In This Article:
Key Points
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Apple beat revenue and profit estimates, fueled by strong growth in services revenue and modest gains in iPhone sales.
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The company made progress shifting U.S. production out of China but faces challenges selling its phones and other electronics in that important market.
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Apple remains a cash-generation machine, upping both its dividend and share-repurchase authorization.
Here's our initial take on Apple's (NASDAQ: AAPL) financial report.
Key Metrics
| Metric | Q2 2024 | Q2 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $90.8 billion | $95.4 billion | 5% | Beat |
| Earnings per share | $1.53 | $1.65 | 8% | Beat |
| iPhone revenue | $46.0 billion | $46.8 billion | 2% | n/a |
| Services revenue | $23.9 billion | $26.6 billion | 12% | n/a |
Apple Makes Progress Navigating Trade Issues
Investor focus coming into this quarter centered on how Apple is navigating ongoing trade wars. The answer was a mixed message.
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First, the good news: Apple said a majority of its devices shipped into the U.S. in the June quarter will originate from India and Vietnam, alleviating concerns about how China-focused tariffs would eat into profits in 2025. But Apple also said that China revenue fell by more than 2% to $16 billion in its fiscal second quarter, falling slightly below analyst expectations.
Overall, the quarter was solid. Apple grew revenue by 5% and earnings per share by 8%, topping analyst estimates. Overall iPhone sales were up slightly, while services revenue posted solid 12% year-over-year gains.
Apple generated $24 billion in operating cash flow in the quarter and continues to boost the cash it is returning to shareholders. The company announced a new $100 billion share-repurchase program and said it is boosting its quarterly dividend by 4% to $0.26 per share.
Immediate Market Reaction
Apple shares were down nearly 15% year to date heading into earnings, and the latest results were not enough to turn the momentum favorable. Apple shares were down 2% in after-market trading after the release of earnings but ahead of the company's call with investors.
What to Watch
The comments on sourcing iPhones outside of China will come as a relief, but investors are likely to still have questions about what lies ahead for Apple. A shift toward local brands in China could accelerate if U.S.-branded products lose favor due to ongoing trade tensions, a potential worry given that iPhone sales still account for roughly half of overall revenue.