LKQ Corporation posted Q4 2025 revenue of $3.3 billion (+2.7% YoY), beating consensus estimates of $3.26 billion, but adjusted EPS of $0.59 missed the $0.64 estimate. Full-year free cash flow reached $847 million, exceeding targets. The stock dropped ~5.6% in pre-market trading following the earnings miss, reflecting investor concerns over declining margins and a 50% drop in GAAP diluted EPS to $0.29.
About LKQ Corporation
LKQ Corporation (Nasdaq: LKQ), short for “Like, Kind, and Quality,” is a leading global provider of alternative and specialty automotive parts used to repair and accessorize automobiles and other vehicles. Founded in February 1998 by Donald Flynn in Chicago, Illinois, the company is now headquartered in Antioch, Tennessee (a Nashville suburb). LKQ is a Fortune 500 company with operations across North America, Europe, and Taiwan, serving collision and mechanical repair shops, dealerships, and retail customers through approximately 1,684 locations.
As of the most recent data, LKQ employs approximately 47,000 people globally around 19,000 in North America, 26,000 in Europe, and 2,000 in Asia. The company commands an estimated 26.2% market share in the U.S. Used Car Parts Wholesaling industry. Currently, LKQ trades at a market capitalization of approximately $8.5 billion, with a P/E ratio of 12.33, an EPS of $2.70, and a dividend yield of approximately 4%. Justin L. Jude serves as President and Chief Executive Officer, having assumed the role in June 2024.
Top Financial Highlights
- Q4 2025 revenue reached USD 3.3 billion, reflecting a 2.7% increase from USD 3.2 billion in Q4 2024 and exceeding the consensus estimate of USD 3.26 billion.
- Q4 2025 GAAP net income declined to USD 75 million, compared to USD 151 million in the prior year quarter, representing a 50% decrease.
- Q4 2025 GAAP diluted earnings per share stood at USD 0.29, down from USD 0.58 in Q4 2024, reflecting a 50% decline and including a USD 52 million goodwill impairment charge related to the Specialty segment.
- Q4 2025 adjusted diluted earnings per share were USD 0.59, decreasing 24.4% from USD 0.78 in Q4 2024, with the prior year benefiting from a USD 35 million non recurring legal settlement.
- Full year 2025 revenue totaled USD 13.7 billion, representing a 1.3% decline from USD 13.8 billion in 2024.
- Full year 2025 net income amounted to USD 596 million, compared to USD 666 million in 2024, with diluted earnings per share of USD 2.31 versus USD 2.53 in the prior year.
- Full year 2025 adjusted net income reached USD 777 million, or USD 3.01 per diluted share, reflecting an 11.2% decline from USD 894 million, or USD 3.39 per share, in 2024.
- Q4 2025 free cash flow totaled USD 274 million, while full year free cash flow reached USD 847 million, exceeding company targets.
- Annual operating cash flow amounted to USD 1.1 billion.
- Q4 segment EBITDA stood at USD 321 million, reflecting a 9.7% margin and an 18% decline from USD 392 million, or a 12.1% margin, in Q4 2024.
- Specialty segment organic revenue increased 7.8% in Q4, representing the strongest performing segment.
- Total debt stood at USD 3.7 billion, with total leverage at 2.4x EBITDA, and more than USD 500 million in debt repaid during Q4.
- Total capital returned to shareholders in 2025 amounted to USD 469 million, including USD 159 million in share repurchases and USD 310 million in cash dividends.
- For 2026, adjusted diluted earnings per share are projected between USD 2.90 and USD 3.20, with free cash flow expected between USD 700 million and USD 850 million, and organic revenue growth for parts and services forecast between negative 0.5% and positive 1.5%.
- The Board of Directors initiated a comprehensive review of strategic alternatives to enhance shareholder value, including exploration of a potential sale of the Specialty segment announced in December 2025.
Beat or Miss?
LKQ’s Q4 2025 results presented a split picture – revenue topped expectations but earnings fell short. Adjusted EPS of $0.59 missed the consensus estimate of $0.64-$0.65, representing a 7.8% negative surprise. Revenue of $3.31 billion, however, beat estimates by 1.85%.
| Metric | Reported | Estimated (Consensus) | Difference/Analysis |
| Q4 Revenue | $3.31 billion | $3.26 billion | Beat by ~$50 million (+1.85%) |
| Q4 Adjusted Diluted EPS | $0.59 | $0.64–$0.65 | Missed by ~$0.06 (-7.8% to -9.2%) |
| Full Year Free Cash Flow | $847 million | ~$825 million (target) | Exceeded company’s own target |
| Q4 Organic Revenue (P&S) | -1.7% YoY | N/A | Decline driven by North America weakness |
| Full Year Adjusted Diluted EPS | $3.01 | $3.00–$3.15 (guidance range) | Within narrowed guidance range |
What Leadership Is Saying?
Justin Jude, President and Chief Executive Officer, stated that in 2025 the company maintained a disciplined focus on controllable factors, resulting in strong free cash flow generation despite broader sector headwinds. In North America, market share gains were achieved through pricing discipline, expansion of MSO relationships, and growth in the Canadian hard parts segment. In Europe, operational integration and cost simplification efforts were advanced to support margin improvement, while Specialty delivered organic revenue growth of 7.8%, reflecting improving end market conditions.
Rick Galloway, Senior Vice President and Chief Financial Officer, emphasized continued focus on operational efficiency and productivity amid uncertain demand trends. The 2026 outlook reflects current market conditions with expectations for gradual improvement over the year. He noted that consistent free cash flow generation and a strong balance sheet provide financial flexibility to support long term strategic priorities and enhance the company’s overall financial position.
Historical Performance
Q4 2025 vs. Q4 2024 (YoY Comparison)
| Category | Q4 2025 | Q4 2024 | Change (%) |
| Total Revenue | $3.3 billion | $3.2 billion | +2.7% |
| Net Income (GAAP) | $75 million | $151 million | -50.30% |
| Diluted EPS (GAAP) | $0.29 | $0.58 | -50.0% |
| Adjusted Diluted EPS | $0.59 | $0.78 | -24.40% |
| Adjusted Net Income | $150 million | $202 million | -25.7% |
| Segment EBITDA | $321 million (9.7% margin) | $392 million (12.1% margin) | -18.10% |
| Free Cash Flow (Full Year) | $847 million | N/A (comparable) | Exceeded targets |
The primary driver behind the steep GAAP earnings decline was a $52 million goodwill impairment charge linked to the Specialty segment, combined with the absence of a $35 million non-recurring legal settlement that benefited Q4 2024. Organic parts and services revenue declined 1.7% in the quarter, with North America down 1% on a per-day basis and Europe declining 5.2% on a per-day basis. The Specialty segment was the standout performer, posting 7.8% organic growth.
Competitor YoY Performance
Q4 2025 vs. Q4 2024
Genuine Parts Company (NYSE: GPC)
| Category | Q4 2025 | Q4 2024 | Change (%) |
| Revenue | $6.0 billion | $5.8 billion | +4.1% |
| Gross Profit | $2.1 billion (35.0% margin) | $2.1 billion (35.9% margin) | +1.5% |
| Adjusted Net Income | $216 million | $224 million | -3.7% |
| Adjusted Diluted EPS | $1.55 | $1.61 | ~-3.7% |
Genuine Parts posted 4.1% revenue growth in Q4 2025, driven by comparable sales gains and acquisitions, but adjusted earnings of $1.55 missed the Zacks Consensus Estimate of $1.79. Gross margins contracted by 90 basis points, impacted by $160 million in non-recurring charges tied to a vendor bankruptcy.
Copart, Inc. (Nasdaq: CPRT) – Fiscal Q4 2025
| Category | Fiscal Q4 2025 | Fiscal Q4 2024 | Change (%) |
| Revenue | $1.13 billion | $1.07 billion | 5.20% |
| Net Income | $396 million | $323 million | +22.9% |
| Gross Profit | $510 million (45.3% margin) | $454 million | +12.4% |
| Diluted EPS | $0.41 | $0.33 | +24.2% |
Copart significantly outperformed both LKQ and Genuine Parts on profitability, with net income surging 22.9% and EPS beating forecasts by nearly 14%. The online auto auction model continued to benefit from rising vehicle complexity and higher total loss rates.
How the Market Reacted?
The market reaction to LKQ’s Q4 2025 results was decidedly negative. LKQ shares fell approximately 5.6% to 6.7% in pre-market trading on February 19, 2026, dropping to approximately $31.00-$31.37 following the earnings release. Investor disappointment centered on the adjusted EPS miss of $0.59 versus the $0.64 consensus estimate, compounded by significant margin compression across the North America and Europe segments.
The stock’s 52-week range spans $28.13 to $44.82, indicating substantial volatility over the past year. As of the most recent close on February 23, 2026, LKQ shares traded at approximately $33.29, with a market cap of roughly $8.5 billion. The announcement of a board-initiated strategic alternatives review, coupled with the exploration of selling the Specialty segment – ironically the company’s best-performing unit has added a layer of uncertainty and speculation to the stock’s near-term outlook.
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