APA 2025 Q2 Earnings Strong Performance as Net Income Surges 7.3%

Apa (APA) reported strong earnings for its fiscal 2025 second quarter, with net income rising 7.3% year-over-year to $665 million. The results exceeded expectations, particularly in earnings growth, despite a 7.2% decline in total revenue. The company also raised its international sales outlook and outlined strategic investments in marketing and technology to drive long-term value creation.

Revenue

Apa reported total revenue of $2.60 billion in the second quarter of 2025, representing a 7.2% decline from $2.80 billion in the same period a year ago. Oil revenue accounted for the largest portion at $1.38 billion, followed by $460 million from purchased oil and gas sales. Natural gas and natural gas liquids revenue stood at $184 million and $153 million, respectively. The company also recognized $138 million in net gains from derivative instruments and $282 million in gains from divestitures, with $14 million attributed to other net sources.

Earnings/Net Income

Apa’s earnings per share (EPS) increased by 14.4% to $1.67 in the second quarter of 2025, compared to $1.46 in the second quarter of 2024. The company's net income reached $665 million, a 7.3% increase from $620 million in the prior-year quarter. The results reflect a strengthening in profitability despite a decline in overall revenue, with earnings growth outpacing the drop in top-line performance.

Price Action

Following the earnings report, Apa’s stock price declined across multiple timeframes. During the latest trading day, the stock dropped 4.49%, while it fell 7.29% during the most recent full trading week. The stock also declined 6.96% month-to-date, indicating a negative market reaction to the earnings report.

Post-Earnings Price Action Review

A post-earnings investment strategy of buying Apa shares 30 days after the earnings release date following a quarter-over-quarter revenue increase over the past three years has underperformed significantly. The strategy yielded a negative compound annual growth rate (CAGR) of -34.24% and a total return of -121.23%, far below the 50.53% benchmark return. The strategy also produced a maximum drawdown of 0.00% and a Sharpe ratio of -0.65, highlighting significant underperformance and moderate risk.

CEO Commentary

Todd Penegor, CEO of Apa, expressed confidence in the company’s trajectory, citing strong Q2 results driven by positive North American comparable sales growth and international improvements. He emphasized the company’s focus on product innovation, including the launch of Cheddar Crust and Shaq-a-Roni, and highlighted strategic initiatives such as marketing amplification, technology investment, and customer experience differentiation. Penegor underscored the importance of data-driven marketing, loyalty program enhancements, and supply chain optimization in driving margin improvements and sustainable growth.

Guidance

Apa raised its international comparable sales growth outlook for 2025 to a range of 2% to 4%, while reiterating its expectation for a 2% to 5% system-wide sales increase. The company also maintained its guidance for flat to +2% North American comparable sales growth. In terms of financial performance, Apa expects consolidated adjusted EBITDA of $200 million to $220 million for 2025, with capital expenditures projected at $75 million to $85 million. General and administrative (G&A) expenses are expected to be at the higher end of the $70 million to $75 million range.

Additional News

Within three weeks of the August 7, 2025 earnings report, Apa announced the Fall 2025 schedule for APA PsycInfo webinars, aimed at strengthening users’ skills in navigating the psychology literature database. The webinars, including beginner and advanced sessions, will focus on search strategies, Boolean operators, and AI-enhanced research tools such as semantic search and citation mapping. Additionally, the APA PsycTherapy database added 10 new unscripted psychotherapy videos to support student and practitioner training. Another key development was the upcoming launch of the APA Style Manual, an institution-wide online subscription to the authoritative Publication Manual of the American Psychological Association, offering unlimited access to APA Style guidelines.