Apple reported a strong Q2 2026, with revenue reaching about $111 billion, beating market expectations. Profit was close to $30 billion, while earnings per share also came in higher than forecasts. The growth was mainly driven by iPhone sales, which generated around $57 billion, along with steady gains in services crossing $30 billion. However, the tech titan also warned that chip shortages and rising memory costs could affect supply in the coming quarters, even as demand remains strong.
The strong performance makes Apple’s March-quarter results one of the strongest in its history. Revenue increased around 17% year-on-year, significantly above the company’s earlier guidance range of 13-16%, and ahead of analyst estimates of about $109-110 billion. Net income climbed to almost $29.6 billion, compared with about $24.8 billion a year earlier, while earnings per share reached $2.01, up more than 20% annually. A key indicator of Apple’s profitability strength was its gross margin, which expanded to 49.3%, compared with 47.1% in the same quarter last year. At the same time, the company generated more than $28 billion in operating cash flow during the quarter.
The iPhone segment once again dominated the revenue mix, contributing about $57 billion, showing a growth of over 20% year-on-year. This surge was largely driven by strong global demand for the latest iPhone 17 series, with Apple indicating that demand exceeded supply in certain regions. Other hardware segments also contributed meaningfully, though at a smaller scale. Mac revenue reached $8.4 billion, supported by refreshed MacBook models and new lower-cost offerings, while iPad revenue stood at $6.91 billion, benefiting from updated models and improving enterprise demand. The Wearables, Home and Accessories segment brought in about $7.9 billion, with continued expansion of the Apple Watch and AirPods ecosystem.
One of the most notable trends in the quarter was the continued rise of the company’s services business. The segment generated about $30.98-$31 billion in revenue, an all-time high, and now accounts for around 28% of total company revenue. This includes revenue from the App Store, subscriptions like Apple Music and Apple TV+, iCloud services, payments, and advertising. Apple also reported a record installed base of over 2.5 billion active devices, which continues to support recurring service income. Geographically, Apple saw double-digit growth across all major regions. China was a standout performer with particularly strong growth, while emerging markets like India showed accelerating adoption, especially in Mac and iPad categories.
However, despite such strong performance, Apple warned of supply chain risks that could affect future quarters. The company is facing constraints in sourcing advanced semiconductors used in its latest devices, as global demand for high-performance chips – driven partially by AI workloads – tightens capacity. Also, rising prices for memory components like DRAM and NAND flash are expected to increase input costs, potentially pressuring margins if not offset by pricing.
Meanwhile, looking ahead, Apple remains optimistic about demand, forecasting double-digit revenue growth in Q3 2026, potentially in the range of 14-17%. The company also continued its aggressive capital return strategy, approving an additional $100 billion share buyback program and increasing its dividend to $0.27 per share. This quarter’s results become even more critical as the company witnessed a major leadership shift, with Tim Cook stepping down and John Ternus named as the next CEO.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
