Apple closes the Cook era with a record June quarter

Apple reported its strongest June quarter yet, with fiscal third-quarter revenue of $109.42 billion, up 16% from a year earlier. Net income reached $29.79 billion and diluted earnings per share were $2.01, while the reported $2.02 basic figure was helped by an 11-cent-per-share tariff refund, according to the Associated Press.

The iPhone was the main engine: sales reached $54.25 billion, up about 22% year over year. Mac revenue also rose to $10.35 billion, Services to $30.74 billion and Wearables, Home and Accessories to $7.88 billion. iPad revenue was the exception, at $6.19 billion. Every geographic segment set a June-quarter record in the company’s reporting, including Greater China at $18.8 billion.

The quality of the result matters as much as the headline. Apple exceeded the consensus earnings and revenue figures cited by FactSet, but part of the earnings-per-share beat came from the tariff refund. The company also says memory costs will rise again in the September quarter, alongside tighter supply for iPhone, Mac and iPad. That combination could put pressure on margins even as demand remains strong.

This was Tim Cook’s final earnings call before John Ternus becomes CEO on September 1. The handoff therefore starts from a position of financial strength, but not without constraints: Apple must absorb more expensive memory, manage the next iPhone cycle and continue investing in AI without matching the much higher capital spending of some rivals.

Some calendar context helps in reading the numbers. Apple's fiscal third quarter runs from April through June, traditionally the quietest stretch of its year: the annual iPhone launch is still months away, holiday shopping is long past, and the period usually serves as a bridge between product cycles. A record set in this window therefore says more about underlying demand for products already on shelves than about any new-release bump — which is arguably the healthier signal of the two.

The report also bookends an era. Tim Cook became chief executive in August 2011, succeeding Steve Jobs, and his tenure was defined less by category invention than by operational scale: a supply chain refined to an industrial art, the transition to Apple-designed silicon, and the deliberate construction of a services business on top of the installed base. John Ternus, a two-decade company veteran who has led Apple's hardware engineering, inherits that machine rather than a turnaround — a very different starting point from the one Cook faced.

The Services line deserves particular attention in that context. The segment — spanning the App Store, iCloud, Apple Music, advertising, payments and AppleCare — has grown into Apple's second-largest source of revenue, with margins that hardware cannot match. The $30.74 billion reported this quarter is exactly the kind of recurring, high-margin income that smooths out hardware cyclicality, and it is likely the pillar Ternus will lean on if device margins come under pressure. Investors have long rewarded that shift, valuing predictable subscription income more highly than cyclical hardware sales.

The memory warning is the cloud on that horizon. DRAM and NAND flash are among the most cyclical commodities in electronics, and surging demand from AI data centres has been absorbing manufacturing capacity across the industry. When memory prices rise, device makers face an unattractive choice: absorb the cost in their margins, raise retail prices, or quietly trim specifications. Apple's own guidance suggests it expects to feel that squeeze through the September quarter at least, which makes the next margin figure one to watch closely.

The AI question frames the longer term. Rivals such as Microsoft, Alphabet and Meta are spending at hyperscale on data centres and models; Apple has so far taken a more capital-light path, leaning on partners and on-device processing. Whether that restraint proves to be discipline or a deficit is the open strategic question Ternus inherits — and one that a record June quarter, however strong, does not answer.

Chief-executive transitions at Apple are generational events rather than routine ones, and the first earnings under new leadership will be read closely for margin guidance, the trajectory in Greater China and any shift in AI posture. For now, Cook exits on a high note: a record quarter, every region growing, and a succession settled well in advance — the kind of orderly handoff most companies of this size never manage.