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 (Basic)
$2.02
++22.42% YoY
Gross Margin
49.3%
++2.22% YoY
Operating Income
$35.88B
++21.28% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q 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: 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: 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: Source: 10-Q Income Statement
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Upgrade to unlockApple'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: Source: 10-Q Balance Sheet & Key Ratios
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Upgrade to unlockReported EPS of $2.01 versus the $1.99 analyst consensus — a +1.1% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $111.18B | $95.36B | +16.60% |
Cost of Revenue | $56.4B | $50.49B | +11.71% |
Gross Profit | $54.78B | $44.87B | +22.10% |
Operating Income | $35.88B | $29.59B | +21.28% |
Net Income | $29.58B | $24.78B | +19.36% |
EPS (Basic) | $2.02 | $1.65 | +22.42% |
EPS (Diluted) | $2.01 | $1.65 | +21.82% |
R&D Expense | $11.42B | $8.55B | +33.56% |
SG&A Expense | $7.48B | $6.73B | +11.13% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $371.08B | $331.23B | +12.03% |
Current Assets | $144.11B | $118.67B | +21.44% |
Total Liabilities | $264.59B | $264.44B | +0.06% |
Current Liabilities | $134.64B | $144.57B | -6.87% |
Stockholders' Equity | $106.49B | $66.8B | +59.43% |
Cash & Equivalents | $45.57B | $28.16B | +61.82% |
Long-Term Debt | $82.7B | $92.2B | -10.30% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $82.63B | $53.89B | +53.33% |
Investing Cash FlowYTD | $-11.05B | $12.71B | -186.98% |
Financing Cash FlowYTD | $-61.94B | $-68.38B | +9.42% |
Dividends PaidYTD | $7.74B | $7.61B | +1.69% |
Share BuybacksYTD | $36.99B | $49.5B | -25.28% |
D&AYTD | $6.65B | $5.74B | +15.89% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 49.3% | 47.1% | +2.22% |
Operating Margin | 32.3% | 31.0% | +1.25% |
Net Margin | 26.6% | — | — |
ROE | 27.8% | — | — |
ROA | 8.0% | — | — |
Current Ratio | $1.07 | — | — |
Debt to Equity | $2.485 | — | — |
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Apple reported Q2 FY2026 diluted EPS of $2.01, up 21.8% YoY, and revenue of $111.2B, up 16.6% YoY — both representing significant acceleration from prior periods. While consensus estimate comparisons are not included in the filing, the scale of growth across revenue, margins, and earnings suggests a strong result relative to typical expectations.
Apple's Q2 FY2026 revenue grew 16.6% YoY to $111.2B, up from $95.4B in Q2 FY2025. This growth was accompanied by gross profit expanding even faster at 22.1% YoY to $54.8B, indicating a favorable mix shift toward higher-margin products and services.
The key takeaways are record-high gross margins of 49.3%, net income of $29.6B (+19.4% YoY), and a 33.6% surge in R&D spending to $11.4B signaling heavy AI investment. Apple also significantly strengthened its balance sheet, with cash rising 61.8% to $45.6B and long-term debt falling 10.3% to $82.7B.
Based on the financial data, key risks include Apple's elevated debt-to-equity ratio of 2.48x, the rapid escalation of R&D costs (+33.6% YoY) which could compress margins if revenue growth slows, and a thin current ratio of 1.07x that limits short-term financial flexibility. Regulatory risk around high-margin Services revenue also remains a structural concern.
Apple's financial health appears strong: stockholders' equity surged 59.4% YoY to $106.5B, cash and equivalents rose 61.8% to $45.6B, and fiscal year-to-date operating cash flow hit $82.6B. The main watch item is the debt-to-equity ratio of 2.48x, though Apple's cash generation comfortably services its obligations.