Apple shares fall 4% on record $109.4B revenue, Cook's final earnings report
In brief
- Apple posts record June quarter revenue of $109.4 billion, up 16% year-over-year.
- Shares fell 4% after-hours despite strong earnings and $2.02 diluted EPS.
- Tim Cook delivers final earnings report as CEO before September 1 transition.
- John Ternus becomes CEO; Cook moves to executive chairman.
- Tariff refunds added $0.11 per share; weak Services and iPad results pressured stock.
Strong Results Across Most Lines
Apple's quarterly revenue increased 16% to $109.4 billion from $94 billion a year earlier. Net income rose to $29.8 billion from $23.4 billion, while diluted earnings per share increased 29% to $2.02. The company recorded a gross margin of 50.1%, bolstered by tariff refunds that added approximately two percentage points to that figure and increased earnings by $0.11 per share.
Hardware drove much of the growth. iPhone revenue rose nearly 22% to a June quarter record of $54.3 billion, while Mac revenue increased 29% to $10.4 billion. Services revenue climbed 12% to a record $30.7 billion. Geographically, Greater China revenue rose more than 22% to $18.8 billion, and Europe revenue increased to $29.4 billion from $24 billion a year earlier.
Softer spots emerged. iPad revenue declined nearly 6% to $6.2 billion, and Revenue from Wearables, Home and Accessories increased about 6% to $7.9 billion.
Why the Selloff?
The market's reaction puzzled investors watching record results. The negative stock reaction appeared to reflect weaker than expected Services and iPad results, along with concerns that tariff refunds accounted for part of the earnings increase.
Concerns over tariff-aided earnings suggest some analysts viewed the boost as temporary — a one-time benefit that won't repeat. Services growth of 12%, while solid, may have disappointed those expecting stronger momentum in Apple's highest-margin business.
Leadership Transition Ahead
Cook is scheduled to step down as chief executive on September 1 after 15 years in the role. John Ternus will become CEO, while Cook will transition to executive chairman. The handoff marks a significant moment for the company, though Cook's move to the board signals continuity in strategy and oversight.
