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 share repurchases and dividends.

• Completed the divestiture of the Self-Service segment and initiated a process to explore the sale of the Specialty segment, simplifying the portfolio.

• 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 productivity across all regions.

Financial highlights

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

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

• Full-year diluted EPS was $2.31 (down 8.7%); adjusted diluted 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.

• Paid down over $500 million in debt in Q4; year-end leverage at 2.4x EBITDA.

Outlook and guidance

• 2026 adjusted diluted EPS expected between $2.90 and $3.20; GAAP EPS guidance is $2.35–$2.65.

• Organic parts and services revenue growth expected between -0.5% and +1.5%.

• Free cash flow guidance for 2026 is $700 million to $850 million; operating cash flow $900–$1,100 million.

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

• Outlook assumes gradual market improvement, continued productivity focus, and includes estimated impacts from tariffs and foreign exchange.