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Apple (AAPL -2%) is trading slightly lower after reporting Q3 (Jun) results last night. Not only did it provide strong upside for Q3, partly due to tariff-related pull ahead in demand, but Apple provided bullish Q4 (Sep) revenue guidance. Specifically, Apple sees Q4 revs being up mid-to-high single digits, which was notably better than expected. Apple also reported less-than-expected tariff costs and we think the SepQ guidance was better-than-feared.

• Revenue rose 9.6% yr/yr to $94.04 bln, its strongest yr/yr growth in the past 14 quarters, fueled by double-digit growth across iPhone, Mac and Services. Apple saw an acceleration of growth in the vast majority of markets, including Greater China and many emerging markets. Apple also posted JunQ revenue records in more than two dozen countries and regions, including the US, Canada, Latin America.
• iPhone sales came in well above street estimates in Q3, its second quarter in a row of upside following a miss in Q1. iPhone revenue rose 13.5% yr/yr to a JunQ record of $44.58 bln vs $40.3 bln street ests. Tariff pull-forward demand had an impact. Apple saw iPhone growth in every geographic segment and double-digit growth in many emerging markets. The iPhone active installed base grew to an all-time high in total and in every geographic segment.
• Mac sales were another bright spot with revs up 14.8% yr/yr to $8.05 bln, driven by continued strength across the portfolio, including MacBook Air, Mac mini and MacBook Pro. Mac sales grew in every geographic segment and saw double-digit growth in Europe, Greater China and the rest of Asia Pacific. The Mac installed base reached an all-time high, and Apple hit a JunQ record for upgraders.
• Services were robust as well with sales up 13.3% yr/yr to $27.4 bln, a bit above street estimates of $26.9 bln. Quality programming was a key driver. Apple TV+ scored 81 Emmy nominations, a record for the platform, with Severance leading all Emmy nominees with 27 nominations and The Studio followed close behind with 23 nominations.
• It was not all good news as iPad sales fell 8% yr/yr to $6.58 bln. However, this was expected given that it was lapping a difficult compare against the launch of the iPad Air and iPad Pro in the year ago quarter. Wearables revenue was also down 8.5% yr/yr to $7.4 bln. This was also driven by a difficult compare on accessories due to the prior year's iPad launches.
• Turning to the tariff impact in JunQ, Apple incurred approximately $800 mln of tariff-related costs, below $900 bln prior guidance, and expects SepQ to add about $1.1 bln in costs. With the new iPhone 17 likely to be announced around the week of Sept 8, we think investors are pleased the tariff impact was not worse. However, lots of iPhone sales will happen in DecQ, so we look forward to tariff guidance on the next call.

Overall, the JunQ results were quite good with nice upside and robust guidance. Results were fueled by strong iPhone and Mac sales and perhaps some tariff-fueled pull forward demand. However, most product categories did well. Even the categories that were down, that was mostly due to lapping tough compares. Tariffs are a chief concern, but they turned out to be a bit less impactful than prior guidance and the SepQ tariff guidance could have been worse.