LKQ Corporation Announces Results for Second Quarter 2025

Progressing with Simplifying the Portfolio to Enhance Return on Invested Capital

Reaffirms Commitment to Executing on Three-Year Plan to Drive Shareholder Value

Updates Outlook for Full Year 2025; Capital Allocation Strategy Unchanged

ANTIOCH, Tenn., July 24, 2025 (GLOBE NEWSWIRE) --  LKQ Corporation (NASDAQ:LKQ) today reported second quarter 2025 financial results and provided updated outlook for 2025.

Second Quarter 2025 Financial and Operating Results

Revenue for the second quarter of 2025 was $3.6 billion, a decrease of 1.9% compared to $3.7 billion for the second quarter of 2024. Parts and services organic revenue decreased 3.4% (2.7% decrease on a per day basis), the net impact of acquisitions and divestitures decreased revenue by 1.0%, and foreign exchange rates increased revenue by 2.3% year over year, for a total parts and services revenue decrease of 2.1%.

Net income² was $192 million compared to $185 million for the same period of 2024. Diluted earnings per share² was $0.75 compared to $0.70 for the same period of 2024, an increase of 7.1%.

On an adjusted basis, net income^1,2 was $225 million compared to $261 million for the same period of 2024. Adjusted diluted earnings per share^1,2 was $0.87 compared to $0.98 for the same period of 2024, a decrease of 11.2%.

The Company's focus on cost reduction measures has resulted in more than $125 million in costs taken out over the past 12 months with an additional $75 million targeted for 2025.

North American organic revenue outperformed the market even as repairable claims across the entire industry declined 9%. In Europe, the Company has replaced more than 25% of the leadership team and continues to focus on reducing costs, rationalizing SKU's and enhancing revenue opportunities, including entering into a strategic partnership to expand our salvage business.

Strategic Initiatives

• Simplify Business Portfolio and Operations: Streamlining operations by focusing on our non-discretionary businesses, divesting non-core assets, and enhancing efficiencies, in collaboration with qualified advisors to ensure comprehensive evaluation and execution of strategic decisions.
• Expand Lean Operating Model Globally: Continuing to scale lean operating model across all regions to drive productivity, improve execution, and accelerate decision-making.
• Invest and Grow Organically: Investing in our core businesses to achieve above market growth and drive market share gains.
• Pursue Disciplined Capital Allocation Strategy: Capital allocation remains focused on maximizing shareholder value.

Commenting on the quarter, Justin Jude, President and Chief Executive Officer, said:

"We are executing on our three-year plan outlined at our September 2024 Investor Day and are confident in our strategy. We have no doubt we have the size, scale and an unmatched distribution network that are the best in the industry. Our results this quarter reflect a Company that is in transformation. We will move faster and harder to simplify our business and reduce costs. As we sharpen our focus on people, process and performance, we will be well positioned to capitalize as the cycle in our sector turns. We are committed to delivering better results for our customers, employees and partners and importantly, creating more value for shareholders."

Cash Flow and Balance Sheet

Cash flow from operations and free cash flow¹ were $296 million and $243 million, respectively, for the second quarter of 2025. Cash flow from operations and free cash flow¹ were $293 million and $186 million, respectively, for the six months ended June 30, 2025. As of June 30, 2025, the balance sheet reflected total debt of $4.5 billion and total leverage, as defined in our credit facility, was 2.6x EBITDA.

Returning Capital to Shareholders

During the second quarter of 2025, the Company invested approximately $39 million to repurchase 1.0 million shares of its common stock and distributed $78 million in cash dividends. For the six months ended June 30, 2025, the Company returned approximately $235 million to its shareholders by investing approximately $79 million to repurchase 2.0 million shares of its common stock and distributing $156 million in cash dividends. Since initiating the stock repurchase program in late October 2018, the Company has repurchased approximately 66.5 million shares of its common stock for a total of $2.9 billion through June 30, 2025. An aggregate balance of $1.6 billion remains for potential additional stock repurchases through October 25, 2026. On July 22, 2025, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on August 28, 2025, to stockholders of record at the close of business on August 14, 2025.

2025 Outlook

"As we look ahead, we are focused on executing on our strategic initiatives to deliver improved financial results. We will continue to follow a disciplined capital allocation strategy that returns capital to shareholders. Our strategy includes driving efficiencies and simplifying our business and portfolio as we look at ROIC as a constant measure. We are navigating through the cyclical issues in our marketplace and will have a stronger Company that is well-positioned when the market turns," stated Rick Galloway, Senior Vice President and Chief Financial Officer.

Based on a confluence of macroeconomic factors in both North America and Europe, coupled with the results this quarter, LKQ is lowering its full year outlook. In North America, the Company is not seeing a recovery in the repairable claims and tariff uncertainty continues. In Europe, general economic softness and geopolitical unrest are drivers of an uncertain environment.

For 2025, management updated the outlook as set forth below:

	2025 Previous Full Year Outlook	2025 Updated Full Year Outlook
Organic revenue growth for parts and services	0% to 2%	(3.5%) to (1.5%)
Diluted EPS2	$2.91 to $3.21	$2.47 to $2.77
Adjusted diluted EPS1,2	$3.40 to $3.70	$3.00 to $3.30
Operating cash flow	$1.075 to $1.275 billion	$0.875 to $1.075 billion
Free cash flow1	$0.75 to $0.90 billion	$0.60 to $0.75 billion

Non-GAAP Financial Measures

This release contains (and management's presentation on the related investor conference call will refer to) non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included with this release are reconciliations of each non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP.

Conference Call Details

LKQ will host a conference call and webcast on July 24, 2025 at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) with members of senior management to discuss the Company's results. To access the investor conference call, please dial (833) 470-1428. International access to the call may be obtained by dialing (404) 975-4839. The investor conference call will require you to enter conference ID: 409932.

Webcast and Presentation Details

The audio webcast and accompanying slide presentation can be accessed at (www.lkqcorp.com) in the Investor Relations section.

A replay of the conference call will be available by telephone at (866) 813-9403 or (929) 458-6194 for international calls. The telephone replay will require you to enter conference ID: 696574. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through July 31, 2025. Please allow approximately two hours after the live presentation before attempting to access the replay.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

Forward-Looking Statements

Statements and information in this press release and on the related conference call, including our outlook for 2025, as well as remarks by the Chief Executive Officer and other members of management, that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the "safe harbor" provisions of such Act.

Forward-looking statements include, but are not limited to, statements regarding our outlook, expectations, beliefs, hopes, intentions and strategies. These statements are subject to a number of risks, uncertainties, assumptions and other factors including those identified below. All forward-looking statements are based on information available to us at the time the statements are made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should not place undue reliance on our forward-looking statements. Actual events or results may differ materially from those expressed or implied in the forward-looking statements. The risks, uncertainties, assumptions and other factors that could cause actual events or results to differ from the events or results predicted or implied by our forward-looking statements include the factors set forth below, and other factors discussed in our filings with the SEC, including those disclosed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our subsequent Quarterly Reports on Form 10-Q. These reports are available at the Investor Relations section on our website (www.lkqcorp.com) and on the SEC's website (www.sec.gov).

These factors include the following (not necessarily in order of importance):

• our operating results and financial condition have been and could continue to be adversely affected by the economic, political and social conditions in North America, Europe, Taiwan and other countries, as well as the economic health of vehicle owners and numbers and types of vehicles sold;
• we face competition from local, national, international, and internet-based vehicle products providers, and this competition could negatively affect our business;
• we rely upon insurance companies and our customers to promote the usage of alternative parts;
• intellectual property claims relating to aftermarket products could adversely affect our business;
• if the number of vehicles involved in accidents or being repaired declines, or the mix of the types of vehicles in the overall vehicle population changes, our business could suffer;
• fluctuations in the prices of commodities could adversely affect our financial results;
• an adverse change in our relationships with our suppliers, disruption to our supply of inventory, or the misconduct, performance failures or negligence of our third party vendors or service providers could increase our expenses, impede our ability to serve our customers, or expose us to liability;
• future public health emergencies could have a material adverse impact on our business, results of operation, financial condition and liquidity, the nature and extent of which is highly uncertain;
• if we determine that our goodwill or other intangible assets have become impaired, we may incur significant charges to our pretax income;
• we could be subject to product liability claims and involved in product recalls;
• we may not be able to successfully acquire businesses or integrate acquisitions, and we may not be able to successfully divest certain businesses;
• we have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business;
• our senior notes do not impose any limitations on our ability to incur additional debt or protect against certain other types of transactions, and we may incur certain additional indebtedness under our credit agreement;
• each of our credit agreement and CAD Note imposes operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities;
• we may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful;
• our future capital needs may require that we seek to refinance our debt or obtain additional debt or equity financing, events that could have a negative effect on our business;
• our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly;
• repayment of our indebtedness is dependent on cash flow generated by our subsidiaries;
• a downgrade in our credit rating would impact our cost of capital;
• the amount and frequency of our share repurchases and dividend payments may fluctuate;
• existing or new laws and regulations, or changes to enforcement or interpretation of existing laws or regulations, may prohibit, restrict or burden the sale of aftermarket, recycled, refurbished or remanufactured products;
• we are subject to environmental regulations and incur costs relating to environmental matters;
• if we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be negatively impacted, which could harm our operating results and investor perceptions of our Company and as a result may have a material adverse effect on the value of our common stock;
• we may be adversely affected by legal, regulatory or market responses to global climate change;
• our amended and restated bylaws provide that the courts in the State of Delaware are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
• our effective tax rate could materially increase as a consequence of various factors, including U.S. and/or international tax legislation, applicable interpretations and administrative guidance, our mix of earnings by jurisdiction, and U.S. and foreign jurisdictional audits;
• if significant tariffs or other restrictions are placed on products or materials we import or any related counter-measures are taken by countries to which we export products, our revenue and results of operations may be materially harmed;
• governmental agencies may refuse to grant or renew our operating licenses and permits;
• the costs of complying with the requirements of laws pertaining to data privacy and cybersecurity of personal information and the potential liability associated with the failure to comply with such laws could materially adversely affect our business and results of operations;
• our employees are important to successfully manage our business and achieve our objectives;
• we operate in foreign jurisdictions, which exposes us to foreign exchange and other risks;
• our business may be adversely affected by union activities and labor and employment laws;
• we rely on information technology and communication systems in critical areas of our operations and a disruption relating to such technology and systems, including cybersecurity threats, could harm our business;
• business interruptions in our distribution centers or other facilities may affect our operations, the function of our computer systems, and/or the availability and distribution of merchandise, which may affect our business;
• if we experience problems with our fleet of trucks and other vehicles, our business could be harmed;
• we may lose the right to operate at key locations; and
• activist investors could cause us to incur substantial costs, divert management's attention, and have an adverse effect on our business.
  
  

Contact:

Joseph P. Boutross - Vice President, Investor Relations

LKQ Corporation

(312) 621-2793

[email protected]

(1) Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP.

(2) References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Income, with Supplementary Data (In millions, except per share data)
	Three Months Ended June 30,
		2025							2024
					% of Revenue(1)							% of Revenue(1)			$ Change				% Change
Revenue	$	3,642			100.0	%		$	3,711			100.0	%		$	(69	)		(1.9)%
Cost of goods sold		2,230			61.2	%			2,270			61.2	%			(40	)		(1.8)%
Gross margin		1,412			38.8	%			1,441			38.8	%			(29	)		(2.0)%
Selling, general and administrative expenses		998			27.4	%			976			26.3	%			22			2.3	%
Restructuring and transaction related expenses		8			0.2	%			49			1.3	%			(41	)		(83.7)%
Depreciation and amortization		94			2.6	%			87			2.4	%			7			8.0	%
Operating income		312			8.6	%			329			8.8	%			(17	)		(5.2)%
Other expense (income):
Interest expense		63			1.7	%			66			1.8	%			(3	)		(4.5)%
Interest income and other income, net		(11	)		(0.3)%				(3	)		(0.1)%				(8	)		n/m
Total other expense, net		52			1.4	%			63			1.7	%			(11	)		(17.5)%
Income before provision for income taxes		260			7.1	%			266			7.2	%			(6	)		(2.3)%
Provision for income taxes		68			1.9	%			82			2.2	%			(14	)		(17.1)%
Equity in (earnings) losses of unconsolidated subsidiaries		(1	)		—	%			(2	)		—	%			1			(50.0)%
Net income	$	193			5.3	%		$	186			5.0	%		$	7			3.8	%
Less: net income attributable to noncontrolling interest		1			—	%			1			—	%			—			n/m
Net income attributable to LKQ stockholders	$	192			5.3	%		$	185			5.0	%		$	7			3.8	%
Basic earnings per share:
Net income	$	0.75						$	0.70						$	0.05			7.1	%
Less: net income attributable to noncontrolling interest		—							—							—			—	%
Net income attributable to LKQ stockholders	$	0.75						$	0.70						$	0.05			7.1	%
Diluted earnings per share:
Net income	$	0.75						$	0.70						$	0.05			7.1	%
Less: net income attributable to noncontrolling interest		—							—							—			—	%
Net income attributable to LKQ stockholders	$	0.75						$	0.70						$	0.05			7.1	%
Weighted average common shares outstanding:
Basic		258.1							265.3							(7.2	)		(2.7)%
Diluted		258.3							265.6							(7.3	)		(2.7)%
(1)The sum of the individual percentage of revenue components may not equal the total due to rounding.

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Income, with Supplementary Data (In millions, except per share data)
	Six Months Ended June 30,
		2025							2024
					% of Revenue(1)							% of Revenue(1)			$ Change				% Change
Revenue	$	7,105			100.0	%		$	7,414			100.0	%		$	(309	)		(4.2)%
Cost of goods sold		4,316			60.7	%			4,521			61.0	%			(205	)		(4.5)%
Gross margin		2,789			39.3	%			2,893			39.0	%			(104	)		(3.6)%
Selling, general and administrative expenses		1,987			28.0	%			2,020			27.2	%			(33	)		(1.6)%
Restructuring and transaction related expenses		19			0.3	%			79			1.1	%			(60	)		(75.9)%
Depreciation and amortization		184			2.6	%			176			2.4	%			8			4.5	%
Operating income		599			8.4	%			618			8.3	%			(19	)		(3.1)%
Other expense (income):
Interest expense		125			1.8	%			130			1.8	%			(5	)		(3.8)%
Interest income and other income, net		(22	)		(0.3)%				(9	)		(0.1)%				(13	)		n/m
Total other expense, net		103			1.5	%			121			1.6	%			(18	)		(14.9)%
Income before provision for income taxes		496			7.0	%			497			6.7	%			(1	)		(0.2)%
Provision for income taxes		134			1.9	%			153			2.1	%			(19	)		(12.4)%
Equity in (earnings) losses of unconsolidated subsidiaries		—			—	%			—			—	%			—			—	%
Net income		362			5.1	%			344			4.6	%			18			5.2	%
Less: net income attributable to noncontrolling interest		1			—	%			1			—	%			—			n/m
Net income attributable to LKQ stockholders	$	361			5.1	%		$	343			4.6	%		$	18			5.2	%
Basic earnings per share:
Net income	$	1.40						$	1.29						$	0.11			8.5	%
Less: net income attributable to noncontrolling interest		—							—							—			—	%
Net income attributable to LKQ stockholders	$	1.40						$	1.29						$	0.11			8.5	%
Diluted earnings per share:
Net income	$	1.40						$	1.29						$	0.11			8.5	%
Less: net income attributable to noncontrolling interest		—							—							—			—	%
Net income attributable to LKQ stockholders	$	1.40						$	1.29						$	0.11			8.5	%
Weighted average common shares outstanding:
Basic		258.6							266.2							(7.6	)		(2.9)%
Diluted		258.9							266.7							(7.8	)		(2.9)%
(1)The sum of the individual percentage of revenue components may not equal the total due to rounding.

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (In millions, except per share data)
	June 30, 2025				December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	289			$	234
Receivables, net of allowance for credit losses		1,442				1,122
Inventories		3,394				3,220
Prepaid expenses and other current assets		340				330
Total current assets		5,465				4,906
Property, plant and equipment, net		1,581				1,517
Operating lease assets, net		1,432				1,388
Goodwill		5,756				5,448
Other intangibles, net		1,148				1,150
Equity method investments		158				169
Other noncurrent assets		404				377
Total assets	$	15,944			$	14,955
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,891			$	1,801
Accrued expenses:
Accrued payroll-related liabilities		205				214
Refund liability		128				126
Other accrued expenses		367				352
Current portion of operating lease liabilities		255				237
Current portion of long-term obligations		34				38
Other current liabilities		132				94
Total current liabilities		3,012				2,862
Long-term operating lease liabilities, excluding current portion		1,237				1,207
Long-term obligations, excluding current portion		4,395				4,127
Deferred income taxes		412				386
Other noncurrent liabilities		345				341
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value, 1,000.0 shares authorized, 323.8 shares issued and 257.3 shares outstanding at June 30, 2025; 323.6 shares issued and 259.1 shares outstanding at December 31, 2024		3				3
Additional paid-in capital		1,567				1,556
Retained earnings		7,867				7,662
Accumulated other comprehensive loss		(51	)			(417	)
Treasury stock, at cost; 66.5 shares at June 30, 2025 and 64.5 shares at December 31, 2024		(2,868	)			(2,787	)
Total Company stockholders' equity		6,518				6,017
Noncontrolling interest		25				15
Total stockholders' equity		6,543				6,032
Total liabilities and stockholders' equity	$	15,944			$	14,955

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Cash Flows (In millions)
	Six Months Ended June 30,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	362			$	344
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		205				200
Stock-based compensation expense		17				16
Other		(1	)			57
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Receivables		(226	)			(225	)
Inventories		20				(37	)
Other assets		(14	)			(65	)
Prepaid income taxes/income taxes payable		32				(10	)
Accounts payable		(65	)			180
Other liabilities		(36	)			3
Operating lease assets and liabilities		(1	)			3
Net cash provided by operating activities		293				466
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(107	)			(146	)
Acquisitions, net of cash acquired		2				(30	)
Other investing activities, net		6				(2	)
Net cash used in investing activities		(99	)			(178	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		682				931
Repayments under revolving credit facilities		(600	)			(1,104	)
Repayments of other debt, net		(23	)			(16	)
Proceeds from issuance of Euro Notes (2031), net of unamortized bond discount		—				816
Repayment of Euro Notes (2024)		—				(547	)
Dividends paid to LKQ stockholders		(156	)			(161	)
Purchase of treasury stock		(79	)			(155	)
Other financing activities, net		7				(40	)
Net cash used in financing activities		(169	)			(276	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		29				(10	)
Net increase in cash, cash equivalents and restricted cash		54				2
Cash, cash equivalents and restricted cash, beginning of period(1)		239				299
Cash, cash equivalents and restricted cash, end of period(1)	$	293			$	301

⁽¹⁾ For the periods ended June 30, 2025 and December 31, 2024, includes $4 million and $5 million of restricted cash included in Other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets, respectively.   

The following unaudited tables compare certain third party revenue categories:

	Three Months Ended June 30,
(In millions)		2025			2024		$ Change				% Change
Wholesale - North America	$	1,362		$	1,398		$	(36	)		(2.6)%
Europe		1,601			1,633			(32	)		(1.9)%
Specialty		464			466			(2	)		(0.4)%
Self Service		50			55			(5	)		(9.8)%
Parts and services		3,477			3,552			(75	)		(2.1)%
Wholesale - North America		80			75			5			5.4	%
Europe		6			6			—			—	%
Self Service		79			78			1			1.5	%
Other		165			159			6			3.3	%
Total revenue	$	3,642		$	3,711		$	(69	)		(1.9)%

Revenue changes by category for the three months ended June 30, 2025 vs. 2024:

	Revenue Change Attributable to:
	Organic(1)			Acquisition and Divestiture			Foreign Exchange			Total Change(2)
Wholesale - North America	(2.6)%			0.3%			(0.2)%			(2.6)%
Europe	(4.9)%			(2.2)%			5.2%			(1.9)%
Specialty	(0.3)%			—%			(0.1)%			(0.4)%
Self Service	(6.9)%			(2.9)%			—%			(9.8)%
Parts and services	(3.4)%			(1.0)%			2.3%			(2.1)%
Wholesale - North America	5.5%			—%			(0.1)%			5.4%
Europe	(6.5)%			(0.6)%			7.1%			—%
Self Service	3.4%			(1.9)%			—%			1.5%
Other	4.0%			(0.9)%			0.2%			3.3%
Total revenue	(3.1)%			(1.0)%			2.2%			(1.9)%

⁽¹⁾ We define organic revenue growth as total revenue growth from continuing operations excluding the effects of acquisitions and divestitures (i.e., revenue generated from the date of acquisition to the first anniversary of that acquisition, net of reduced revenue due to the disposal of businesses) and foreign currency movements (i.e., impact of translating revenue at different exchange rates). Organic revenue growth includes incremental sales from both existing and new (i.e., opened within the last twelve months) locations and is derived from expanding business with existing customers, securing new customers and offering additional products and services. We believe that organic revenue growth is a key performance indicator as this statistic measures our ability to serve and grow our customer base successfully.

⁽²⁾ The sum of the individual revenue change components may not equal the total percentage change due to rounding.

The following unaudited tables compare certain third party revenue categories:

	Six Months Ended June 30,
(In millions)		2025			2024		$ Change				% Change
Wholesale - North America	$	2,698		$	2,820		$	(122	)		(4.3)%
Europe		3,116			3,270			(154	)		(4.7)%
Specialty		857			888			(31	)		(3.4)%
Self Service		101			109			(8	)		(7.8)%
Parts and services		6,772			7,087			(315	)		(4.4)%
Wholesale - North America		156			153			3			1.3	%
Europe		13			13			—			—	%
Self Service		164			161			3			2.0	%
Other		333			327			6			1.6	%
Total revenue	$	7,105		$	7,414		$	(309	)		(4.2)%

Revenue changes by category for the six months ended June 30, 2025 vs. 2024:

	Revenue Change Attributable to:
	Organic(1)			Acquisition and Divestiture			Foreign Exchange			Total Change(2)
Wholesale - North America	(4.0)%			0.3%			(0.6)%			(4.3)%
Europe	(3.9)%			(2.2)%			1.4%			(4.7)%
Specialty	(3.2)%			—%			(0.3)%			(3.4)%
Self Service	(6.2)%			(1.6)%			—%			(7.8)%
Parts and services	(3.9)%			(0.9)%			0.4%			(4.4)%
Wholesale - North America	1.5%			—%			(0.2)%			1.3%
Europe	(1.3)%			(0.5)%			1.8%			—%
Self Service	3.0%			(1.0)%			—%			2.0%
Other	2.1%			(0.5)%			—%			1.6%
Total revenue	(3.6)%			(0.9)%			0.3%			(4.2)%

⁽¹⁾ We define organic revenue growth as total revenue growth from continuing operations excluding the effects of acquisitions and divestitures (i.e., revenue generated from the date of acquisition to the first anniversary of that acquisition, net of reduced revenue due to the disposal of businesses) and foreign currency movements (i.e., impact of translating revenue at different exchange rates). Organic revenue growth includes incremental sales from both existing and new (i.e., opened within the last twelve months) locations and is derived from expanding business with existing customers, securing new customers and offering additional products and services. We believe that organic revenue growth is a key performance indicator as this statistic measures our ability to serve and grow our customer base successfully.

⁽²⁾ The sum of the individual revenue change components may not equal the total percentage change due to rounding.

The following unaudited table compares revenue and Segment EBITDA by reportable segment:

	Three Months Ended June 30,												Six Months Ended June 30,
		2025						2024						2025						2024
(In millions)				% of Revenue						% of Revenue						% of Revenue						% of Revenue
Revenue
Wholesale - North America	$	1,442					$	1,474					$	2,854					$	2,974
Europe		1,607						1,639						3,129						3,283
Specialty		465						466						859						889
Self Service		129						133						265						270
Eliminations		(1	)					(1	)					(2	)					(2	)
Total revenue	$	3,642					$	3,711					$	7,105					$	7,414
Segment EBITDA
Wholesale - North America	$	227		15.8	%		$	256		17.3	%		$	449		15.7	%		$	500		16.8	%
Europe		151		9.4	%			174		10.6	%			292		9.3	%			317		9.7	%
Specialty		39		8.5	%			41		8.9	%			60		7.0	%			68		7.7	%
Self Service		13		10.0	%			13		9.9	%			33		12.3	%			29		10.9	%
Total Segment EBITDA	$	430		11.8	%		$	484		13.0	%		$	834		11.7	%		$	914		12.3	%

We have presented Segment EBITDA solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our segment profit and loss and underlying trends in our ongoing operations. We calculate Segment EBITDA as Net Income excluding net income and loss attributable to noncontrolling interest; income and loss from discontinued operations; depreciation; amortization; interest; gains and losses on debt extinguishment; income tax expense; restructuring and transaction related expenses; change in fair value of contingent consideration liabilities; other gains and losses related to acquisitions, equity method investments, or divestitures; equity in losses and earnings of unconsolidated subsidiaries; equity investment fair value adjustments; impairment charges; and direct impacts of the Ukraine/Russia conflict. Our chief operating decision maker ("CODM"), who is our Chief Executive Officer, uses Segment EBITDA as the key measure of our segment profit or loss. The CODM uses Segment EBITDA to compare profitability among our segments and evaluate business strategies. This financial measure is included in the metrics used to determine incentive compensation for our senior management. We also consider Segment EBITDA to be a useful financial measure in evaluating our operating performance, as it provides investors, securities analysts and other interested parties with supplemental information regarding the underlying trends in our ongoing operations. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. Refer to the table on the following page for a reconciliation of net income to Segment EBITDA.

The following unaudited table reconciles Net Income to Segment EBITDA:

	Three Months Ended June 30,								Six Months Ended June 30,
(In millions)		2025				2024				2025				2024
Net income	$	193			$	186			$	362			$	344
Less: net income attributable to noncontrolling interest		1				1				1				1
Net income attributable to LKQ stockholders		192				185				361				343
Adjustments:
Depreciation and amortization		105				100				205				200
Interest expense, net of interest income		58				62				115				123
Provision for income taxes		68				82				134				153
Equity in (earnings) losses of unconsolidated subsidiaries		(1	)			(2	)			—				—
Equity investment fair value adjustments		—				2				(1	)			2
Restructuring and transaction related expenses		8				49				19				79
Restructuring expenses - cost of goods sold		—				6				—				14
Direct impacts of Ukraine/Russia conflict(1)		—				—				1				—
Segment EBITDA	$	430			$	484			$	834			$	914
Net income attributable to LKQ stockholders as a percentage of revenue		5.3	%			5.0	%			5.1	%			4.6	%
Segment EBITDA as a percentage of revenue		11.8	%			13.0	%			11.7	%			12.3	%

⁽¹⁾ Adjustments include provisions for and subsequent adjustments to reserves for asset recoverability (primarily receivables and inventory).

We have presented Segment EBITDA solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our segment profit and loss and underlying trends in our ongoing operations. See paragraph under the previous table (revenue and Segment EBITDA by reportable segment) for details on the calculation of Segment EBITDA.

Segment EBITDA should not be construed as an alternative to operating income, net income or net cash provided by operating activities, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report Segment EBITDA information calculate Segment EBITDA in the same manner as we do and, accordingly, our calculation is not necessarily comparable to similarly-named measures of other companies and may not be an appropriate measure for performance relative to other companies.

The following unaudited table reconciles Net Income and Diluted Earnings per Share to Adjusted Net Income and Adjusted Diluted Earnings per Share, respectively:

	Three Months Ended June 30,								Six Months Ended June 30,
(In millions, except per share data)		2025				2024				2025				2024
Net income	$	193			$	186			$	362			$	344
Less: net income attributable to noncontrolling interest		1				1				1				1
Net income attributable to LKQ stockholders		192				185				361				343
Adjustments:
Amortization of acquired intangibles		36				36				71				73
Restructuring and transaction related expenses		8				49				19				79
Restructuring expenses - cost of goods sold		—				6				—				14
Direct impacts of Ukraine/Russia conflict(1)		—				—				1				—
Excess tax deficiency (benefit) from stock-based payments		—				—				1				(1	)
Tax effect of adjustments		(11	)			(15	)			(24	)			(27	)
Adjusted net income	$	225			$	261			$	429			$	481
Weighted average diluted common shares outstanding		258.3				265.6				258.9				266.7
Diluted earnings per share:
Reported	$	0.75			$	0.70			$	1.40			$	1.29
Adjusted	$	0.87			$	0.98			$	1.66			$	1.80

⁽¹⁾   Adjustments include provisions for and subsequent adjustments to reserves for asset recoverability (primarily receivables and inventory).

We have presented Adjusted Net Income and Adjusted Diluted Earnings per Share as we believe these measures are useful for evaluating the core operating performance of our continuing business across reporting periods and in analyzing our historical operating results. We define Adjusted Net Income and Adjusted Diluted Earnings per Share as Net Income and Diluted Earnings per Share adjusted to eliminate the impact of net income and loss attributable to noncontrolling interest, income and loss from discontinued operations, restructuring and transaction related expenses, amortization expense related to all acquired intangible assets, gains and losses on debt extinguishment, changes in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments, or divestitures, impairment charges, direct impacts of the Ukraine/Russia conflict, excess tax benefits and deficiencies from stock-based payments and any tax effect of these adjustments. The tax effect of these adjustments is calculated using the effective tax rate for the applicable period or for certain discrete items the specific tax expense or benefit for the adjustment. Given the variability and volatility of the amount of related transactions in a particular period, management believes that these costs are not core operating expenses and should be adjusted in our calculation of Adjusted Net Income. Our adjustment of the amortization of all acquisition-related intangible assets does not exclude the amortization of other assets, which represents expense that is directly attributable to ongoing operations. Management believes that the adjustment relating to amortization of acquisition-related intangible assets supplements the GAAP information with a measure that can be used to assess the comparability of operating performance. The acquired intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. These financial measures are used by management in its decision making and overall evaluation of our operating performance and are included in the metrics used to determine incentive compensation for our senior management. Adjusted Net Income and Adjusted Diluted Earnings per Share should not be construed as alternatives to Net Income or Diluted Earnings per Share as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report measures similar to Adjusted Net Income and Adjusted Diluted Earnings per Share calculate such measures in the same manner as we do and, accordingly, our calculations are not necessarily comparable to similarly-named measures of other companies and may not be appropriate measures for performance relative to other companies.

The following unaudited table reconciles Forecasted Net Income and Diluted Earnings per Share to Forecasted Adjusted Net Income and Adjusted Diluted Earnings per Share, respectively:

	Forecasted Fiscal Year2025
(In millions, except per share data)	Minimum Outlook				Maximum Outlook
Net income(1)	$	639			$	717
Adjustments:
Amortization of acquired intangibles		142				142
Restructuring and transaction related expenses		42				42
Other adjustments		2				2
Tax effect of adjustments		(50	)			(50	)
Adjusted net income(1)	$	775			$	853
Weighted average diluted common shares outstanding		258.4				258.4
Diluted earnings per share:
Reported(1)	$	2.47			$	2.77
Adjusted(1)	$	3.00			$	3.30

⁽¹⁾ Actuals and outlook figures are for continuing operations attributable to LKQ stockholders.

We have presented forecasted Adjusted Net Income and forecasted Adjusted Diluted Earnings per Share in our financial outlook. Refer to the discussion of Adjusted Net Income and Adjusted Diluted Earnings per Share for details on the calculation of these non-GAAP financial measures. In the calculation of forecasted Adjusted Net Income and forecasted Adjusted Diluted Earnings per Share, we included estimates of net income, amortization of acquired intangibles for the full fiscal year 2025, restructuring expenses under previously announced plans, and the related tax effect; we included for all other components the amounts incurred through June 30, 2025.

The following unaudited table reconciles Forecasted Net Cash Provided by Operating Activities to Forecasted Free Cash Flow:

	Forecasted Fiscal Year2025
(In millions)	Minimum Outlook			Maximum Outlook
Net cash provided by operating activities	$	875		$	1,075
Less: purchases of property, plant and equipment		275			325
Free cash flow	$	600		$	750

We have presented forecasted free cash flow in our financial outlook. Refer to the paragraph on the following page for details on the calculation of free cash flow.

The following unaudited tables reconciles Net Cash Provided by Operating Activities to Free Cash Flow and Net Income to Adjusted EBITDA:

	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)		2025			2024			2025			2024
Net cash provided by operating activities	$	296		$	213		$	293		$	466
Less: purchases of property, plant and equipment		53			80			107			146
Free cash flow	$	243		$	133		$	186		$	320

	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)		2025			2024			2025			2024
Net income	$	193		$	186		$	362		$	344
Less: net income attributable to noncontrolling interest		1			1			1			1
Net income attributable to LKQ stockholders		192			185			361			343
Adjustments:
Depreciation and amortization		105			100			205			200
Interest expense, net of interest income		58			62			115			123
Provision for income taxes		68			82			134			153
Adjusted EBITDA	$	423		$	429		$	815		$	819

We have presented free cash flow solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our liquidity. We calculate free cash flow as net cash provided by operating activities, less purchases of property, plant and equipment. We believe free cash flow provides insight into our liquidity and provides useful information to management and investors concerning our cash flow available to meet future debt service obligations and working capital requirements, make strategic acquisitions, pay dividends and repurchase stock. We believe free cash flow is used by investors, securities analysts and other interested parties in evaluating the liquidity of other companies, many of which present free cash flow when reporting their results. This financial measure is included in the metrics used to determine incentive compensation for our senior management. Free cash flow should not be construed as an alternative to net cash provided by operating activities, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report free cash flow information calculate free cash flow in the same manner as we do and, accordingly, our calculation is not necessarily comparable to similarly-named measures of other companies and may not be an appropriate measure for liquidity relative to other companies.

We also evaluate our free cash flow by measuring the conversion of Adjusted EBITDA into free cash flow. For the denominator of our conversion ratio, we calculate Adjusted EBITDA as Net Income excluding net income and loss attributable to noncontrolling interest, income and loss from discontinued operations, depreciation, amortization, interest, gains and losses on debt extinguishment, income tax expense, gains and losses on the disposal of businesses, and other unusual income and expense items that affect investing or financing cash flows. We exclude gains and losses on the disposal of businesses as the proceeds are included in investing cash flows, which is outside of free cash flow. Adjusted EBITDA should not be construed as an alternative to operating income, net income or net cash provided by operating activities, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report Adjusted EBITDA information calculate Adjusted EBITDA in the same manner as we do and, accordingly, our calculation is not necessarily comparable to similarly-named measures of other companies and may not be an appropriate measure for performance relative to other companies.