Apple Q2 EPS $2.01 vs est. $1.95; revenue $111.2B vs est. $109.5B. iPhone $57.0B misses on supply; Mac $8.4B beats; Services $30.98B beats. China $20.5B. $100B buyback.

Summary:

• Apple reported Q2 fiscal 2026 EPS of $2.01, beating the $1.95 consensus, on revenue of $111.2 billion against estimates of $109.45-109.66 billion
• Net income came in at $29.6 billion versus the $28.5 billion expectation; operating income was $35.9 billion against a $34.8 billion estimate
• iPhone revenue of $56.99 billion came in marginally below estimates of $57.21 billion; CEO Tim Cook attributed the shortfall to supply constraints on advanced processor chips rather than weak demand
• Mac revenue of $8.40 billion beat the $8.02 billion estimate, boosted by the new $500 MacBook Neo, which targets the lower-priced laptop market currently dominated by Chromebooks
• Services revenue reached $30.98 billion, ahead of the $30.39 billion estimate, with the App Store continuing to generate robust income despite ongoing regulatory scrutiny in Europe
• Greater China net sales of $20.50 billion significantly outpaced estimates of $19.45 billion, a notable beat given the competitive and geopolitical pressures in that market
• iPad net sales were $6.91 billion versus $6.66 billion estimated; Wearables, Home and Accessories were $7.90 billion versus $7.70 billion estimated
• Gross margins were 49.27%, above the 48.38% consensus, reflecting Apple’s pricing discipline and product mix
• The board authorised an additional $100 billion share buyback, consistent with the prior year’s programme
• Incoming CEO John Ternus, who takes over from Cook in September, is expected to speak on the earnings call; investors are focused on Siri and AI strategy ahead of the June developer conference

Apple delivered a stronger-than-expected second fiscal quarter, posting earnings per share of $2.01 on revenue of $111.2 billion, comfortably ahead of Wall Street’s consensus of $1.95 and $109.5 billion respectively. Net income of $29.6 billion and operating income of $35.9 billion both cleared analyst estimates, and the board authorised a further $100 billion in share buybacks, matching the prior year’s programme.

The standout performers were Mac, Services and Greater China. Mac revenue of $8.40 billion beat estimates by roughly $380 million, driven in part by early sales of the MacBook Neo, a $500 laptop aimed squarely at the budget segment long dominated by Google Chromebooks. The Neo is seen as a significant strategic move for Apple, opening up a market estimated at $20 billion that the company has not traditionally competed in on price. Services revenue reached $30.98 billion, maintaining its run of above-consensus growth as the App Store, licensing arrangements and subscription offerings continued to expand.

Greater China net sales of $20.50 billion came in well ahead of the $19.45 billion estimate, a meaningful beat that will ease concerns about Apple’s exposure to geopolitical risk and local competition in the region. The result suggests that Apple’s brand loyalty and the appeal of the iPhone 17 family are holding firm in a market where rivals including Huawei have been aggressively competing for share.

The one area of friction was iPhone. Revenue of $56.99 billion came in fractionally below the $57.21 billion estimate, and CEO Tim Cook told Reuters the shortfall was a function of supply rather than demand. The iPhone 17 family, including the new iPhone Air, uses an advanced chip made by TSMC on the same manufacturing process node as many leading artificial intelligence processors. With AI chip demand absorbing significant capacity, Apple found less flexibility than usual in securing additional components.

Cook described demand as exceptional, suggesting the constraint is temporary. However, if advanced node tightness at TSMC persists through the June quarter, the impact on iPhone volumes could be more than a rounding error heading into what is typically a quieter period ahead of the autumn upgrade cycle.

Gross margins of 49.27% against a 48.38% estimate were a further positive, reflecting Apple’s ability to manage memory chip cost pressures through its scale and pricing architecture. Entry-level models in the iPhone 17 range held prices steady relative to storage capacity, while Pro models carried higher price tags, a mix that has helped protect the margin line.

Investor attention now turns to the earnings call and the June developer conference, where Apple is expected to lay out its artificial intelligence roadmap for Siri and broader software. Incoming CEO John Ternus, who transitions from Tim Cook in September, is expected to speak, giving markets their first substantive look at the strategic direction under new leadership.