LKQ Corporation Revenue & Financials

A former Waste Management executive's decision to apply garbage-hauling consolidation logic to the $8 billion junkyard industry spawned what is now a $13.65 billion global auto parts distribution empire with operations in over 20 countries. In FY2025, the company reported revenue of $13.65 billion, down 1.3% from $13.82 billion in FY2024, with parts and services revenue declining 1.5% to $13.31 billion. Net income from continuing operations attributable to LKQ stockholders was $596 million ($2.31 per diluted share), down 10.5% from $666 million ($2.54) in FY2024. On an adjusted basis, net income was $777 million ($3.01 per share), down 13.1% from $894 million ($3.39). The company's gross margin compressed to 38.6% from 38.9%, while Segment EBITDA declined 10.5% to $1.51 billion from $1.69 billion. Operating income fell 13.3% to $993 million, yielding an operating margin of 7.3%. Free cash flow was $847 million, down from higher levels in prior years. The balance sheet carries $3.7 billion in total debt with leverage of 2.4x EBITDA as of December 31, 2025 — a manageable but not trivial burden. The company has returned $469 million to shareholders in FY2025 through $159 million in share repurchases and $310 million in dividends. The company generates $13.65 billion in revenue (FY2025) across three segments: North America ($5.65 billion, 41.4% of revenue), Europe ($6.31 billion, 46.2%), and Specialty ($1.69 billion, 12.4%). Net income from continuing operations was $596 million ($2.31 per diluted share), down 10.5% from $666 million in FY2024. Adjusted net income was $777 million ($3.01 per share). The company trades on NASDAQ under LKQ with a market cap of approximately $6.43 billion. LKQ generates revenue through two primary categories that together produced $13.65 billion in FY2025. The first and dominant category is Parts and Services, which generated $13.31 billion (97.5% of total revenue) in FY2025, down 1.5% from $13.51 billion in FY2024. The Europe segment is the largest revenue contributor, generating $6.31 billion (46.2% of total revenue) in FY2025, down 1.5% from $6.41 billion in FY2024. The Europe segment's Segment EBITDA was $584 million in FY2025, yielding a margin of 9.3%, down from 9.9% in FY2024. The North America segment generated $5.65 billion (41.4% of total revenue) in FY2025, down 2.5% from $5.76 billion in FY2024. The segment's Segment EBITDA was $814 million, yielding a margin of 14.4%, down from 16.3% in FY2024. The Specialty segment generated $1.69 billion (12.4% of total revenue) in FY2025, up 2.1% from $1.66 billion in FY2024. The segment's Segment EBITDA was $111 million, yielding a margin of 6.5%, down from 6.8% in FY2024. The second revenue category is Other, which generated $345 million (2.5% of total revenue) in FY2025, up 8.2% from $318 million in FY2024. FY2025 revenue declined 1.3% to $13.65 billion, adjusted net income fell 13.1% to $777 million, and Segment EBITDA compressed 190 basis points in North America and 60 basis points in Europe. FY2026 guidance calls for adjusted diluted EPS of $2.90 to $3.20, adjusted net income of $742 million to $819 million, and free cash flow of at least $700 million. LKQ operates in the global automotive aftermarket, which was valued at approximately $560 billion in 2023 and is projected to grow at a 4-5% CAGR through 2030. LKQ reported revenue of $13.65 billion in FY2025, down 1.3% from $13.82 billion in FY2024. Parts and services revenue declined 1.5% to $13.31 billion, while Other revenue grew 8.2% to $345 million. Gross profit was $5.27 billion, yielding a gross margin of 38.6%, down 30 basis points from 38.9% in FY2024. Cost of goods sold was $8.39 billion. Selling, general, and administrative expenses increased 1.5% to $3.81 billion, representing 27.9% of revenue versus 27.2% in FY2024. Restructuring and transaction-related expenses declined 68.9% to $42 million from $135 million. The company recorded a $52 million impairment of goodwill in Q4 2025. Operating income fell 13.3% to $993 million (7.3% margin) from $1.15 billion (8.3% margin) in FY2024. Interest expense was $224 million, down 5.9% from $238 million. The provision for income taxes was $204 million, yielding an effective tax rate of 25.5%. Adjusted net income was $777 million ($3.01 per share), down 13.1% from $894 million ($3.39). Segment EBITDA was $1.51 billion (11.1% margin), down from $1.69 billion (12.2%) in FY2024. Cash flow from operations was $1.06 billion, and free cash flow was $847 million. Capital expenditures were $216 million, down from $311 million in FY2024. The balance sheet shows $289 million in cash and cash equivalents, total debt of $3.7 billion, and total stockholders' equity of $6.56 billion. The company returned $469 million to shareholders in FY2025: $159 million in share repurchases (4.5 million shares) and $310 million in dividends. Since initiating the repurchase program in October 2018, LKQ has repurchased approximately 69.0 million shares for $2.9 billion, with $1.6 billion remaining for potential additional repurchases through October 2026. In FY2025, organic revenue declined 2.7%, with North America organic revenue down and Europe facing 'significant GMS headwinds.' The North America segment's Segment EBITDA margin compressed 190 basis points to 14.4% from 16.3% in FY2024, while Europe's margin fell 60 basis points to 9.3% from 9.9%. The Specialty segment generated $1.69 billion in revenue in FY2025 but only $111 million in Segment EBITDA (6.5% margin), making it the least profitable segment. LKQ's growth strategy combines organic share capture in the $200 billion global automotive aftermarket with targeted bolt-on acquisitions that add geographic density and product breadth to existing segments. In Europe, where LKQ generated approximately $7 billion in 2025 revenue, the strategy is consolidation-driven: acquiring independent multi-location distributors that operate in fragmented markets where LKQ's scale advantages in procurement, IT, and logistics create immediate margin improvement. The company's capital allocation framework prioritizes debt reduction to bring leverage below 2.5x net debt to EBITDA, with targeted acquisition spend of $300-500 million annually focused on Europe and North America specialty. The company has initiated Project Greenfield, a European operational transformation program targeting $50 million in annualized savings through distribution center consolidation, fleet optimization, and procurement standardization across the 20+ countries in which it operates. The company's 2026 guidance targets organic revenue growth of 2-4% and adjusted EBITDA margins of 14-15%, recovery from the 13.2% reported in 2025. The $8 billion industry consisted of an estimated 11,000-plus junkyards across the United States, serving more than 200,000 collision and mechanical repair shops by recycling parts from 11 million junked autos per year.