Apple posts record $109.4 billion quarter on iPhone surge, but supply warnings rattle investors

Record quarter beats expectations

Apple reported revenue of $109.42 billion for its fiscal third quarter ended June 27, up 16.4% from a year earlier and above the $108.65 billion analysts expected, according to LSEG data. Profit reached $2.02 per share, including an 11-cent boost from U.S. tariff refunds; even without that one-time item, earnings topped Wall Street's $1.89 estimate. Net income grew 27% to $29.8 billion. The company called it the strongest June quarter ever, with double-digit growth in every geographic segment.

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.

iPhone and Mac fuel growth

iPhone sales climbed 22% to $54.25 billion, a third-quarter record, beating the $53.86 billion consensus. The redesigned iPhone 17 lineup, including the thin iPhone Air and a Pro model with a raised camera bump, continued to drive demand even as customers anticipated new models this fall. Mac revenue surged 29% to $10.35 billion, well above the $8.8 billion forecast, powered by the entry-level MacBook Neo and high-end MacBook Pro. The Neo, launched in March at $699 after a June price increase from $599, disrupted the affordable laptop market with its lightweight design and speed.

Greater China revenue rebounded 22% to $18.8 billion, with iPhone market share reaching 18% of smartphone shipments, up from 17% a year earlier, according to Counterpoint Research. Apple reclaimed its position as the world's most valuable public company from Nvidia, briefly touching a $5 trillion market valuation.

Supply constraints cast shadow

Despite the strong results, Tim Cook warned that memory chip shortages and tight advanced chipmaking capacity will worsen. The constraints, already affecting Mac availability, are expected to spread to iPhone and iPad production. Cook described the situation as a demand forecast issue rather than a typical supply problem.

If you look at the root causes behind those, it's that we're having an incredibly strong product cycle beyond our expectations, and the supply chain just fundamentally has less flexibility in it to meet the high levels of demand.

Apple raised Mac and iPad prices by up to 20% in June, citing the global memory crunch, but has not yet increased iPhone prices. Analysts expect the iPhone 18, due this fall, could cost up to $200 more. To ease the impact, Apple announced a leasing program with Klarna starting at $17.99 per month and a new Upgrade program for devices.

This is not a regular supply issue, it's a demand forecast issue to be candid. We've got a quarter ahead where we'll be scrambling on the supply side.

Leadership handoff

The earnings call was Tim Cook's last as CEO. He will become executive chairman on September 1, handing the role to John Ternus, Apple's head of hardware engineering. Cook thanked shareholders and reflected on his 15-year tenure. Ternus inherits a company at a financial high but must navigate the supply chain pressures that Cook's operations expertise had long managed.

Market reaction and services

Shares fell between 4% and 8% in after-hours trading as investors weighed the supply warnings and services revenue that, while a record $30.74 billion (up 12%), disappointed some analysts who had hoped for faster growth. Apple also benefited from roughly $1.1 billion in tariff refunds, which Cook said would be reinvested in the U.S. as part of a $600 billion domestic manufacturing plan over four years. The company's gross margin was 2 percentage points higher due to the refunds.