More earnings analysis: https://betafinch.com
Groups: FAANG (https://betafinch.com/groups/FAANG), MAG7 (https://betafinch.com/groups/MAG7)
──────────
ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! Today we're digging into Apple's fiscal Q3 2026 results, and Jordan, there is a LOT here — record numbers, a CEO transition, and a whole conversation about memory chip prices that got surprisingly dramatic.

JORDAN: Before we get into any of it, quick note for everyone listening — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

ALEX: Right, so let's start with the headline number: $109.4 billion in revenue, up 16% year-over-year, a June quarter record. iPhone alone did $54.3 billion, up 22%. Mac had its best June quarter ever at $10.4 billion, up 29%. Services hit $30.7 billion, also a record.

JORDAN: Those Mac numbers jumped out at me the most. 29% growth is huge for a product line that's usually pretty steady. That's the MacBook Neo and MacBook Pro doing real work — and they set records for both new customers and upgraders, including in the U.S., China, and India.

ALEX: And this all happened despite supply constraints, which becomes a big theme later in the call. Profitability-wise, gross margin was 50.1%, EPS was $2.02, up 29%. But here's the asterisk — a chunk of that came from tariff refunds, worth about two percentage points on gross margin and 11 cents on EPS.

JORDAN: Right, so strip that out and it's still a solid quarter, just not quite as flashy as the headline. Operating cash flow was $34.4 billion, also a record even without the tariff benefit. So the underlying business is genuinely strong.

ALEX: Now let's talk about the elephant in the room — memory prices. Tim Cook called this a "100-year flood" on memory pricing.

JORDAN: That phrase is going to get quoted a lot. Basically, DRAM costs have been spiking quarter after quarter — more expensive in March than December, more in June than March, and they're expecting even higher costs in September. Apple's offsetting some of it with leftover inventory and cheaper non-memory components, but that cushion is fading.

ALEX: And this is part of why Apple actually raised prices on iPad and Mac — which Cook admitted was reluctant. He was pretty candid that they look at units, revenue, and margin together rather than defending one metric in isolation.

JORDAN: The other supply story is the September guide. Apple's guiding 9-11% revenue growth for the quarter, which is a real deceleration from the mid-teens they'd been running. Analysts pushed hard on this, and Cook was clear it's not a partner or vendor issue — it's that iPhone and Mac demand outran their forecasts, and there's just less flexibility in the advanced-node chip supply chain than usual.

ALEX: Which is kind of a good problem to have, but still a real one for the next couple quarters. FX is also a headwind — about two and a half points sequentially — so between currency and supply, that explains most of the slowdown.

JORDAN: Services is worth flagging too. 12% growth was a touch below expectations, mostly FX plus some softness in mobile gaming on the App Store. But cloud services and payment services hit all-time records, and Apple now has over one and a half billion paid subscriptions. So the growth engine's still running, just facing more currency drag than the hardware side.

ALEX: Now, the big non-financial story — this was Tim Cook's final earnings call. He's handing the CEO role to John Ternus, who was on the call and fielded a question about competitive threats.

JORDAN: Ternus kept it pretty measured — didn't take the bait on OpenAI or SpaceX device rumors, just said Apple's focused on its own roadmap. Cook, on the other hand, got a little sentimental, thanking shareholders and analysts

This episode includes AI-generated content.