Apple sold fewer iPhones in Q2 but made more money

Fresh off a record-breaking $78.4 billion first quarter, Apple reported a decidedly more muted Q2 of fiscal year 2017: a profit of $11 billion, or $2.10 per share, on revenue of $52.9 billion.

The quarter ending April 1 saw no new flagship iPhones, though there was a refreshed iPhone SE and a special edition red model. But Apple usually sees a decline from Q1 to Q2. And the results are better than the year-ago Q2, which saw profit of $1.90 per share on $50.6 billion in revenue.

Apple CEO Tim Cook said the company saw “continued robust demand for iPhone 7 Plus” and “strong momentum of our services business, with our highest revenue ever for a 13-week quarter.”

Well, it wouldn’t be an Apple earnings report if some record wasn’t shattered, right?

Apple’s profits beat analyst expectations on profit but missed slightly on revenue and iPhone sales, for those who care about that sort of thing.

Sales in Europe and China were down year-over-year, but the Americas, Japan, and rest of the Asia Pacific were up.

Apple sold fewer iPhones in Q2 than Q1, as always, but also sold fewer phones than in Q2 of 2016. However, the company made more money off the iPhones it did sell this quarter over last—$33.25 billion vs. $32.86 billion, to be precise. That indicates that perhaps people are choosing the more expensive 7 Plus when they upgrade.

Somewhat surprisingly, the Mac saw an upswing in Q2. Apple sold 4.2 million Macs, up from 4% year-over-year. iPad sales were down 13%, but revenue from other products (which includes the Apple Watch) was up 31%.

As Cook said (and has said time and time again), services remain a bright spot for the company as it moves to diversify its revenue sources. In the March quarter, Apple made more than $7 billion from services (which includes Apple Pay, AppleCare, Apple Music, the iTunes Store, etc., etc., etc.).

That’s up from just shy of $6 billion a year ago. Adding a billion dollars to a business in one year isn’t bad, though analysts had expected Apple to hit $7.06 billion. Basically, Apple is disappointing Wall Street, as always.

But it’s still America’s most valuable company, and its market cap on Tuesday hit $776.59 billion. The company is also sitting on more $250 billion in cash.