Only recently returning to growth, Apple (NASDAQ:AAPL) was put to the test in its second fiscal quarter of 2017 as investors looked to see whether the company's return to growth would continue. On Tuesday, Apple showed investors that it can not only continue to grow its business, but it can grow it at an even faster rate than it did in its first quarter.

Going further, Apple also expanded its capital-return program, announcing a larger authorization for share repurchases and a bigger dividend.

Here's a look at Apple's second-quarter results.

Red special edition iPhone 7 Plus and iPhone 7.

Red special edition iPhone 7. Image source: Apple.

The raw numbers


Q2 2017

Q2 2016 

Year-Over-Year Change


$52.9 billion

$50.6 billion






Gross margin



(60 basis points)

Data source: Apple's second-quarter earnings release. Table by author.

In Q2, Apple's revenue and EPS increased 4.5% and 10.5%, respectively, compared with the year-ago quarter. This growth is up from Apple's 3.3% and 2.4% respective growth in revenue and EPS in Apple's first quarter.

This makes for Apple's second quarter in a row of growing its revenue and EPS on a year-over-year basis, following a period in fiscal 2016 in which Apple's business declined on a year-over-year basis for three quarters in a row.

"We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus," said Apple CEO Tim Cook in the company's second-quarter press release. Cook cited "great customer response" to the new iPhone 7 (PRODUCT)RED Special Edition and Apple's services business as key drivers during the quarter.

Second-quarter highlights

Beyond Apple's accelerating revenue and EPS growth, here are some other key takeaways from Apple's second quarter.

  • Apple expanded its total capital return authorization by $50 billion and extended the program's expiration by one year, to March 2019.
  • Of its incremental capital return authorization, Apple plans to spend $35 billion on repurchases and $15 billion on dividends.
  • Apple increased its quarterly dividend by 10.5% to $0.63 per share. The dividend increase is slightly higher than its 10% increase last year.
  • iPhone revenue, which accounted for about 63% of Apple's revenue, increased 1% year over year. iPhone unit sales, however, were down 1% year over year.
  • iPad revenue declined 12% year over year.
  • iMac revenue increased 14% year over year.
  • Services revenue increased 18% year over year.
  • Other products, which includes sales of Apple TV, Apple Watch, Beats products, iPod, and Apple-branded and third-party accessories, jumped 31% year over year, marking a notable change of direction compared with the segment's 8% year-over-year decline in Apple's first quarter of 2017. 
  • Apple generated $12.5 billion in operating cash flow and returned $10.2 billion to investors through repurchases and dividends. 
Apple Store, Upper West Side New York City

Image source: Apple.

What now?

Going forward, Apple expects growth to continue. The company guided for third-quarter revenue to be between $43.5 billion and $45.5 billion. In the third quarter of 2016, Apple's revenue was $42.4 billion.

Apple also said it expects its third-quarter gross profit margin to be between 37.5% and 38.5%. Those figures compare with a gross profit margin of 38% in the year-ago quarter. With revenue expected to increase and management anticipating a similar gross profit margin to the year-ago quarter, Apple's EPS should also increase in Q3.

Investors should look for Apple's recent return to year-over-year growth to continue throughout 2017 and beyond.