Apple Services Revenue Misses Estimates as App Store Changes and Gaming Slowdown Weigh on Results
Apple’s fiscal Q3 2026 services revenue slipped to $30.74B vs $31.22B estimates, sending shares down more than 4% after hours. CFO Kevan Parekh blamed slower mobile gaming and App Store model changes tied to a U.S. court order, even as paid subscriptions rose past 1.5B (up from 1B in Jan 2025) and the App Store hit a June-quarter record backed by Apple Ads moving into Apple Maps.
Apple’s services business fell short of Wall Street expectations in its fiscal third quarter of 2026, with the company reporting $30.74 billion in services revenue against analyst estimates of $31.22 billion. The miss contributed to a drop of more than 4% in Apple’s stock price in after-hours trading.
Apple CFO Kevan Parekh attributed the shortfall to several factors, with two standing out: a slowdown in mobile gaming and changes to the App Store’s business model. In the U.S., Apple is operating under a court order requiring it to allow app developers to process customer payments outside the App Store, bypassing Apple’s commission. The company noted the matter is headed to the Supreme Court for a final ruling. Foreign exchange rates were cited as the main driver of the miss, and results also compared unfavorably to prior quarters boosted by revenue from Apple’s “F1” theatrical release.
Despite the revenue miss, Apple reported that its total paid subscriptions surpassed 1.5 billion — up from 1 billion in January 2025. Both transacting and paid accounts reached all-time highs in the quarter, with double-digit growth in emerging markets. The App Store still set a June quarter revenue record, though that figure includes Apple Ads revenue, which has grown in importance and recently expanded to Apple Maps.
Several services segments performed well individually. Apple Ads, AppleCare, Apple Music, and Apple TV each set June quarter records, while cloud and payment services hit all-time highs. Apple TV viewership also reached an all-time high in the quarter.
Looking ahead, Apple pointed to potential new revenue streams, including Creator Studio subscriptions, an upcoming bill-splitting feature in Apple Cash, and the newly launched Apple Upgrade program — developed in partnership with Klarna — as areas that could expand its services business going forward.