Organic parts revenue fell about 1% year-over-year in Q3 2025 at LKQ Corp. [NASDAQ: LKQ], the Tennessee-based part supplier said Oct. 30, improving on Q2 and Q1 declines of 3.4% and 4.3% and low single-digit declines through 2024. It expects full-year 2025 organic parts revenue to decline 2% to 3%.
Companywide Q3 revenue was $3.5 billion, up about 1% from the same period last year; net income fell 6% to $180 million. Earnings per share were about 70 cents, down 4%.
LKQ expects full-year net income in a range of $637 million to $675 million, with $2.47 to $2.62 EPS. Full-year free cash flow is forecast at $600 million to $750 million.
The company reported and commented on results Oct. 30 in a press release and earnings call.
North American Revenue, EBITDA, Insurance, MSOs
Wholesale North America Q3 2025 revenue of $1.34 billion was essentially flat, declining by less than 1%, with EBITDA of $199 million, down 11% year-over-year from $224 million.
“We … continued to gain market share in a down market in North America,” President and CEO Justin Jude said in the press release. On the conference call, he said, “repairable claims continue to experience downward pressure, though the rate of decline has moderated to approximately 6%.”
Jude on the earnings call said LKQ sees movement on insurance rates. “At the end of Q2, a record of 46.5% of auto insurance policies were shopped in the past year,” he said. Carriers filing for rate reductions signals an “ongoing pricing pressure from carriers [that] should help insurance rates normalize.” He said LKQ’s products “continue to help carriers immediately reduce costs to offset any lower premiums.”
Jude added, “We are also seeing used car prices somewhat stabilized, but with continuing volatility month to month, values haven't normalized yet.” He also said LKQ’s “Elitek business, which provides technical repairs and calibrations, performed well with several key accounts, achieving double-digit growth in the quarter.”
Senior Vice President and CFO Rick Galloway on the call said EBITDA margin of 14% was down from 15.8%, partly due to gross margins affected by “the dilutive effect of increasing prices to offset dollar-for-dollar higher input costs from tariffs, and unfavorable customer mix effect as we continue to grow share with the MSOs.”
Quarterly overhead was also higher, Galloway said.
Debt Down
Jude said on the call, “we completed the sale of our self-service segment to Pacific Avenue Capital Partners for $410 million [which] simplified our business [and] strengthened our balance sheet.”
It closed Sept. 30, according to the earnings release. Galloway said on the call LKQ repaid $390 million in debt the next day, with pretax proceeds from the sale.
Including other repayments, LKQ cut its debt by north of $600 million in the quarter, to total debt of about $4.2 billion, for a leverage ratio of 2.5X EBITDA, Galloway said.
Paul Hughes