Apple releases third-quarter fiscal 2026 results after the market closes on Friday, July 31. Analyst consensus expects revenue around $108.9 billion with earnings per share of $1.89. The company guided for 14-17% year-over-year growth last quarter, and it delivered. The question now is whether that growth sticks.

iPhone revenue is expected to land in the $31-32 billion range—another record. That’s mid-to-high teens growth despite mounting saturation in developed markets. Price increases are working. Customers are paying more for Pro models and upgraded storage. Gross margin is expected to expand to 47.5-48.5%, a sign that Services revenue is pulling mix higher even as hardware faces tougher comparisons.

Services Revenue and Installed Base Moat

Services revenue is expected to grow about 14% year over year. That’s the real story. Hardware is mature. Services is where Apple compounds value by locking in existing customers with subscriptions, app store fees, and financial services. The company now has such a large installed base that small percentage growth in services equals large dollar amounts.

A 14% Services growth rate might sound modest compared to cloud companies, but it’s compounding on a base already north of $20 billion annually. Every percentage point of growth adds hundreds of millions in recurring revenue that Apple will capture for years.

Mac and Wearables Weakness

Mac and wearables growth has slowed. Mac is facing competition from better value in the Windows ecosystem, while wearables growth is moderating as the market matures. iPad is a bright spot, but it’s too small to move the needle on total revenue. iPhone and Services are 80% of the story, and both are firing.

Watch for any guidance pullback. If the company cuts expectations for Q4 (holiday season), that signals iPhone demand is slowing faster than expected.