Apple posts record June quarter, but higher costs loom large

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 12 percent.

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.

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.

During the call, Apple CFO Kevan Parekh stated that Apple expects revenue to increase between 9 and 11 percent overall for the upcoming quarter and that the current supply-chain shortage will have an effect on Mac, iPhone, and iPad sales. Cook stated that the constraints will have a more severe impact on Apple’s production and that Apple expects to spend more on memory than in the previous two quarters. Apple’s stock was down $23 after the company announced the next quarter outlook

The call was the last for Cook, who is stepping down as CEO in September. During the call, Cook made the following statement:

The transition [to John Ternus as CEO] is going seamlessly, and I am beyond excited for John to step into his new role and lead Apple into its next era. He is truly one of a kind and there is no better person to take the helm of the company. As I’ve said, I couldn’t be more confident in his leadership, in our executive team, and in the extraordinary people at Apple who are determined to enrich the lives of our users all over the world. We have a bright future ahead, and I truly have never been more optimistic.

Apple CEO Tim Cook

In 2012, Cook’s first year as CEO, Apple posted annual revenue of $156.5 billion. In Cook’s final quarter as CEO, the company posted $109.4 billion. In 2025, Apple posted revenue of $416.16 billion.