# Aptiv (APTV) — Financial Analysis

**Exchange:**   
**Coverage as of:** 2026-Q2  
**Updated:** 2026-06-03  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/APTV/thesis · /stocks/APTV/memo

## Financial Snapshot

---
title: "Step 04 — Financial Quality"
ticker: APTV
company: "Aptiv PLC"
source: coverage-next-full
date: 2026-06-02
---

### Step 04 — Financial Quality: Aptiv PLC (APTV)

#### Statement Quality Assessment

##### Revenue Recognition
- GAAP revenue recognized when performance obligations are satisfied (ASC 606 / IFRS 15)
- Component/connector sales: point-in-time upon delivery to OEM
- Software/Wind River: mix of perpetual license (upfront), subscription (ratable), and support/maintenance (ratable)
- No red flags in revenue recognition structure from filings review [S1]

##### Non-Recurring Items (Last 3 Years)

| Year | Item | Amount | Direction |
|------|------|--------|-----------|
| FY2022 | Russia/Ukraine charges | ($54M) | Negative |
| FY2022 | Wind River acquisition costs | (~$100M) | Negative |
| FY2023 | Swiss DTA recognition (tax benefit) | +$1.93B | Positive (non-cash) |
| FY2023 | Motional equity losses | ($312M) | Negative |
| FY2024 | Motional gain on stake reduction | +$605M | Positive |
| FY2024 | Restructuring charges | (~$150M) | Negative |
| FY2025 | ASUX goodwill impairment | ($648M) | Negative |
| FY2025 | Versigent separation costs | (~$100M) | Negative |

**Quality Assessment:** GAAP net income has been heavily distorted by large non-recurring items in FY2023–FY2025. Adj. EBITDA (management's preferred metric) is more reliable: FY2024 ~$3.0B, FY2025 $3.1–3.3B. The $648M goodwill impairment in FY2025 is a legitimate quality concern — it signals that ASUX was overvalued at acquisition (or that autonomous driving expectations were too high).

##### Cash Conversion Quality

| Year | Net Income | Operating CF | Difference | Quality Signal |
|------|-----------|-------------|-----------|----------------|
| FY2022 | $594M | $1,500M | +$906M | GOOD — D&A + WC |
| FY2023 | $2,900M | $2,300M | -$600M | OK — large non-cash tax benefit inflates NI |
| FY2024 | $1,800M | $2,400M | +$600M | GOOD — Motional gain non-cash |
| FY2025 | $165M | $2,200M | +$2,035M | GOOD — goodwill impairment non-cash |

**Cash conversion is healthy.** Operating CF consistently exceeds adjusted earnings; non-cash distortions are the primary GAAP earnings driver. FCF quality appears sound. [S2]

##### Balance Sheet Quality

| Item | FY2025 | Comment |
|------|--------|---------|
| Cash & Equivalents | ~$3.5B | Adequate; partially needed for debt service |
| Goodwill | ~$4.0B (post-impairment) | Elevated from Wind River; ASUX impairment reduced |
| Total Debt | ~$10.1B | Long-term, staggered maturities |
| Net Debt | ~$6.6B | Net Debt/Adj. EBITDA ~2.2x on New Aptiv basis |
| Pension Obligations | Modest | Jersey/Swiss structure limits legacy pension |

**Leverage concern:** $6.6B net debt is meaningful relative to ~$13B New Aptiv revenue. However, at ~$2.5B+ adj. EBITDA target, leverage is ~2.5–3x — manageable for an investment-grade issuer (APTV carries BBB- / Baa3 equivalent ratings). Post-spin debt allocation between APTV and VGNT not fully confirmed in reviewed filings. [S1][S2]

---

#### Adversarial Research Sweep

*Note: Transcript analysis was not performed (filings-and-consensus path). Investigation sourced from SEC filings, press releases, web search.*

##### Short Interest & Bear Thesis
- Short interest: ~4.1% of float (June 2026) — not a heavily shorted name [S3]
- No activist campaigns or hostile takeover activity identified

##### Investigations & Lawsuits

**Material items from 10-K risk factors and 8-K filings:**
1. **Delphi Technologies legacy:** The 2020 BorgWarner acquisition of Delphi Technologies removed ongoing legacy indemnification risks that previously concerned investors [S1]
2. **Motional JV:** APTV reduced its stake in the Motional autonomous driving JV from 50% to ~15% in 2025 after the JV scaled back commercialization plans. No SEC enforcement or litigation disclosed; equity losses ($312M in FY2023) previously overhang earnings — now largely resolved [S1][S3]
3. **China regulatory risk:** Operating in China under heightened geopolitical scrutiny; no specific China-related SEC disclosures found
4. **Product liability:** Standard OEM supplier product liability exposure; no material outstanding claims identified in filings [S1]
5. **Environmental:** Standard EPA/REACH compliance disclosures; no Superfund or material environmental liability identified

##### Short Reports / Negative Research
- No prominent short-seller reports (Hindenburg, Muddy Waters, etc.) identified for APTV
- The primary bear case is operational/strategic (EV exposure timing, ASUX goodwill impairment, auto cyclicality) rather than fraud/accounting concerns

##### Accounting Red Flags Assessment
- **Revenue concentration:** No single customer disclosed >10% in recent filings — no material concentration risk disclosed
- **Related party transactions:** None material identified
- **Auditor:** PricewaterhouseCoopers (PwC) — Big 4, no auditor changes, no qualified opinions [S1]
- **SBC inflation:** SBC is $300–400M/year (~1.5–2% of revenue) — material but not egregious for a technology-forward company; included in adj. EBITDA add-backs

**Verdict:** No material accounting or governance red flags. Primary financial quality concern is the $648M goodwill impairment (ASUX overvaluation) and elevated leverage ($6.6B net debt). Both are disclosed, not hidden. 

---

#### Quality Score

| Dimension | Score | Comment |
|-----------|-------|---------|
| Revenue recognition | HIGH | Standard, clean |
| Cash conversion | HIGH | OCF consistently > NI (adj.) |
| Balance sheet | MEDIUM | $6.6B net debt; goodwill elevated post Wind River |
| Non-recurring items | MEDIUM | Heavy non-cash distortions FY2023–2025 |
| Governance/fraud risk | HIGH | PwC audit; no red flags |
| Overall | MEDIUM-HIGH | Healthy operating cash generation; watch leverage |

---

#### Source Index

| Code | Source | Detail |
|------|--------|--------|
| S1 | Aptiv 10-K FY2022/2023/2024 | Balance sheet, non-recurring items, risk factors |
| S2 | StockAnalysis.com / XBRL | Cash flow, debt metrics |
| S3 | other/consensus.md | Short interest, analyst commentary |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/APTV/fundamental

## Navigation

- Overview: /stocks/APTV
- Financials (this page): /stocks/APTV/financials
- Thesis: /stocks/APTV/thesis
- Investment Memo: /stocks/APTV/memo
- Coverage universe: /stocks