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]

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]