Apple's FY26Q2 covers January through March 2026.
Apple FY2026 Q2 Results Summary:
Revenue reached $111.2B, up 17% year over year versus guidance of 13%-16%, with foreign exchange adding 2.5 percentage points.
Gross margin reached 49.3%, up 2.3 percentage points year over year. Products gross margin was 38.7%, up 2.8 points, an unusually strong result amid surging memory prices. A more favorable product mix and lower tariff costs more than offset rising memory expense. Services gross margin increased 1 percentage point to 76.7%.
Net income reached $29.6B, up 19% year over year, the fastest growth since late 2019. Net margin was 26.6%.
Apple's global active-device installed base reached a record of more than 2.5 billion devices. A device is considered active if it has used an Apple service within the past 90 days; management has not updated this figure for one quarter.
iPhone revenue reached $57B, up 22% year over year and above 20% for a second consecutive quarter. The active iPhone installed base set a record, as did the number of upgraders for this point in the year. Revenue growth would have been higher without supply constraints on the advanced process nodes used for iPhone SoCs.
Services revenue reached $31B, up 16% year over year and accelerating by 2 percentage points sequentially. Apple has more than one billion paid subscriptions, a figure management has not updated for ten quarters, while customer engagement continues to rise. Services grew at double-digit rates in both developed and emerging markets and set revenue records across most categories. Both transacting and paid accounts reached all-time highs.
Mac revenue reached $8.4B, up 6% year over year, well short of the sellout narrative in some media coverage, although supply was genuinely constrained. The Mac installed base reached a record and grew in both developed and emerging markets, with double-digit gains in many emerging markets including India and Indonesia. Demand for Mac mini, Mac Studio, and MacBook Neo exceeded expectations, and supply may take several months to catch up. Kansas City Public Schools is replacing Windows laptops and Chromebooks for high-school students with MacBook Neo, completing its transition to an all-Apple district.
iPad revenue reached $6.9B, up 8% year over year. Both the installed base and the number of upgraders set records, while iPad revenue grew at double-digit rates in India, Mexico, and Thailand.
Wearables and other products generated $7.9B of revenue, up 5% year over year and ending a streak of ten consecutive quarterly declines.
Greater China revenue reached $20.5B, up 28% year over year but below the company-wide growth rate for a second consecutive quarter. Government consumer subsidies were the main driver and the largest contributor to Apple's earnings beat. Traffic at Apple stores in China grew at a strong double-digit rate. Greater China operating margin increased 3.4 percentage points to 44.8%.
Apple's global expansion continued, with every geographic segment setting a revenue record for the quarter and delivering double-digit growth. Greater China and the rest of Asia Pacific both posted particularly strong double-digit gains.
Operating margin was 43.0% in the Americas, up 1.4 percentage points year over year; 46.5% in Europe, up 3.3 points; 44.8% in Greater China, up 3.4 points; 45.7% in Japan, down 1.4 points; and 45.0% in the rest of Asia Pacific, up 2.4 points.
Apple expects FY26Q3 revenue to grow 14%-17% year over year despite capacity constraints on iPhone and Mac. Services growth should remain in line with this quarter at 16%. Gross margin is guided to 47.5%-48.5% and operating expenses to $18.8B-$19.1B. At the high end, this framework implies approximately $28.9B of Q3 net income, up 23% year over year and the fastest growth since FY22Q1.
Apple repurchased $12.3B of stock, down 50% sequentially and the lowest amount since FY19Q1, and paid $3.8B in dividends. Net cash stood at $62B. The company will no longer treat a net-cash-neutral position as a formal target and will instead evaluate cash and debt independently. The board authorized another $100B of repurchases and raised the dividend by 4%.
Apple launched Apple Business this quarter, a new integrated platform combining its hardware, software, and enterprise services so organizations can manage deployments and scale operations more efficiently.
Advertising revenue grew year over year. Apple recently added more ads to App Store search results, and in summer 2026 Apple Maps plans to introduce advertising at key search and discovery moments in the United States and Canada.
The iPhone and Mac supply constraints stem primarily from limited advanced-node capacity, specifically TSMC's N3 process, rather than memory availability.
Apple did face higher memory costs this quarter, but the impact was partly offset by lower-cost inventory already on hand. Memory expense should rise materially next quarter, although existing inventory will again provide a partial offset, helping explain the strong gross-margin guidance. The effect of higher memory prices will become more pronounced in later quarters.
Overall, Apple's results were driven primarily by strong iPhone and Greater China performance, while next-quarter growth guidance exceeded market expectations. The company has now returned to consecutive quarters of double-digit revenue and profit growth after a long absence.
As for the market's main concern, rising memory prices, Apple's inventory position is remarkable. The gross-margin guidance suggests almost no near-term impact, although the situation by the end of 2026 remains uncertain.
Apple's Core Growth Formula:
AAPL = active installed base (2.5 billion devices) x customer engagement (Services revenue)
Ming-Chi Kuo recently wrote that an OpenAI phone is already in development and could appear as early as 2027. In the generative-AI era, the smartphone, our most frequently used computing device, arguably needs a fundamental redesign, especially after the premature end of the Doubao phone, the delayed progress of Apple Intelligence, and Android devices whose Gemini integration still falls short of a truly AI-native phone.
Several years ago, I argued in 'A Thought Experiment: Should Microsoft Revive Its Phone Business?' that Microsoft was the company best positioned to use AI to return to smartphones, although it has never demonstrated a strong hardware culture. Kuo's article suggested that OpenAI wants to replace the app as the primary interface and genuinely reinvent the phone. As more applications become accessible through command-line-style interfaces, that transition may arrive sooner.