Apple reported fiscal second-quarter results that topped Wall Street estimates, with fiscal second-quarter sales of $111.18 billion and earnings of $2.01 per share for the period ended March 28. Those figures exceeded analyst projections of $109.66 billion in revenue and $1.95 in earnings per share, according to LSEG data.
The company’s flagship iPhone remained the largest revenue contributor, generating $56.99 billion for the quarter. That total was slightly below the consensus of $57.21 billion, even as Apple introduced the most significant refresh to its iPhone lineup since 2017. Management attributed the shortfall to constraints in the supply of advanced processor chips rather than demand weakness.
Apple CEO Tim Cook explained that demand for the new iPhone family outstripped available supply for key components. He said the iPhone 17 family’s chips are produced on a variant of the same Taiwan Semiconductor Manufacturing Co. (TSMC) process technology that is used to make many leading AI chips, and that the supply chain currently offers "a little less flexibility" for sourcing additional parts. As a result, Apple was unable to meet the full scope of consumer demand during the quarter.
The iPhone 17 line, together with the new iPhone Air, was spearheaded by incoming CEO John Ternus, who is set to succeed Tim Cook in September. Under Ternus’s direction, Pro-tier models have accrued additional features and higher price points, while the entry-level 17e and the base iPhone 17 maintained price parity relative to their storage configurations. That mix, combined with Apple’s purchasing scale, helped the company better absorb rising memory chip costs.
Gross margin for the quarter was 49.27%, ahead of the 48.38% estimate reported by LSEG. Observers noted the margin beat alongside product mix effects from Mac and services.
Mac revenue was a notable outperformer. Apple reported Mac sales of $8.4 billion, above the $8.02 billion estimate, a result that included several weeks of sales for the MacBook Neo. The Neo, priced at $500 for students, was highlighted by analysts as a potential vehicle for Apple to enter a lower-priced laptop market segment valued at approximately $20 billion, a category currently led by Google Chromebooks.
Services continued to contribute a substantial recurring revenue stream, delivering $30.98 billion for the quarter versus estimates of $30.39 billion. That segment includes App Store revenue, which remains under regulatory scrutiny in some jurisdictions. iPad sales totaled $6.91 billion, topping estimates of $6.66 billion, while wearables, which include the Apple Watch, produced $7.9 billion compared with forecasted revenue of $7.7 billion.
Regional results included stronger-than-expected China sales, with Greater China revenue of $20.5 billion, surpassing analyst expectations of $19.45 billion per Visible Alpha data.
Corporate capital returns were updated as Apple’s board authorized an additional $100 billion in share buybacks, matching the authorization granted the prior year.
Apple said it will host a conference call at 5 p.m. ET (2100 GMT) where analysts expect remarks from incoming CEO John Ternus. Market participants will also be listening for further details on Apple’s roadmap for its voice assistant, Siri, and the company’s plans to integrate Google technology into its AI initiatives. Apple’s annual developer conference in June is anticipated to provide more specific disclosures on those AI efforts.
Context and analysis
The quarter’s results reflect a mixed dynamic: demand for the latest iPhones appears robust but was constrained by component availability tied to advanced semiconductor process capacity. At the same time, Apple leveraged product lineup changes and price positioning to bolster Mac revenue and sustain services growth. The margin outperformance suggests favorable product mix and cost absorption amid higher memory prices.
Investors will be watching the upcoming conference call and the developer conference for further clarity on Apple’s AI strategy and Siri enhancements, as well as management commentary on when supply flexibility for advanced chips may improve.