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.

• 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 and value-enhancing review.

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

• Maintained operational discipline, gained market share in North America, and entered 2026 with a more focused organization and approved restructuring plan.

• Initiated a comprehensive strategic review to explore alternative structures for unlocking shareholder value.

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 diluted EPS was $0.29, including a $52 million goodwill impairment; adjusted EPS was $0.59 (down 24.4%); full-year diluted EPS was $2.31 (down 8.7%), adjusted EPS $3.01 (down 11.2%).

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

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

• Returned $469 million to shareholders in 2025, representing 55% of free cash flow.

Outlook and guidance

• 2026 guidance assumes tariffs as of February 1 and no meaningful market recovery; organic parts and services revenue growth expected 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.

• Restructuring plan to generate over $50 million in annualized cost savings, with more than half realized in 2026.

• Guidance includes estimated impacts from tariffs and foreign exchange.