What Management Said
Read the full Q2 2026 transcript ↗Today, Apple is proud to report $111.2 billion in revenue, up 17% from a year ago, and a March quarter record, which was above the high end of our guidance range despite supply constraints. Customer enthusiasm for iPhone has been extraordinary, with revenue growing 22% year-over-year to achieve a March quarter record. Services reached an all-time revenue record, growing 16% from a year ago, while EPS set a March quarter record of $2.01, up 22% year-over-year. We set March quarter revenue records and grew double digits in every geographic segment, including strong double-digit growth in Greater China and the rest of Asia Pacific.
We also achieved March quarter revenue records in both developed and emerging markets and saw double-digit growth in nearly every emerging market we track, including India. As I mentioned earlier, iPhone had an excellent quarter with $57 billion in revenue, a March quarter record despite supply constraints. Mac revenue was $8.4 billion for the March quarter, up 6% from a year-ago, despite supply constraints driven by higher-than-expected levels of demand. Turning to iPad, revenue was $6.9 billion, up 8% from a year ago.
Across wearables, home, and accessories, revenue for the March quarter came in at $7.9 billion, up 5% from a one year ago. Now let's turn to services, which set an all-time revenue record with $31 billion. We saw double-digit growth in both developed and emerging markets and set new all-time revenue records across most of the services categories. Audiences are applauding the return of shows like Your Friends & Neighbors, Shrinking, and For All Mankind, while discovering new favorites like Widow's Bay.
What went well
- March quarter revenue record of $111.2B, up 17% YoY, above the high end of guidance despite supply constraints
- iPhone revenue of $57B, up 22% YoY, a March quarter record; the iPhone 17 family is the most popular lineup in Apple's history through the March quarter
- Services set an all-time revenue record of $31B, up 16% YoY, with all-time records in both developed and emerging markets and across most categories
- Greater China revenue up 28% YoY (first-half up 33%), a quarterly revenue record driven by iPhone
- Company gross margin of 49.3% was above the high end of guidance, up 110bps sequentially
- March quarter records for net income ($29.6B) and diluted EPS ($2.01, up 22% YoY); operating cash flow of $28.7B
- March quarter revenue records in every geographic segment; installed base at another all-time high, over 2.5 billion active devices
- Board authorized an additional $100B for buybacks and raised the dividend 4% to $0.27; FX was a ~2.5-point tailwind to growth
What went wrong
- Supply constraints on iPhone and, to a lesser extent, Mac, driven by availability of advanced-node SoC capacity; June-quarter constraints shift primarily to several Mac models (Mac mini, Mac Studio, MacBook Neo)
- Products gross margin of 38.7% was down 200bps sequentially on seasonal loss of leverage and higher memory costs
- Operating expenses of $18.9B, up 24% YoY, were slightly above the high end of guidance due to a one-time SG&A expense
- Significantly higher memory costs expected in the June quarter (only partly offset by carry-in inventory), with an increasing impact beyond June
- Mac mini and Mac Studio supply-demand balance may take several months to reach
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Total company revenue growth | Q3 FY2026 (June quarter) | 14%-17% YoY, comprehending constrained supply |
| Services revenue growth | Q3 FY2026 (June quarter) | similar YoY rate to March quarter after removing the favorable FX tailwind (FX was ~2.5 points in Q2, slightly more for services) |
| Gross margin | Q3 FY2026 (June quarter) | 47.5%-48.5%, reflecting significantly higher memory costs partly offset by carry-in inventory |
| Operating expenses | Q3 FY2026 (June quarter) | $18.8B-$19.1B |
| OINE | Q3 FY2026 (June quarter) | around $250M, excluding mark-to-market of minority investments |
| Tax rate | Q3 FY2026 (June quarter) | around 17% |
| iPad | Q3 FY2026 (June quarter) | difficult compare driven by prior-year launch of the A16-powered iPad |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| iPhone revenue | +22% | iPhone 17 family strength (design, performance, durability, camera, Center Stage, integrated Apple Intelligence); double-digit growth in the majority of markets and a March quarter upgrader record; gained share per IDC, despite supply constraints |
| Mac revenue | +6% | Recent launches including MacBook Neo; March quarter records for upgraders and customers new to Mac; gained share per IDC, despite supply constraints |
| iPad revenue | +8% | Continued strength of the A16-powered iPad and M5-powered iPad Pro; over half of buyers new to the product; double-digit emerging-market growth |
| Wearables, home and accessories revenue | +5% | Strength in wearables and accessories; new March quarter emerging-market revenue record; over half of Apple Watch buyers new to the product |
| Services revenue | +16% | Broad-based with all-time records in developed and emerging markets and across most categories; FX slightly more favorable than the company-level ~2.5-point tailwind |
| Greater China revenue | +28% | iPhone-driven March quarter revenue record; iPhone top-selling model, Mac mini top desktop, MacBook Air top laptop in urban China; store traffic up double digits |
| Company gross margin | 49.3% (up 110bps sequentially) | Favorable mix and lower tariff-related costs, partly offset by seasonal loss of leverage and higher memory costs; products gross margin down 200bps to 38.7% |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| CEO transition | Not previously announced | Tim Cook to become Executive Chairman on September 1st; John Ternus (SVP Hardware Engineering) to become CEO, pledging continued financial discipline | — |
| Supply constraints | Primarily advanced-node SoC capacity affecting iPhone (and some Mac) | June-quarter constraints shift primarily to Mac (Mac mini, Mac Studio, MacBook Neo) on higher-than-expected AI/agentic and Neo demand; may take several months to balance | — |
| Memory costs | A bit more of an impact expected in March quarter | Saw higher memory costs in March (partly offset by carry-in inventory); significantly higher expected in June; increasing impact beyond June; will evaluate a range of options | — |
| Capital structure / net cash neutral | Net cash neutral was a formal target since 2018 | No longer a formal target; will evaluate cash and debt independently; additional $100B buyback authorization and a 4% dividend increase to $0.27; over $1T returned since program start (>$850B via buybacks) | — |
| AI investment / Google collaboration | Google collaboration announced for Apple Foundation Models | Collaboration going well; R&D accelerating faster than the company; more personalized Siri still coming this year; growing agentic-AI developer interest on Apple platforms | — |
| Tariffs | ~$1.4B in December quarter | Lower in March on lower product volume, a full-quarter IEEPA reduction and reduced Section 122 global rate; pursuing tariff refunds to reinvest in U.S. innovation/manufacturing | — |
| MacBook Neo | Newly introduced | Off-the-charts demand; driving new-to-Mac customers (e.g., Kansas City Public Schools switching from Windows/Chromebooks); supply-constrained | — |
Q&A Summary
Contextualize the March-quarter iPhone and Mac supply constraints and whether June guidance is constrained, and expand on dropping net cash neutral (Erik Woodring, Morgan Stanley)?
Cook: constrained in March mainly on iPhone (advanced-node SoC capacity), less on Mac; June constraints shift primarily to Mac (Mac mini, Mac Studio, MacBook Neo) on higher-than-expected AI/agentic and Neo demand, possibly taking several months to balance. Parekh: net cash neutral served well since 2018 but Apple will now evaluate cash and debt independently for more optimal decisions, while staying committed to returning excess cash (added $100B buyback authorization).
How should we think about an 'agentic smartphone' / new form factors, and is there an overarching gross-margin philosophy beyond June given components (Ben Reitzes, Melius)?
Cook: won't detail the roadmap but thrilled with iPhone (+22%, strongest cycle ever through March). On margins/memory: minimal December impact, higher in March (partly offset by carry-in inventory), significantly higher in June, and an increasing impact beyond June; will look at a range of options.
How is MacBook Neo driving new customer segments and under-penetrated markets, and is App Store ad inventory / Maps ads contributing to services (Michael Ng, Goldman Sachs)?
Cook: supply-constrained on MacBook Neo; focused on new-to-Mac and long-hold customers, with school systems (e.g., Kansas City) switching from Chromebooks/Windows. Parekh: advertising grew YoY with new App Store search ad slots, and Apple Maps ads coming this summer in the U.S. and Canada, balanced with privacy.
In a memory-dislocation period, is Apple more focused on share gain (e.g., not raising prices at the low end) or profitability, and where will Apple invest in agentic AI (Wamsi Mohan, Bank of America)?
Cook: will look at a range of options with memory costs increasing, but won't go beyond that. Apple is clearly investing more, with R&D accelerating faster than the company; sees opportunities in both products and services. Parekh: AI is a key incremental investment area on top of the normal product roadmap.
What levers drive 20%+ iPhone growth despite constraints and its durability, and what advice are you giving John for the transition (Amit Daryanani, Evercore)?
Cook: the iPhone 17 family drives it (design, performance, durability, camera, Center Stage, integrated Apple Intelligence), with double-digit growth across most markets, a March upgrader record, and 99% U.S. customer satisfaction. On advice: Steve told him to do the right thing; his advice to John is to spend time where the greatest benefit to company and users lies and keep the North Star of making the best products.
Is iPhone constrained in June and can Apple secure SoC and memory (alternative sources), and is services gross margin approaching a scaling ceiling (David Vogt, UBS)?
Cook: the primary constraint in March and June is advanced-node SoC capacity, not memory; won't predict when supply/demand match, and Mac mini/Studio may take several months. Parekh: services portfolio has varied models and profitability; Q2 services margin up 20bps on mix; some services improve as they gain scale; hard to speculate on long-term trajectory.
Update on balancing the Google collaboration with internal models (invest more?), and why is the sequential product gross-margin decline so muted plus the FX impact (Samik Chatterjee, JPMorgan)?
Cook: investing more, R&D scaling significantly YoY; Google collaboration going well alongside independent work. Parekh: products gross margin down 200bps sequentially on seasonal leverage loss and higher memory; overall company gross margin up 110bps on favorable mix and lower tariffs; no sequential FX impact on gross margin. Cook: March tariffs lower on volume, a full-quarter IEEPA reduction and reduced Section 122 rate; pursuing refunds to reinvest in U.S. innovation/manufacturing.
What are you seeing in China competitively, and how is the India market evolving (Aaron Rakers, Wells Fargo)?
Cook: thrilled with China, first-half up 33% and March up 28% (a quarterly revenue record), iPhone-driven with iPhone top model, Mac mini top desktop and MacBook Air top laptop in urban China, store traffic up double digits. India a huge opportunity: second-largest smartphone and third-largest PC market with still-modest share, a rising middle class, and majority of buyers new to each product category.
More on Apple Inc.
Reported 2026-04-30 · figures from the Apple Inc. Q2 2026 earnings call.
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