Apple's gross margins and earnings per share were boosted by the tariff refunds the company received so far. Another $1 billion in tariff refunds are still unaccounted for.
Even as new potentially illegal tariffs affect Apple's supply chain, the company has received refunds for some of the damages done by the previous illegal ones. Apple's record-breaking quarter didn't need the help of the tariff refunds, but it does add some extra flair to the already outstanding results.
Apple shared that its gross margin was 50.1% with a favorable impact of 2% provided by tariff refunds. Those refunds also mean diluted earnings per share gained $0.11, making the total $2.02 per share.
Doing a little napkin math reveals that the total refund so far is about $2.19 billion. Apple previously shared how much tariffs had impacted the company, which added up to $3.2 billion.
Gross Margin from 2018 to 2026
Luckily, for both Apple and the consumer, the cost of the tariffs was never passed to customers through price hikes. Instead, Apple absorbed the costs and thus can add the refunds to its cash pile.
During the earnings call, CEO Tim Cook reiterated that Apple will re-invest the refunds into the United States. President Trump previously said that he would keep track of who requested refunds, so Apple's announcement to invest the refund into US manufacturing will likely mollify him.
Apple shared that it expects another 1% boost to revenue in the September quarter thanks to more tariff refunds. That aligns with the approximate $1 billion still remaining in what Apple paid in the first round of tariffs.
Apple did increase prices of some products recently. However, these price changes are not related to tariffs, but instead are related to the flash and RAM chip shortage directly and indirectly created by the AI-boom.
