APC is a great operation code caching system for PHP that can help speed up your site. PHP is a dynamic server-side scripting language that needs to be parsed, compiled and executed by the server with every page request. In many cases though, the requests produce exactly the same results which means that the cloud server has to unnecessarily repeat all these steps for each of them.
This is where APC comes into play. What it does is save the PHP opcode (operation code) in the RAM memory and if requested again, executes it from there. In essence, it bypasses the parsing and compiling steps and minimizes some unnecessary loads on the cloud server.