Apple Posted Its Best June Quarter Ever. The Stock Fell 6% Anyway.

Apple just posted the best June quarter in its history. Record revenue, record iPhone sales, record Mac sales, records in every single geography it reports. The stock fell more than 6% in after-hours trading.

That gap is the whole story. The quarter Apple reported is already over, and it was excellent. The quarter Apple guided to is the one investors reacted to, and it comes with a warning that the company cannot build enough of what people want to buy, at margins that keep shrinking for reasons outside its control.

The quarter itself was genuinely great

Revenue came in at $109.4 billion, up 16% from $94.0 billion a year ago, ahead of the roughly $108.7 billion analysts expected. Net income hit $29.8 billion. Diluted earnings per share landed at $2.02, up 29%, though about $0.11 of that came from tariff refunds. Strip those out and you get $1.91 against a $1.89 estimate, which is a beat but a much more ordinary one.

The product lines: iPhone at $54.3 billion, up 22% on the iPhone 17 family. Mac at $10.4 billion, up 29%, with the MacBook Neo and MacBook Pro driving all-time records for both upgraders and new customers. Services at $30.7 billion, up 12%.

Apple's installed base passed 2.5 billion active devices, paid subscriptions crossed 1.5 billion, and operating cash flow set a record at $34.4 billion. The board declared a $0.27 dividend payable August 13. Gross margin was 50.1% against 46.5% a year ago, again with roughly two points of that coming from tariff refunds. It was Apple's 13th consecutive quarter beating estimates.

Two soft spots

iPad was the only category that shrank, at $6.19 billion against $6.58 billion a year ago, and short of the roughly $6.9 billion analysts wanted.

Services missed too, coming in around $30.7 billion against a consensus closer to $31.4 billion, with growth slowing from earlier in the year. That one stings more than the dollar figure suggests, because Services is the high-margin engine that makes the hardware math work.

September is going to be rough

Apple guided the September quarter to 9 to 11% revenue growth. That's a steep deceleration from the 16% it just delivered, and CFO Kevan Parekh laid out two causes: a foreign exchange headwind of about 2.5 percentage points, and supply constraints that he said will increase significantly.

Here's the part worth understanding. In the June quarter, constraints mostly hit the Mac. In September they hit iPhone, Mac, and iPad together. Cook was careful to frame this as a good problem: it isn't a supplier failing, it's a forecasting miss. iPhone and Mac sold better than Apple planned for, and the bottleneck is availability of the advanced process nodes Apple's chips are built on. He described a supply chain carrying less slack than usual.

iPhone revenue growth is guided to the mid-teens. Gross margin is guided to 47 to 48%, including about a point of tariff refund benefit.

The pricing answer

This was the thing worth listening for, and Cook did address it directly.

On why Mac and iPad prices went up last month: "We reluctantly raised prices," he said, pointing to what he called a "100-year flood" in memory pricing with exponential increases.

Parekh put real numbers behind it. Memory cost changes account for more than 100% of the sequential gross margin decline. Adjusted gross margin, stripping out tariff refunds, went from 49.3% in March to 48.1% in June, and Apple projects 46.5% in September. The memory increase alone was larger than that entire decline. Other factors, including carry-in inventory, cheaper non-memory components, and favorable product mix, offset part of it. Parekh warned that the inventory cushion shrinks over time while memory prices keep climbing.

What Apple would not do is commit to anything about the iPhone. Asked directly about pricing philosophy, Cook said the company weighs units, revenue, and margin together rather than running a formula, and makes a business judgment from there. That is a careful non-answer, and it's probably the honest one. On sourcing, he noted the DRAM market has only three primary suppliers and Apple is evaluating all its options, which is a polite way of saying the leverage here does not sit with Apple.

So the iPhone 18 Pro price is still unknown. But a CEO who calls memory a hundred-year flood, says he raised prices reluctantly, and declines to rule anything out is not sending a signal that iPhone prices hold.

The rest of the call

On Siri AI: Apple is working with the European Commission on an EU rollout, and Siri AI will arrive on the Mac in the EU first, because Macs aren't covered by the same regulations that apply to iPhone and iPad. In China, Apple has approval to ship the original Apple Intelligence features like Clean Up, with more work required before Siri AI lands there.

On the supply chain: Apple announced a new multi-year agreement with Broadcom worth more than $30 billion for US-made silicon components, part of its $600 billion American investment commitment. The company says it now sources over 100 million components from Arizona.

And on the handoff: John Ternus joined the call and fielded a question about the competitive landscape, sounding optimistic without saying much. Cook described the transition as seamless.

Cook's 90th and final earnings call as CEO ended with the best June quarter Apple has ever had and a stock down 6%, which is a decent summary of Apple's whole year. The company is selling more than it can build, at margins shrinking for reasons it can't control. Ternus inherits that on September 1, and the first real decision on his desk is what to charge for an iPhone.