EARNINGS REVIEW
Apple, FY26 Q2 Earnings Results
Historical quarterly report · Results and outlook reflect information available at the time of that release. Actual results from later quarters have not been incorporated into the outlook.
Growth in iPhone and Services increased revenue and earnings in the March-ended quarter. The sequential decline from the year-end peak season must be distinguished from year-over-year growth, and cash generation should be assessed alongside substantial shareholder returns.
Assessment · Product demand, Services growth and FCF generation are positive. However, the durability of earnings growth and shareholder returns should be assessed in light of quarterly seasonality, supply and product mix. Subsequent quarters are assessed against actual disclosed growth, profitability and cash conversion; guidance without verified official evidence is excluded.
Key management and company statements
Earnings release · Excerpt from the original“double-digit growth across every geographic segment”Meaning · All geographic segments achieved double-digit growth.
Context · This describes revenue growth across regions, rather than recovery in only one particular region.
Original statement ↗“over $28 billion in operating cash flow”Meaning · Operating cash flow exceeded 28 B$.
Context · OCF for this quarter was 28.702 B$, distinct from cumulative first-half OCF.
Original statement ↗01 Revenue, operating income and results versus expectations
Year over year · revenue 95.359 → 111.184 B$ (+16.6% · +15.825 B$), operating income 29.589 → 35.885 B$ (+21.3% · +6.296 B$).
Quarter over quarter · revenue 143.756 → 111.184 B$ (−22.7% · −32.572 B$), operating income 50.852 → 35.885 B$ (−29.4% · −14.967 B$), operating margin 35.4% → 32.3% (−3.1%p).
iPhone revenue increased by 10.153 B$, and Services by 4.331 B$. The company highlighted demand for the iPhone 17 lineup and record quarterly Services revenue. These are disclosed product/service categories, distinct from geographic reporting segments.
02 Earnings sustainability · From operating income to net income
Pretax income was 35.833 B$ and income tax expense was 6.255 B$. Net non-operating income bridging operating income to net income was −0.052 B$, so large investment valuation gains were not the main driver of this quarter’s net income growth.
Services and products have different gross profit structures, so changes in revenue mix affect consolidated profitability. No profits were estimated for individual services where their specific margins were not disclosed.
- Operating income
- 35.885 B$
- Net non-operating income
- −0.052 B$
- Income tax expense
- −6.255 B$
- Consolidated net income
- 29.578 B$
Net income of 29.578 B$ in the existing quarterly dataset is on a consolidated basis.
03 Cash flow quality · Net income → OCF → FCF
The company presents its cash flow statement cumulatively for the first half. Subtracting cumulative Q1 figures for the same fiscal year gives quarterly OCF of 28.702 B$ and cash CapEx of 1.971 B$, resulting in FCF of 26.731 B$.
- Consolidated net income
- 29.578 B$
- Total net adjustments for noncash items, working capital and other items¹
- −0.876 B$
- Operating cash flow
- 28.702 B$
- Cash CapEx
- −1.971 B$
- FCF
- 26.731 B$
¹ Total net adjustments calculated as OCF−net income. This is not a single disclosed line item; it combines noncash items, working capital, classification differences and other adjustments.
FCF versus previous quarter · 51.552 → 26.731 B$, 24.821 B$ deterioration.
04 Financial capacity · Net debt and payment obligations
Previous-quarter net cash · 2025-12-27
Cash and current investments 66.907 / Debt 90.509 B$
Current-quarter net cash · 2026-03-28
Cash and current investments 68.507 / Debt 84.711 B$
Net debt improved by 7.398 B$ from the previous quarter. The carrying amount of current debt is 10.307 B$. It may differ from the principal maturity schedule.
Cash and current investments below exclude noncurrent marketable securities. Therefore, net debt under this definition should not be confused with company net debt after deducting all liquid assets held by Apple.
Common definition · Cash and current investments = cash equivalents + current investments and deposits. Debt = carrying amount of interest-bearing borrowings (current + noncurrent), excluding separately reported lease liabilities. This differs from total liabilities of 264.591 B$. Restricted cash, noncurrent securities and noncurrent deposits are excluded from cash and current investments.
05 Investment, capital allocation and cash returns
The additional share-repurchase program authorized by the board is up to 100 B$. This is an authorization limit, not the actual amount repurchased this quarter or an obligation to execute. Assess capacity for cash returns by considering FCF, debt repayment and the scope of cash and investment assets together.
This quarter, cash CapEx/revenue is 1.8% and FCF/revenue is 24.0%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.
06 Next-quarter outlook · Official-source verification pending
Next-quarter revenue growth and gross-margin guidance were not verified in the official earnings release or 10-Q. Agreement between a third-party transcript and reporting does not replace verification of an official call source. The forecast ranges and derived revenue amounts are therefore excluded from the assessment.
Verified current-quarter results and cash flows are retained. Subsequent product and services growth, profitability and cash conversion will be compared using actual disclosures; performance against unverified guidance is not assessed.
Quarterly results · CY-aligned presentation
Amounts in B$. Based on the CY-aligned year of this report, the table shows all 4 quarters of the preceding year and the current year to date. Each fiscal quarter is assigned to the CY quarter with the greatest overlap in actual reporting dates, alongside its original FY/CY quarter and start/end dates. Amounts have not been recalculated into actual calendar quarters.
| CY alignment | 2025 · 4 quarters | 2026 · 1 quarters | Change this quarter | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Metric | 2025 total4-quarter totalBalances are period-end | 1QFY25 Q224-12-29 ~25-03-29 | 2QFY25 Q325-03-30 ~25-06-28 | 3QFY25 Q425-06-29 ~25-09-27 | 4QFY26 Q125-09-28 ~25-12-27 | 2026 year to date1-quarter totalBalances are period-end | 1QFY26 Q225-12-28 ~26-03-28 | QoQvs FY26 Q1 | YoYvs FY25 Q2 |
| Revenue | 435.617 | 95.359 | 94.036 | 102.466 | 143.756 | 111.184 | 111.184 | −22.7%−32.572 B$ | +16.6%+15.825 B$ |
| Operating income | 141.070 | 29.589 | 28.202 | 32.427 | 50.852 | 35.885 | 35.885 | −29.4%−14.967 B$ | +21.3%+6.296 B$ |
| Operating margin | 32.4% | 31.0% | 30.0% | 31.6% | 35.4% | 32.3% | 32.3% | −3.1%p | +1.2%p |
| FCF | 123.324 | 20.881 | 24.405 | 26.486 | 51.552 | 26.731 | 26.731 | −24.821 B$ | +5.850 B$ |
| Operating cash flow | 135.472 | 23.952 | 27.867 | 29.728 | 53.925 | 28.702 | 28.702 | −46.8%−25.223 B$ | +19.8%+4.750 B$ |
| Cash CapEx | 12.148 | 3.071 | 3.462 | 3.242 | 2.373 | 1.971 | 1.971 | −16.9%−0.402 B$ | −35.8%−1.100 B$ |
| Net cash | −23.602 | −49.688 | −46.326 | −43.960 | −23.602 | −16.204 | −16.204 | +7.398 B$ | +33.484 B$ |
| Cash and current investments | 66.907 | 48.498 | 55.372 | 54.697 | 66.907 | 68.507 | 68.507 | +2.4%+1.600 B$ | +41.3%+20.009 B$ |
| Debt | 90.509 | 98.186 | 101.698 | 98.657 | 90.509 | 84.711 | 84.711 | −6.4%−5.798 B$ | −13.7%−13.475 B$ |
Indented rows are components or reference items for the parent metric. Net cash = cash and current investments − debt. Depending on the company definition, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.
Annual totals and year-to-date totals appear before each year’s quarters. Revenue, earnings and cash flow are sums of quarterly figures; margin is total operating income ÷ total revenue; net cash, cash and debt are balances at the end of the last quarter. Do not treat totals covering different lengths of time as directly comparable annual figures.
Net cash = cash and current investments − debt. A negative figure indicates net debt. Changes in FCF and net cash are shown as absolute amounts in B$. Quarterly figures have not been adjusted to force reconciliation with disclosed annual totals.
Comparison bases, calculation methods and quarterly sources
Calculation and presentation · Amounts in B$. Figures disclosed in millions of US dollars are divided by 1,000 without altering the source values. Where only cumulative cash flows are available, the previous cumulative period within the same fiscal year is deducted. YoY, QoQ and margins are calculated using amounts before display rounding. Earnings changes from negative or 0 bases are expressed as profit/loss transitions and absolute amounts.
Opinions and outlook · Management quotations include original excerpts and their translations. Quotations not identified as earnings-call transcripts come from earnings releases. Interpretations and implications are the author’s judgments. No numerical probability of achieving a target is assigned without quantitative verification.