance, iPad sales declined to $6.2 billion and Greater China revenue missed investor expectations.
- Apple’s stock dropped over 4% in after-hours trading, reflecting concerns about certain segments despite increased R&D spending of $11.7 billion.
Apple’s third-quarter 2026 earnings report on Thursday wasn’t your typical financial announcement. It was Apple CEO’s Tim Cook’s last full quarter, which gave it a bit of nostalgia. But more importantly, it marked the end of a quarter where Apple announced steep price increases for the Mac, iPad, HomePod, Apple TV, and Apple Vision Pro following increased costs for RAM, storage, and other components.
Turns out that Apple posted its strongest June quarter ever. Apple announced revenue of $109.4 billion for the quarter, a 16 percent year-over-year increase. The company’s gross margin was 50.1 percent, and diluted earnings per share (EPS) were $2.02, up 29 percent year over year.
“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,” said Cook in a press release. The Mac boasted a 29 percent increase (a June quarter record), and Apple said it set a new all-time record with upgraders and customers new to the Mac. iPhone revenue increased 22 percent, and Services jumped 14 percent.
How the quarter ended year-over-year for Apple:
- iPhone: $54.3 billion (up from $45 billion)
- iPad: $6.2 billion (down from $6.6 billion)
- Mac: $10.4 billion (up from $8 billion)
- Wearables, Home, and Accessories: $7.9 billion (up from $7.4 billion)
- Services: $30.7 billion (up from $27 billion)
Apple declared a cash dividend of $0.27 per share of common stock. The dividend is payable on August 13 to shareholders of record as of the close of business on August 10.
However, there are signs that higher prices affected Apple’s overall earnings in the quarter. For one, the EPS included “a favorable impact of $0.11 from tariff refunds,” meaning the actual price would have been $1.91, a lot closer to the expected $1.88. Furthermore, the all-important Greater China region saw a softening to $18.8 billion versus an expected $19.5 billion, a fairly significant miss. Also, iPad sales are clearly struggling and won’t be helped by dramatically higher prices.
In after-hours trading, the stock dropped more than 4 percent ahead of the anticipated earnings call.
A notable change in Apple’s financial statement is an increase in research and development expenditure. Apple spent $11.7 billion, up from $8.9 billion year over year, a sizable 31 percent increase.
