Apple reports second quarter results | Hacker News Reader

Apple reports second quarter results

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Short version:

Reported quarterly revenue: ~$111 billion, so a 17% year-over-year increase.

Diluted earnings per share: ~$2. 22% increase compared to the same quarter last year.

Operating cash flow: surpassed $28 billion. Record for a March quarter.

iPhone: Record March-quarter revenue of ~$57 billion, heavily supported by demand for the iPhone 17.

Services: Hit an all-time high revenue record of ~$31 billion.

Capital Allocation: The board raised the quarterly cash dividend by 4% to $0.27 per share and authorized an additional $100 billion for share repurchases.

More generally, we're seeing a transition in their financials away from hardware dependence. At this point we can pretty conclusively say that Apple is now a hardware manufacturer mainly, backed up by a high-margin services ecosystem. Services revenue has grown consistently, providing a smoothing function against the more spikey revenue from the hardware product cycles.

Overall they've managed to maintain an ability to deliver double-digit growth, despite creating categories of product which haven't succeeded, providing enough free cash flow to continue their insane (in terms of scale) capital return program (dividends and massive buybacks in the main).

So hardware independent, they don’t even have any Mac minis, Mac pros or Mac studios in stock anymore

This comment hits hard as I tried to buy a Mac Mini this morning and could not find one anywhere in Calgary

As a company, this is a great problem to have. Way better than the opposite.

Doesn't this prove that they are hardware independent? Even having products not in stock was a Steve Jobs thing and this is possibly a temporary effect of supply chains changing.

I wonder if there’s a breakdown of their top performing or fastest growing services. It’s interesting how they dont seem to promote the services that much yet are seeing tremendous growth.

Always remember that most of their “services” revenue is the App Store 30% tax on casino games for children, and the commissions for Safari default search engine coming from Google. These two are Apple’s twin licenses to print money, and both of them grow without Apple needing to innovate or really do anything.

App Store grows as the addictive game publishers improve their manipulation skills, and Google’s check grows as browser usage increases. Every time someone types, say, “Citibank” into the search box and doesn’t add .com, Apple earns a tiny payment from Google.

I’m sure they als make a decent chunk of money from iCloud as users who buy base models are almost certainly forced to make use of iCloud Photo Library to free up enough space on the device to even function; but I suspect it’s orders of magnitude less than that.

I should buy a share of AAPL and instigate a shareholder’s lawsuit that argues that calling the App Store baksheesh “services” is misleading.

I pay $40/month for Apple One alone, not to mention my various AppleCare subscriptions. Surely they make more money from that kind of service than google search payments.

Sure, and I have that Apple One plan too. Certainly from you and me they do. But the sheer number of people doing "searches" (99% of the sites visited from every safari browser is probably doing a "search" to get there) makes the Google search commission so big -- $20 billion per year in 2022 when we found out the figure due to court filings. It would take over 526 million of us - half a billion users - all subscribing to Apple One $38 tier just to equal that number. And I don't think the shift from Google to LLMs for "question asking" has probably put a dent in it, because when I look at how people use their devices, I believe that most searches are done for navigation purposes (people don't like remembering URLs and don't use bookmarks).

The other reading is that the company plans to shift to a no-growth one, since it starts to return 100's of Bs to the shareholders, essentially admitting they cannot invest them in the company itself.

I wish they’d stop doing buy backs and invest 100B in R&D … imagine what they could do in battery tech or otherwise.

They really should have built a car.

It'd make them leaders in batteries.

It'd keep America at the forefront of EVs.

Huge disappointment.

"Keep?" If it ever was at the forefront, those days are gone and fading fast.

Actually, the product they should build is an ebike. They should buy Weel.[1]

[1] https://insideevs.com/news/614379/weel-evb-electric-concept-...

Not sure we need yet another unaffordable luxury car brand.

I never know why this keeps getting downvoted, is HN really full of investors and not engineers? why do you want buy backs and not R&D?

Because Apple dropped 10 billion on car research which was an apparent fail.

Far simpler and cheaper to snipe startups where you know you are getting a proven product. That comes with a fresh batch of engineers in most cases who specialize in the tech so you skip a lot of the hiring/training steps.

If I had an R&D request it would be they train some machine models on their developer feedback and public feedback databases to give some guidance on where the real holes are and what people are actually hoping for.

I certainly never wanted a car from them… the whole Apple business model is reducing the moving parts to reduce product failures and a car would be a huge regression.

They really need to build their own fabs at this point. AI is going to kill their ASIC and DRAM supply chain if they don't.

"Real men have fabs." - Jerry Sanders, first CEO of AMD.

Actually, AMD, Nvidia, and Apple need to build their own fabs. Maybe Google, Amazon, and Meta too.

I always wonder if this is a possibility. They've worked so closely with TSMC that they've many times over the decade bankrolled R&D and equipment that TSMC uses. I would be super interested to know if that relationship has left them enough know-how of the fab process to someday control their destiny there, that would actually be pretty insane.

Apple almost certainly has entire production lines at TSMC that they effectively own. I don’t really think bringing chip fabrication in-house has any immediate benefit for them.

We can observe with Apple’s pricing staying stable that they have some of the best supplier arrangements in the industry.

Apple doesn't own TSMC. TSMC is putting Apple in the back burner in favor of Nvidia and other high margin companies.

They are literally being limited by TSMC (as well as the DRAM makers) because they don't have their own fabs.

It isn’t that simple: Apple made strategic investments in TSMC, and actually fronted the money for many of the fabs making their chips.

Perhaps something that Ternus can add to his legacy-building exercise, given that he led hardware.

Especially outside of Taiwan.

“They need their own fabs” is a very current events-biased read of the situation.

You can easily end up like AMD or Intel spending years with your own fab that’s uncompetitive.

One of the best things that ever happened to AMD was spinning off their fabs.

Intel only recently righted their ship after spending years with fabs that couldn’t keep up with competition, and even Panther Lake still contains some TSMC silicon.

The AI boom is inevitably not going to last forever. Either demand will subside or production will increase. High prices in tech rarely stick around.

You can easily end up like AMD or Intel spending years with your own fab that’s uncompetitive.

You could.

Or you could have no fab and no supply of chips for your business.

Yeah, one of those two bad scenarios sinks a corporation the other is a tax write off.

Being short on chips means you can raise prices.

Making chips on an uncompetitive lithographic process means your chips are worth less.

No, you CAN'T raise prices because no one will buy them, destroying your brand and your business. And you won't have supply anyways.

There is no scenario where not having a fab is beneficial.

Apple will have to build their own fabs, whether they like it or not. And they will need to make it competitive if they want to stay in business.

> There is no scenario where not having a fab is beneficial.

Mmm, I think that's an overly strong statement.

In the scenario where Apple has a fab that's doing work at a 2030 level in 2030, that's great, especially if everyone else is, by their standards, doing work at a 2025 level. In the scenario where Apple's fab is doing work at a 2030 level in 2035, and another fab is doing work at a 2035 level, owning their own fab has suddenly become a liability. If they had used that money to hire the output of other fabs, then as soon as it became clear that another one was eclipsing the one they were using, they could simply switch. And given the way businesses operate, it would be very hard to justify closing down their own fab to use the one that was outperforming it.

Now, granted, that's not an especially likely scenario, but it is a very realistic one.

The capital return program was a massive own goal in my humble opinion. It will work for now but soon Apple will go through their Intel years because they spent too long sweating their (admittedly incredible) assets. Something like Harmony OS is going to eat their lunch and they will only have themselves to blame.

I imagine you're saying the capital return program is a mistake because they should reinvest the money in R&D etc.

I think the issue is there's diminishing returns to spending, and in some cases it can be outright negative. For example, one major thing you can do with money is hire more people. Hiring more people than you can handle is a great way to grind everything to a halt. You're basically making a bet when you hire that the additional capacity outweighs the danger of coordination failure.

Perhaps you could invest more money in fabs or something like that. I don't know, I'm a software person. But I did work at apple on software for 15 years, and I do not think throwing more money at software is particularly effective. The biggest teams at apple are often the least functional.

Yeah that's definitely what I'm saying.

Hopefully there is work being done on the replacement for the Mach kernel and OSX / iOS in general. If there isn't that would be a grave mistake and exactly the kind of one someone like Tim Cook would make. Look at how he fumbled AI at Apple. I'm not saying he isn't talented, he is, but he isn't a product guy or an engineer.

This could happen in parallel with existing software dev skunkworks style.

Why on earth would they migrate away from the Mach kernel and OSX/iOS?

Because nothing lasts forever. Take a look at what Harmony OS is capable of if you want to see what a modern take on an OS and ecoystem looks like. It sure isn't the pinnacle either.

Can you give a brief comparison? I'm not familiar with Harmony OS and wouldn't know where to start on comparing the two.

I found out about it through this guy and his videos, they are slow but in depth: https://www.youtube.com/watch?v=GSLFz4jTMEY

There's no reason for Apple to migrate; none at all. The idea that they need to do so is just ridiculous, regardless of what Harmony OS may do. iOS/macOS does exactly what they need.

Will things change? Perhaps if/when quantum computing becomes a bigger item.

The people who designed Mach in 1985 would almost certainly design something very different if they had today’s hardware, AI agents, secure enclaves, NPUs, ubiquitous networking, cloud edges, wearables, smart home devices and generally device density per person.

HarmonyOS is interesting because it points at the right axis: one coherent OS fabric across many devices, not a set of separate device OSes glued together by continuity features. Continuity, iCloud, Handoff, AirDrop, HomeKit etc are impressive glue. They are not the same as one logical OS fabric.

"For example, one major thing you can do with money is hire more people."

Something else you can do is buy companies.

That is absurd. Nobody is arguing that Apple should deplete its war chest. Steve Jobs's infantile stance against dividends has fortunately been replaced by a proper return to the company's OWNERS.

And "Harmony OS" is going to threaten their ecosystem of hardware, software, services, and developers?

"More generally, we're seeing a transition in their financials away from hardware dependence."

Nonsense. They make 72% of their revenue from hardware, and without those hardware sales, the Services category would be nil.

Yes, but their hardware growth might have "ceilinged", services is likely where future growth will be.

Services is really just Google's baksheesh plus corrosive game mechanics. Without the hardware, there is no Services. Hence Apple will always be dependent on maintaining a large lead with their devices.

I subscribed to MacAddict in the mid-90s, back when Gil Amelio was Apple’s CEO, the company couldn’t ship software (Copland, Dylan, Gershwin, etc.), & they could barely afford to acquire NeXT.

It still blows my mind that this is the same company.

In most ways, it isn't meaningfully. It became what it is now, but in the same way a 600 year old oak isn't anything like an acorn or a sapling, what exists now isn't meaningfully that.

They're a monster. Vastly impressive stuff.

The joke is that NeXT acquired Apple and got paid to do it.

There’s a lot of truth to it. A huge amount of the software stack is inherited from NeXT. Steve Jobs was inherited from NeXT. Modern Apple is vastly more successful than NeXT ever was, but there’s a lot of continuity there as well.

It's right there in the developer APIs. All of those NS_ prefixes in the MacOS and iOS SDKs stand for NeXTSTEP.

In fairness to all concerned, the MacOS to MacOS X transition was brilliantly executed. These days we take VMs for granted, but back then it was a novel idea to run MacOS 8 as a process inside of MacOS X (the "blue box"). For most users it was seamless.

Microsoft had done something similar (twice!) but Apple polished the living daylights out of it.

Apple did it before as well. A/UX ran System 7 in a UNIX process. That was a really niche system, though.

That and XENIX are really interesting “what might have beens”.

Yet they completely failed to do so for Mac 32-bit apps. There is a huge library of apps that have not been updated to 64-bit to this day and it is a travesty they never released a virtual classic mode to run 32-bit and even OS 9 apps. It is the one place Microsoft shines in comparison, and the only excuse they give is “deal with it”.

I am certain the reason Wine never tried Mac emulators is fear of Apple legal and consequently you far more easily run ancient Windows programs on Mac then you can even fairly recent Mac Applications.

32-bit apps continued to be supported for a couple of releases after 64-bit rolled out. Just like Classic.

I can see Apple's position: The Mac has been through four major ISAs and the value to most users of maintaining that entire stack indefinitely in the current macOS is nil.

A number of digital preservation standards are emerging (Wasm, MAME/MESS, EaaSI, Olive, ...) and I would like to see a legal requirement on OS vendors that platforms that are no longer supported must be made available to archivists.

There's only a handful of sources for the services revenue which is growing like crazy, I wonder if they've been able to negotiate a higher ad revenue cut with Google which was revealed to be 36% in Google's antitrust trial, leaving a lot of money on the table.

It definitely looks like they've been able to stall the effect of rulings allowing apps to use third party payments. But earlier this week the courts reversed a stay of December's injunction that limits Apple to a very small fee, in their arguments against the stay Epic claimed developers were hesitant to use 3rd party payments until they knew what the final cost would be and that reversing the stay would mitigate their fears so it will be interesting to see what happens next quarter.

It's worth considering (IMO, anyway) that users don't want to use apps that use third party billing, too. That's my own preference, I avoid them and look for something that lets me pay via the App Store instead. In the cases where I can't do that (Disney, Netflix), I just leave a bad review and send feedback on their website asking to pay in the app.

For me there's definitely a trust factor for random app developers and an indifference for non-subscriptions where the one-time fee is irrelevant, but I wouldn't pay an extra $20 - $100 a year in fees to avoid a company like Netflix or Disney managing subscriptions it's just not that hard to do and they're adequate at it.

There may be one or two good examples of companies who do not depend on dark patterns to keep subscriptions, but plenty of the big names are associated with absolute horror stories of numerous hour long phone calls fighting retention specialists to get a service canceled.

For me the ease of seeing what subscriptions I have in one place with easy cancellation options avoids the stress of trusting companies with PII and credit card info and ever needing to deal with anything over the phone.

That said… making it impossible to sell your product with less than a 30% margin does not seem in line with today’s software and streaming economics. I am not sure the model Apple should adopt, but the current one lacks artistry.

Among even non-tech people I know, it's now common knowledge to check on the web if you can get a discount without the Apple tax before doing an in-app purchase. I think most people care more about saving 10-30% on their purchases than the convenience.

Interesting, I haven't heard of people doing that. I just asked my non-tech sisters and neither of them do it, but they do pay for the big media apps outside of Apple since there's no choice there.

For me, I much prefer the convenience of having all my subscriptions centrally located in the App Store, and, more importantly, being able to cancel them with one click there too.

They're going to have another one soon: ads in maps. What a user experience disaster that will be all to make a few more dollars.

I used to tout the superiority of Apple Maps to people by saying "And there no ads, so you can trust the results". I can't do that anymore.

It seems to me that Apple is only going to be further increasing the number of price points and "levels" of caliber of devices, from budget/entry level all the way to new heights such as things like iPhone Ultra or Macbook Ultra, because services will be have an even wider net to cast into (If you're buying Ultra devices, you'll probably get AppleCare+, and if you have new apple devices such as the Neo or 17e etc, you'll be more likely to get Apple music or books or fitness or whatnot.

Focused on "simplicity", they used to have only a "tableful" of products.

With more products, will Apple collapse under the weight of the complexity?

That was a different era of consumer behavior. Consumers are hyper targeted with personalized organic and paid messages. The algorithmic media ecosystem mitigates or counters complex product offerings. For example, my YouTube feed displays Apple Pro devices reviews over other lines like iPad basic. Also, purchase power acts as a natural filter.

The customer base is also so much bigger. Just before the the iMac was introduced, they were selling under half a million Macs per quarter. And that was divided up among a bunch of different models. That makes it much harder to manage production and inventory, and your development costs get spread across fewer units. With 10x more Mac sales and 100x more iPhone sales, there’s more room for variety.

There is a difference between 5 B revenue and 400 B revenue.

Also the price point shifted from primarily a 2K machine, to all price ranges, with the original iPhone being a few hundred bucks. More sales smaller units so the number of products being sold is more than it appears based on the revenue comparison.

Maybe the price per unit is available somewhere for people to trend how it changed over 2-3 decades.

They pretty much still only have a "Good -> Better -> Best" ladder for the majority of their products, with a handful of "niche" offerings sprinkled in. Complexity hasn't increased much from those days, they added one extra column and row

iPhone: iPhone 17e -> iPhone 17 -> iPhone 17 Pro (Niche: iPhone Air)

iPad: iPad -> iPad Air - > iPad Pro (Niche: iPad Mini)

Mac Laptop: Macbook Neo -> Macbook Air -> Macbook Pro

Mac Desktop: Mac Mini -> iMac -> Mac Studio

They have product with different screen sizes, but those are really just configuration options on the base product in that tier, now. Compare that to offerings from Samsung or Dell and you can see it could be much, much more complicated.

I am personally saddest to hear about the discontinuation of the Vision Pro - in a couple of generations there was a solid chance that it would be easy sell for me and/or other people who don't VR/AR game but probably would use it for media/productivity.

>I am personally saddest to hear about the discontinuation of the Vision Pro

I'm more sad they cancelled their EV project. We need more healthy competition there than public spying VR ski goggles.

The competition would have been at the luxury end. Apple would have been competing with Mercedes, BMW and Cadillac, not with Hyundai and Kia.

Why luxury? Apple is mass market not luxury.

Apple sells mass market by marketing it as luxury.

And to be fair, it kinda is. The OS on the Neo is the same as on a Mac Pro (RIP)

> Apple would have been competing with Mercedes, BMW and Cadillac, not with Hyundai and Kia.

So? Did I stutter when I said that would be great for competition?

Luxury cars go down in value pretty quickly on the used market after they age a while and then become affordable to the masses.

I live in an low income migrant EU neighborhood, and it's not full of new Kias and Hyundais, but 10+ year old BMWs, Mercedes and Audis, because some people prefer the status of a used old car from a luxury brand, rather than a new car from a budget brand.

Apple entering the ring with their supply chain and attention to detail, would have been a net positive impact to the car industry the same way Tesla was when it entered. No major car brand took EVs seriously before Tesla showed them how to make good cool looking ones, and their media entertainment units, even on 100k German cars, were laggy pieces of shit before Tesla changed the game. Tesla might not win this war, but they certainly moved the industry forward a lot in the right direction.

There is tons of EV competition. 252 new EV models were announced at the Beijing Auto Show last week. Reviews of the Xiaomi SU7 2026 generally acknowledge it as best in class. etc.

Yeah, but Americans can’t buy those.

I couldn’t find information about discontinuation in the article - did I miss it or is there another source?

Edit, I found this: https://www.macrumors.com/2026/04/29/apple-vision-pro-m5-flo... - seems like rumors; but perhaps as close to an announcement as we’ll ever get.

The Vision Pro has been getting discontinued about once a month for the past two years.

Apparently it’s more that they’ve stopped making them because they have more than enough stocked up.

There's been nothing but rumors about that. I don't think it's getting canned.

"in a couple of generations there was a solid chance that it would be easy sell for me and/or other people who don't VR/AR game but probably would use it for media/productivity."

Why in a couple of generations? You've put your finger on why the product failed: Apple's fear of connectivity. Apple zealously cripples the I/O on all of its mobile products, rendering them unusable for so many things.

All the Vision Pro needed was a video input. Gamers, 3-D modelers, drone pilots, filmmakers, engineers, travelers... all would have been a ready market for an excellent head-mounted video device. But nope... Apple can't have people doing anything with its products that it didn't think of.

Agreed. I agree with the iOS lockdown as I do most of my financial and medical there. I can see it for iPad as a sort of locked down computer you can’t break typing random things into terminal some website said to.

Vision Pro, however, should have been a full computer the way the Mac is as it was never going to appeal to non geeks.

The introductory video of this cyborg recording spatial video at birthday parties seemed pure fiction as there would not be smiles at the weird masked guy with the eyes flashing whenever he wanted to take a picture especially as glasses that record video are slammed so hard. I could only imagine such a thing maybe at a wedding.

Flip phones with apps were around a long time before the iPhone and people knew what to do with them.

Vision Pro really was a whole new thing and they biffed it not allowing people to vibe code and play on it directly instead forcing to dig through complicated X-code on a connected Mac. It needed a 3D Quartz Composer type thing at the very least that just isn’t there.

So I really wanted to understand the different kinds of margins. Yes, this was made with the help of an AI, with lots of iterations to make it applicable to Apple and easily understandable. I attempted to verify the numbers manually fwiw. Now please roast me.

Net profit margin: 26.6% ($29.58B / $111.18B) — what the company and its shareholders keep after taxes and everything else. (edited)

Operating margin: 32.3% ($35.89B / $111.18B) — left after the product and running the company (staff, R&D, marketing, stores).

Gross margin: 49.3% ($54.78B / $111.18B) — left after paying suppliers and contract manufacturers. Shows how much more customers pay than it costs to build.

Correction, shareholders don’t keep the profit, the company keeps most of this on its balance sheet which may cause a corresponding rise in the price of Apple’s stock if people did not already anticipate that level of return. (And markets are rational)

The only money that shareholders keep is the dividend per share which was $0.27 out of a profit of $2.01 per share.

Good point. I'll add an edit.

I know it is not you but the industry parlance, so a question to anyone knowledgable. Is gross margin ever useful? Sure 50% sounds like a lot, but without R&D and staff and other expenses, you can not make that 50% and even the 100%.

If they’re going hard in on services maybe they’ll finally go up against Microsoft 365 and Google Workspace, proper.

Between the two someone needs to disrupt it with a cheaper stripped down alternative (from a big player) because the prices are going through the roof.

Unless they change their tack, Apple is unlikely to go head to head against Microsoft 365 or Google Workspace because they only target their own ecosystem (macOS/iOS). For MS and Google these Apple-owned platforms are not their primary user base.

Apple has no desire to go into the enterprise space.

I was floored to find out recently that the web interface for iCloud (iCloud.com) has no way to edit a spreadsheet in-browser. I thought for sure they’d have browser based Numbers at this point, but nope! I think if they haven’t done this yet it ain’t gonna happen.

I presume you mean how you can upload CSV or XLSX spreadsheets but not view them? It does seem an oversight they do not have conversion on the website or the ability to import into a spreadsheet. More interesting is how Pages gives a nice red exclamation saying not a supported file while Numbers gaslights you letting you share something you can’t use.

Charts: https://sixcolors.com/post/2026/04/apple-announces-record-fi...

All this while passing on the leap of faith everybody else is taking in the form of crazy AI investments.

If the bubble bursts, Apple with its mountain of cash will be ready to buy the carcasses of whatever is left.

If the bubble bursts why would Apple buy any AI companies?

For the same reason that Yahoo should have bought Google after the dot-com bust. AI is useful and will eventually change the world. Many companies won't be able to provide sufficient returns, but will still have useful assets that Apple could buy at a discount.

More likely they would buy the assets of AI companies for pennies on the dollar. There could be a lot of H100s floating around at fire sale prices. Or they would acquire these companies for talent.

Google did this for several years in the early 2000s – snapping up talent and data center capacity from the casualties of the dotcom bust.

What will they do with all that H100s? They dont O&O any data centers. AFAIK, Apple uses GCP for iCloud.

Also, remember H100 will be ~years old. Sometimes I wonder whether the average HN crowd really thinks through things.

Apple has historically shown an unwillingness to deploy capital to "own" things. They partner with TSMC for manufactoring, they get their panels from Samsung, Google on Gemini ..

Vertically integrated doesnt mean they "make" everything, but instead partners build things to their specification.

Apple does own datacenters. They have eight, not to many colocation facilities.

Do you know what they house in those? Eight seem too few for someone like Apple, who serves billions of users.

Decent even though Google, OpenAI, Anthropic eating their lunch on AI.

That's the case for now, but I get this feeling that in 3 years we're all likely to just be running local models on Apple Silicon and they're gonna be having the last laugh.

They're not really in that business, though, so who cares? It's like saying Apple is eating the other guys' lunch on Swift adoption. Or Microsoft is eating their lunch on Video Games. There's no rule that says "All companies must focus on AI."

Fun fact: selling iPhones and my TV+ subscription I forgot to cancel and don’t even use is a lot more profitable than selling $2 of compute time for $1 (with 0-6 months of moat).

That they aren’t participating in the AI arms race is very good for current earning

Apple is saving a ridiculous amount of money by just licensing Gemini from Google instead of trying to keep up with a frontier model of their own. In a few years when the S-curve has flattened a bit it will probably be way cheaper to catch up if Google then tries to squeeze them.

The best quarter on record by 17% and they raise the dividend by a paltry 4%... sigh

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