分组1 - LKQ reported quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $0.93 per share, and down from $0.98 per share a year ago, representing an earnings surprise of -6.45% [1] - The company posted revenues of $3.64 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.87%, but down from $3.71 billion year-over-year [2] - LKQ has surpassed consensus EPS estimates two times over the last four quarters and topped consensus revenue estimates just once [2] 分组2 - The stock's immediate price movement will depend on management's commentary on the earnings call and future earnings expectations [3][4] - LKQ shares have increased by approximately 5.1% since the beginning of the year, compared to the S&P 500's gain of 8.1% [3] - The current consensus EPS estimate for the coming quarter is $0.95 on revenues of $3.58 billion, and for the current fiscal year, it is $3.54 on revenues of $14.12 billion [7] 分组3 - The Automotive - Replacement Parts industry, to which LKQ belongs, is currently in the top 39% of Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for LKQ was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it will perform in line with the market [6]

Financial Data and Key Metrics Changes - Total revenues for the quarter were reported at $3.6 billion, with diluted earnings per share at $0.75, a $0.05 increase compared to Q2 2024 [23] - Adjusted diluted earnings per share decreased by $0.11 to $0.87, primarily due to lower operating results [23] - Free cash flow during the quarter was $243 million, despite a nearly $35 million headwind from tariffs, bringing year-to-date cash flows to $186 million [23][24] Business Line Data and Key Metrics Changes - North America's organic revenue fell by 2.2% per day, which is an improvement compared to the last five quarters, with aftermarket collision parts business witnessing slight growth [10] - Europe's organic revenue decreased by 4.9% or 3.8% on a per day basis, primarily due to difficult economic conditions and increased competition [11] - Specialty's organic revenue was largely flat year over year, marking the best quarterly performance since Q4 2021 [17] Market Data and Key Metrics Changes - North America posted a segment EBITDA margin of 15.8%, a 150 basis point decrease from last year [25] - Europe's segment EBITDA margin was 9.4%, a 120 basis point decrease from last year, with ongoing economic softness impacting performance [25] - The self-service segment reported an EBITDA margin of 10%, consistent with the prior year [27] Company Strategy and Development Direction - The company is focused on a multi-year transformation strategy to simplify its business portfolio and operations, enhance margins, and pursue disciplined capital allocation [6][22] - Immediate actions include additional cost-cutting measures primarily in Europe, targeting an additional $75 million in cost reductions [8] - The company aims to expand its market share and improve operational efficiency while navigating macroeconomic challenges [9][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macro challenges and operational obstacles but emphasized opportunities for long-term value creation [5] - The outlook for North America anticipates a delayed recovery in repairable claims and ongoing tariff disruptions [29] - In Europe, persistent economic softness and geopolitical unrest are expected to continue impacting market conditions [30] Other Important Information - The company has made significant leadership changes, with over 25% of VP-level roles refreshed to drive transformation [19] - The effective interest rate was 5.2% at the end of Q2, with total debt of $4.5 billion and a leverage ratio of 2.6 times EBITDA [27][29] Q&A Session Summary Question: Discussion on increased competition in North America and used car pricing - Management noted that while used car pricing showed some improvement earlier in the quarter, it has not grown fast enough to significantly impact repairable claims [40][41] Question: Pricing competition in Europe - Management indicated that while competition remains, they are maintaining market share and have renegotiated several national account agreements [46] Question: Impact of tariffs on the bottom line - Management clarified that the $35 million headwind from tariffs was related to inventory at the end of Q2, with minimal impact on the P&L [110][112] Question: Production flexibility of key suppliers - Management mentioned that many suppliers are considering relocating production to mitigate tariff impacts, but no major movements have been observed yet [93] Question: Breakdown of collision versus non-collision organic revenue growth - Management stated that aftermarket volume was up in the quarter, while paint and some mechanicals were down due to market conditions [96][98]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were reported at $3.6 billion, with diluted earnings per share at $0.75, an increase of $0.05 compared to Q2 2024 [25] - Adjusted diluted earnings per share decreased by $0.11 to $0.87, primarily due to lower operating results [25] - Free cash flow for the quarter was $243 million, despite a nearly $35 million headwind from tariffs, bringing year-to-date cash flows to $186 million [25][26] Business Line Data and Key Metrics Changes - North America's organic revenue fell by 2.2% per day, which is an improvement compared to the last five quarters, with aftermarket collision parts showing slight growth [11] - Europe's organic revenue decreased by 4.9%, primarily due to difficult economic conditions and increased competition [12] - Specialty's organic revenue was largely flat year over year, marking the best quarterly performance since Q4 2021 [18] - Self-service's organic revenue was soft due to lower part volumes but maintained a 10% EBITDA margin [18] Market Data and Key Metrics Changes - North America experienced a 100 basis point decline in gross margins, with segment EBITDA margin at 15.8%, a decrease of 150 basis points year over year [27] - Europe reported a segment EBITDA margin of 9.4%, a decrease of 120 basis points from last year [27] - The overall market for repairable claims is expected to remain weak, with auto insurance prices projected to rise by an average of 7.5% this year [32] Company Strategy and Development Direction - The company is focused on a multiyear transformation strategy to simplify its portfolio and operations, enhance margins, and pursue disciplined capital allocation [6][37] - Immediate actions include additional cost-cutting measures, primarily in Europe, aiming to cut another $75 million in costs [7] - The company is also reviewing business units for potential asset sales to accelerate its simplification strategy [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges and operational obstacles but emphasized a commitment to executing their strategic plan [5][9] - The outlook for North America has been revised downward due to delayed recovery in repairable claims and ongoing tariff disruptions [31] - In Europe, persistent economic softness and geopolitical unrest are expected to continue impacting performance [32] Other Important Information - The company has made significant leadership changes, refreshing over 25% of VP-level roles to drive transformation [20] - A new executive position focused on global talent development has been created to support overall business growth [19] Q&A Session Summary Question: Discussion on increased competition in North America and used car pricing - Management noted that while used car pricing showed some improvement earlier in the quarter, it has not grown fast enough to significantly impact repairable claims [42][44] Question: Competitive dynamics in Europe - Management indicated that while competition remains strong, they are maintaining market share and have renegotiated several national account agreements [48] Question: Impact of tariffs on financials - Management confirmed that the $35 million headwind from tariffs was related to inventory at the end of Q2, with minimal impact on the P&L [110] Question: Production flexibility of suppliers - Management stated that many suppliers are considering relocating production to mitigate tariff impacts, but no major movements have been observed yet [94] Question: Breakdown of collision versus non-collision organic revenue growth - Management highlighted that aftermarket parts volume was up, while paint and some mechanicals were down due to market conditions [99]

Financial Performance - Q2 2025 - Total revenue decreased by 1.9% year-over-year to $3642 million[12, 16] - Organic parts and services revenue declined by 3.4%[12, 16] - Segment EBITDA decreased by 10.9% year-over-year to $430 million, with a margin of 11.8%, a decrease of 120 bps[12, 16] - Diluted EPS increased by 7.1% to $0.75, while adjusted diluted EPS decreased by 11.2% to $0.87[12, 16] - Operating cash flow was $293 million year-to-date, and free cash flow was $186 million year-to-date[12, 16] Segment Performance - Q2 2025 - North America wholesale revenue decreased to $1442 million from $1474 million, with segment EBITDA decreasing to $227 million from $256 million[18, 50] - Europe revenue decreased to $1607 million from $1639 million, with segment EBITDA decreasing to $151 million from $174 million[21, 50] - Specialty revenue slightly decreased to $465 million from $466 million, with segment EBITDA decreasing to $39 million from $41 million[25, 50] - Self Service revenue decreased to $129 million from $133 million, with segment EBITDA remaining at $13 million[29, 50] Capital Allocation and Liquidity - The company invested $39 million to repurchase 1 million shares of common stock in Q2 2025[10] - The company distributed $78 million in cash dividends to common stockholders in Q2 2025[10] - Year-to-date, the company returned $235 million to shareholders, including $79 million in share repurchases and $156 million in dividends[10, 33] - $1636 million remains authorized for share repurchases through October 25, 2026[10, 34] Outlook 2025 - The company revised its full-year organic parts and services revenue growth outlook to a decline of 3.5% to 1.5%, compared to the prior outlook of 0% to 2%[37] - The company revised its full-year GAAP diluted EPS outlook to $2.47 to $2.77, compared to the prior outlook of $2.91 to $3.21[37] - The company revised its full-year adjusted diluted EPS outlook to $3.00 to $3.30, compared to the prior outlook of $3.40 to $3.70[37] - The company revised its full-year operating cash flow outlook to $0.875 billion to $1.075 billion, compared to the prior outlook of $1.075 billion to $1.275 billion[37] - The company revised its full-year free cash flow outlook to $0.60 billion to $0.75 billion, compared to the prior outlook of $0.75 billion to $0.90 billion[37]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) LKQ Corporation's Q2 2025 revenue decreased by 1.9% to $3.6 billion due to a 3.4% organic decline, while GAAP net income increased to $192 million and diluted EPS rose by 7.1% to $0.75, despite adjusted figures showing a decline Q2 2025 Financial Metrics | Financial Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $3.6 billion | $3.7 billion | (1.9)% | | Net Income | $192 million | $185 million | +3.8% | | Diluted EPS | $0.75 | $0.70 | +7.1% | | Adjusted Net Income | $225 million | $261 million | (13.8)% | | Adjusted Diluted EPS | $0.87 | $0.98 | (11.2)% | - The **1.9% total revenue decrease** was driven by a **3.4% organic revenue decline**, partially offset by a **2.3% positive impact from foreign exchange rates**; acquisitions and divestitures had a net negative impact of **1.0%**[3](index=3&type=chunk) - The company has implemented significant cost reduction measures, removing over **$125 million in costs** over the past 12 months and targeting an additional **$75 million for 2025**[4](index=4&type=chunk) [Second Quarter 2025 Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Operational%20Highlights) North American organic revenue outperformed the market despite a 9% industry-wide decline in repairable claims, while Europe is undergoing a significant leadership overhaul and focusing on cost reduction, SKU rationalization, and salvage business expansion - North American organic revenue outperformed the market even as the entire industry experienced a **9% decline in repairable claims**[5](index=5&type=chunk) - In Europe, the company is executing a turnaround strategy that includes: - Replacing over **25% of the leadership team** - Focusing on cost reduction and SKU rationalization - Entering a strategic partnership to expand the salvage business[5](index=5&type=chunk) [Strategic Initiatives & Management Commentary](index=1&type=section&id=Strategic%20Initiatives%20%26%20Management%20Commentary) [Strategic Initiatives](index=1&type=section&id=Strategic%20Initiatives) The company's strategy focuses on simplifying its business portfolio, expanding its lean operating model globally, investing in core businesses for organic growth, and maintaining disciplined capital allocation to maximize shareholder value - LKQ's core strategic initiatives are: - **Simplify Business Portfolio**: Focus on non-discretionary businesses and divest non-core assets - **Expand Lean Operating Model**: Scale the lean model globally to drive productivity - **Invest and Grow Organically**: Invest in core businesses to gain market share - **Pursue Disciplined Capital Allocation**: Focus on maximizing shareholder value[6](index=6&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed confidence in the company's three-year plan, with the CEO emphasizing accelerated business simplification and cost reduction, and the CFO reiterating focus on disciplined capital allocation amidst cyclical market challenges - CEO Justin Jude stated the company is in transformation and will "move faster and harder to simplify our business and reduce costs" to be positioned for when the market cycle turns[7](index=7&type=chunk) - CFO Rick Galloway emphasized the focus on executing strategic initiatives, maintaining a disciplined capital allocation strategy, and using Return on Invested Capital (ROIC) as a key measure while navigating cyclical market issues[9](index=9&type=chunk) [Capital Management](index=2&type=section&id=Capital%20Management) [Cash Flow and Balance Sheet](index=2&type=section&id=Cash%20Flow%20and%20Balance%20Sheet) The company generated $296 million in cash flow from operations and $243 million in free cash flow during Q2 2025, with total debt at $4.5 billion and a leverage ratio of 2.6x EBITDA as of June 30, 2025 Cash Flow (in millions) | Cash Flow (in millions) | Q2 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Cash Flow from Operations | $296 | $293 | | Free Cash Flow | $243 | $186 | - As of June 30, 2025, the balance sheet reflected total debt of **$4.5 billion** and a total leverage ratio of **2.6x EBITDA**[8](index=8&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) In Q2 2025, LKQ returned $117 million to shareholders through $39 million in share repurchases and $78 million in dividends, with $1.6 billion remaining under its share repurchase authorization and a declared quarterly dividend of $0.30 per share - During Q2 2025, the company repurchased **1.0 million shares** for approximately **$39 million** and paid **$78 million in dividends**[8](index=8&type=chunk) - The company has a remaining authorization of **$1.6 billion** for share repurchases through October 25, 2026[8](index=8&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.30 per share**, payable on August 28, 2025[8](index=8&type=chunk) [2025 Outlook](index=2&type=section&id=2025%20Outlook) [Updated 2025 Full Year Outlook](index=2&type=section&id=Updated%202025%20Full%20Year%20Outlook) LKQ has lowered its full-year 2025 outlook due to macroeconomic headwinds in North America and Europe, now expecting organic revenue to decline between 1.5% and 3.5%, and reducing guidance for diluted EPS, adjusted diluted EPS, and free cash flow - The outlook was lowered due to a confluence of factors, including no recovery in repairable claims and tariff uncertainty in North America, and general economic softness and geopolitical unrest in Europe[10](index=10&type=chunk) Updated 2025 Full Year Outlook | Metric | Previous 2025 Outlook | Updated 2025 Outlook | | :--- | :--- | :--- | | Organic revenue growth | 0% to 2% | (3.5%) to (1.5%) | | Diluted EPS | $2.91 to $3.21 | $2.47 to $2.77 | | Adjusted diluted EPS | $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 flow | $0.75 to $0.90 billion | $0.60 to $0.75 billion | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Income Statement](index=6&type=section&id=Income%20Statement) For Q2 2025, revenue declined 1.9% YoY to $3.64 billion, while net income attributable to LKQ stockholders rose 3.8% to $192 million; for the first six months, revenue fell 4.2% to $7.11 billion, with net income increasing 5.2% to $361 million due to lower restructuring expenses Q2 2025 Income Statement (in millions) | Income Statement (in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $3,642 | $3,711 | (1.9)% | | Gross Margin | $1,412 | $1,441 | (2.0)% | | Operating Income | $312 | $329 | (5.2)% | | Net Income (to LKQ) | $192 | $185 | +3.8% | H1 2025 Income Statement (in millions) | Income Statement (in millions) | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $7,105 | $7,414 | (4.2)% | | Gross Margin | $2,789 | $2,893 | (3.6)% | | Operating Income | $599 | $618 | (3.1)% | | Net Income (to LKQ) | $361 | $343 | +5.2% | [Balance Sheet](index=8&type=section&id=Balance%20Sheet) As of June 30, 2025, LKQ's total assets increased to $15.94 billion from $14.96 billion at year-end 2024, driven by higher receivables, inventories, and goodwill, while total liabilities rose to $9.40 billion and stockholders' equity grew to $6.54 billion Balance Sheet (in millions) | Balance Sheet (in millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $5,465 | $4,906 | | Total Assets | $15,944 | $14,955 | | Total Current Liabilities | $3,012 | $2,862 | | Long-term Obligations | $4,395 | $4,127 | | Total Stockholders' Equity | $6,543 | $6,032 | [Cash Flow Statement](index=9&type=section&id=Cash%20Flow%20Statement) For the first six months of 2025, net cash provided by operating activities significantly decreased to $293 million from $466 million in H1 2024, primarily due to a larger negative impact from changes in receivables and a smaller positive contribution from accounts payable Cash Flow (in millions) | Cash Flow (in millions) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $293 | $466 | | Net Cash used in Investing Activities | ($99) | ($178) | | Net Cash used in Financing Activities | ($169) | ($276) | | Net Increase in Cash | $54 | $2 | [Segment & Revenue Analysis](index=10&type=section&id=Segment%20%26%20Revenue%20Analysis) [Revenue Analysis](index=10&type=section&id=Revenue%20Analysis) In Q2 2025, total revenue fell 1.9%, with parts and services revenue down 2.1%, driven by a 4.9% organic decline in Europe and a 2.6% organic decline in Wholesale - North America; for the first half, total revenue was down 4.2%, with a 3.9% organic decline in parts and services Q2 2025 Revenue Change vs. Q2 2024 | Q2 2025 Revenue Change vs. Q2 2024 | Organic | Acquisition/Divestiture | Foreign Exchange | Total Change | | :--- | :--- | :--- | :--- | :--- | | 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)% | | **Parts and services** | **(3.4)%** | **(1.0)%** | **2.3%** | **(2.1)%** | H1 2025 Revenue Change vs. H1 2024 | H1 2025 Revenue Change vs. H1 2024 | Organic | Acquisition/Divestiture | Foreign Exchange | Total Change | | :--- | :--- | :--- | :--- | :--- | | 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)% | | **Parts and services** | **(3.9)%** | **(0.9)%** | **0.4%** | **(4.4)%** | [Segment Performance](index=12&type=section&id=Segment%20Performance) Total Segment EBITDA for Q2 2025 decreased to $430 million from $484 million in Q2 2024, with the margin contracting from 13.0% to 11.8%, as both Wholesale - North America and Europe segments experienced significant declines in EBITDA and margin compression Segment EBITDA (in millions) | Segment EBITDA (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Wholesale - North America | $227 | $256 | $449 | $500 | | Europe | $151 | $174 | $292 | $317 | | Specialty | $39 | $41 | $60 | $68 | | Self Service | $13 | $13 | $33 | $29 | | **Total Segment EBITDA** | **$430** | **$484** | **$834** | **$914** | Segment EBITDA Margin | Segment EBITDA Margin | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Wholesale - North America | 15.8% | 17.3% | 15.7% | 16.8% | | Europe | 9.4% | 10.6% | 9.3% | 9.7% | | **Total Segment EBITDA Margin** | **11.8%** | **13.0%** | **11.7%** | **12.3%** | [Non-GAAP Financial Measures & Reconciliations](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Segment EBITDA Reconciliation](index=13&type=section&id=Segment%20EBITDA%20Reconciliation) This section reconciles GAAP Net Income to Segment EBITDA, showing that for Q2 2025, Net Income of $193 million was adjusted for items like depreciation & amortization ($105M), net interest expense ($58M), and taxes ($68M) to reach Segment EBITDA of $430 million Segment EBITDA Reconciliation (in millions) | Reconciliation (in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $193 | $186 | | Adjustments (D&A, Interest, Taxes, etc.) | $238 | $299 | | **Segment EBITDA** | **$430** | **$484** | [Adjusted Net Income & EPS Reconciliation](index=14&type=section&id=Adjusted%20Net%20Income%20%26%20EPS%20Reconciliation) This table reconciles GAAP Net Income and Diluted EPS to their adjusted non-GAAP counterparts, illustrating that for Q2 2025, Net Income of $192 million was adjusted for items such as amortization of acquired intangibles ($36M) and restructuring expenses ($8M) to achieve an Adjusted Net Income of $225 million Adjusted Net Income & EPS Reconciliation (in millions, except EPS) | Reconciliation (in millions, except EPS) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income attributable to LKQ | $192 | $185 | | Adjustments (Amortization, Restructuring, etc.) | $33 | $76 | | **Adjusted net income** | **$225** | **$261** | | **Reported Diluted EPS** | **$0.75** | **$0.70** | | **Adjusted Diluted EPS** | **$0.87** | **$0.98** | [Forecasted Adjusted Net Income & EPS Reconciliation](index=15&type=section&id=Forecasted%20Adjusted%20Net%20Income%20%26%20EPS%20Reconciliation) This section provides the reconciliation for the company's full-year 2025 guidance, showing that the forecasted GAAP Net Income range of $639M-$717M is adjusted for expected amortization ($142M) and restructuring ($42M) to arrive at the forecasted Adjusted Net Income range of $775M-$853M FY 2025 Forecast Reconciliation (in millions, except EPS) | FY 2025 Forecast Reconciliation (in millions, except EPS) | Minimum Outlook | Maximum Outlook | | :--- | :--- | :--- | | Net income | $639 | $717 | | Adjustments | $136 | $136 | | **Adjusted net income** | **$775** | **$853** | | **Reported Diluted EPS** | **$2.47** | **$2.77** | | **Adjusted Diluted EPS** | **$3.00** | **$3.30** | [Free Cash Flow Reconciliation](index=15&type=section&id=Free%20Cash%20Flow%20Reconciliation) This section details the calculation of Free Cash Flow by subtracting capital expenditures from operating cash flow, indicating that for Q2 2025, the company generated $243 million in Free Cash Flow from $296 million in operating cash flow, with a full-year forecast between $600 million and $750 million FCF Reconciliation (in millions) | FCF Reconciliation (in millions) | Q2 2025 | H1 2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $296 | $293 | | Less: purchases of property, plant and equipment | $53 | $107 | | **Free cash flow** | **$243** | **$186** | Forecasted FY 2025 FCF (in millions) | Forecasted FY 2025 FCF (in millions) | Minimum | Maximum | | :--- | :--- | :--- | | Net cash provided by operating activities | $875 | $1,075 | | Less: purchases of property, plant and equipment | $275 | $325 | | **Free cash flow** | **$600** | **$750** | [Forward-Looking Statements & Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) [Risk Factors](index=3&type=section&id=Risk%20Factors) The company outlines numerous risk factors that could materially affect its business and financial results, including adverse economic and political conditions, intense competition, reliance on insurance companies, supply chain disruptions, commodity price fluctuations, substantial indebtedness, and regulatory changes - The report contains forward-looking statements, including the 2025 outlook, which are subject to numerous risks and uncertainties, and the company undertakes no obligation to update these statements[16](index=16&type=chunk)[17](index=17&type=chunk) - Key business risks include: - Adverse economic, political, and social conditions - Intense competition from various providers - Reliance on insurance companies to promote alternative parts - Potential decline in vehicle accidents or repairs - Fluctuations in commodity prices - Supply chain disruptions and supplier relationships[19](index=19&type=chunk)[20](index=20&type=chunk) - Financial and operational risks include: - Substantial indebtedness that could affect financial condition - Inability to generate sufficient cash to service debt - Risks associated with foreign operations and exchange rates - Cybersecurity threats and reliance on IT systems - Potential for activist investor campaigns[20](index=20&type=chunk)[21](index=21&type=chunk)

Core Insights - LKQ Corporation reported a revenue of $3.6 billion for Q2 2025, a decrease of 1.9% compared to $3.7 billion in Q2 2024, with organic revenue for parts and services down 3.4% [2][13] - The company achieved a net income of $192 million, up from $185 million in the same period last year, with diluted earnings per share increasing by 7.1% to $0.75 [3][25] - LKQ is focused on cost reduction, having eliminated over $125 million in costs over the past year, with an additional $75 million targeted for 2025 [4][10] Financial Performance - Revenue for the first half of 2025 was $7.1 billion, down 4.2% from $7.4 billion in the same period of 2024 [27] - The gross margin for Q2 2025 was 38.8%, slightly down from 39.0% in Q2 2024 [25] - Operating income for Q2 2025 was $312 million, a decrease of 5.2% compared to $329 million in Q2 2024 [25] Strategic Initiatives - The company is executing a three-year plan aimed at simplifying its business portfolio and enhancing return on invested capital [1][7] - LKQ is expanding its lean operating model globally to drive productivity and improve execution [10] - The company is pursuing a disciplined capital allocation strategy focused on maximizing shareholder value [10][12] Market Outlook - LKQ has lowered its full-year outlook for 2025, projecting organic revenue growth for parts and services to be between -3.5% and -1.5%, down from a previous estimate of 0% to 2% [13] - The updated diluted EPS forecast for 2025 is between $2.47 and $2.77, a reduction from the previous range of $2.91 to $3.21 [13] - The company is navigating macroeconomic challenges in both North America and Europe, including declining repairable claims and geopolitical unrest [13] Shareholder Returns - In Q2 2025, LKQ repurchased approximately 1.0 million shares for $39 million and distributed $78 million in cash dividends [11] - Since the initiation of the stock repurchase program in late October 2018, the company has repurchased approximately 66.5 million shares for a total of $2.9 billion [11] - The Board of Directors declared a quarterly cash dividend of $0.30 per share, payable on August 28, 2025 [11] Cash Flow and Balance Sheet - Cash flow from operations for Q2 2025 was $296 million, with free cash flow at $243 million [8] - As of June 30, 2025, total debt stood at $4.5 billion, with a leverage ratio of 2.6x EBITDA [8][29] - The company reported total assets of $15.9 billion and total stockholders' equity of $6.5 billion as of June 30, 2025 [29][30]

Core Viewpoint - LKQ is expected to report quarterly earnings of $0.93 per share, reflecting a 5.1% decline year over year, with revenues forecasted at $3.61 billion, a decrease of 2.7% compared to the previous year [1]. Revenue Estimates - Analysts estimate 'Revenue- Other- Total' to be $151.43 million, indicating a decline of 4.8% from the prior-year quarter [4]. - 'Revenue- Parts and Services- Wholesale- North America' is projected to reach $1.35 billion, suggesting a 3.1% decrease year over year [4]. - The total 'Revenue- Parts and Services' is expected to be $3.44 billion, reflecting a 3.2% decline from the previous year [4]. - 'Revenue- Parts and Services- Specialty' is anticipated to be $438.81 million, indicating a 5.8% decrease year over year [5]. - 'Revenue- Parts and Services- Europe' is forecasted at $1.59 billion, suggesting a 2.4% decline from the prior-year quarter [5]. - 'Revenue- Parts and Services- Self Service' is estimated at $52.92 million, reflecting a 3.8% decrease year over year [5]. - 'Revenue- Specialty' is expected to be $436.72 million, indicating a 6.3% decline year over year [6]. - 'Revenue- Wholesale- North America' is projected to reach $1.43 billion, suggesting a 3.1% decrease year over year [6]. - 'Revenue- Europe' is expected to be $1.62 billion, indicating a 1.3% decline year over year [6]. - 'Revenue- Self Service' is estimated at $132.14 million, reflecting a 0.7% decrease year over year [7]. EBITDA Estimates - 'EBITDA- Self Service' is expected to reach $13.67 million, compared to $13.00 million reported in the same quarter of the previous year [7]. - 'EBITDA- Specialty' is projected at $33.34 million, down from $41.00 million reported in the same quarter of the previous year [8]. Stock Performance - Over the past month, shares of LKQ have remained unchanged, while the Zacks S&P 500 composite has increased by 5.4% [8].

Core Points - LKQ Corporation will release its second quarter 2025 financial results on July 24, 2025 [1] - A conference call and webcast will be held on the same day at 8:00 a.m. Eastern Time to discuss the results [2] - The company provides a range of alternative and specialty parts for automobiles and has operations in North America, Europe, and Taiwan [5] Conference Call Details - The conference call can be accessed by dialing (833) 470-1428 for domestic calls and (404) 975-4839 for international calls, with a conference ID of 409932 [2] - A replay of the conference call will be available by telephone and online, accessible through July 31, 2025 [4] Company Overview - LKQ Corporation is a leading provider of OE recycled and aftermarket parts, offering services to repair and accessorize various types of vehicles [5]

Core Insights - LKQ Corporation has formed a joint venture with SYNETIQ Ltd. to enhance its vehicle recycled parts strategy in Europe [1][2] - The joint venture, named LKQ SYNETIQ, aims to leverage LKQ's distribution capabilities and SYNETIQ's dismantling and recycling expertise to meet future EU regulations [2][4] - The collaboration is expected to provide sustainable and affordable parts for automotive repair, particularly for hybrid and electric vehicles [4] Company Overview - LKQ Corporation is a leading provider of alternative and specialty parts for automobiles, with operations in North America, Europe, and Taiwan [5] - The company offers a wide range of OE recycled and aftermarket parts, components, and services for various types of vehicles [5] Joint Venture Details - LKQ SYNETIQ will combine LKQ's logistics network with SYNETIQ's dismantling capabilities, which include dismantling approximately 27,000 vehicles annually across four UK sites [2][3] - The joint venture will be led by key executives from both companies, including Michael Hill from SYNETIQ and Annick Jourdenais from LKQ Europe [3] Strategic Goals - The partnership aims to maximize the environmental and financial potential of vehicles while supporting the UK's salvage community [4] - LKQ plans to continue acquiring salvage vehicles and recycled parts from various sources to enhance availability for consumers [4]

Core Insights - LKQ Corporation released its 2024 Sustainability Report, highlighting its commitment to driving success as a leading operator while supporting the global circular economy [1][2] - The company emphasizes a three-pillar strategy focused on sustainable solutions, people-led performance, and strong governance to manage risks and capitalize on opportunities [2][3] Company Achievements - In 2024, LKQ processed 735,000 vehicles and sold nearly 12 million salvaged parts, contributing significantly to the circular economy [5] - The company reduced Scope 1 and Scope 2 greenhouse gas emissions by 16% relative to revenue compared to a 2022 baseline, achieved through renewable energy use and energy efficiency upgrades [5] - LKQ donated over $4 million through its Community Foundation to various charitable causes, enhancing its community engagement and stakeholder relationships [5]