Apple Posts Record $109.4B Quarter — Then Stock Drops 6%

Apple just reported its strongest June quarter on record, with revenue hitting $109.4 billion — up 16% from $94 billion a year ago. Net profit jumped 27% to $29.8 billion, and diluted earnings per share rose 29% to $2.02. Despite those headline numbers, the stock fell more than 6% in after-hours trading.

The beat that wasn't enough

iPhone revenue led the charge at $54.3 billion, up nearly 22% year-over-year. Mac had an even stronger run, climbing 29% to $10.4 billion. Services — Apple's highest-margin business, covering the App Store, iCloud, Apple Music, and Apple TV+ — grew 12% to $30.7 billion. That last number is where things got complicated: analysts had expected $31.2 billion, and the $500 million miss was enough to spook markets.

CEO Tim Cook called it "the strongest June quarter in Apple's history," pointing to double-digit growth across iPhone, Mac, and Services in every geographic region. Europe was the standout, contributing $5.4 billion in new revenue — about 35% of total growth. Greater China reached $18.8 billion.

What's slowing things down

Cook flagged two headwinds on the earnings call. First, supply constraints on advanced semiconductors will pressure iPhone and Mac availability into Q4. Apple raised prices on several products recently, and Cook warned more increases are possible. Second, the Siri AI rollout — a key selling point for Apple Intelligence — remains stalled in the EU and China due to regulatory reviews, with no timeline disclosed for when those markets will get access.

R&D; spending surged 32% to $11.7 billion as Apple races to close the AI gap with Google and Microsoft. Gross margin expanded to 50.1%, but that figure includes a 2-percentage-point benefit from tariff refunds — a one-time item worth roughly $0.11 per share. Strip that out, and the underlying margin picture is softer than the headline suggests.

The outlook

Apple enters Q4 with real momentum but genuine constraints. Semiconductor shortages could limit supply of its most profitable hardware just as the back-to-school and pre-holiday cycle kicks in. The services slowdown matters because that segment carries margins well above 70% — far higher than hardware. Until the Siri AI delay in the EU resolves, per Yahoo Finance, Apple's premium services pitch to its largest growth market remains incomplete.