LKQ (LKQ) Q4 2025 earnings summary

Executive summary

• Achieved $1.1 billion in operating cash flow and $847 million in free cash flow for 2025, exceeding targets despite sector headwinds and soft demand in North America and Europe.

• Returned $469 million to shareholders in 2025 through $159 million in share repurchases and $310 million in dividends.

• Completed the divestiture of the Self-Service segment and initiated a process to explore the sale of the Specialty segment as part of a strategic transformation.

• Initiated a comprehensive strategic review to explore alternative structures and enhance shareholder value, including potential divestitures and restructuring.

• Maintained focus on operational execution, cost discipline, and restructuring to support margins and cash flow.

Financial highlights

• Q4 2025 revenue was $3.3 billion, up 2.7% year-over-year; full year 2025 revenue was $13.7 billion, down 1.3%.

• Q4 2025 diluted EPS was $0.29, including a $52 million goodwill impairment; adjusted EPS was $0.59 (down 24.4%).

• Full-year 2025 diluted EPS was $2.31 (down 8.7%); adjusted EPS was $3.01 (down 11.2%), at the lower end of guidance.

• Segment EBITDA for 2025 was $1.51 billion (11.1% of revenue), down from $1.69 billion (12.2%) in 2024.

• Operating cash flow for 2025 was $1.1 billion; free cash flow was $847 million.

Outlook and guidance

• 2026 guidance assumes conservative market recovery, with organic parts and services revenue growth between -0.5% and +1.5%.

• Adjusted diluted EPS expected in the range of $2.90–$3.20; GAAP diluted EPS guidance: $2.35–$2.65.

• Free cash flow expected between $700 million and $850 million; operating cash flow $900–$1,100 million.

• EBITDA margins expected to be slightly down in 2026 due to annualized tariff impacts.

• Guidance includes estimated impacts from tariffs and foreign exchange, with no meaningful market recovery assumed until sustained improvements are observed.