Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Apple delivered a standout Q2 FY2026 with revenue surging 16.6% YoY to $111.2B and net income climbing 19.4% to $29.6B, driven by record gross margins of 49.3% and accelerating R&D investment of $11.4B.
Revenue
$111.18B
+16.60% YoY
EPS (Diluted)
$2.01
+21.82% YoY
Gross Margin
49.3%
+2.2 pts YoY
Operating Income
$35.88B
+21.28% YoY
Source: SEC XBRL
Apple (AAPL) reported Q2 FY2026 revenue of $111.18B, up 16.6% year over year. Operating margin was 32.3%, up 1.3 points from 31.0% a year earlier. AAPL's fiscal Q2 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 2 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Mar 2026 | 1.91 | 1.93 | Miss -0.9% |
| Jun 2026 | 1.91 | 2.05 | Miss -6.9% |
| Dec 2025This filing | 2.01 | 1.99 | Beat +1.1% |
| Sep 2025 | 1.85 | 1.81 | Beat +2.4% |
Reported EPS of $2.01 versus the $1.99 analyst consensus — a +1.1% beat for Dec 2025.
Compiled by AI from this SEC filing
Apple posted Q2 FY2026 revenue of $111.2B, up 16.6% YoY from $95.4B, representing a significant acceleration in top-line growth and suggesting strong demand across its product and services ecosystem.
Source: 10-Q Income Statement
Gross margin expanded 220 basis points YoY to 49.3% (from 47.1%), indicating improved product mix, likely driven by higher-margin Services revenue growth and operational efficiencies in cost of revenue which rose only 11.7% against 16.6% revenue growth.
Source: 10-Q Income Statement & Key Ratios
R&D expense surged 33.6% YoY to $11.4B, the fastest-growing cost line on the income statement, signaling Apple's intensified investment in AI, silicon development, and next-generation product categories.
Source: 10-Q Income Statement
Stockholders' equity jumped 59.4% YoY to $106.5B while cash and equivalents surged 61.8% to $45.6B, and long-term debt declined 10.3% to $82.7B, reflecting a meaningfully stronger financial position.
Source: 10-Q Balance Sheet
Fiscal year-to-date operating cash flow reached $82.6B, up 53.3% from $53.9B in the same prior-year period, underscoring Apple's exceptional ability to convert earnings into cash and fund shareholder returns.
Source: 10-Q Cash Flow Statement
Compiled by AI from this SEC filing · 1 high, 3 medium, 1 low
Apple's debt-to-equity ratio stands at 2.48x, meaning total liabilities of $264.6B significantly exceed stockholders' equity of $106.5B. While Apple's cash generation is strong, this leverage level leaves the company exposed to interest rate risk and limits financial flexibility in a downturn.
Source: 10-Q Balance Sheet & Key Ratios
R&D expenses grew 33.6% YoY to $11.4B, far outpacing revenue growth of 16.6%. Sustained investment at this pace in AI and new product categories may compress margins if revenue growth moderates, and there is no guarantee these investments will yield commercially successful products.
Source: 10-Q Income Statement
Apple's current ratio of 1.07x indicates that current assets of $144.1B only marginally exceed current liabilities of $134.6B. While current liabilities declined 6.9% YoY, the slim buffer leaves limited room to absorb unexpected short-term cash demands.
Source: 10-Q Balance Sheet & Key Ratios
Apple deployed $36.99B in share buybacks and $7.74B in dividends on a fiscal year-to-date basis, totaling approximately $44.7B in capital returns. While operating cash flow of $82.6B covers these returns, any deterioration in cash generation could pressure the company's ability to maintain its buyback cadence.
Source: 10-Q Cash Flow Statement
The significant gross margin expansion to 49.3% appears partly driven by a favorable revenue mix shift toward higher-margin Services. Any regulatory action (e.g., App Store antitrust rulings) or competitive pressure that reduces Services revenue could disproportionately impact overall profitability.
Source: 10-Q Income Statement & Key Ratios
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 111.18 $B | 95.36 $B | +16.60% |
Cost of Revenue $B | 56.40 $B | 50.49 $B | +11.71% |
Gross Profit $B | 54.78 $B | 44.87 $B | +22.10% |
Operating Income $B | 35.89 $B | 29.59 $B | +21.28% |
Net Income $B | 29.58 $B | 24.78 $B | +19.36% |
EPS (Basic) $ | 2.02 $ | 1.65 $ | +22.42% |
EPS (Diluted) $ | 2.01 $ | 1.65 $ | +21.82% |
R&D Expense $B | 11.42 $B | 8.55 $B | +33.56% |
SG&A Expense $B | 7.48 $B | 6.73 $B | +11.13% |
Answers draw on this SEC filing and the data on this page
Apple delivered double-digit revenue growth in Q3 FY2026, powered by iPhone and Services, but warned that escalating component costs and tariff headwinds may pressure margins ahead.
Apple delivered a strong fiscal Q4 2025, with revenue surging 15.7% YoY to $143.8B, net income rising 15.9% to $42.1B, and operating cash flow jumping 80.1% to $53.9B, reflecting broad-based growth and expanding margins.
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