Apple reported fiscal second-quarter revenue of $111.18 billion, up 17% year over year, and earnings of $2.01 per share — both ahead of estimates — as the company navigated its best-ever March quarter and prepared for a CEO transition in September.
Apple reported its strongest March quarter on record Thursday, posting fiscal second-quarter revenue of $111.18 billion — a 17% increase from $95.4 billion a year earlier — and earnings of $2.01 per share, both ahead of Wall Street estimates.
Analysts polled by LSEG had expected revenue of $109.66 billion and earnings of $1.95 per share. Apple shares climbed roughly 3% in extended trading following the report.
The results arrived as investors assessed the company's trajectory for the first time since Apple announced on April 20 that CEO Tim Cook will step down, handing the role to hardware chief John Ternus on September 1. Cook will move into an executive chairman position.
Ternus joined the earnings call and told investors that the company has an "incredible roadmap ahead." He added, "While you're not going to get me to talk about the details of that roadmap, suffice it to say, this is the most exciting time in my 25-year career at Apple to be building products and services."
Cook, explaining the timing of his departure announcement, cited the company's financial momentum, its product roadmap, and his confidence in his successor. "There is no one on this planet I trust more to lead Apple into the future than John Ternus," Cook said.
Revenue beat estimates across every major product category except iPhone. iPhone sales rose 22% year over year to $56.99 billion, falling just short of the $57.21 billion analysts had projected — the second time in three quarters that iPhone revenue has missed expectations. Cook told investors that the iPhone 17 is now the "most popular lineup in our history."
Mac revenue came in at $8.4 billion against an $8.02 billion estimate, while iPad revenue reached $6.91 billion versus $6.66 billion expected. Services revenue rose approximately 16% to $30.98 billion, ahead of the $30.39 billion consensus, and gross margin reached 49.3%, above the 48.4% estimate and up from 48.2% in the prior quarter.
Greater China sales climbed 28% to $20.5 billion from $16 billion a year earlier, reinforcing the region's position as Apple's third-largest market behind the Americas and Europe.
Research and development spending grew 33% in the quarter to $11.42 billion from $8.55 billion a year ago, outpacing revenue growth. Cook attributed the acceleration to AI investment opportunities. "We're investing in products and services, and we see opportunities in both of those," he said.
Apple's active installed base surpassed 2.5 billion devices across all product categories and geographic segments — a record the company said reinforces the addressable market for its higher-margin services offerings.
On the AI front, Cook confirmed that a partnership with Google using its Gemini model to power Siri is progressing. "The collaboration with Google is going well," he said, noting Apple is also "happy with the work that we're doing independently as well." He affirmed that a more personalized version of Siri would arrive later this year.
Memory costs emerged as a consistent theme on the call. Cook said the impact in the December quarter was "minimal," with a somewhat greater effect in the March period, and warned that in the current quarter, "we expect significantly higher memory costs." CFO Kevan Parekh said supply constraints affected both iPhones and Macs during the period.
For the June quarter, Apple guided for revenue growth of 14% to 17% from a year earlier. Analysts surveyed by LSEG had been projecting growth of 9.5%, to approximately $103 billion.
Apple's board authorized a new $100 billion share repurchase program and declared a cash dividend of 27 cents per share, a 4% increase. Parekh also said the company is stepping back from its long-standing net cash neutral framework, telling investors it would "independently evaluate cash and debt" going forward.
With the leadership transition set for September and a Siri update expected before year's end, Apple enters the second half of its fiscal year carrying momentum — and an AI strategy still taking shape under a new executive.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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