Apple (NASDAQ: AAPL) held its fiscal 2025 second-quarter earnings call after the market closed on Thursday. In the company’s quarterly calls last year, artificial intelligence (AI) was the primary focal point. But not this time. Instead, both Apple’s management and analysts on the earnings call were fixated on tariffs.
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1. Tariffs didn’t affect Apple’s business much in Q2.
Apple’s revenue increased 5% year over year in its fiscal Q2 to $95.4 billion. The company’s earnings per share jumped 8% to $1.65. Both top- and bottom-line numbers beat Wall Street’s estimates.
If you’re thinking tariffs didn’t affect Apple’s business much in Q2, you’re right. CEO Tim Cook said in the Q2 earnings call that the company “had a limited impact from tariffs” in its March quarter.
2. Apple didn’t see much pull-forward demand in Q2.
There was some speculation that Apple might see higher demand in fiscal Q2 as consumers bought iPhones and other products to get ahead of potential tariff-related price increases. That wasn’t the case. Cook said that the company didn’t see a significant “pull forward in demand.” He noted that Apple’s channel inventory at the beginning of fiscal Q2 was similar to the levels at the end of the quarter for iPhone and most other products.
3. Apple projects a $900 million tariff impact in Q3.
While Apple didn’t feel much impact from tariffs in fiscal Q2, the company projects that its tariff-related costs will increase by around $900 million in Q3. This is a relatively low amount that surprised at least one analyst on the earnings call.
4. Apple has built up inventory to reduce the tariff impact.
One reason why Apple’s expected fiscal Q3 impact from tariffs isn’t too bad is that the company has built up inventory. Management didn’t reveal any numbers about the buildup in the earnings call. However, Apple’s quarterly regulatory filing showed manufacturing purchase obligations of $38.4 billion as of March 29, 2025. As of March 30, 2024, the company’s manufacturing purchase obligations totaled $34.2 billion.
5. Most iPhones sold in the U.S. in Q3 will come from India.
The highest tariffs levied by the Trump administration are on imports from China. However, Apple expects that India will be the country of origin for the majority of iPhones that it sells in the U.S. during fiscal Q3. Nearly all AirPods, Apple Watches, iPads, and Mac products the company sells in the U.S. during Q3 will come from Vietnam. China will continue to be the source for most products sold outside the U.S., though.
6. Some AppleCare and accessories products are exposed to the steep 145% tariffs on Chinese imports.
Are any Apple products exposed to the 145% tariffs on Chinese imports? Yes, but the exposure is fairly limited. Cook said in the earnings call that some of the company’s AppleCare and accessories products sold in the U.S. are impacted by the steep Chinese tariffs.
7. Most Apple products aren’t currently subject to global reciprocal tariffs.
The global reciprocal tariffs announced by the Trump administration in April 2025 don’t apply to most Apple products — at least not yet. That’s because the U.S. Commerce Department has launched a Section 232 investigation into the effects of tariffs on semiconductors and products that contain semiconductors. A Section 232 investigation (which refers to a section in the Trade Expansion Act of 1962) is used to assess the impact of imports on national security.
8. Apple’s Q2 and Q3 tariff exposure is mostly related to the February IEEPA tariffs.
If most Apple products aren’t subject to global reciprocal tariffs or the 145% tariffs on Chinese imports, what tariffs do affect the company now?
Cook said that for fiscal Q2 and Q3, Apple’s tariff exposure is primarily related to President Trump’s tariffs announced in February 2025 on imports from Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA). The president declared a national emergency related to fentanyl and other drug trafficking and used the IEEPA authority to levy tariffs in response.
9. Apple remains mum on potential tariff-related price increases.
Cook was asked in the earnings call about his thoughts on potential tariff-related price increases. He replied, “On the pricing piece, we have nothing to announce today.” That’s the best response for now. However, it seems likely that Apple will consider passing along higher costs caused by tariffs to consumers instead of absorbing the costs.
10. There’s a lot of uncertainty.
The word “uncertainty” was mentioned several times during Apple’s call. This uncertainty especially applies beyond the June quarter. Apple executives were careful to frame the discussion about the future by emphasizing that the company’s outlook assumes that “the global macroeconomic outlook doesn’t worsen.”
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Keith Speights has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
