Nasdaq:APA
APA Corp
A global leader in oilfield equipment manufacturing and aftermarket services supporting the energy sector across multiple continents.
Key Metrics
Investment Thesis
Bull Case
APA offers compelling value as a low-cost producer in the oilfield services sector with high barriers to entry due to its specialized technology and global footprint. The company's strong cash generation capabilities provide flexibility for shareholder returns and strategic M&A, positioning it well for potential upcycles in energy demand.
Bear Case
The significant decline in revenue over the past three years suggests vulnerability to sustained low oil prices or reduced capital expenditure by major energy companies. High debt levels implied by negative financing cash flows of $2.50B could constrain growth opportunities and increase financial risk during downturns.
About APA Corp
APA Corporation is a leading midstream energy services provider operating across North America, Europe, Asia, and Africa. The company specializes in oilfield equipment manufacturing, drilling tools, and comprehensive aftermarket support services for the global petroleum industry. With a diverse portfolio spanning upstream and downstream sectors, APA delivers critical solutions that enhance operational efficiency for major energy producers worldwide.
Analysis
Management Discussion
Despite a recent revenue contraction from $11.07B in 2022 to $8.95B in 2025, the company demonstrated resilience with net income recovering from $1.12B in 2024 to $1.69B. The strong operating cash flow of $4.54B highlights effective working capital management, though significant cash outflows for investing and financing activities reflect ongoing capital deployment strategies.
Industry Overview
The global oilfield services industry is highly cyclical, driven primarily by exploration and production budgets which fluctuate with crude oil prices and geopolitical stability. Companies in this sector compete on technology innovation, operational efficiency, and the ability to provide integrated solutions that reduce downtime for energy producers.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $11.07B | $8.28B | $9.74B | $8.95B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $11.07B | $8.28B | $9.74B | $8.95B |
| Operating Expenses | $5.51B | $4.63B | $7.29B | $5.86B |
| Operating Income | $5.57B | $3.65B | $2.44B | $3.09B |
| G&A | $483.0M | $351.0M | $372.0M | $350.0M |
| Stock-Based Comp | $348.0M | $84.0M | $49.0M | $107.0M |
| D&A | $1.23B | $1.54B | $2.27B | $2.30B |
| Other OpEx | $5.03B | $4.28B | $6.92B | $5.51B |
| Non-Operating Income | $169.0M | $-765.0M | $-907.0M | $-296.0M |
| Interest Income | $10.0M | $10.0M | $12.0M | $25.0M |
| Pre-Tax Income | $5.73B | $2.88B | $1.53B | $2.79B |
| Income Tax | $1.65B | $-324.0M | $417.0M | $1.10B |
| Continuing Ops | $4.08B | $3.21B | $1.12B | $1.69B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $4.08B | $3.21B | $1.12B | $1.69B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $4.08B | $3.21B | $1.12B | $1.69B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.71B | $2.46B | $3.40B | $2.12B |
| Cash & Equivalents | $245.0M | $87.0M | $625.0M | $516.0M |
| Accounts Receivable | — | $1.61B | $1.96B | $1.06B |
| Inventory | $427.0M | $453.0M | $425.0M | $351.0M |
| Prepaid Expenses | $31.0M | $46.0M | $54.0M | $80.0M |
| Other Current Assets | $2.00B | $266.0M | $341.0M | $112.0M |
| Long-Term Assets | $10.44B | $12.78B | $15.99B | $15.64B |
| Goodwill | $0 | — | — | — |
| Other LT Assets | $9.81B | $12.35B | $15.99B | — |
| Total Assets | $13.15B | $15.24B | $19.39B | $17.76B |
| Current Liabilities | $2.92B | $2.40B | $2.96B | $2.57B |
| Accounts Payable | $771.0M | $658.0M | $1.22B | $871.0M |
| Current Leases | $167.0M | $116.0M | $118.0M | $97.0M |
| Taxes Payable | $90.0M | $138.0M | $221.0M | $112.0M |
| Other Current Liab | $1.89B | $1.49B | $1.39B | $1.49B |
| Long-Term Liabilities | $8.89B | $9.15B | $10.07B | $8.19B |
| LT Operating Leases | $133.0M | $165.0M | $255.0M | $220.0M |
| Other LT Liab | $8.75B | $8.98B | $9.82B | $7.97B |
| Total Liabilities | $11.80B | $11.55B | $13.03B | $10.76B |
| Shareholders' Equity | $1.34B | $3.69B | $6.36B | $7.00B |
| Paid-In Capital | $11.42B | $11.13B | $13.15B | $12.82B |
| Retained Earnings | $-5.81B | $-2.96B | $-2.15B | $-721.0M |
| AOCI | $14.0M | $15.0M | $12.0M | $10.0M |
| Total L&E | $13.15B | $15.24B | $19.39B | $17.76B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $4.08B | $3.21B | $1.12B | $1.69B |
| Non-Cash Adjustments | $3.35B | $-792.0M | $2.48B | $4.30B |
| Working Capital Changes | $-2.49B | $714.0M | $17.0M | $-1.45B |
| Cash from Operations | $4.94B | $3.13B | $3.62B | $4.54B |
| Cash from Investing | $-1.51B | $-2.14B | $-924.0M | $-2.15B |
| Dividends Paid | $207.0M | $308.0M | $353.0M | $360.0M |
| Cash from Financing | $-3.49B | $-1.15B | $-2.16B | $-2.50B |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-57.0M | $-158.0M | $538.0M | $-109.0M |
| Beginning Cash | $302.0M | $245.0M | $87.0M | $625.0M |
| Ending Cash | $245.0M | $87.0M | $625.0M | $516.0M |
Frequently Asked Questions
How does APA Corp make money?
The company generates revenue primarily through three core segments: drilling tools and components manufacturing, wellhead and production equipment sales, and robust aftermarket support services including maintenance and repair for global clients. Additional streams include specialized tubular goods and technical services that address diverse customer needs in both onshore and offshore markets.
What are the main risks for APA?
Investors must consider the cyclical nature of oil and gas markets which directly impacts demand for APA's services and equipment. Geopolitical tensions and supply chain disruptions in key regions like Europe and Asia could affect operations and logistics costs. Regulatory changes regarding environmental compliance and carbon emissions may influence long-term project profitability.
What is APA's competitive advantage?
APA maintains a competitive edge through its extensive global service network with over 100 locations, enabling rapid response times for critical equipment repairs. The company's deep engineering expertise and proprietary product designs allow it to solve complex drilling challenges, while its diversified geographic footprint provides revenue stability against regional market fluctuations.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.