Apple blew past Wall Street expectations in its first earnings report since it announced CEO Tim Cook would be stepping down.
Cook shared his thoughts about the leadership transition on Thursday, saying: “There’s no one on this planet I trust more to lead Apple into the future” than incoming CEO John Ternus. Asked by an investor what advice he has given Ternus, Cook said: “Never forget the north star for the company. You know, we’re about making the best products in the world that really enrich other people’s lives.”
Ternus spoke briefly, too, praising Cook’s thoughtfulness in financial decision-making and saying: “This is the most exciting time in my 25-year career at Apple to be building products and services.”
Cook reported Apple’s “best March quarter ever” and “double-digit growth across every geographic segment”. He also noted “extraordinary demand for the iPhone17 lineup”.
Apple crushed Wall Street expectations of $110bn in revenue, racking up $111.2bn for the second quarter of 2026. That trend held in greater China, where revenue reached $20.4bn. Apple also beat Wall street expectations of $1.96 in its earnings per share, and reported $2.01.
Apple’s stocks rose in after-hours trading after the release.
Apple’s 20 April announcement that Ternus would take over as the company’s top executive in September comes at a critical juncture for the iPhone maker.
Apple has not invested as heavily in AI as its biggest competitors but it’s still bearing some of the costs from the AI boom. OpenAI, Google and Microsoft buying up much of the world’s memory chip supply has made them more expensive, increasing costs for Apple to build its products. Cook warned Thursday that there would be “significantly higher” memory costs in the third quarter, but told investors that the main supply constraint for Apple were the advanced nodes that chips are produced on, not the memory chips. Samsung reported its quarterly earnings the same day, which showed a nearly 50-fold increase in memory chip profit.
Ternus also inherits a complicated privacy legacy. While Cook has fought hard for these protections in the US, he has made significant concessions in China – Apple’s second-largest and fastest-growing market.
Cook said he was thrilled Thursday by increasing revenue in China – primarily driven by iPhone sales – and that he sees a “huge opportunity” and is “over-the-moon excited” about India, too. India hosts the second-biggest phone market, and Apple currently has only a “modest share” there, he said.
Cook also spoke about how Apple is approaching AI: “not as a standalone feature” but as an “essential, intuitive part of the experience across our devices”, citing AirPods’ live translation feature and a promise to release a revamped Siri later this year. Cook said the company “under-called the level of enthusiasm” consumers would show for the newly released, budget-focused MacBook Neo.
Ternus, currently senior vice-president of hardware, joined Apple’s product design team in 2001. Apple has said his contributions were instrumental in introducing many new products, including the iPad and AirPods, as well as many generations of iPhone, Mac and Apple Watch products. Ternus is expected to be in charge by the time Apple launches its first foldable iPhone later this year.
