Apple reported fiscal Q3 2026 earnings Thursday evening that broke multiple records, $109.4 billion in revenue up 16 percent year over year, iPhone revenue up 22 percent to a June quarter record, Mac revenue up 29 percent, and the stock fell 8 percent Friday morning anyway.
The Q4 revenue growth guidance of 9 to 11 percent missed the 12.1 percent consensus. Services revenue of $30.7 billion and Greater China revenue of $18.8 billion both missed estimates. That was enough to send shares lower.
The reason the numbers were good but the outlook is worrying: the global memory shortage is hitting Apple from two directions simultaneously.
Memory costs are rising, what Tim Cook called a "100-year flood" in memory pricing, forcing the company to raise prices on Mac and iPad and guiding gross margins to 47 to 48 percent next quarter versus 50.1 percent this quarter.
And semiconductor supply from TSMC cannot keep pace with demand for the iPhone 17 and MacBook Neo, both selling dramatically better than Apple forecast. "We've got a quarter where we're going to be scrambling on the supply side, essentially," Cook said.
There is one more piece of context that made Thursday's call significant beyond the numbers. It was Tim Cook's final earnings call as Apple's chief executive.
He hands the CEO title to hardware chief John Ternus on September 1. Cook called the transition "seamless" and said he is "beyond excited" for Ternus's era.