01—Abstract
Summary
Summary of the 10-Q filed July 31, 2026. Cited figures are marked; the original filing is the authoritative source.
Apple Inc. reported strong financial results for the third quarter and the first nine months of fiscal year 2026, demonstrating robust growth across its product and services segments.
Total net sales increased by 16%a year-over-year for both periods, driven primarily by significant growth in iPhone sales, particularly the Pro models, and continued strength in Services, advertising, and cloud services. The company also saw notable expansion in its Europe and Greater China markets, with Europe up 22% and Greater China up 30% for the nine-month period, partially benefiting from favorable currency movements in Europe and Greater China. Profitability improved substantially, with gross margin increasing to 50.1% in the third quarter and 49.1% for the nine months, up from 46.5% and 46.8% respectively in the prior year.
This improvement was attributed to a more favorable product mix, tariff refunds, and higher Services revenue, despite increased costs for certain components like memory. Research and Development expenses saw a significant increase of 33%b for the nine-month period, reflecting investments in artificial intelligence and infrastructure. The company maintained a strong financial position, with substantial cash reserves and continued capital return programs, including significant share repurchases and dividend payments.
02—Key points
Key Highlights
- Total net sales grew by 16% year-over-year to $109.4 billion for the third quarter and $364.4 billion for the first nine months of fiscal 2026.
- iPhone sales surged by 22% year-over-year, driven by strong performance of Pro models.
- Services revenue increased by 12% and 14% for the third quarter and nine months, respectively, boosted by advertising and cloud services.
- Gross margin expanded significantly, reaching 50.1% in Q3 FY26 and 49.1% in the first nine months of FY26, up from 46.5% and 46.8% in the prior year.
- Operating income saw a substantial increase of 26% for the third quarter and 22% for the first nine months.
- R&D expenses increased by 32% in the third quarter and 33% for the nine months, indicating significant investment in future technologies like AI.
- The company returned $25.8 billion to shareholders through share repurchases and $4.0 billion in dividends during the third quarter of 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Apple Inc. kept $0.27.
- Revenue$109.42B100.0%
- Cost of revenue−$54.65B49.9%
- Gross profit$54.77B50.1%
- Operating costs−$19.07B17.4%
- Operating income$35.70B32.6%
- Interest, other & tax−$5.91B5.4%
- Net income$29.79B27.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed July 31, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $109.42B$94.04B | +16.4% |
| Cost of Revenue | $54.65B$50.32B | +8.6% |
| Gross Profit | $54.77B$43.72B | +25.3% |
| R&D Expenses | $11.73B$8.87B | +32.3% |
| SG&A Expenses | $7.35B$6.65B | +10.5% |
| Operating Expenses | $19.07B$15.52B | +22.9% |
| Operating Income | $35.70B$28.20B | +26.6% |
| Net Income | $29.79B$23.43B | +27.1% |
| EPS (Basic) | $2.03$1.57 | +29.3% |
| EPS (Diluted) | $2.02$1.57 | +28.7% |
| Shares Outstanding (Basic) | 14.66B14.90B | −1.7% |
| Shares Outstanding (Diluted) | 14.71B14.95B | −1.6% |
05—Questions
Frequently Asked Questions
What is the primary driver of Apple's revenue growth in this quarter?
The primary driver of Apple's revenue growth is the strong performance of its iPhone segment, which saw a 22% increase in net sales year-over-year, particularly driven by sales of the Pro models. Additionally, the Services segment continues to show robust growth, increasing by 12% in the third quarter.
How has Apple's profitability evolved compared to the previous year?
Apple's profitability has improved significantly. The overall gross margin increased from 46.5% to 50.1% for the third quarter and from 46.8% to 49.1% for the first nine months of the fiscal year. This improvement is attributed to a favorable product mix, tariff refunds, and higher Services revenue, which offset increased component costs.
What are the key areas of investment for Apple, as indicated by expense changes?
Research and Development (R&D) expenses have increased substantially, by 32% for the third quarter and 33% for the nine-month period. This suggests significant investment in areas such as artificial intelligence, and infrastructure to support future product development and services.
What are the major risks and challenges highlighted in the filing?
Key risks include ongoing supply constraints and increasing costs for components like semiconductors and memory, which could impact revenue and margins. Additionally, Apple faces significant regulatory scrutiny and legal challenges globally, particularly concerning antitrust issues and digital market regulations (like the EU's DMA), which could lead to fines and require substantial business practice changes. The company also notes potential impacts from tariffs and geopolitical trade disputes.
06—Continue