LKQ Corporation reported its fourth‑quarter and full‑year 2025 financial results, posting revenue of $3.31 billion for the quarter and $13.7 billion for the year. Net income fell to $75 million from $151 million a year earlier, while adjusted diluted earnings per share were $0.59, a 24.4 % decline from $0.78 in the prior year’s quarter. Operating cash flow reached $1.1 billion and free cash flow for the year was $847 million. The company also outlined a restructuring plan expected to deliver more than $50 million in annualized cost savings, with a $60–$70 million restructuring charge anticipated for 2026.
The quarter’s revenue grew 2.7 % year‑over‑year to $3.31 billion, driven by gains in the North America and Specialty segments. In contrast, full‑year revenue declined 1.3 % to $13.7 billion, reflecting weaker performance in Europe and the impact of tariffs on the company’s global supply chain. Q4 2024 revenue was $3.4 billion, and full‑year 2024 revenue was $14.4 billion, underscoring the mixed trajectory of the business.
Net income and earnings per share fell sharply, with Q4 2025 net income at $75 million versus $151 million in Q4 2024, and EPS at $0.59 versus $0.78. The $0.06 miss against the consensus estimate of $0.65 was driven by lower EBITDA in North America and Europe, weaker demand in the repairable claims market, and the cost impact of tariffs. These headwinds eroded profitability even as revenue grew modestly in the quarter.
Segment performance highlighted a 7.8 % organic revenue growth in the Specialty segment, while the North America business gained market share in a soft demand environment through pricing discipline and expansion of its MSO relationships. “Despite the headwinds in Europe, we further integrated and simplified our operations to support sustained margin improvement and capitalize on adjacent market opportunities,” said CEO Justin Jude. “Specialty performed well in the quarter posting organic revenue growth of 7.8% as their end markets continue to improve.” The European segment’s EBITDA margin contracted to 8.3 % from 10.1 % in Q4 2024, reflecting pricing pressure and macro‑economic uncertainty.
Management outlined 2026 guidance of adjusted diluted EPS in the range of $2.90 to $3.20, describing the outlook as “intentionally conservative” and acknowledging gradual improvement as market conditions evolve. CFO Rick Galloway noted that the guidance “reflects current market conditions and assumes gradual improvement as the year progresses,” and emphasized that operational excellence remains a core focus. The company’s strategic review, initiated in late January 2026, aims to unlock shareholder value through portfolio simplification, including the divestiture of its self‑service segment and exploration of selling the Specialty segment. “The Board and I, along with our entire management team, are aligned in our confidence that LKQ’s future and that confidence compels us to explore whether alternative structures could unlock value more effectively than the market is recognizing today,” Jude added.
Investors reacted negatively to the earnings miss and margin contraction, with the EPS shortfall and declining profitability metrics outweighing the revenue beat. The market’s response underscored concerns about the company’s ability to translate revenue growth into sustainable earnings in the face of ongoing headwinds.
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