Apple Inc. · Q2 2026 call

Today, Apple is pleased to report $109.4 billion in revenue, up 16% from a year ago and a June quarter record. We were able to achieve this despite supply constraints and sequential foreign exchange headwinds.

Earlier this month, Apple announced a new agreement with Broadcom to design and produce custom silicon components and cutting-edge wireless connectivity technologies. The new multi-year agreement with Broadcom, which is part of Apple's American Manufacturing Program, is expected to exceed $30 billion. This marks our largest-ever American manufacturing program commitment.

Our installed base of over two and a half billion active devices has reached another all-time high across all major product categories and geographic segments. Services revenue was $30.7 billion, up 12% year-over-year. We set revenue records in every services category, including all-time records in cloud services and payment services.

Company gross margin was 50.1%, up 80 basis points sequentially. This included a benefit from tariff refunds, which had a favorable impact of approximately two percentage points. When you remove this favorable impact, we would have been at the midpoint of the guidance range we provided last quarter.

Diluted earnings per share was $2.02, up 29% year-over-year, and included $0.11 of favorable impact from tariff refunds. Operating cash flow was very strong at $34.4 billion. All three of these metrics set June quarter records, even when excluding the tariff refund benefit.

The projected supply constraints in the September quarter affect iPhone, Mac, and iPad. As a result, we expect our September quarter total company revenue to grow between 9%-11% year-over-year.

We expect gross margin to be between 47%-48%. This includes an expected benefit of approximately one percentage point related to tariff refunds. We expect operating expenses to be between $19.1 billion-$19.4 billion.

As you know, this will be my final earnings call, and John will lead these calls going forward. The transition is going seamlessly, and I am beyond excited for John to step into his new role and lead Apple into its next era. He is truly one of a kind, and there is no better person to take the helm of the company.

As I alluded to last quarter, we expected to pay significantly more in the June quarter than the March quarter, and that is what happened. It was partially offset by the benefit of carry-in inventory. For September, we expect to pay even higher memory costs, […] If you look beyond September, we see the market pricing for memory continuing to increase, which could drive an increasing impact on our business, and we're continuing to evaluate this.

The root cause of it is not a regular supply issue. It's a demand forecast issue, to be candid, where the iPhone and the Mac are both doing remarkably better than we thought they would do. We had high expectations, so it wasn't that our expectations were low.

The supply chain just has less flexibility in it than normal. We've been pulling supply ahead. At some point, there's a limit to that. We've got a quarter that we're going to be scrambling on the supply side, essentially.

Let me stress again, this isn't a partner or supplier issue. This issue is an incredibly strong, it's a great issue in some ways. It's an incredibly strong iPhone and Mac product cycle that has really yielded demand beyond our expectation.

On the pricing front, we reluctantly raised prices, I would say. We did it because we're in what I would characterize as a 100-year flood on the memory pricing, with exponential increases in memory prices.

Well, thank you for asking. I guess I would just reiterate what Tim said, there is so much opportunity for us with everything that's happening in this space. We're just really focused on our plans and very excited about it.

You look at China, last week we received approval to ship sort of the original features of Apple Intelligence, things like cleanup and so forth. We're working now through the rollout of those, and there will be more work required down the road for Siri AI. We're at the front end of that.