Apple Reports Strong Q2 2025 Results With $100 Billion Buyback and Resilient Product Demand

Apple Reports Strong Q2 2025 Results With $100 Billion Buyback and Resilient Product Demand

Apple Inc. (NASDAQ: AAPL) has reported solid financial results for its fiscal second quarter ended March 29, 2025, beating analyst expectations on both revenue and earnings per share. The tech giant posted $95.4 billion in revenue, reflecting a 5% year-over-year growth, and delivered earnings per share (EPS) of $1.65, an 8% increase from the same quarter last year.

Despite the strong results, Apple’s stock slipped by as much as 4% in after-hours trading, largely due to softer-than-expected performance in its high-margin Services division and concerns over rising tariff-related costs heading into the next quarter.

Performance vs. Wall Street Expectations

Apple’s results came in ahead of most forecasts. EPS was reported at $1.65 versus the $1.63 analysts had expected, while revenue came in at $95.4 billion compared to the $94.66 billion projected by LSEG.

In product-specific revenue, iPhone sales reached $46.84 billion, beating the estimate of $45.84 billion. Mac revenue came in at $7.95 billion, slightly above the $7.77 billion forecast, and iPad revenue hit $6.4 billion, topping the $6.20 billion expected. However, Wearables, Home, and Accessories revenue declined to $7.52 billion, coming in below the anticipated $7.95 billion.

Apple’s Services segment, which includes iCloud, Apple Music, Apple TV+, and Google Search licensing, reported revenue of $26.65 billion—up 11.65% year-over-year but just under the $26.70 billion expected. Gross margin for the quarter held steady at 47.1%, in line with analyst projections.

CEO and CFO Commentary

Apple CEO Tim Cook celebrated the company’s strong momentum, highlighting the successful launch of the iPhone 16e, new MacBooks, and the latest iPads powered by Apple Silicon. He also reiterated Apple’s long-term sustainability goals, proudly stating that Apple has reduced its carbon emissions by 60% over the last decade.

CFO Kevan Parekh emphasized Apple’s operational strength, noting that the quarter generated $24 billion in operating cash flow, enabling Apple to return $29 billion to shareholders. He also confirmed that the company’s installed base of active devices reached an all-time high across all product lines and geographic segments.

Shareholder Returns and Buyback Program

In line with its commitment to shareholder value, Apple announced a 4% increase in its quarterly dividend, raising it to $0.26 per share, payable on May 15, 2025. The board also authorized a new $100 billion share repurchase program, slightly below last year’s $110 billion authorization but still a significant vote of confidence in Apple’s future.

Mixed Results in Services and Wearables

While Apple’s Services division posted double-digit growth, it still came in just below expectations—raising concerns among some analysts given its role in bolstering profit margins. Last year, Services grew 14.2% in the same quarter, compared to the 11.65% growth this year.

Apple’s Wearables segment, which includes AirPods, Apple Watch, and other accessories, reported a 5% decline in revenue, which Cook partially attributed to the comparison with last year’s launch of the Vision Pro headset.

Strong Hardware Sales Across Key Product Lines

Despite the Services shortfall, Apple’s core hardware products performed well. iPhone sales remained resilient, buoyed by continued global demand. Mac sales rose nearly 7% thanks to the new MacBook Air models, and iPad revenue jumped 15% year-over-year, supported by refreshed iPad Air launches.

Geographic Performance and Currency Impacts

In Greater China, Apple saw revenue slightly decline to $16 billion. Cook explained that results were hurt by foreign exchange rates and that performance would have been flat in constant currency terms. Meanwhile, sales in the Americas, Apple’s largest market, increased by nearly 8%, reflecting strong consumer demand and possibly preemptive buying ahead of new tariffs.

Tariffs and Supply Chain Adaptation

Looking ahead, Apple expects tariffs to add $900 million in costs for the third quarter, according to Tim Cook. While acknowledging the difficulty in forecasting beyond June due to geopolitical uncertainties, he emphasized Apple’s proactive supply chain strategy.

Cook revealed that about half of the iPhones sold in the U.S. are now sourced from India, and most other U.S.-bound products are produced in Vietnam, both offering lower tariff exposure than China. Additionally, Apple plans to purchase $19 billion worth of chips from U.S. suppliers this year, further bolstering its domestic sourcing.

Outlook for Q3 2025

Apple expects low to mid-single-digit revenue growth for the upcoming quarter ending in June, with a gross margin of approximately 46%. Wall Street analysts are projecting Q3 earnings of $1.48 per share on $89.45 billion in revenue.

Despite the macroeconomic and geopolitical headwinds, Tim Cook closed the call on a confident note:

“We will continue to manage the company with thoughtful and deliberate decisions, with a focus on long-term growth and the innovations that will drive it.”