Thank you for joining us. Even when excluding the tariff refund benefit. Now, I'm going to provide some more details for each of our revenue categories. iPhone revenue was $54.3 billion, up 22% year-over-year, driven by the iPhone 17 family. We grew double digits in the vast majority of markets we track and reached June quarter revenue records across both developed and emerging markets. The iPhone active install base grew to an all-time high and set a June quarter record for upgraders. According to a recent survey from World Panel, iPhone was the top-selling model in the US, urban China, the UK, France, Australia, and Japan. We were thrilled with the response to the iPhone 17 family. Customer satisfaction in the US was recently measured at 99% by 451 Research. Thank you for joining us. Mac had its best quarter ever for customers new to the Mac and for upgraders worldwide, including in the US, China mainland, and India. And in the US, customer satisfaction for Mac was recently measured at 95%. iPad revenue was $6.2 billion, down 6% year over year, driven by the continued difficult compare against the launch of the A16-powered iPad in the prior year. At the same time, the iPad install base reached a new all-time high, and over half of the customers who purchased an iPad were new to the product. And 451 Research recently measured customer satisfaction at 98% in the U.S. Wearables, home, and accessories revenue was $7.9 billion, up 6% year-over-year, driven by strength in wearables and accessories. And we saw growth in both developed and emerging markets. The wearables install base reached a new all-time high. We set a June quarter record for upgraders on Apple Watch, and over half the customers purchasing an Apple Watch during the quarter were new to the product. And in the U.S., customer satisfaction on Apple Watch was reported at 95%. Our services revenue reached a June quarter record of $30.7 billion, up 12% year over year, despite significant sequential FX headwinds. For the total services business, we saw a double-digit growth in the vast majority of markets we track. We set records in every category, with June quarter records in advertising, app store, AppleCare, music, and video, as well as all-time records in cloud services and payment services. We are optimistic about the long-term future of our services business. With our large install base of over 2.5 billion active devices, we have an incredibly strong foundation for growth opportunities. Our services continue to attract more customers, and we have now surpassed $1.5 billion in paid subscriptions. Both transacting and paid accounts reached new all-time highs in the quarter, with double-digit growth for both in emerging markets. And we continue to improve and expand our services offerings, from powerful updates to Creator Studio to exciting new features we're bringing to services later this year, like splitting bills with Apple Cash using visual intelligence. Turning now to enterprise and education, organizations are using the Apple platform to drive AI innovation and empower the next generation of students. Starting with enterprise, Morgan Stanley has deployed over 20,000 iPhone 17 devices globally as part of a shift from employee-owned to corporate-owned devices for reliability and security. More companies are choosing Mac for on-device AI advantages including lower costs, better performance, and enhanced privacy and security. At Disney, creative teams are increasingly turning to Mac for on-device AI workflows that reduce overall cloud token costs and keep their IP secure. and Credit Agricole, France's leading retail bank, is using on-device AI and MacBook Pro to streamline regulatory workflows, reducing manual processing time by over 80%. Our newest addition to the Mac lineup, MacBook Neo, is reaching new enterprise users in many environments, from bank branches to retail storefronts. In education, MacBook Neo continued to accelerate adoption of Apple products. with many districts leveraging Apple Financial Services to deploy at scale. Pinellas County Schools, one of the largest districts in Florida, is transitioning 25,000 students from Windows devices to MacBook Neo across its 18 high schools. In Washington, Peninsula School District 401 moved over 8,000 students from Chromebooks to MacBook Neo. And in Oklahoma, Midwest City, Dell City School District purchased over 6,000 MacBook Neos to become an all Apple district for students. In fact, in the last quarter, about half of the MacBook Neo large purchases by US education institutions displaced Windows and Chromebook devices. Let's turn to our cash position and capital return program. We ended the quarter with $147 billion in cash and marketable securities and $84 billion in total debt. During the quarter, Suhasini Chandramouli, Jennifer Newstead, Ben Borders, Katherine Adams, Timothy Cook, Sabih Khan, Deirdre O'Brien The color we're providing assumes that global tariff rates, policies, and their application remain in effect as of this call, and the global macroeconomic outlook does not worsen from today. We also expect our September quarter total company revenue to be impacted by two main factors. First, we expect foreign exchange to be a sequential headwind of about 2.5 percentage points to the year-over-year total company growth rate from the June quarter to the September quarter. Second, we expect the impact from supply constraints to increase significantly sequentially. The projected supply constraints in the September quarter affect iPhone, Mac and iPad. As a result, we expect our September quarter total company revenue to grow between nine and 11% year over year. On iPhone, we expect to continue to see high levels of demand. Thank you for joining us. We expect gross margin to be between 47% and 48%. This includes an expected benefit of approximately one percentage point related to tariff refunds. We expect operating expenses to be between 19.1 billion and $19.4 billion. We expect OINE to be around $350 million, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 16.5%. Finally, today, our board of directors has declared a cash dividend of 27 cents per share of common stock payable on August 13th, 2026 to shareholders of record as of August 10th, 2026. Before we take questions, let me turn it back over to Tim.

Thanks, Kevin. Before we get into questions, I just wanted to take a moment to say thank you to all of you, from our shareholders, particularly our long-term shareholders, who have put their trust in us for so many years to the analysts who have followed our company so closely. As you know, this will be my final earnings call and John will lead these calls going forward. The transition is going seamlessly and I am beyond excited for John to step into his new role and lead Apple into its next era. He is truly one of a kind and there is no better person to take the helm of the company. As I've said, I couldn't be more confident in his leadership, in our executive team, and in the extraordinary people at Apple who are determined to enrich the lives of our users all over the world. We have a bright future ahead, and I truly have never been more optimistic. So thank you all, and now Kevan and I will be happy to take your questions.

Thank you, Tim. We ask that you limit yourself to two questions. Operator, may we have the first question, please?

Certainly. We will go ahead and take our first question from Amit Daryanani from Evercore. Please go ahead.

Thanks for taking my question. Tim, best of luck. It's been a pleasure working with you over the years. Maybe to start with, if I think about the 9% to 11% sort of growth that's guided for September, it's about a 500 basis points or so deceleration versus what we've seen in, you know, really in June quarter, even through this year, I would say. Can you just talk about how much of this decel is really supply constraint versus other factors like FX? And if you just flush out what these supply constraints are, they're broadening beyond these advanced SOCs you talked about last quarter as well.

Yeah, this is Kevin. How are you doing? Why don't I start with just kind of describing the sequential change and then I'll let Tim jump into, you know, kind of a bit more color on supply constraints. So I think as I mentioned in my prepared remarks, we expect the December quarter total revenue to grow by 9 to 11 percent year over year. and then we expect that to be impacted by two main factors so first when we look at kind of going from the June quarter to September quarter we expect foreign exchange to be a sequential headwind of around two and a half percentage points to the year-over-year total company growth rate and then the second impact is that the impact from supply constraints is we expect that to increase significantly when we go sequentially from June to September and that protected supply constraint in the September quarter will affect the iPhone Mac, and the iPad. And really, when you combine those two factors, we get pretty close to the June overall total company growth rate.

Yeah, Mitt, it's Tim. First of all, thank you for your comments. During the June quarter, we did experience supply constraints primarily on the Mac and to a lesser extent on iPhone and iPad. These were driven by very high levels of demand. And as we've said before, we are seeing less flexibility in the supply chain than normal. And the constraints were primarily driven by the availability of the advanced nodes that our SOCs are produced on. If you look forward then into the current quarter, the September quarter, Thank you very much. And so we're seeing some very significant constraints currently with limited flexibility in the supply chain to remedy it. Got it. It's really helpful.

Thanks a lot for that. And then, Tim, I just have a memory question for you. You know, Apple has historically, I think, done a really excellent job about delivering capability and utility to customers. without really making them pay disproportionately more. The staggering memory inflation seems to challenge that equation for you folks right now. And there are reports that suggest that you're seeking greater sourcing flexibility for memory. Can you just talk about, is this sourcing options really about ensuring that you have supply and it's a way to mitigate memory inflation? Or is it more to preserve the value proposition for your customers? Just any light you could shed on this would be helpful. Thank you.

Yeah, let me back up and talk about memory in general, because I know this is a subject on many of your minds. If you look at the, as I said on the last call, we paid more for memory in the March quarter than the December quarter. And then, as I alluded to last quarter, we expected to pay significantly more Thank you very much. By a few factors, and let me walk through kind of what they are. The first is, as you would expect, we have a benefit from some carry-in inventory in the September quarter. However, we believe this will see decreasing benefit from this over time beyond the September quarter. The second is we're expecting lower costs on certain non-memory components that are in our BOM. And then if you look beyond September, we see the market pricing for memory continuing to increase, which could drive an increasing impact on our business. And we're continuing to evaluate this. In terms of the sources of supply, primarily the DRAM market has three suppliers. And obviously, if there were more suppliers, that would be good, and it would help us on the supply side and perhaps the pricing side. It's unclear on the pricing side, but it could help on the supply side. And so we're evaluating all options.

All right, thank you, Amit. Operator, could we have the next question, please?

Our next question is from Michael Eng, Goldman Sachs. Please go ahead.

Good afternoon. First, Tim, congratulations on the extraordinary run on these earnings calls. In terms of my questions, I have two as well. First, on the Apple upgrade program, Could you talk a little bit about the expected adoption rates across your $2.5 billion device install base in success? Do you see it shortening the replacement cycle for iPhone or also having an equal impact to Mac and iPad, which may not have benefited from device subsidies in the U.S. like iPhone has historically? Thank you.

Michael, first of all, thank you for your comments. I really appreciate that. If you look at the upgrade program, what it's all about is making it easier for customers to get their hands on our latest products with a leasing plan that's right for them. And of course, as you know, the residual values on Apple products are generally Thank you for joining us. And so we're very excited about it. It is offered in our retail stores, and so it's not widely offered in all channels. And so we'll see what the customer uptake is, but the early feedback on it is quite positive.

Yeah, Michael, I just mentioned that it's only available in the U.S. right now as well.

Great. Thank you. That's very helpful. And then my second question, just on iOS 27 and Apple intelligence, you know, went into public beta earlier this month. Could you talk about, you know, learnings from the public beta? Will, you know, the new Siri AI be a demand driver for iPhones this holiday? You know, how does the Apple intelligence Thank you for that. First of all, we are off the charts excited about Siri AI.

We had a great reception from WWDC. We released the developer beta immediately after the keynote. The developer feedback has been overwhelmingly positive. The feedback from reviewers and so forth have been overwhelmingly positive. We released it to the public for a public beta a few weeks ago and the continued feedback is really, really great. I think it's a very big idea to have AI that's private, that's based on your personal context and that's integrated across the operating system. And so we couldn't be happier with how things are going. In terms of what it means for compute cost, it's obviously early going for us. And so I don't want to say that we have a complete plan for that. We do believe there will be people that want to use it a lot. And so we will have some kind of upgrade possibilities on iCloud Plus where people can buy up the stack on iCloud Plus. And we'll see how the pickup for that is. But we could not be more excited about where the product is.

Wonderful. Thank you for all the thoughts, Sam. Thank you.

Thank you, Michael. Operator, could we have the next question, please?

Our next question is from Ben Rices from Millies Research. Please go ahead.

Yeah. Hey, guys. Thanks a lot for the question. And obviously, Tim, I've known you a long time. I really miss you. I wanted to ask about the supply constraints again. And I think people are just trying to make sense of it a little bit this way is that, you know, the street had yet 12% growth for the quarter. September. And so, you know, you could argue that to get to the 10 percent you guided, that's just the FX. And then in the first quarter, which is December, street has decelerating quite a bit, you know, to like eight to nine percent. So I think, you know, what we're struggling with after hours here is how much these supply constraints really hit you in December and, you know, impact that because, you know, the street did a pretty good job of taking that number into the you know, higher single digits. Is there any guidance you can give us there as you see it, Tim? And we'd really appreciate it. Thanks.

Let me talk about the constraints a little more, and then Kevin can weigh in on the guidance for revenue. As I had mentioned before, the primary issue is advanced nodes that we run our SOCs on. That's the primary supply constraint now, and the root cause of it is not a is not a regular supply issue. It's a demand forecast issue, to be candid, where the iPhone and the Mac are both doing remarkably better than we thought they would do. And we had high expectations, so it wasn't that our expectations were low, but as you can see, Thank you for joining us. Thank you for joining us. to be scrambling on the supply side, essentially. And Kevin, you want to add on the revenue guidance?

Yeah, thanks, Tim. Ben, let me jump in here. And the dynamics Tim mentioned combined with the foreign exchange impact I mentioned earlier sequentially is really what's built into the 9% to 11% guidance we're giving for the September total company revenue year on your growth rate. Beyond September, we're not providing any color. At this point, you mentioned December, so we're not providing any kind of color or guidance beyond the September quarter.

Okay. And then, you know, if I could just ask, and you guys, you know, know what's in the press all the time, but there's this little company. that is also building a fab in Arizona that you guys have been speculating you guys could work with that could potentially alleviate some at least your silicon constraints. Is there any possibility that you guys broaden out your silicon providers in a reasonable timeframe to alleviate these so we feel better about supply?

Yeah, let me stress again. This isn't a partner or supplier issue. This issue is an incredibly strong, it's a great issue in some ways. It's an incredibly strong iPhone and Mac product cycle that has really yielded demand beyond our expectation. In Arizona, we do source over 100 million components this year out of Arizona. And so we have, it is part of our $600 billion commitment to the US and we could not be more pleased with how that fab has ramped and is producing for us.

Thanks, Tim. Yep, thank you.

Thank you, Ben. Operator, could we get the next question, please?

Our next question is from Eric Woodring of Morgan Stanley. Please go ahead.

Great, thanks so much for taking my questions, guys. And Tim, just echo what everyone is saying. It's been a pleasure working with you. Hope to still talk to you in the future. You know, I want to maybe focus on pricing here, Tim, and kind of unprecedented for you to take pricing in the ways that you have I guess two related questions is just, you know, is it your intention to pursue some of these multi-year LTAs with your suppliers just to ensure access to supply at pre-agreed prices? And when you approach product pricing in this environment, is it your intention to protect, you know, product gross profit dollars? Is it your intention to protect product gross margins? We just love the kind of thought process behind the pricing. And then a quick follow-up, please. Thank you.

On the pricing front, we reluctantly raised prices, I would say. We did it because we're in what I would characterize as a 100-year flood on the memory pricing, with exponential increases in memory prices. So that was the rationale for it. In terms of our philosophy on dollars or percentages, we look at units, revenue, and margin, and then come to a business judgment as to how to handle that. And so it's not a... mathematical formula that gets us to a specific result or just looking at one dimension of that. We look at all three dimensions and think about it over the long term instead of a 90-day clock.

Hopefully that helps. I appreciate that. Yeah, yeah, no, that does help. Thank you, Tim. And then Just maybe a quick follow-up, I guess Tim or Kevin, just 12% services growth was just a bit below your guidance. I imagine FX maybe played a role there. I think the fiscal 4Q guidance assumes another deceleration. I think the math would imply below 10% year-over-year as reported. Can you maybe just help us understand the kind of function factors underlying that deceleration? And if that's App Store, which I think some third-party data sources would suggest, is that a function of AI maybe reprioritizing time away from parts of the App Store? Just want to make sure we understand the moving pieces on services, please. Thank you so much.

Hey, Eric, this is Kevin. I'll take that one. So let's walk from kind of the 16% in our fiscal second quarter to kind of the 12% that we just talked about in the June quarter that you referenced. And we look at that, you know, relative to the March quarter, foreign exchange was the main driver for the change in the year-on-year growth rate sequentially. and also a couple other factors to keep in mind. One is we had the theatrical release of F1, which is one of the highest grossing sports films in history. And this year we didn't have a theatrical release. So that had a favorable impact on both the June quarter and also the September quarter and the year ago. We also had some factors that impacted the performance of the App Store. We did see some headwinds in mobile gaming. And then keep in mind, we also made some changes to the App Store business model in certain countries. And in the U.S., we do continue to operate under a court ruling impacting the link-out transactions. But we're pleased the Supreme Court will hear our appeal. Despite this, the App Store did set a June quarter revenue record. So if we take a step back, there are several positive trends in the services business. And during the June quarter, we saw strong double-digit growth in categories like cloud services, video, payment services, and advertising. and we set revenue records in every category with June quarter records in advertising, the App Store, Apple Care, music and video where Apple TV viewership reached an all-time high in the quarter. And then we also set all-time records in cloud services and payment services where Apple Pay saw a record level of users in both developed and emerging markets. And services also had a June quarter record in emerging markets. and as we outlined in the prepared remarks, our services continue to attract more customers and we now have surpassed one and a half billion in paid subscriptions and our transacting and paid accounts hit an all-time high with double growth in both those two in emerging markets. So I think when I step back, If I look at how we landed versus our expectations that we had outlined in the March quarter for the June quarter, I would say that we roughly met our expectations, but we did see a bit more softness on mobile gaming in the App Store. As we go into the September quarter, what I would say is we expect foreign exchange will continue to be a headwind. This is a theme that's impacting the services business more so than the total company. We expect foreign exchange to drive about a five percentage point headwind to the year-on-year growth rate from the March to September quarter. So if we look at the sequential change from the June quarter, the 12% services we reported to what we're guiding for the September quarter, we are going to see another two and a half point sequential headwind.

Great. Thank you so much, Kevin. I appreciate the detail there.

Sure. No problem, Eric. Thanks. Awesome. Thanks, Eric. Operator, could we get the next question, please?

Our next question is from Aaron Rakers of Wells Fargo. Please go ahead.

Yeah, thanks for taking the questions and also best wishes, Tim. I guess I want to, you know, maybe it tethers with the memory pricing dynamic, but, you know, as you look at the demand that you're seeing right now, I'm curious of how you assess whether or not you've seen any pull forward of demand either from the consumer or even the enterprise and education markets and whether or not you're factoring that into your views as we look forward at all.

You're talking about an iPhone, I assume, in general. We've been running at this 22% growth rate for The last while for this cycle has been a 22% increase year to date. And so it's not obvious, I would say, that it's not obvious in the data that what you're asking is true. Obviously, we've now had to increase prices on iPad and Mac. and the price elasticity there is just too early to come to a definitive conclusion of what happens there because it takes a little while for the channels to adjust since there's channel inventory and it takes a while for the consumer to respond and so we'll understand that more in the weeks ahead.

very helpful and then as a quick follow-up maybe more longer term thematically as AI you know proliferates towards the edge and more consumers utilize AI I'm curious Tim if you see AI opening up additional opportunities I can appreciate that you're not going to give us specifics but do you see other kind of addressable markets evolving from AI over time?

Yes, I think there are enormous opportunities for Apple moving forward in AI. And, you know, I'm so excited about Siri AI and kind of where it is and where it's going. And I'm excited about the feedback that we're getting there. And of course, the ability to run Some percentage of request on device is also very strategic and sort of a competitive weapon, if you will. So I could not be more excited about the opportunities there. Thank you. Yeah.

Thanks, Aaron. Operator, can we get the next question, please?

Our next question is from Bansi Mohan of Bank of America. Please go ahead.

Hi, yes, thank you. Tim, first, congrats on your tenure as CEO. You joined back in 2011 when Apple reported $108 billion in revenue, and you just delivered a quarter of $109 billion, so just an amazing journey.

Thank you for that.

I really appreciate it. Yeah, sure, Tim. It's been a pleasure. For my question, first on Siri AI, do you expect that Siri AI would change the capital intensity of Apple despite the fact that you have the ability to do so much differentiated workloads on device and you have this distributed compute? You do have some requests that go into the back end, both in your own first party cloud as well as third party. So is it right to think that the capital intensity of Apple

We use a hybrid model, as I know Kevin has reviewed with you earlier. And so we use some third-party cloud and we do our own data centers. and so there will be a mix. But generally speaking, as you know, we have been growing our OPEX and spending more in AI in general and and quite a bit more. And there are other locations on the P&L other than OpEx like OCogs and et cetera that also have AI expenditures. And so we'll see what Siri AI does from the cost side of it, but there's also the ability when people use it a lot for them to move up on an iCloud platform plan as well. And so what the balance of that is a bit uncertain at the moment. Okay. Thanks, Tim.

Yeah.

And John, since you're on the call, congrats on the new role. I'd love to get maybe just a high-level take from you if you think that the competitive landscape here is changing, especially as you hear about potentially companies like OpenAI building an AI-enabled competitive device or SpaceX AI potentially having a phone that could bypass some of the typical carrier attacks. Just would love your high-level thoughts on how you see the competitive landscape evolving and Apple's position there.

Well, thank you for asking. I guess I would just say, reiterate what Tim said. There is so much opportunity for us with everything that's happening in this space. And we're just really focused on our plans and very excited about it. Thank you.

Awesome. Thank you, Wamsi. Operator, can we have the last question, please?

We will now go to Samik Chatterjee of J.P. Morgan. Please go ahead.

Hi, thanks for squeezing me in here and 10 best wishes from my side as well. Maybe just for my first one, if I go back to WWDC when you announced Siri AI, you also did mention along with the rollout that probably we won't have the initial rollout in China and Europe. So just wanted to get your updated thoughts on that front and any more color in terms of what hurdles you need to cross to be able to launch it in those regions and have a follow up. Thank you.

Yeah, thanks for the question. Let me take them individually. If you look at the EU, we're working closely with the Commission. Obviously, our complete desire is to launch everything everywhere at the same time. That's always the Thank you very much. There, because the Mac is not covered by the same regulations as the iPhone and the iPad. So net-net, we're working with them and hope to reach some sort of solution. If you then look at China, last week we received approval to ship sort of the original features of Apple intelligence, things like cleanup and so forth. And so we're working now through the rollout of those. and there will be more work required down the road for Siri AI, but we're at the front end of that.

Great. And for my follow-up, Kevin, just not to beat sort of this FX thing to death here, but if I look at the gross margin, you delivered 48% in the quarter without the tariff refund benefit, you're guiding to like 46 and a half. Any way to walk us through the sequential driver there and how much of that is FX impacting it versus maybe like increased commodity costs, et cetera, that's driving that sequential moderation? Because it does seem a bit more atypical than your normal sort of yours.

Yeah, Samik, that's a good question. So let me walk through kind of what's impacting our gross margins. We look at our gross margin change from the 49.3 we had at the total company level for the March quarter. And as you mentioned, the 48.1 adjusted for the tariff refund in the June quarter, that 120 basis point change. If you look at the drivers of that, more than 100% of that can be explained by the memory cost change that Tim outlined. While FX was a factor, really the main driver was really the memory cost impact. and as Tim outlined earlier when we talked a bit about the dynamics around the memory cost is we did see some partial offsets from things like the benefit of carrying inventory, reduction in non-memory component costs and some favorable mix. We are seeing the same dynamics when you go from the 48.1 that we printed in the June quarter Thank you for joining us.

Thank you both for taking my questions.

And congrats again, Tim. Thank you so much for saying that. I appreciate it.

Thank you, Samik. A replay of today's call will be available on Apple Podcasts and at apple.com slash investor. Thanks again for joining us today.

Once again, this does conclude today's conference. We do appreciate your participation.