Apple Q3 FY2026: a 50.1% gross margin, two points of it tariff refunds

Apple (NASDAQ: AAPL) reported fiscal third-quarter revenue of $109.4 billion, up 16%, and diluted EPS of $2.02, up 29% — June-quarter records for both. Apple’s filings carry no quantitative revenue, EPS or margin guidance, so the comparison here is year over year, where both lines grew by double digits. The release itself qualifies the margin: gross margin of 50.1% included “a favorable impact of approximately 2 percentage points from tariff refunds,” and EPS included $0.11 from the same source.

That qualifier is the quarter. Hardware did the growing — iPhone up 22%, Mac up 29% — while Services, the recurring and highest-margin line, slowed to 12% growth from 16% three months earlier. And the 10-Q, filed the next day, says the company is in “a period of supply constraints and increasing costs for components,” including memory, and “expects these trends to intensify.”

Apple Q3 FY2026 results at a glance

	Q3 FY2026 (June)	Q2 FY2026 (March)	Q3 FY2025 (June)
Total net sales	$109,417M	$111,184M	$94,036M
Products	$78,678M	$80,208M	$66,613M
Services	$30,739M	$30,976M	$27,423M
Gross margin	$54,770M	$54,781M	$43,718M
Gross margin %	50.1%	49.3%	46.5%
Operating income	$35,695M	$35,885M	$28,202M
Net income	$29,789M	$29,578M	$23,434M
Diluted EPS	$2.02	$2.01	$1.57

Category	Q3 FY2026	Q3 FY2025	YoY
iPhone	$54,252M	$44,582M	+22%
Mac	$10,352M	$8,046M	+29%
iPad	$6,191M	$6,581M	−6%
Wearables, Home and Accessories	$7,883M	$7,404M	+6%
Services	$30,739M	$27,423M	+12%

The March-quarter gross margin percentage (49.3%) is our arithmetic from that quarter’s reported $54,781 million gross margin on $111,184 million of sales; the other percentages are as reported in the 10-Q.

Net income rose 27% and operating income 27% (our arithmetic). EPS grew faster than net income because the diluted share count fell about 1.6%, to 14,715 million from 14,948 million (our arithmetic). Operating margin was about 32.6% against 30.0% a year earlier (our arithmetic), even with research and development up about 32% to $11.7 billion.

How much of the 50.1% gross margin came from tariff refunds?

About two points, per the release — so the gross margin excluding refunds was roughly 48.1% (our arithmetic). That is still above the 46.5% of the June 2025 quarter, but about 120 basis points below the 49.3% Apple earned in the March quarter, which carried no tariff-refund disclosure in its release.

The 10-Q explains where the refunds come from: after the Supreme Court’s February 20, 2026 ruling striking down certain tariffs imposed under the International Emergency Economic Powers Act, Apple “applied for a refund of tariffs paid” and “recognized any refunds received as a reduction of products cost of sales.” The benefit therefore sits entirely in Products, whose gross margin rose to 40.1% from 34.5%. The 10-Q attributes that increase to “a different mix of products and tariff refunds, partially offset by higher costs, including memory.” Services gross margin was 75.6%, flat on the year.

	Reported	Excluding tariff refunds (our arithmetic)
Gross margin %, Q3 FY2026	50.1%	~48.1%
Diluted EPS, Q3 FY2026	$2.02	~$1.91
Diluted EPS growth vs $1.57	+29%	~+22%

Two points of margin on $109.4 billion of sales is roughly $2.2 billion of gross profit (our arithmetic). The refunds recover tariffs already paid rather than reflecting the current cost of making the products, so the ex-refund line is the more comparable base.

Why does the memory-cost disclosure matter?

Because Apple wrote it into the 10-Q as an expectation, not a past event. The filing says the company “is experiencing a period of supply constraints and increasing costs for components driven by factors such as industry supply-demand imbalances for components, including advanced semiconductors, storage (NAND) and memory (DRAM),” that it “expects these trends to intensify,” and that they “may materially negatively impact the Company’s revenue, costs, gross margin.” It adds that price increases “that have been and may in the future be taken” may not offset the effect and may reduce demand.

The MD&A closes the gross-margin section the same way: the company “believes, in general, gross margins will be subject to volatility and downward pressure.” Taken together with the refund-adjusted sequential decline, the filings describe a margin that rose this quarter for a one-off reason while the underlying cost line moved the other way.

Is Services growth slowing?

Yes, on the filed numbers. Services revenue of $30.7 billion grew 12.1% year over year, after 16.3% in the March quarter (both our arithmetic from the releases), and was slightly below the March quarter’s $31.0 billion in absolute terms. The 10-Q attributes the year-over-year increase “primarily” to “higher net sales from advertising and cloud services.”

The slowdown matters more than its size suggests because of the mix. Services produced $23.2 billion of gross margin at 75.6%, about 42% of the company’s total gross margin on 28% of its revenue (our arithmetic). Products — where iPhone (+22%, which the 10-Q attributes to Pro models) and Mac (+29%, “higher net sales of laptops,” following the MacBook Neo launch in the March quarter) did the work — carry a 40.1% margin that this quarter included the refunds.

What happened in Greater China?

Greater China sales rose 22.4% to $18.8 billion, from $15.4 billion a year earlier (our arithmetic on reported figures), and the release says revenue grew double digits “in every geographic segment.” The growth rate slowed from about 28% in the March quarter, when the region reported $20.5 billion (our arithmetic). Europe grew about 22% to $29.4 billion and the Americas about 11% to $45.8 billion (our arithmetic).

How much did Apple return to shareholders?

During the quarter Apple repurchased $25.8 billion of its common stock and paid $4.0 billion of dividends and dividend equivalents, per the 10-Q — about $29.8 billion in total (our arithmetic), roughly equal to the quarter’s $29.8 billion of net income. The board declared a dividend of $0.27 per share, payable August 13, 2026. Shares outstanding fell to 14,609 million at June 27 from 14,773 million at the end of fiscal 2025.

The company also has a leadership change in progress. Per an April 20, 2026 Form 8-K, Tim Cook moves from chief executive to Executive Chair on September 1, 2026, and John Ternus, Senior Vice President of Hardware Engineering, becomes CEO on that date. The September quarter will therefore be the first reported under a new chief executive.

What to watch in Q4 FY2026

• Gross margin without refunds. The ex-refund figure was about 48.1%. Whether the next release discloses further refund benefits, and what the margin is without them, is the cleanest read on the memory-cost pressure the 10-Q describes.
• Services growth against 12.1%. A second quarter of deceleration would make it a trend rather than a single print.
• iPhone and Mac growth against +22% and +29%. The September quarter is compared with September 2025, so these rates are a reference point, not a like-for-like base.
• Supply constraints. The 10-Q says they are expected to intensify; the September-quarter results will show whether they limited sales.
• Capital return under the new CEO. $25.8 billion of buybacks in the June quarter is the baseline.

Quick answers

How much did Apple earn in Q3 FY2026?

Net income was $29.8 billion, or $2.02 per diluted share, on revenue of $109.4 billion. Revenue rose 16% and EPS 29% year over year. EPS included a $0.11 favorable impact from tariff refunds.

What was Apple’s gross margin in Q3 FY2026?

50.1%, including a favorable impact of about 2 percentage points from tariff refunds, per the release. Excluding the refunds it was roughly 48.1% (our arithmetic), against 49.3% in the March quarter and 46.5% a year earlier.

Did Apple beat its guidance in Q3 FY2026?

Apple’s SEC filings carry no quantitative revenue or margin guidance, so there is no filed target to measure against. Year over year, revenue grew 16% and diluted EPS 29%.

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Sources and method. Company figures — net sales by category and by reportable segment, the income statement, EPS and share counts, the tariff-refund impacts on gross margin and EPS, the balance sheet, the dividend and the executive quotations — are Apple’s own disclosures in Exhibit 99.1 to the Form 8-K filed 2026-07-30 (accession 0000320193-26-000018) for the quarter ended 2026-06-27, read directly from SEC EDGAR and linked above. Products and Services gross margin percentages, the explanations for gross-margin and category changes, the supply-constraint, component-cost and tariff-refund disclosures, and the quarter’s buybacks and dividends come from the Form 10-Q filed 2026-07-31 (accession 0000320193-26-000020). March-quarter comparatives come from Exhibit 99.1 to the Form 8-K filed 2026-04-30 (accession 0000320193-26-000011), and the CEO transition from the Form 8-K filed 2026-04-20 (accession 0001140361-26-015711). Commentary from the earnings call is not used: it is not part of a filed document. The filing’s EDGAR acceptance time was 16:30 ET.

No consensus estimate is included, so this piece makes no claim that the quarter beat or missed expectations; Apple files no quantitative guidance, so the only comparison made is with prior periods. This piece makes no claim about the share-price reaction.

Our arithmetic, labelled as such: the ~48.1% gross margin and ~$1.91 EPS excluding tariff refunds (reported figures minus the disclosed ~2-point and $0.11 impacts) and the ~22% ex-refund EPS growth; the ~$2.2 billion gross-profit equivalent of 2 points; the March-quarter 49.3% gross margin and the ~120-basis-point sequential decline; the 27% growth in net income and operating income; the ~1.6% decline in diluted shares; the ~32.6% and ~30.0% operating margins and the ~32% R&D growth; the 12.1% and 16.3% Services growth rates; Services’ ~42% share of gross margin and 28% share of revenue; the Greater China, Europe and Americas growth rates; and the ~$29.8 billion total returned. These are approximations built on the disclosed figures, not reported numbers. The interpretation — that the headline margin was lifted by a non-recurring refund while component costs push the other way, and that hardware rather than Services drove the growth — is our analysis, not a company statement, and is not a forecast.

Related: Meta Q2 2026, Microsoft Q4 FY2026 and Amazon Q2 2026.

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