Apple Q2 2026 Earnings Bolstered by iPhone, Services
Apple Q2 2026 earnings were driven by iPhone 17 and record Services; guidance and chip-cost warnings could pressure margins and tilt positioning.
KEY TAKEAWAYS
- Revenue for Q2 FY2026 was $111.2 billion, up 17% year over year.
- Q3 FY2026 guidance calls for 14% to 17% revenue growth while flagging higher memory-chip costs.
- Board authorized an additional $100 billion share repurchase.
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Apple Inc. (AAPL) reported fiscal second-quarter 2026 revenue of $111.2 billion, a 17% increase year over year, driven by strong March-quarter demand for the iPhone 17 and record Services revenue. The company issued Q3 FY2026 revenue guidance projecting continued growth despite memory-chip cost pressures.
Quarter Results and Product Momentum
Apple posted diluted earnings per share of $2.01, up 22% from a year earlier, with net income of $29.6 billion. Gross margin expanded 220 basis points to 49.3%, and operating cash flow reached $28.7 billion. Chief Executive Tim Cook called it “our best March quarter ever” in prepared remarks.
iPhone revenue hit $57.0 billion, a 21.7% increase and a March-quarter record fueled by the iPhone 17 lineup and the new iPhone 17e. Services revenue reached an all-time quarterly high of $31.0 billion, growing 16.3%. Mac sales rose 5.7% to $8.4 billion, supported by the MacBook Neo, while iPad revenue climbed 8.0% to $6.9 billion, aided by a record installed base and the M4-powered iPad Air. Wearables, Home & Accessories generated $7.9 billion, up 5.0%, with more than half of Apple Watch buyers new to the product.
Geographically, revenue grew across all major regions, including a 28.1% increase in Greater China, 14.7% in Europe, and 11.9% in the Americas.
Guidance, Costs, and Capital Moves
For fiscal third quarter 2026, Apple set revenue guidance of 14% to 17% growth year over year, with gross margin expected between 47.5% and 48.5%. Operating expenses are projected between $18.8 billion and $19.1 billion. The company anticipates other income and expense near $250 million and an estimated tax rate of about 17%.
Management said the outlook depends on continued demand for the iPhone 17 and Mac products but flagged supply constraints from a memory-chip shortage and higher chip costs expected over the next quarters. These conditions could pressure pricing and margins.
The board authorized an additional $100 billion in share repurchases and raised the quarterly dividend to $0.27 per share from $0.26, payable May 14, 2026, to shareholders of record on May 11, 2026. The earnings release followed the announcement that Tim Cook will transition to executive chairman and John Ternus will become CEO in September 2026.
This combination of strong top-line guidance alongside explicit cost and supply warnings highlights a near-term trade-off between momentum and margin risk. Analysts remain divided on whether the results reflect durable demand or short-term factors.
Quote: “Our best March quarter ever,” said Tim Cook.
