Apple Posts Record $109.4B Quarter, Then Loses 6% as Tim Cook Hands the CEO Job to John Ternus
Apple beat estimates with record iPhone, Mac, and Services revenue, but shares fell on a supply-strained outlook. The earnings call doubled as Tim Cook's last, ahead of a September 1 handover to John Ternus.
Apple posted $109.4 billion in fiscal Q3 2026 revenue, up 16% year-over-year and ahead of the $108.9 billion Wall Street expected. Every major product line hit records: iPhone revenue reached $54.25 billion (up from $44.58 billion a year ago), Mac hit $10.35 billion (up from $8.05 billion), and Services grew to $30.74 billion (up from $27.42 billion). Diluted EPS came in at $2.02, up 29% year-over-year, though $0.11 of that came from one-time tariff refunds. Gross margin hit 50.1%, also boosted roughly 2 points by those refunds.
Despite the beat, shares dropped about 6% in after-hours trading. The reason: guidance. Component costs tied to the broader AI data-center memory shortage are squeezing Apple’s outlook, and Greater China revenue missed estimates at $18.8 billion against a $19.5 billion projection. Tim Cook addressed the memory issue directly on the call: “If you look beyond September, we see the market pricing for memory continuing to increase and have an increasing impact on our business.”
That line carried extra weight because it was Cook’s final earnings call as CEO. Apple confirmed John Ternus, currently head of hardware engineering, takes over as CEO on September 1, 2026, ending Cook’s 15-year run atop the company. The transition was flagged well in advance, but this call was the formal close of that chapter — Cook signing off on the numbers before Ternus takes the wheel into a September product cycle already reshaped by the same supply pressures Cook just described.
That reshaping shows up directly in the launch calendar. For the first time, Apple is breaking from its single September iPhone drop: iPhone 18 Pro and Pro Max are still expected around September 9, alongside Apple’s first foldable device, but the standard iPhone 18 and a new iPhone 18e are being pushed to spring 2027. Splitting the lineup eases pressure on a September event that would otherwise have to absorb Pro models, a foldable, and Apple Watch updates at once — and lets Apple stagger component demand across two launch windows instead of one.
Apple declared a $0.27-per-share dividend payable August 13. But the story out of this report isn’t the dividend or even the record top line — it’s a company posting its best quarter on record while warning that the AI industry’s hunger for memory chips is now materially reshaping its cost structure and its product calendar, on the very call where its CEO for the past decade and a half stepped back.