LKQ Corporation, the parent company of Keystone Automotive and its NTP-STAG RV aftermarket distribution division, reported fourth quarter and full year 2025 financial results and 2026 financial outlook.
“Throughout 2025, our team relentlessly focused on what we could control, resulting in significant free cash flow generation despite sector headwinds across our global enterprise. Our North America business gained market share in a soft demand environment through pricing discipline, continued expansion of our MSO relationships and the ongoing expansion of our Canadian hard parts business. Despite the headwinds in Europe, we further integrated and simplified our operations to support sustained margin improvement and capitalize on adjacent market opportunities. The European leadership team has taken a stronger position on productivity to ensure the appropriate cost structure is delivered in 2026,” said Justin Jude, president and chief executive officer. “Specialty performed well in the quarter posting organic revenue growth of 7.8% as their end markets continue to improve.”
Fourth Quarter & Full Year 2025 Financial Results
Revenue for the fourth quarter of 2025 was $3.3 billion, an increase of 2.7% compared to $3.2 billion for the fourth quarter of 2024. Total parts and services revenue increased 2.2%, which included a 3.7% increase from foreign exchange rates year over year, a 1.7% decrease in parts and services organic revenue and the net impact of acquisitions and divestitures, which increased revenue by 0.2%.
Net income for the fourth quarter of 2025 was $75 million compared to $151 million for the same period of 2024. Diluted earnings per share was $0.29 compared to $0.58 for the same period of 2024, a decrease of 50.0%.
On an adjusted basis, net income in the fourth quarter of 2025 was $150 million compared to $202 million for the same period of 2024, which benefited from a non-recurring favorable legal settlement of $35 million (pre-tax). Adjusted diluted earnings per share was $0.59 compared to $0.78 for the same period of 2024, a decrease of 24.4%.
Revenue for the full year of 2025 was $13.7 billion, a decrease of 1.3% compared to $13.8 billion for the full year of 2024. Total parts and services revenue decreased 1.5%, which included a 2.7% decrease in parts and services organic revenue (2.3% decrease on a per day basis), a 1.7% increase from foreign exchange rates year over year, and the net impact of acquisitions and divestitures, which decreased revenue by 0.5%.
Net income for the full year of 2025 was $596 million compared to $666 million for the same period of 2024. Diluted earnings per share was $2.31 compared to $2.53 for the same period of 2024, a decrease of 8.7%.
On an adjusted basis, net income for the full year of 2025 was $777 million compared to $894 million for the same period of 2024. Adjusted diluted earnings per share was $3.01 compared to $3.39 for the same period of 2024, a decrease of 11.2%.
Strategic Initiatives
On Jan. 26, the company announced that the board of directors initiated a comprehensive review of strategic alternatives to enhance shareholder value. The review has no deadline or definitive timetable, and there can be no assurance the review will result in any transaction or other strategic outcome. The company will provide updates on the process if appropriate or required by law. In addition, the company continues to execute on the following key initiatives:
- Simplify Business Portfolio and Operations: Streamlining operations by focusing on nondiscretionary businesses, divesting non-core assets, and enhancing efficiencies.
- Announced completion of the sale of its former Self Service segment in October and announced the process to explore a potential sale of its Specialty segment in December.
- Expand Lean Operating Model Globally: Continuing global rollout of lean operating model to improve productivity, execution, and decision-making.
- Achieved meaningful progress with its SKU rationalization program in 2025, with over 85% of targeted SKUs reviewed, up from 50% in 2024.
- Invest and Grow Organically: Investing in its core businesses to achieve above market growth and drive market share gains.
- Gained share in North America despite economic backdrop, grew its Bumper to Bumper hard parts business and expanded its calibration services platform.
- Pursue Disciplined Capital Allocation Strategy: Remaining focused on maximizing shareholder value with a disciplined capital allocation strategy and further strengthening its balance sheet to maintain its competitive market position and resilient business model through all market cycles.
- Returned $469 million of capital through share buybacks and dividends and launched strategic review process to enhance shareholder value.
Further supporting its strategic initiatives, LKQ Corp. recently approved a restructuring plan intended to better position its cost structure to more efficiently serve its strategic markets and enhance the company’s long-term performance. The plan is expected to result in restructuring charges of approximately $60 to $70 million and generate more than $50 million in annualized cost savings, with more than half of these savings anticipated to be realized in 2026.
