Apple (AAPL) Q2 2026 earnings report

Apple issued a better-than-expected income forecast for the present interval after beating on gross sales and earnings within the fiscal second quarter. The inventory rose about 3% in prolonged buying and selling.

Gross sales for iPhones missed estimates for the second time in three quarters, the one important quantity that got here up in need of expectations in Thursday’s report.

Here is how the corporate did in comparison with analyst estimates, in accordance with LSEG consensus.

• EPS: $2.01 vs. $1.95
• Income: $111.18 billion vs. $109.66 billion

Wall Road can be these key areas: 

• iPhone income: $56.99 billion vs $57.21 billion anticipated
• Mac income: $8.4 billion vs. $8.02 billion anticipated
• iPad income: $6.91 billion vs. $6.66 billion anticipated
• Wearables, Dwelling and Equipment income: $7.9 billion vs. $7.7 billion anticipated
• Companies income: $30.98 billion vs. $30.39 billion anticipated
• Gross margin: 49.3% vs. 48.4% anticipated

Income climbed 17% from $95.4 billion a 12 months earlier, Apple said. It was the primary time the corporate confronted Wall Road because the announcement final week that Tim Cook will likely be stepping down as CEO after 15 years on the job.

Apple mentioned on the earnings name that income within the June quarter will improve between 14% and 17% from a 12 months earlier. Analysts have been anticipating progress of 9.5% to $103 billion, in accordance with LSEG.

The corporate’s board licensed a further $100 billion in inventory repurchases and declared a money dividend of 27 cents per share, up 4%.

Gross sales of iPhones rose 22% within the quarter from a 12 months earlier. Like different client electronics firms and system makers, Apple faces provide chain constraints, largely because of the international reminiscence scarcity that is being pushed by hovering synthetic intelligence demand. Meta and Microsoft mentioned Wednesday that increased reminiscence costs contributed to their increased capital expenditures forecasts for the 12 months.

Prepare dinner mentioned on the earnings name that the iPhone 17 is now the “hottest lineup in our historical past” and famous that general income beat steerage “regardless of provide constraints.” CFO Kevan Parekh mentioned the corporate confronted provide constraints on iPhones and Macs.

Together with sturdy income steerage, Prepare dinner made clear to buyers that the reminiscence crunch is not going away. He mentioned the affect within the December quarter was “minimal” and that there was a bit extra of successful within the March interval.

Within the present quarter, “we count on considerably increased reminiscence prices,” Prepare dinner mentioned. Going past that, “we consider reminiscence prices will drive an rising affect on our enterprise,” which can lead the corporate to “have a look at a variety of choices,” he mentioned.

In March, Apple announced a variety of new merchandise, together with its iPhone 17e, a refreshed iPad Air laptop computer with an M4 chip in 11-inch and 13-inch sizes. it additionally unveiled the MacBook Neo, a low-cost laptop computer priced at $599 and geared toward college students and budget-conscious shoppers.

Whereas system gross sales are at all times key to Apple’s outcomes, prime of thoughts for Wall Road is what to anticipate from incoming CEO John Ternus. Apple introduced on April 20, that Ternus is succeeding Cook, who will turn out to be govt chairman on Sept. 1.

Ternus, a longtime Apple exec who’s been operating {hardware}, joined the decision and was launched by Prepare dinner.

“We have now the proper chief able to step into the function,” Prepare dinner mentioned in his opening remarks, including that Apple has the group to comprehend the “promise of this firm.”

Ternus thanked Prepare dinner and Apple’s shareholders and mentioned, the corporate has an “unbelievable roadmap forward.”

“And when you’re not going to get me to speak concerning the particulars of that roadmap, suffice it to say, that is probably the most thrilling time in my 25-year profession at Apple to be constructing services,” Ternus mentioned.

One of many first issues Ternus has to figure out is the place Apple goes to go together with AI. Early within the quarter, Apple introduced it could partner with Google to make use of its Gemini AI mannequin to energy its Siri product.

Throughout the Q&Part of the earnings name, Prepare dinner mentioned, “the collaboration with Google goes nicely,” and that the corporate is “pleased with the place issues are and we’re pleased with the work that we’re doing independently as nicely.”

Companies income within the quarter rose about 16% from $26.65 billion a 12 months in the past. Apple makes use of its huge buyer base — and a complete of over 2.5 billion energetic units available on the market — to promote subscriptions to leisure companies, in addition to to companies for Apple Pay, iCloud and AppleCare.

With the expansion in companies, Apple generates increased revenue margins. Lengthy caught within the excessive 30s, Apple’s gross margin has been steadily transferring up in recent times, reaching 49.3% within the newest quarter up from 48.2% within the earlier interval.

Larger China gross sales elevated throughout the quarter to $20.5 billion, up 28% from $16 billion a 12 months in the past. The China area is Apple’s third greatest, behind Americas and Europe.

Analysis and improvement prices elevated at a a lot quicker tempo than income, rising 33% within the quarter to $11.42 billion from $8.55 billion a 12 months earlier.

Prepare dinner mentioned, concerning the R&D figures, that the corporate is “clearly investing extra,” partly because of the AI progress potential it sees.

“We’re investing in services, and we see alternatives in each of these,” he mentioned.

Parekh adopted by saying that the corporate believes “AI is a very necessary funding space for Apple and we will be doing that incrementally on prime of what we usually put money into our product roadmap.”

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