Apple delivered fiscal second-quarter 2026 results that exceeded Wall Street expectations across every major line item, posting revenue of $111.18 billion — a 17% year-over-year increase — and earnings per share of $2.01, comfortably beating the consensus estimate of $1.94.
Shares of Apple climbed more than 4% in after-hours trading following the report, contributing to the S&P 500 crossing 7,200 for the first time on May 1.
Key Financial Results
| Metric | Q2 FY2026 | Estimate | Q2 FY2025 | YoY Change |
|---|---|---|---|---|
| Revenue | $111.18B | $109.66B | $95.4B | +17% |
| EPS | $2.01 | $1.94 | $1.65 | +22% |
| Gross Margin | 49.3% | ~48.5% | 46.9% | +2.4pp |
| iPhone Revenue | $56.99B | ~$54B | $46.8B | +22% |
| Services Revenue | $30.97B | $30.37B | $26.6B | +16% |
iPhone: Second Consecutive Quarter Above 20% Growth
iPhone revenue of $56.99 billion marked the second straight quarter of greater than 20% year-over-year growth in the segment. The iPhone 17 cycle, particularly the Pro and Pro Max models with Apple Intelligence features, continues to drive upgrade activity across markets.
Greater China iPhone revenue showed meaningful recovery, a reversal from the competitive pressure Apple had faced from Huawei throughout calendar year 2025. Apple CFO Kevan Parekh noted on the call that China demand benefited from strong holiday-season momentum that carried into the March quarter.
Services Crosses $31 Billion
Apple’s Services business generated $30.97 billion in revenue, exceeding the $30.37 billion consensus. The segment, which carries gross margins near 75%, remains Apple’s primary driver of overall margin expansion.
App Store revenue, Apple Pay transaction volume, and Apple TV+ subscriber growth were cited as the primary contributors. The company now reports more than 1.1 billion paid subscriptions across its services platform.
Gross Margin Expansion Surprises
The 49.3% gross margin significantly exceeded Apple’s prior guidance range of 48–49%, suggesting that tariff costs were more effectively managed than analysts had feared. Apple’s India manufacturing expansion — now accounting for approximately 30% of US-bound iPhone production — appears to be delivering meaningful cost benefits.
Forward Guidance
Apple guided for fiscal Q3 2026 (June quarter) revenue growth of 14–17% year-over-year, implying revenue of approximately $88–$90 billion. The guidance range is wider than usual, reflecting ongoing trade policy uncertainty.
CEO John Ternus, who assumed the role in January 2026 following Tim Cook’s transition to executive chairman, noted that the company remains focused on managing the “complex global supply chain environment” while investing in artificial intelligence capabilities.
Tariff Impact Contained
Despite operating in one of the most exposed hardware supply chains to US-China tariff policy, Apple reported a tariff cost impact of approximately $1.2 billion in Q2 — within its guidance range and below the $1.4 billion absorbed in Q1.
The company continues to diversify manufacturing toward India and Vietnam, though China remains the majority production base. No new significant tariff escalation was flagged for Q3.
What This Means for Investors
Apple’s Q2 results reinforce the company’s position as a cash-generation machine operating at the intersection of premium hardware and high-margin recurring services. The stock trades at approximately 32x forward earnings, a premium the company continues to justify through consistent execution.
The combination of iPhone cycle strength, Services compounding, and better-than-expected tariff management positions Apple favorably heading into the summer months, though macro uncertainty from ongoing US-Iran tensions and potential Federal Reserve policy shifts remain headwinds for the broader market.
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This article reports publicly available earnings data. It does not constitute investment advice.