What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-01 compared with 2026-01-30 · 86 added, 50 removed, 117 unchanged (54% of the section changed)

19 unchanged sentences

Net sales can also be affected when consumers and distributors anticipate a product introduction.

During the first quarter of 2026, the Company announced the following updated products:

• 14-inch MacBook Pro ®

• Apple Vision Pro ®

During the second quarter of 2026, the Company announced the following new or updated products:

• MacBook Pro ®

• MacBook Air ®

• MacBook Neo™

• AirPods Max ® 2

Macroeconomic Conditions

Macroeconomic conditions, including inflation, interest rates, component pricing and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company’s results of operations and financial condition.

The Company is experiencing a period of supply constraints and increasing costs for components driven by factors such as industry supply-demand imbalances for components, including advanced semiconductors, storage (NAND) and memory (DRAM).

The Company expects these trends to intensify, which, together with actions that may be taken by the Company in response to such trends, may materially adversely affect demand for the Company’s products and negatively impact the Company’s revenue, costs, gross margin, results of operations and financial condition.

| Q2 2026 Form 10-Q | 13

5 unchanged sentences

Department of Commerce investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors.

The announcement of the initial results of the investigation did not impose any additional tariffs affecting the Company’s products at this time.

The announcement of the initial results of the investigation did not impose any additional tariffs affecting the Company’s products.

Separately, on February 20, 2026, the U.S.

Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977.

The Company is applying for a refund of tariffs paid, following the processes established by U.S.

Customs and Border Protection.

Various modifications to U.S.

tariffs have been announced and further changes could be made in the future, which may include additional measures under the Section 232 semiconductor sector investigation, additional sector-based tariffs, or other measures.

tariffs have been announced, including the imposition of tariffs under Section 122 of the Trade Act of 1974, and further changes could be made in the future, which may include additional measures under the Section 232 semiconductor sector investigation, additional sector-based tariffs, actions under Section 301 of the Trade Act of 1974, or other measures.

Tariffs and other measures that are applied to the Company’s products or their components can have a material adverse impact on the Company’s business, results of operations and financial condition, including impacting the Company’s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin.

3 unchanged sentences

Segment Operating Performance

The following table shows net sales by reportable segment for the three months ended December 27, 2025 and December 28, 2024 (dollars in millions):

Three Months Ended

2025 December 28,

The following table shows net sales by reportable segment for the three- and six-month periods ended March 28, 2026 and March 29, 2025 (dollars in millions):

Three Months Ended Six Months Ended

2026 March 29,

2025 Change March 28,

2026 March 29,

Americas $ 45,093 $ 40,315 12 % $ 103,622 $ 92,963 11 %

4 unchanged sentences

Total net sales $ 111,184 $ 95,359 17 % $ 254,940 $ 219,659 16 %

Americas net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and Services.

Europe net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and Services.

Americas net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 due to higher net sales of iPhone and Services.

The strength in foreign currencies relative to the U.S.

dollar had a net favorable year-over-year impact on Europe net sales during the first quarter of 2026.

dollar had a favorable year-over-year impact on Americas net sales during the second quarter of 2026.

Europe net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher net sales of iPhone and Services.

The strength in foreign currencies relative to the U.S.

dollar had a net favorable year-over-year impact on Europe net sales during the second quarter and first six months of 2026.

Greater China

Greater China net sales increased during the first quarter of 2026 compared to the same quarter in 2025 due to higher net sales of iPhone.

Japan net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and iPad.

Greater China net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 due to higher net sales of iPhone.

The strength in the renminbi relative to the U.S.

dollar had a favorable year-over-year impact on Greater China net sales during the second quarter of 2026.

| Q2 2026 Form 10-Q | 14

Japan net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher net sales of iPhone.

The weakness in the yen relative to the U.S.

dollar had an unfavorable year-over-year impact on Japan net sales during the first quarter of 2026.

dollar had an unfavorable year-over-year impact on Japan net sales during the first six months of 2026.

Rest of Asia Pacific

Rest of Asia Pacific net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPhone and Services.

| Q1 2026 Form 10-Q | 14

Rest of Asia Pacific net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher net sales of iPhone and Services.

The strength in foreign currencies relative to the U.S.

dollar had a net favorable year-over-year impact on Rest of Asia Pacific net sales during the second quarter of 2026.

Products and Services Performance

The following table shows net sales by category for the three months ended December 27, 2025 and December 28, 2024 (dollars in millions):

Three Months Ended

2025 December 28,

The following table shows net sales by category for the three- and six-month periods ended March 28, 2026 and March 29, 2025 (dollars in millions):

Three Months Ended Six Months Ended

2026 March 29,

2025 Change March 28,

2026 March 29,

iPhone $ 56,994 $ 46,841 22 % $ 142,263 $ 115,979 23 %

4 unchanged sentences

Total net sales $ 111,184 $ 95,359 17 % $ 254,940 $ 219,659 16 %

iPhone net sales increased during the first quarter of 2026 compared to the same quarter in 2025 due to higher net sales of Pro models.

Mac net sales decreased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to lower net sales of laptops and desktops.

iPad net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales of iPad and iPad Pro, partially offset by lower net sales of iPad mini ® .

iPhone net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 due to higher net sales of Pro models.

Mac net sales increased during the second quarter of 2026 compared to the second quarter of 2025 due to higher net sales of laptops.

Year-over-year Mac net sales during the first six months of 2026 were relatively flat.

iPad net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher net sales of iPad, partially offset by lower net sales of iPad mini ® .

Wearables, Home and Accessories

Wearables, Home and Accessories net sales decreased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to lower net sales of Wearables.

Services net sales increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher net sales from advertising, the App Store ® and cloud services.

Wearables, Home and Accessories net sales increased during the second quarter of 2026 compared to the second quarter of 2025 primarily due to higher net sales of Accessories and Wearables.

Year-over-year Wearables, Home and Accessories net sales during the first six months of 2026 were relatively flat.

Services net sales increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher net sales from advertising, the App Store ® and cloud services.

| Q2 2026 Form 10-Q | 15

Products and Services gross margin and gross margin percentage for the three months ended December 27, 2025 and December 28, 2024, were as follows (dollars in millions):

Three Months Ended

2025 December 28,

Products and Services gross margin and gross margin percentage for the three- and six-month periods ended March 28, 2026 and March 29, 2025, were as follows (dollars in millions):

Three Months Ended Six Months Ended

2026 March 29,

2025 March 28,

2026 March 29,

Gross margin:

7 unchanged sentences

Products Gross Margin

Products gross margin and gross margin percentage increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to a different mix of products, partially offset by tariff costs.

Products gross margin and gross margin percentage increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to a different mix of products and strength in foreign currencies relative to the U.S.

dollar, partially offset by higher costs.

Services Gross Margin

Services gross margin increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to higher Services net sales and a different mix of services.

Services gross margin percentage increased during the first quarter of 2026 compared to the same quarter in 2025 primarily due to a different mix of services, partially offset by higher costs.

Services gross margin increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher Services net sales and a different mix of services.

Services gross margin percentage increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to a different mix of services and strength in foreign currencies relative to the U.S.

dollar, partially offset by higher costs.

The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of the 2025 Form 10-K and Part II, Item 1A of this Form 10-Q, in each case under the heading “Risk Factors.” As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.

| Q2 2026 Form 10-Q | 16

Operating Expenses

Operating expenses for the three months ended December 27, 2025 and December 28, 2024, were as follows (dollars in millions):

Three Months Ended

2025 December 28,

Operating expenses for the three- and six-month periods ended March 28, 2026 and March 29, 2025, were as follows (dollars in millions):

Three Months Ended Six Months Ended

2026 March 29,

2025 Change March 28,

2026 March 29,

Research and development $ 11,419 $ 8,550 34 % $ 22,306 $ 16,818 33 %

5 unchanged sentences

Research and Development

The growth in research and development (“R&D”) expense during the first quarter of 2026 compared to the same quarter in 2025 was primarily driven by increases in infrastructure-related costs, headcount-related expenses and engineering program costs.

Research and development (“R&D”) expense increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher infrastructure-related costs and headcount-related expenses.

Selling, General and Administrative

The growth in selling, general and administrative expense during the first quarter of 2026 compared to the same quarter in 2025 was primarily driven by increases in headcount-related expenses and variable selling expenses.

| Q1 2026 Form 10-Q | 16

Selling, general and administrative expense increased during the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to higher headcount-related expenses, variable selling expenses and professional services.

Provision for Income Taxes

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three months ended December 27, 2025 and December 28, 2024, were as follows (dollars in millions):

Three Months Ended

2025 December 28,

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and six-month periods ended March 28, 2026 and March 29, 2025, were as follows (dollars in millions):

Three Months Ended Six Months Ended

2026 March 29,

2025 March 28,

2026 March 29,

Provision for income taxes $ 6,255 $ 4,530 $ 15,160 $ 10,784

1 unchanged sentence

Statutory federal income tax rate 21 % 21 % 21 % 21 %

The Company’s effective tax rate for the first quarter of 2026 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, the impact of the U.S.

The Company’s effective tax rate for the second quarter of 2026 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, the impact of the U.S.

federal R&D credit, and a change in valuation allowance, partially offset by state income taxes.

The Company’s effective tax rate for the first six months of 2026 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, the impact of the U.S.

federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.

The Company’s effective tax rate for the first quarter of 2026 was higher compared to the first quarter of 2025 primarily due to the impact of foreign currency loss regulations issued by the U.S.

The Company’s effective tax rate for the second quarter of 2026 was higher compared to the second quarter of 2025 primarily due to the impact of changes in unrecognized tax benefits, partially offset by a change in valuation allowance.

The Company’s effective tax rate for the first six months of 2026 was higher compared to the same period in 2025 primarily due to the impact of changes in unrecognized tax benefits, the impact of foreign currency loss regulations issued by the U.S.

Department of the Treasury in December 2024, and the tax impact from foreign currency revaluations in the first quarter of 2025 related to the State Aid Decision.

| Q2 2026 Form 10-Q | 17

Liquidity and Capital Resources

The Company believes its balances of cash, cash equivalents and marketable securities, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.

The Company’s contractual cash requirements have not changed materially since the 2025 Form 10-K, except for manufacturing purchase obligations and other purchase obligations.

The Company’s contractual cash requirements have not changed materially since the 2025 Form 10-K, except for manufacturing purchase obligations, other purchase obligations, and deemed repatriation tax payable.

Manufacturing Purchase Obligations

1 unchanged sentence

The Company also obtains individual components for its products from a wide variety of individual suppliers.

As of December 27, 2025, the Company had manufacturing purchase obligations of $44.4 billion, with $43.7 billion payable within 12 months.

As of March 28, 2026, the Company had manufacturing purchase obligations of $44.6 billion, with $43.9 billion payable within 12 months.

Other Purchase Obligations

The Company’s other purchase obligations primarily consist of noncancelable obligations related to supplier arrangements, licensed intellectual property and content, distribution rights, and the acquisition of capital assets related to product manufacturing.

As of December 27, 2025, the Company had other purchase obligations of $35.1 billion, with $9.3 billion payable within 12 months.

As of March 28, 2026, the Company had other purchase obligations of $30.4 billion, with $9.3 billion payable within 12 months.

Deemed Repatriation Tax Payable

During the first six months of 2026, the Company paid the remaining $8.8 billion balance of the deemed repatriation tax payable imposed by the U.S.

Tax Cuts and Jobs Act of 2017.

Capital Return Program

In addition to its contractual cash requirements, the Company has an authorized share repurchase program.

The program does not obligate the Company to acquire a minimum amount of shares.

As of December 27, 2025, the Company’s quarterly cash dividend was $0.26 per share.

In addition to its contractual cash requirements, the Company has an authorized share repurchase program, under which the remaining availability was $63.8 billion as of March 28, 2026.

On April 30, 2026, the Company announced the Board of Directors had authorized an additional program to repurchase up to $100 billion of the Company’s common stock.

The programs do not obligate the Company to acquire a minimum amount of shares.

On April 30, 2026, the Company also announced the Board of Directors raised the Company’s quarterly cash dividend from $0.26 to $0.27 per share, beginning with the dividend to be paid during the third quarter of 2026.

The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.

During the first quarter of 2026, the Company repurchased $25.0 billion of its common stock and paid dividends and dividend equivalents of $3.9 billion.

| Q1 2026 Form 10-Q | 17

During the second quarter of 2026, the Company repurchased $11.0 billion of its common stock and paid dividends and dividend equivalents of $3.8 billion.

Recent Accounting Pronouncements

6 unchanged sentences

The Company is currently evaluating the timing and method of its adoption of ASU 2025-06.

| Q2 2026 Form 10-Q | 18

Disaggregation of Income Statement Expenses

17 unchanged sentences

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company’s market risk during the first three months of 2026.

There have been no material changes to the Company’s market risk during the first six months of 2026.

For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2025 Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis