Apple Inc.’s fiscal third quarter delivered a stunning array of all‑time records, but the celebration on Tim Cook’s final earnings call as chief executive was tempered by warnings that surging memory costs and tightening semiconductor supply will weigh on the September period and potentially beyond.

“It’s not a regular supply issue. It’s a demand forecast issue, to be candid,” Cook told analysts. “The iPhone and the Mac are both doing remarkably better than we thought they would do … We’ve got a quarter that we’re going to be scrambling on the supply side, essentially.”

The results themselves were undeniably strong. Total revenue of $109.4 billion rose 16% from a year ago, exceeding the company’s own expectations and setting a June quarter record. Diluted earnings per share jumped 29% to $2.02, including a $0.11 tailwind from tariff refunds, while gross margin reached 50.1% – a level that included an approximately two‑percentage‑point benefit from those same refunds.

Product‑segment momentum

ProductQ3 FY2026 RevenueYoY ChangeiPhone$54.3B+22% (record)Mac$10.4B+29% (record)iPad$6.2B–6%Wearables, Home & Accessories$7.9B+6%Services$30.7B+12% (record)

Prior‑year comps based on FY2025 Q3: iPhone $44.58B, Mac $8.05B, iPad $6.58B, Wearables $7.40B, Services $27.42B. Source: SEC filings.

iPhone’s 22% surge came on the back of the iPhone 17 family, which CFO Kevan Parekh said drove double‑digit growth in the vast majority of markets and led the company to set June quarter records for upgraders. Customer satisfaction in the U.S. reached 99% according to 451 Research. Mac’s 29% leap was powered by the all‑new MacBook Neo and MacBook Pro, with the Neo grabbing particular attention in education and enterprise; Parekh noted that about half of the large U.S. education purchases during the quarter displaced Windows and Chromebook devices. iPad, facing a tough comparison against last year’s A16‑powered launch, slipped 6%, though its installed base hit an all‑time high. Services revenue crossed $30 billion for the first time in a June quarter, buoyed by all‑time records in cloud and payment services, while Apple’s paid subscription base surpassed 1.5 billion.

The memory “100‑year flood” and margin pressure

Cook was unusually blunt about the cost environment. “We reluctantly raised prices,” he said, “because we’re in what I would characterize as a 100‑year flood on the memory pricing, with exponential increases.”

Parekh provided the arithmetic behind the margin compression. Excluding the tariff‑refund boost, the June quarter gross margin came in at 48.1%, down 120 basis points sequentially from March’s 49.3%. “More than 100% of that can be explained by the memory cost change,” he said. The sequential decline from an adjusted 48.1% to the midpoint of the September guidance (46.5%, once the expected one‑point tariff benefit is removed) is similarly driven by memory. While carry‑in inventory and lower costs on non‑memory components provide partial offsets, Parekh cautioned that “the benefit of carry‑in inventory is expected to decrease over time.” Beyond September, market pricing for memory continues to rise, and Cook added that Apple is “evaluating all options” on the sourcing side, noting that the DRAM market currently has only three suppliers.

Supply constraints and the cautious September outlook

The September quarter guidance – total company revenue growth of 9% to 11% year‑over‑year – represents a notable deceleration from the 16% just delivered. Two factors are at work. First, a sequential foreign‑exchange headwind of about 2.5 percentage points will reduce the headline growth rate. Second, supply constraints are expected to “increase significantly” and will affect iPhone, Mac, and iPad. Cook stressed that the root cause is not a supplier failure but unexpectedly robust demand for its advanced‑node SoCs: “We’ve been pulling supply ahead. At some point, there’s a limit to that.”

Parekh indicated that iPhone revenue growth is expected to be in the mid‑teens range for September, while services growth, after removing a 2.5‑point sequential FX hit, will be “largely similar” to the 12% reported in the June quarter. The services business already bears a heavier FX burden than the total company; Parekh flagged that the cumulative FX drag on services from March to September will be about five percentage points.

Tim Cook’s farewell and leadership transition

The call marked Cook’s last as CEO; incoming chief executive John Ternus joined the line and fielded a question on the competitive landscape. “There is so much opportunity for us with everything that’s happening in this space,” Ternus said. “We’re just really focused on our plans and very excited about it.” Cook emphasized that the transition is seamless and expressed “never been more optimistic” about Apple’s future. The company also unveiled a new multi‑year agreement with Broadcom exceeding $30 billion for U.S.‑based silicon components, part of its broader $600 billion American investment commitment.

What analysts pressed on

The Q&A session surfaced the tension between stellar unit performance and looming headwinds. Ben Reitzes of Melius Research asked how deeply supply constraints would bite in the December quarter, to which Parekh replied that the company would not provide guidance beyond September. Cook reiterated that the constraints stem from advanced nodes and that the Arizona fab sourcing over 100 million components is performing well but isn’t the issue.

Erik Woodring of Morgan Stanley pressed on pricing philosophy, and Cook explained that Apple looks at “units, revenue, and margin” over the long term, not a 90‑day mathematical formula. Amit Daryanani of Evercore wanted more color on memory sourcing flexibility, and Cook hinted at evaluating all options while pointing to the concentrated DRAM market. Samik Chatterjee raised the regulatory hurdles for launching Siri AI in China and Europe; Cook noted that the EU negotiations are ongoing for iPhone/iPad, while the Mac is exempt, and that China has just approved the original Apple Intelligence features.

As Cook signed off, he left investors with a message both nostalgic and forward‑looking: “We have a bright future ahead, and I truly have never been more optimistic.” The rally in Apple’s stock after hours suggested that Wall Street largely agreed, even if the path to the holiday quarter looks bumpier than the record numbers alone would imply.