Apple: Q3 FY2026 Earnings

For reference, Q2 FY2026 (reported April 30): revenue $111.2B (+16.6%), EPS $2.01 (+~20%), gross margin 49.3%, Greater China +28% YoY. Q3's slight sequential revenue decline reflects normal seasonality, not deterioration, but the Services and China misses this quarter break a string of largely clean beats.

• This was Tim Cook's final earnings call as CEO. John Ternus, Apple's SVP of Hardware Engineering and a 25-year Apple veteran, becomes CEO on September 1, 2026
• Ternus inherits a company with approximately $146.5B in cash and marketable securities, roughly $62.2B in net cash, and more than $117B in operating cash flow generated over the first nine months of fiscal 2026
• Cook closed his tenure the way he ran it: record revenue, disciplined supply-chain execution, and double-digit growth across every reported geographic segment

• Apple raised prices on Macs and iPads in June due to a global surge in memory chip costs, Cook said the company "reluctantly raised prices" because of exponential increases in component costs
• Management warned that supply constraints will have a "much bigger impact" on revenue in the September quarter, affecting iPhone, iPad, and Mac availability
• Cook cited less flexibility in the supply chain than normal, alongside constraints on advanced-node chip availability

• Apple confirmed it is preparing to launch an all-new Siri AI, described by Cook as "a completely reimagined version of Siri that is profoundly capable, deeply personal, and integrated seamlessly across our platforms"
• Cook credited the A19 and A19 Pro chips for powering on-device AI features driving iPhone demand
• R&D expenses rose more than 32% YoY, reflecting continued investment in AI, custom silicon, health, and spatial computing ahead of the leadership transition

• Apple reclaimed the world's largest market-cap title on July 27, closing at an all-time high of $336.91 (~$4.93-4.95T market cap) heading into the print
• Shares had gained roughly 23% year-to-date heading into the report
• Analyst Ethan Feller (Zacks): "Revenue grew 16% year over year, a remarkable growth rate at Apple's scale, while EPS jumped 29%, marking a ninth consecutive quarterly beat", but called Services "the real explanation for the after-hours pullback more than any broader rotation narrative"
• Apple reports alongside Amazon this week, both closing out a heavy week of mega-cap tech earnings

Tim Cook's final quarter as CEO was, on the surface, exactly the record-setting close his tenure deserved: double-digit growth across every region, a 22% iPhone surge, and a ninth straight EPS beat. The market's 3-4% after-hours reaction, however, is squarely about what didn't work: Services missing estimates for the first time in a while, and Greater China falling short in a market investors have learned to watch closely. Roughly $0.11 of EPS and 2 points of gross margin came from a one-time tariff refund, meaning the underlying beat, while still real, was somewhat smaller than the headline suggests. The September-quarter warning on worsening supply constraints, tied to a global memory-chip shortage that already forced Mac and iPad price hikes, is the more immediate concern for John Ternus as he takes over September 1. He inherits a company at record scale, with nearly $150B in cash and a genuinely strong iPhone cycle, but also two open questions (Services growth, China durability) that Cook is handing off unresolved. Next earnings: Q4 FY2026, expected late October 2026, will be Ternus's first as CEO.