Chevron 2025 Q4 Earnings Summary
Financial Performance Overview
Earnings: Chevron reported Q4 2025 earnings of 2.8 billion (1.39 per diluted share), down from 3.2 billion in the same period of 2024. Adjusted earnings were 3.0 billion (1.52 per diluted share). The decline was primarily driven by lower crude oil prices, decreased earnings from affiliates, unfavorable foreign currency impacts (130 million loss), and a 128 million net loss related to pension settlements.
Cash Flow Strength: Despite lower oil prices, the company demonstrated robust cash generation. Q4 cash flow from operations (CFFO) reached 10.8 billion, with adjusted free cash flow at 4.2 billion. The company reported achieving its highest-ever operating cash flow for 2025 under similar commodity price conditions.
Operational Highlights and Strategic Progress
Record Production: Global and U.S. net oil-equivalent production increased by 12% and 16% respectively in 2025, reaching new annual highs. This growth was fueled by the Hess Corporation acquisition (contributing 261,000 barrels per day), expansion in the Permian Basin, and ramp-ups in major projects.
Hess Integration and Cost Control: Following the Hess acquisition, the company quickly achieved its initial 1.0 billion synergy target. Additionally, organizational restructuring led to 1.5 billion in structural cost reductions, with a goal to reach 3.0-4.0 billion in savings by the end of 2026.
Major Project Launches: The Future Growth Project at Tengizchevroil (TCO) in Kazakhstan commenced production, raising total capacity to approximately 1 million barrels per day. Deepwater projects in the Gulf of Mexico, including Anchor and Ballymore, also began operations.
Shareholder Returns
Dividend Increase: The Board announced a 4% increase in the quarterly dividend to 1.78 per share, marking the 39th consecutive year of annual dividend growth.
Capital Return: A record 27.1 billion in cash was returned to shareholders in 2025, including 12.1 billion in share repurchases, 12.8 billion in dividends, and 2.2 billion for Hess share purchases at the start of the year.
Segment Analysis
Upstream:
- U.S. Upstream: Earnings fell to 1.258 billion from 1.42 billion YOY, mainly due to lower liquid realizations, though higher sales volumes from Hess and the Permian Basin partially offset the drop.
- International Upstream: Earnings decreased significantly to 1.777 billion from 2.884 billion, impacted by unfavorable exchange rates in Australia, lower affiliate earnings, and declining prices.
Downstream:
- U.S. Downstream: Performance improved significantly, turning a 348 million loss in the prior year into a 230 million profit. This was driven by lower operating expenses (following previous severance costs), higher refined product margins, and reduced impairments.
- International Downstream: Earnings rose to 593 million from 100 million, primarily supported by improved refined product margins.
Future Outlook and New Momentum
The company continues to advance new energy opportunities, including hydrogen, lithium, and power solutions. It has entered the U.S. lithium sector by acquiring approximately 135,000 acres in Texas and Arkansas for direct lithium extraction. Chevron emphasized that despite lower commodity prices, its record production and cost controls will drive industry-leading free cash flow growth.
Chevron Q4 2025 Consolidated Statement of Income
Units: $ Millions
| Item | 2025 Q4 | 2024 Q4 | YoY | % of Total Rev (2025 Q4) |
| Revenues and Other Income | ||||
| Sales and other operating revenues | 45,787 | 48,334 | -5.3% | 97.7% |
| Income from equity affiliates | 663 | 688 | -3.6% | 1.4% |
| Other income/loss | 423 | 3,204 | -86.8% | 0.9% |
| Total Revenues and Other Income | 46,873 | 52,226 | -10.2% | 100.0% |
| Costs and Other Deductions | ||||
| Purchased crude oil and products | 25,348 | 30,148 | -15.9% | 54.1% |
| Operating expenses | 9,030 | 9,257 | -2.5% | 19.3% |
| Exploration expenses | 324 | 449 | -27.8% | 0.7% |
| Depreciation, depletion and amortization | 5,884 | 4,973 | +18.3% | 12.6% |
| Taxes other than on income | 1,327 | 1,141 | +16.3% | 2.8% |
| Interest and debt expense | 361 | 199 | +81.4% | 0.8% |
| Total Costs and Other Deductions | 42,274 | 46,167 | -8.4% | 90.2% |
| Income Before Income Tax Expense | 4,599 | 6,059 | -24.1% | 9.8% |
| Income tax expense | 1,754 | 2,800 | -37.4% | 3.7% |
| Net Income | 2,845 | 3,259 | -12.7% | 6.1% |
| Less: Noncontrolling interests | 75 | 20 | +275.0% | 0.2% |
| Net Income Attributable to Chevron | 2,770 | 3,239 | -14.5% | 5.9% |
Segment Earnings Analysis
Since detailed segment revenue was not provided, the following analysis is based on Segment Earnings, reflecting actual profit contributions.
Units: $ Millions
| Segment | 2025 Q4 Earnings | 2024 Q4 Earnings | YoY | Earnings Share (2025 Q4)* |
| Upstream | 3,035 | 4,304 | -29.5% | 109.6% |
| – US Upstream | 1,258 | 1,420 | -11.4% | 45.4% |
| – International Upstream | 1,777 | 2,884 | -38.4% | 64.2% |
| Downstream | 823 | (248) | Turnaround | 29.7% |
| – US Downstream | 230 | (348) | Turnaround | 8.3% |
| – International Downstream | 593 | 100 | +493.0% | 21.4% |
| All Other | (1,088) | (817) | Loss Widened | -39.3% |
| Total Earnings | 2,770 | 3,239 | -14.5% | 100.0% |
Note: Earnings share is calculated based on Net Income Attributable to Chevron (2.77 billion). Percentages may exceed 100% or be negative due to losses in the “All Other” category.
Financial Highlights Analysis
Revenue Decline: Total revenues fell 10.2% YOY in Q4 2025, primarily driven by lower crude oil prices.
Increased DD&A: Depreciation, depletion, and amortization rose significantly by 18.3% (approx. 900 million), reflecting an expanded asset base and higher production following the Hess acquisition.
Spike in Interest Expense: Interest expenses jumped 81.4% YOY, aligning with the increase in total debt from 24.5 billion to 40.7 billion.
Upstream Profit Contraction: Upstream earnings dropped nearly 30% due to lower oil prices, decreased international affiliate earnings, and foreign exchange losses.
Significant Downstream Improvement: The Downstream segment returned to profitability, aided by lower operating expenses in the U.S. (which included severance costs in the prior year) and improved refined product margins.
Chevron Q4 2025 Selected Balance Sheet Data
Units: $ Millions
| Item | Dec 31, 2025 | Dec 31, 2024 | Change | % Change |
| Assets | ||||
| Cash and cash equivalents | 6,293 | 6,781 | (488) | -7.2% |
| Time deposits | 4 | 4 | 0 | 0.0% |
| Total Assets | 324,012 | 256,938 | +67,074 | +26.1% |
| Liabilities | ||||
| Total Debt | 40,758 | 24,541 | +16,217 | +66.1% |
| Equity | ||||
| Chevron Corp. Stockholders’ Equity | 186,450 | 152,318 | +34,132 | +22.4% |
| Noncontrolling interests | 5,726 | 839 | +4,887 | +582.5% |
| Total Equity | 192,176 | 153,157 | +39,019 | +25.5% |
Selected Financial Ratios
| Ratio | 2025 | 2024 | Definition/Description |
| Debt Ratio | 17.9% | 13.9% | Total Debt / (Total Debt + Stockholders’ Equity) |
| Net Debt Ratio | 15.6% | 10.4% | Net Debt / (Net Debt + Total Stockholders’ Equity) |
| Debt-to-CFFO | 1.2x | 0.8x | Total Debt relative to Cash Flow from Operations |
| Net Debt-to-CFFO | 1.0x | 0.6x | Net Debt relative to Cash Flow from Operations |
Data Analysis and Insights
Significant Asset Expansion (+26%): Total assets surged from 256.9 billion to 324.0 billion, primarily driven by the completion of the Hess Corporation acquisition. This is also reflected in the dramatic increase in noncontrolling interests.
Rising Debt Levels: Total debt increased by approximately 16.2 billion (up 66%), causing the debt ratio to climb from 13.9% to 17.9%. This reflects acquisition financing and the shifts in capital structure following the integration of Hess assets.
Cash Position: Despite large-scale acquisitions and capital expenditures, the year-end cash balance remained steady at 6.3 billion, representing only a minor decrease compared to the previous year.
Growth in Stockholders’ Equity: Equity increased by approximately 34.1 billion, largely resulting from the issuance of new shares for the acquisition and retained earnings for the year.
Summarized Statement of Cash Flows
Units: $ Billions
| Item | 2025 Q4 | 2024 Q4 | 2025 Full Year | 2024 Full Year |
| Operating Activities | ||||
| Net Income | 2.8 | 3.3 | 12.5 | 17.7 |
| Adjustments: | ||||
| – Depreciation, depletion and amortization (DD&A) | 5.9 | 5.0 | 20.1 | 17.3 |
| – Distributions greater than (less than) income from equity affiliates | 0.5 | 0.1 | 2.3 | (0.4) |
| – Loss (gain) on asset retirements and sales | (0.2) | (1.4) | (0.5) | (1.7) |
| – Net change in operating working capital | 1.7 | 3.4 | (1.0) | 1.2 |
| – Others (deferred income taxes, FX effects, etc.) | 0.1 | (1.7) | 0.5 | (2.6) |
| Net Cash Provided by Operating Activities (CFFO) | 10.8 | 8.7 | 33.9 | 31.5 |
| Investing Activities | ||||
| Capital expenditures | (5.3) | (4.3) | (17.3) | (16.4) |
| Proceeds from asset sales, etc. | 0.4 | 7.1 | 1.8 | 7.7 |
| Corporate acquisition (net of cash) | — | — | 1.1 | — |
| Acquisition of Hess common stock | — | — | (2.2) | — |
| Net repayment of (loans to) equity affiliates | — | (0.1) | 0.8 | (0.2) |
| Net Cash Used for/Provided by Investing Activities | (4.9) | 2.7 | (15.9) | (8.9) |
| Financing Activities | ||||
| Net change in debt | (0.9) | (1.4) | 5.9 | 3.6 |
| Cash dividends | (3.4) | (2.9) | (12.8) | (11.8) |
| Shares repurchased | (3.0) | (4.6) | (12.2) | (15.4) |
| Others (distributions to noncontrolling interests, stock issuance) | — | 0.1 | 0.1 | 0.1 |
| Net Cash Used for Financing Activities | (7.4) | (8.8) | (19.1) | (23.5) |
| Effect of exchange rate changes on cash | — | (0.1) | 0.1 | (0.1) |
| Net Change in Cash, Cash Equivalents and Restricted Cash | (1.5) | 2.5 | (1.0) | (1.0) |
Cash Flow Analysis and Free Cash Flow (FCF)
| FCF Analysis | 2025 Q4 | 2024 Q4 | YoY Change |
| Cash Flow from Operations (CFFO) | 10.8 | 8.7 | +24.1% |
| Less: Capital Expenditures | (5.3) | (4.3) | +23.3% |
| Free Cash Flow (FCF) | 5.5 | 4.4 | +25.0% |
| Adjusted FCF (Excl. Working Capital) | 4.2 | N/A | N/A |
Cash Flow Insights
Strong Growth in Operating Cash Flow (CFFO):
Despite the decline in net income this quarter (from 3.3 billion to 2.8 billion), Q4 CFFO grew to 10.8 billion compared to 8.7 billion last year. This was primarily driven by higher DD&A (a non-cash expense, +0.9 billion) and increased distributions from equity affiliates, demonstrating robust cash generation from core operations.
Expansion of Capital Expenditures (Capex):
Q4 Capex increased to 5.3 billion (up from 4.3 billion last year), with full-year Capex reaching 17.3 billion. The increase reflects asset integration costs following the Hess acquisition and increased investments in power solutions for U.S. data centers.
Significant Decrease in Proceeds from Asset Sales:
Q4 2024 benefited from 7.1 billion in proceeds from asset sales, whereas Q4 2025 saw only 0.4 billion. This shift resulted in a net cash outflow for investing activities this quarter, compared to a net inflow in the prior year’s period.
Sustained Shareholder Returns:
In Q4, the company paid 3.4 billion in dividends and repurchased 3.0 billion in shares. Although share repurchases were lower than the 4.6 billion in Q4 2024, the full-year repurchase total reached 12.2 billion. Combined with dividends, the company returned a record 27.1 billion to shareholders for the full year.
Free Cash Flow (FCF):
Q4 Free Cash Flow stood at 5.5 billion (10.8 billion CFFO minus 5.3 billion Capex). Excluding the impact of working capital changes, adjusted Free Cash Flow was 4.2 billion.
Highlights of the Hess Corporation Acquisition
Based on Chevron’s Q4 2025 financial report, the acquisition of Hess Corporation (Hess) has been successfully completed, significantly impacting the company’s operations and financial standing. Key highlights of the acquisition include:
1. Integration and Synergies
Integration Progress: Chevron has finalized the acquisition and rapidly integrated Hess assets into its global portfolio.
Cost Synergies: The company announced that it has already achieved its initial target of 1.0 billion in preliminary operating synergies.
2. Contribution to Production and Reserves
Production Boost: Hess assets were a critical driver in pushing Chevron’s 2025 production to record highs. Specifically, the Hess acquisition contributed 261,000 barrels of oil equivalent per day (261 MBOED) for the full year of 2025.
Regional Impact: This contribution significantly boosted production growth across both U.S. Upstream and International Upstream segments.
Reserve Expansion: At the end of 2025, Chevron’s proved reserves stood at approximately 10.6 billion barrels of oil equivalent, with the largest addition coming from assets acquired through Hess.
3. Strategic Asset: Guyana
The acquisition of Hess granted Chevron a significant interest in the Stabroek Block offshore Guyana, which is the core strategic asset of this deal:
Development Progress: The fourth development project, Yellowtail, has achieved first oil production.
Future Planning: A Final Investment Decision (FID) has been reached for Hammerhead, the seventh development project.
4. Financial Impact
Increased Capital Expenditures (Capex): Capex reached 17.3 billion in 2025, an increase from the previous year, partly due to ongoing investments in legacy Hess assets following the acquisition.
Cash Outflows: At the start of 2025, Chevron spent 2.2 billion to purchase Hess shares. Additionally, the cash flow statement shows a net cash outflow for corporate acquisitions of 1.1 billion (net of cash acquired).
Special Items and Related Charges: The financial report listed several one-time charges related to the acquisition, including:
- Severance and Transaction Costs: U.S. Upstream recognized approximately 325 million (pre-tax), International Upstream recognized 88 million (pre-tax), and other segments recognized 51 million (pre-tax) in related costs.
- Pension Settlements: Net losses were incurred due to pension settlement costs, including those associated with Hess.
5. Summary
The acquisition is regarded as one of the major achievements of 2025. It not only optimized the upstream asset portfolio but also enabled the company to generate industry-leading free cash flow growth despite a lower oil price environment.
Tengizchevroil (TCO) Assets and Operations
Based on Chevron’s Q4 2025 financial report, Tengizchevroil (TCO) is a major asset in Kazakhstan. Below are the detailed highlights:
1. Strategic Position and Equity
TCO is Chevron’s affiliate company in Kazakhstan, with Chevron holding a 50% equity interest.
2. Major Operational Milestones
Project Launch: TCO successfully started production at the Future Growth Project, marking one of Chevron’s key business achievements in 2025.
Capacity Expansion: With the launch of the new project, TCO has increased total production capacity to approximately 1 million barrels of oil equivalent per day (1 million BOE per day).
Production Contribution: The increase in TCO production is a primary driver for volume growth in Chevron’s International Upstream segment, offsetting production declines caused by asset sales in other regions.
3. Financial Impact
Increased Cash Flow Contribution: Despite falling commodity prices, increased cash distributions from TCO were a significant factor in helping Chevron achieve growth in operating cash flow for 2025.
Decrease in Capital Expenditures: As major construction projects reached completion and entered the production phase, capital expenditures for TCO have decreased significantly. This is also the main reason for the overall decline in Chevron’s affiliate capital expenditures (Affiliate capex).
How does the West Texas data center power project specifically operate? This initiative is a flagship venture for Chevron to tap into the energy demands of Artificial Intelligence (AI). By decoupling energy production from the public grid and linking it directly to data centers, Chevron addresses power delays and reliability issues.
Core Operating Model: Behind-the-Meter Power
The most distinctive feature of this project is the off-grid or behind-the-meter approach.
- Co-location: Power facilities are built directly adjacent to data center sites.
- Bypassing the Grid: Electricity is transmitted through dedicated private lines rather than the public utility grid.
- Advantages: This bypasses the traditional interconnection queue, which can involve several years of waiting for public grid access. It allows for rapid deployment (estimated 12 to 18 months) and ensures 24/7 baseload power for data centers without competing with residential electricity demand.
Technical Architecture and Fuel Source
- Natural Gas Power Generation: The project utilizes the vast and inexpensive associated gas from the Permian Basin in West Texas as its primary fuel. This provides a solution for local natural gas egress constraints (limited pipeline capacity), turning gas directly into saleable electrons on-site.
- Advanced Gas Turbines: The facility utilizes GE Vernova 7HA-class advanced gas turbines. These turbines offer extremely high conversion efficiency and the flexibility to adjust output quickly in response to data center load fluctuations.
- Generation Scale: The first phase is expected to provide 2.5 GW of power, with the potential to scale up to 5 GW (equivalent to the capacity of more than two nuclear reactors).
Integration of Green Energy and Carbon Reduction
While primarily natural gas-based, the project is designed with the flexibility to transition toward lower-carbon operations:
- Carbon Capture and Storage (CCS): Space is reserved within the facility to integrate CCS technology, with a target to capture over 90% of CO2 emissions.
- Hydrogen Capability: The GE turbines are capable of burning hydrogen, allowing for future integration of hydrogen fuel to further reduce carbon intensity.
- Renewable Complementarity: The system can integrate with West Texas’s abundant solar and wind assets. Gas output is lowered when renewables are plentiful and serves as reliable “insurance power” when wind or solar availability is low.
Key Milestones
| Phase | Estimated Timing | Status / Description |
| Partnership Established | January 2025 | Strategic partnership with Engine No. 1 and GE Vernova |
| Final Investment Decision (FID) | Early 2026 | Expected milestone to trigger large-scale construction |
| First Power | 2027 | Projected start of operations and service to initial customers |
This project marks Chevron’s transition from a traditional fuel supplier to a service provider selling “electrons” directly to hyperscale cloud customers.
Would you like me to generate more details on how Chevron’s lithium extraction plans in Texas integrate with these energy infrastructure projects?
Chevron Picks Texas for First AI Data Center Power Project
This video report by Bloomberg discusses Chevron’s business vision for the Texas data center power project and how the company is transforming amid the AI boom.
Source: https://www.chevron.com/investors/reports-and-filings
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