Apple’s March quarter revenue rose 5% y/y, up from 4% in the prior quarter and 6% in September, marking a steady growth trend across recent periods. Gross margins improved by 20 basis points sequentially, while product revenue increased 3% and services revenue increased by 12%. Product revenue was slightly ahead of consensus, and Services finished in line. iPhone revenue was up 2% y/y, versus the Street’s flat expectation. Cook highlighted that there was no evidence of a pull-forward in iPhone demand ahead of the tariffs setting in.

For the upcoming June quarter, Apple guided to low- to mid-single-digit revenue growth, in line with consensus estimates around 3–4%, and acknowledged a $900m tariff-related cost headwind, expected to impact EBITDA by 4% for the quarter.

The bottom line on the March quarter and June guide is that it was a win for the company. Apple beat estimates despite consumer spending slowing in an uncertain economy and delivered strong earnings despite the added cost burden of navigating tariffs.

Despite favorable results and guidance, AAPL shares fell roughly 4% after earnings, largely due to a lack of visibility into the second half of the year. Of the 20 analyst questions on the call, six were related to the post-June outlook, with Cook and CFO Kevan Parekh offering limited clarity and using unusually cautious language, calling it “very difficult to predict.” Much of this uncertainty stems from the unresolved Section 232 tariff investigation, which could further affect cost structures and supply chain decisions.

My take is that investors are asking for a lot. It’s rare that Apple ever talks about the business beyond the current quarter, so there’s precedent for them sidestepping long-term questions. What gave the “cautious on the back half of the year” camp some momentum was the frequency of questions on the topic. In the end, I believe Cook feels we’re in a difficult period, and giving a six-month outlook would be reckless. I also believe most investors would agree with him.

What we do know is that Apple has done an excellent job running the business during the first six months of the year, based on the March results and June guidance. We also know that Cook is at the center of that success, and he’ll be in charge in the back half of the year. That’s something that should help investors sleep well at night.

Tariffs dominated the call’s discussion, accounting for seven of the 20 analyst questions. To manage the risk, Apple has ramped up production in India and Vietnam, with about half of U.S. iPhones now sourced from India, while the rest of the world continues to be supplied through China.

I estimate that 40–45% of total revenue remains tied to China-based manufacturing, which still makes the region a significant risk factor in Apple’s model. Cook reminded investors that his long-term plans include further supply chain diversification. As for the opportunity to expand manufacturing in the U.S., I don’t see much of Apple’s recent $500B “Made in the U.S.” commitment translating into measurable domestic manufacturing.

On the call, Cook reiterated that Apple Intelligence, especially its personalized Siri experience, remains in development. He acknowledged that the AI experience has not yet met internal quality standards. While he did not provide an update on the timing of the all-important personalized Siri, the company has previously stated that a public release is expected in early 2026. As for dependence on OpenAI or Gemini, Cook emphasized that Apple is building its own smaller models to support AI features, putting more of its AI future in Apple’s hands. Lastly, there was no update on the timing of Apple Intelligence’s launch in China, which appears to remain stalled as the company works to finalize a local language model partner.

The big picture on Apple Intelligence

1. The product has been a disappointment. A year ago, I predicted that the iPhone 16 cycle would show strong growth, up 8–10%, following the iPhone 15 cycle’s modest 1% increase. In reality, the iPhone 16 will likely grow only 3% y/y, based on the company’s June quarter guidance, which is the final quarter of the iPhone 16 cycle.
2.  That said, they have time to get it right. Apple has a base of what I estimate to be 1.5 billion active customers, each owning an average of 1.3 devices. For many of them, their personal and professional tech ecosystems are built entirely around Apple. The risk that, over the next three years, Samsung launches a powerful AI phone that causes Apple users to abandon the platform is slim to none.
3. It now looks like the fall of 2026 is when we should begin to see iPhone growth accelerate. I stand by my prediction that Apple Intelligence will power an iPhone supercycle, albeit two years later than I originally expected. In the end, I believe iPhone can return to 8–10% growth during the iPhone 18 cycle, which begins late next year.

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