Apple Inc ((AAPL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Apple Inc.’s latest earnings call struck an upbeat tone, with management emphasizing powerful revenue growth, record profitability and an expanding services engine that more than offset mounting cost and supply challenges. Executives acknowledged memory inflation and SoC-related bottlenecks, yet framed them as manageable headwinds against a backdrop of robust demand and record-high engagement across the ecosystem.
Record Revenue and Broad-Based Top-Line Strength
Apple posted March-quarter revenue of $111.2 billion, up 17% year over year and a new record for the period, with every geographic segment hitting a March high. Management highlighted that both developed and emerging markets contributed, underscoring the breadth of demand rather than reliance on any single region.
iPhone Fuels Growth With Record Upgrades
iPhone revenue surged 22% year over year to $57 billion, setting a March record and cementing the iPhone 17 family as the most popular lineup from launch through March. The company reported a March record for iPhone upgraders and said the active installed base hit an all-time high as it gained share according to IDC.
Services Hit All-Time High and Expand Margins
Services revenue climbed 16% to $31 billion, an all-time high driven by double-digit growth in both developed and emerging markets. Transacting and paid accounts reached new records, while Services gross margin ticked up to 76.7%, reinforcing the segment’s role as Apple’s most profitable growth engine.
Earnings Power, Cash Generation and Shareholder Returns
Earnings per share rose 22% to $2.10, a March-quarter record, with net income of $29.6 billion and operating cash flow of $28.7 billion. Apple returned $15 billion to shareholders, split between $11 billion of buybacks and $3.8 billion in dividends, and its board authorized a further $100 billion in repurchases alongside a 4% dividend increase.
Installed Base Reaches 2.5 Billion Devices
Apple’s installed base surpassed 2.5 billion active devices across major product lines, underlining the durability of its ecosystem. Management also cited exceptionally high customer satisfaction readings across iPhone, Mac, iPad and Apple Watch, reinforcing the company’s ability to drive repeat purchases and ongoing services spend.
Hardware Portfolio Shows Broad Momentum
Mac revenue rose 6% to $8.4 billion, with March records for both upgraders and customers new to the Mac platform, while iPad revenue increased 8% to $6.9 billion. Wearables, Home and Accessories delivered $7.9 billion, up 5%, aided by strong demand for MacBook Neo, M5 MacBook Air and Pro, M4 iPad Air, refreshed AirPods and Apple Watch models.
Strategic Investment and Sustainability Commitments Advance
Management highlighted progress on its large U.S. investment program, including plans to move Mac mini production to Houston and major chip sourcing from TSMC’s Arizona facilities. On sustainability, Apple reiterated targets for high levels of recycled materials across batteries, magnets and overall shipments, and plans to eliminate plastic from packaging.
Supply Constraints Hit iPhone and Mac Lines
The company acknowledged that limited availability of advanced SoC nodes constrained iPhone supply in March and is set to weigh more heavily on several Mac models into June. Apple warned that Mac mini and Mac Studio could take several months to reach a better supply-demand balance, tempering near-term upside despite healthy demand.
Memory Inflation Pressures Product Margins
Product gross margin slipped to 38.7%, down 200 basis points sequentially, as sharply higher memory costs began to bite. Management said significantly higher memory prices are embedded in the June outlook and are expected to exert growing pressure beyond that, leaving some uncertainty around how quickly product margins can recover.
Operating Expenses Rise With AI and R&D Spend
Operating expenses grew 24% year over year to $18.9 billion, running slightly above guidance due to a one-time SG&A item and stepped-up investment. Apple emphasized heavier R&D and operating spending tied to artificial intelligence and other strategic initiatives, positioning higher costs as deliberate bets on future growth.
Shift Away From Net Cash Neutral Target
In a notable capital-structure shift, Apple said it will no longer aim explicitly for a net cash neutral position and will instead evaluate cash and debt independently. While buybacks and dividends remain priorities, dropping this benchmark gives management more flexibility in how aggressively it returns capital or deploys funds for strategic needs.
Guidance Highlights Growth Amid Ongoing Headwinds
For the June quarter, Apple expects revenue growth of 14%–17% year over year, assuming no deterioration in tariffs or macro conditions and factoring in constrained Mac supply. The company guided to gross margins between 47.5% and 48.5%, operating expenses around $18.8–$19.1 billion, reiterated elevated memory costs and highlighted a tougher comparison for iPad given last year’s launch timing.
Apple’s call painted the picture of a company balancing powerful demand, record services economics and shareholder generosity against cyclical cost and supply issues that may linger into the back half of the year. Investors will be watching how quickly Mac supply normalizes and how Apple mitigates memory inflation, but for now the growth story and cash-generation profile remain firmly intact.