Earnings quality is currently strained, evidenced by an operating cash flow to net income ratio of -0.71 in 2026Q1 and a volatile free cash flow deficit of $96 million.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 |
|---|
| Cash from Operations | 1.01B | 1.06B | 1.12B | 1.36B | 1.25B | 1.37B | 1.44B | 1.06B | 710.74M | 518.9M | 635.01M | 529.84M | 370.9M | 428.06M | 206.19M | 211.77M | 159.18M | 164M | 132.96M | 54.37M | 52.38M | 37.53M | 25.9M | 20.95M | 17.74M | 12.1M | -3.38M |
| Operating CF Margin % | - | 7.64% | 7.81% | 9.78% | 9.77% | 10.44% | 12.42% | 8.51% | 5.98% | 5.33% | 7.4% | 7.37% | 5.5% | 8.46% | 5% | 6.48% | 6.44% | 8.01% | 6.97% | 4.83% | 6.64% | 6.86% | 6.1% | 6.39% | 6.18% | 4.83% | -1.5% |
| Operating CF Growth % | -1682.51% | -5.17% | -17.33% | 8.48% | -8.56% | -5.32% | 35.7% | 49.71% | 36.97% | -18.29% | 19.85% | 42.85% | -13.35% | 107.6% | -2.64% | 33.04% | -2.94% | 23.35% | 144.55% | 3.8% | 39.56% | 44.91% | 23.64% | 18.09% | 46.62% | 457.57% | - |
| Net Income | 517M | 608M | 693M | 938M | 1.15B | 1.09B | 640.41M | 545.03M | 483.17M | 530.23M | 463.98M | 423.22M | 381.52M | 311.62M | 261.23M | 210.26M | 169.07M | 123.6M | 99.9M | 65.9M | 44.4M | 30.89M | 20.57M | 14.58M | -38.89M | 4.23M | -878K |
| Depreciation & Amortization | 404M | 418M | 406M | 319M | 264M | 284M | 299.5M | 314.41M | 294.08M | 230.2M | 206.09M | 128.19M | 125.44M | 86.46M | 70.17M | 54.51M | 41.43M | 38.06M | 33.42M | 18.02M | 12.09M | 8.57M | 6.87M | 5.45M | 5.01M | 7.9M | 7.54M |
| Stock-Based Compensation | 28M | 34M | 30M | 40M | 38M | 34M | 29M | 27.7M | 22.76M | 22.83M | 22.47M | 21.34M | 22.02M | 22.04M | 15.63M | 5.13M | 9.97M | 7.28M | 5.5M | 3.04M | 2.46M | 42K | 201.6M | 15M | 0 | 0 | 0 |
| Deferred Taxes | -75M | -75M | -34M | 13M | 6M | -27.08M | -33.83M | 7.11M | -2.18M | -46.54M | -16.16M | 22.39M | 6.24M | 4.28M | 4.22M | 9.3M | 8.96M | 5.88M | 13.54M | 4.3M | 3.62M | 1.67M | 3.49M | 2.33M | 1.12M | 1.2M | 0 |
| Other Non-Cash Items | 233M | 84M | 83M | -31M | -173M | -13.28M | 12.07M | 71.85M | 112.61M | 8.68M | 46.33M | -7.1M | -11.22M | -8.72M | -11.22M | 6.56M | -15.05M | -7.29M | -9.2M | -18.97M | -7.84M | -494K | -201.07M | -15.07M | 50.17M | -1.23M | -27.05M |
| Working Capital Changes | -107M | -6M | -57M | 77M | -35M | -2.72M | 496.72M | 97.94M | -199.69M | -226.51M | -87.69M | -58.2M | -153.1M | 12.37M | -133.83M | -73.99M | -55.21M | -3.53M | -10.2M | -17.92M | -2.34M | -3.14M | -5.56M | -1.33M | 332.26K | 17M | 17M |
| Change in Receivables | -31M | -16M | -2M | 5M | -16M | -16.23M | 93.59M | 26.42M | 241K | -55.98M | -50.8M | 14.7M | -61.74M | -44.67M | -12.81M | -18.07M | -12.31M | -384K | -15.03M | -11.03M | -4.13M | -2.43M | -2.14B | -3.89B | 0 | 0 | 0 |
| Change in Inventory | 79M | -49M | -253M | 71M | -342M | -234.51M | 433.07M | 15.46M | -127.15M | -203.86M | -64.11M | -83.19M | -122.59M | -69.22M | -95.04M | -90.09M | -67.8M | -20.43M | 4.23M | -35.13M | -8.67M | -8.55M | -5.17M | 544.72K | -1.16M | 0 | 0 |
| Change in Payables | 6M | 156M | 251M | -5M | 269M | 283.19M | -64.03M | 3.71M | -77.62M | 45.14M | 18.58M | -4.22M | -5.47M | 49.64M | -15.1M | 28.59M | 10.16M | -18.07M | -4.79M | 6.88M | -2.47M | -2.17M | -3.09B | 2.27B | 0 | 0 | 0 |
| Cash from Investing | 193M | 185M | -406M | -2.44B | 172M | -418.76M | -165.89M | -264.85M | -1.46B | -384.6M | -1.71B | -329.99M | -920.99M | -505.61M | -352.53M | -571.61M | -191.58M | -102.49M | -138.91M | -905.82M | -110.66M | -126.02M | -87.82M | -12.22M | -6.75M | -3.5M | -8.31M |
| Capital Expenditures | -202M | -216M | -311M | -358M | -222M | -293.47M | -172.69M | -265.73M | -250.03M | -179.09M | -207.07M | -170.49M | -140.95M | -90.19M | -88.25M | -86.42M | -61.44M | -55.87M | -66.91M | -38.4M | -36.15M | -26.22M | -25.68M | -9.1M | -6.85M | -3.4M | 0 |
| CapEx % of Revenue | 1.45% | 1.55% | 2.17% | 2.58% | 1.74% | 2.24% | 1.49% | 2.12% | 2.11% | 1.84% | 2.41% | 2.37% | 2.09% | 1.78% | 2.14% | 2.64% | 2.49% | 2.73% | 3.51% | 3.41% | 4.58% | 4.79% | 6.04% | 2.77% | 2.39% | 1.36% | - |
| Acquisitions | 395M | 1M | -60M | -2.1B | 404M | -104.33M | 14.53M | 7.22M | -1.19B | -203.08M | -1.35B | -160.52M | -775.92M | -406.28M | -264.28M | -485.19M | -130.15M | -46.62M | -72M | -867.42M | -73.24M | -102.94M | -61.5M | -3.29M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 400M | -35M | 20M | -10M | -20.96M | 0 | 1.25M | 38.72M | 5.24M | 32.16M | 1.01M | -4.12M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -2.11M | 2.71M | 0 | 160.86K | 105.32K | -100K | -8.31M |
| Cash from Financing | -1.12B | -1.19B | -746M | 1.1B | -1.39B | -985.13M | -1.51B | -600.67M | 883M | -112.57M | 1.23B | -224.09M | 519M | 165.94M | 157.07M | 311.41M | 18.96M | -33.16M | 11.79M | 921.63M | 59.13M | 90.05M | 47.45M | 6.77M | -12M | -11.1M | 14.93M |
| Debt Issued (Net) | -676M | -708M | -17M | 1.47B | -48M | 69.29M | -1.37B | -300.56M | 937.91M | -119.75M | 1.22B | -239.12M | 492.61M | 132.2M | 123.64M | 291.52M | -9.58M | -50.73M | -10.94M | 554.72M | 45.77M | -9.34M | 42.51M | -30.17M | -11.94M | 0 | 0 |
| Equity Issued (Net) | -120M | -159M | -360M | -38M | -1.04B | -876.84M | -117.29M | -291.81M | -54.7M | 7.47M | 7.96M | 8.17M | 9.32M | 15.39M | 17.69M | 11.92M | 13.96M | 8.25M | 10.4M | 360.48M | 6.26M | 99.69M | 4.94M | 36.73M | -59.55K | 0 | 0 |
| Dividends Paid | -309M | -310M | -318M | -302M | -284M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -120M | -159M | -360M | -38M | -1.04B | -876.84M | -117.29M | -291.81M | -60M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.13M | 0 | 0 | 0 | -22.9M | -103.2K | 0 | 0 |
| Other Financing | -15M | -14M | -51M | -30M | -22M | -177.58M | -27.4M | -8.3M | -217K | -286K | -4.44M | 6.86M | 17.07M | 18.35M | 15.74M | 7.97M | 14.58M | 9.32M | 12.33M | 6.42M | 7.1M | -302K | 0 | 210.8K | 0 | -11.1M | 14.93M |
| Net Change in Cash | 99M | 93M | -65M | 21M | 3.87M | -38.02M | -210.87M | 191.26M | 51.99M | 52.37M | 140M | -27.21M | -35.88M | 90.72M | 11.52M | -47.44M | -13.22M | 29.84M | 4.83M | 70.21M | 3.58M | 450K | 0 | 15.5M | -1M | -2.5M | 14.93M |
| Free Cash Flow | 808M | 847M | 810M | 998M | 1.03B | 1.07B | 1.27B | 798.3M | 460.71M | 339.81M | 427.94M | 359.35M | 229.95M | 337.87M | 117.94M | 125.36M | 97.75M | 108.13M | 66.05M | 15.97M | 16.23M | 11.31M | 231.77K | 11.85M | 10.89M | 8.7M | -3.38M |
| FCF Margin % | 5.8% | 6.09% | 5.64% | 7.2% | 8.04% | 8.2% | 10.93% | 6.38% | 3.88% | 3.49% | 4.99% | 5% | 3.41% | 6.67% | 2.86% | 3.83% | 3.96% | 5.28% | 3.46% | 1.42% | 2.06% | 2.07% | 0.05% | 3.61% | 3.79% | 3.47% | -1.5% |
| FCF Growth % | 42.76% | 4.57% | -18.84% | -2.92% | -4.25% | -15.54% | 59.23% | 73.28% | 35.58% | -20.59% | 19.09% | 56.27% | -31.94% | 186.49% | -5.92% | 28.25% | -9.61% | 63.7% | 313.66% | -1.61% | 43.43% | 4781.95% | -98.04% | 8.85% | 25.16% | 357.09% | - |
| FCF per Share | 3.16 | 3.31 | 3.07 | 3.72 | 3.70 | 3.61 | 4.17 | 2.57 | 1.46 | 1.09 | 1.38 | 1.17 | 0.75 | 1.11 | 0.39 | 0.42 | 0.34 | 0.38 | 0.23 | 0.07 | 0.07 | 0.06 | 0.00 | 0.08 | 0.07 | 0.06 | -0.02 |
| FCF Conversion (FCF/Net Income) | 1.56x | 1.75x | 1.62x | 1.45x | 1.09x | 1.25x | 2.26x | 1.97x | 1.48x | 0.97x | 1.37x | 1.25x | 0.97x | 1.37x | 0.79x | 1.01x | 0.94x | 1.29x | 1.33x | 0.83x | 1.18x | 1.22x | 1.26x | 1.44x | -0.46x | 2.86x | 3.85x |
| Interest Paid | 77M | 0 | 230M | 197M | 71M | 76M | 107M | 143.12M | 137.87M | 95.71M | 86.02M | 54.92M | 59.68M | 45.25M | 29.03M | 21.35M | 27.42M | 29.53M | 35.86M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 75M | 0 | 322M | 305M | 346M | 423M | 248M | 181.31M | 200.1M | 273.02M | 230.04M | 180.13M | 176.96M | 110.86M | 146.48M | 113.43M | 88.29M | 49.29M | 39.17M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working capital volatility
As reported in recent quarterly filings, LKQ's operating cash flow to net income ratio plummeted to -0.71 in 2026Q1, highlighting a significant divergence between accounting profits and actual cash generation that warrants close scrutiny from investors concerned about the sustainability of current earnings levels.
The sharp negative conversion ratio in the most recent quarter suggests that accounting net income is failing to translate into liquid resources, likely due to aggressive inventory accumulation or delayed receivables. This disconnect implies that the company's reported profitability may be overstated relative to its ability to fund operations internally.
Based on the provided financial statements, LKQ's free cash flow trajectory has become increasingly erratic, swinging from a peak of $387 million in 2025Q3 to a deficit of $96 million in 2026Q1, indicating a lack of consistency in the company's ability to generate surplus cash.
The inability to maintain positive free cash flow suggests that the business model is currently struggling to balance capital expenditures with operational inflows. Investors should monitor whether this trend reflects a structural shift in the cost of salvage procurement or merely temporary timing issues in the cash cycle.
According to the latest cash flow data, LKQ experienced a massive $383 million outflow from working capital in 2026Q1, a stark reversal from the $117 million inflow seen in 2025Q4, which suggests significant inefficiencies in managing inventory levels or collecting payments from repair shop customers.
This extreme volatility in working capital appears to be the primary driver of the company's recent cash flow weakness. Such fluctuations may indicate that the company is struggling to align its salvage inventory purchases with actual demand, potentially leading to bloated stock levels that tie up critical liquidity.
As evidenced by the quarterly data, LKQ has maintained a consistent capital expenditure profile, with CapEx as a percentage of revenue hovering between 1.2% and 3.6% over the last ten quarters, suggesting that the company is not currently engaged in a massive, unbudgeted infrastructure expansion.
While the capital intensity appears controlled, the persistent spending on maintenance and infrastructure during periods of revenue contraction may be limiting the company's financial flexibility. The stability of these expenditures suggests that management is prioritizing the preservation of its salvage network despite the current headwinds in the broader auto parts market.
Based on reported figures, LKQ has continued to prioritize dividend payments and share repurchases even as operating cash flow turned negative in 2026Q1, which may indicate a reliance on debt or existing cash reserves to fund shareholder returns during this period of operational stress.
The decision to maintain dividend payouts while cash flow is deteriorating suggests a management focus on shareholder optics that may not be fully supported by current operational performance. This strategy warrants further investigation into the company's long-term ability to sustain these returns without compromising its balance sheet health.
Quick answers to the most common questions about buying LKQ stock.
LKQ Corporation (LKQ) generated $1.06B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
LKQ Corporation (LKQ) generated $847.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
LKQ Corporation (LKQ) spent $216.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, LKQ Corporation (LKQ) returned $310.0M to shareholders via cash dividends and spent $159.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.