Apple's Double-Digit Growth Anchors Hardware Demand
Hardware issuers posted a wave of positive demand and outlook comments as Apple, ADTRAN, and others described broad-based strength.
Apple (AAPL) said it posted double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment, and that its installed base of active devices reached a new all-time high. That mix of product-line and regional expansion is the clearest demand signal in the Hardware & Devices group for the quarter.
ADTRAN Holdings (ADTN) said demand across its end markets remained strong, led by Optical Networking Solutions, and that it was gaining momentum in optical networking while increasing diversity across cloud providers, hyperscalers, enterprise, and government customers. Management said the underlying strength or trajectory of the business remained intact despite near-term factors affecting quarterly results, and projected third-quarter revenue of $275.0 million to $295.0 million.
Pricing comments were thinner. Corsair Gaming (CRSR) said gross profit benefited from a favorable shift toward higher-margin categories. Extreme Networks (EXTR) said targeted pricing actions are successfully offsetting incremental supply-chain costs. Esco Technologies (ESE) said profitability was driven by leverage on higher volume and price increases, partially offset by inflationary pressures. Digi International (DGII) said its segment saw no material impact from pricing.
Input costs cut both ways. Apple reported a favorable impact of approximately 2 percentage points from tariff refunds on gross margin. Clearfield (CLFD) said tariff recoveries benefited the quarter but that the company does not expect them to recur in future periods. BlackSky Technology (BKSY) said total cost of sales as a percentage of revenue improved to 27%. Ciena (CIEN) pointed to expanding supply capacity.
Capital spending stayed growth-oriented. Amphenol (APH) said it remains focused on expanding growth opportunities through enabling technologies, diversification, and an active acquisition program. Bel Fuse (BELFA) said it plans to use equity proceeds to support the remaining 20% of Enercon in early 2027, as well as future M&A and growth initiatives. Powerfleet (AIOT) cited capitalized software development costs of $4.1 million and capital expenditures of $4.9 million. BlackSky said the next two Gen-3 satellites are expected to launch in the third quarter.
Hiring was a smaller thread. Unusual Machines (UMAC) said revenue growth was driven by the continued increase in headcount and capacity, with total headcount growing to 240 employees at the end of the second quarter. Vuzix (VUZI) said higher cash salary and benefits related expenses due to headcount increases. Methode Electronics (MEI) cited investments in talent and capabilities as part of its transformation.
Inventories were mixed. Clearfield removed a previously booked order from backlog because it no longer expects to fulfill it, resulting in an inventory charge. DIEBOLD NIXDORF (DBD) said increased demand drove inventory investment and pressured free cash flow. Digi said heightened inventory-related costs in the prior year did not repeat. Methode said timing resulted in higher accounts receivable and inventory levels.
Consumer and customer behavior pointed to infrastructure spending. Corsair said Elgato Marketplace gross revenue and transaction volume each up over 100%. Digi said customers are treating connectivity, edge intelligence, and software as essential infrastructure rather than discretionary spending. NetApp (NTAP) said organizations choose the NetApp Platform to power their AI and hybrid multi-cloud initiatives. Methode said the consumer appliance business winds down.
Powerfleet said it is reallocating resources and forgoing portions of projected non-strategic South African revenue, while expecting the revenue CAGR from fiscal 2026 through fiscal 2028 to remain consistent with prior expectations, with stronger growth in fiscal 2028 driven by the South Africa project ramp. Apple’s all-time-high installed base and ADTRAN’s optical-networking momentum frame a group that is still spending on capacity, product lines, and customers even as tariff and inventory items remain uneven.