Revenue was down in the quarter compared to last year as repairable claims declined. Revenue for the full year was up.
LKQ Corporation (NASDAQ: LKQ) today reported revenue for the fourth quarter of 2024 was $3.4 billion, a decrease of 4.1% compared to $3.5 billion for the fourth quarter of 2023. Parts and services organic revenue decreased 3.6% (4.5% decrease on a per day basis), the net impact of acquisitions and divestitures decreased revenue by 0.7%, and foreign exchange rates decreased revenue by 0.3% year over year, for a total parts and services revenue decrease of 4.5%. Other revenue grew 6.2% primarily due to higher commodities volumes, partially offset by lower scrap steel prices relative to the same period in 2023.
Revenue for the full year of 2024 was $14.4 billion, an increase of 3.5% compared to $13.9 billion for the full year of 2023. Parts and services organic revenue decreased 2.2% (2.8% decrease on a per day basis), the net impact of acquisitions and divestitures increased revenue by 6.3%, and foreign exchange rates increased revenue by 0.1% year over year, for a total parts and services revenue increase of 4.1%. Other revenue fell 7.8% primarily due to lower commodities prices and volumes relative to 2023.
“The LKQ team focused on our core strengths to manage difficult market conditions in 2024 and position the Company for greater success in the future. I am proud of the team’s strong finish. Specifically, our Europe segment achieved an EBITDA margin of 10.1% in the quarter, which is a record for the segment in the fourth quarter. This was the third consecutive quarter the Europe segment attained double-digit EBITDA margins, and the Europe segment achieved its highest level of EBITDA dollars for a full year in 2024,” stated Justin Jude, President and Chief Executive Officer. “We will continue to emphasize portfolio simplification, operational excellence and profitable growth to deliver long-term value to our shareholders.”
Commenting on the decline in revenue in North America during a conference call with the investment community discussing the results, Jude explained while revenue was down, the company believes it outperformed the market and the decline in repairable claims when one-time factors, such as the 2023 UAW strike that benefited alternative parts usage (APU), are backed out of the comparison.
“The North American revenue decline of 8.5% per day was larger than what we reported in the first three quarters of 2024. But when you back out the non-recurring benefit of the UAW strikes in 2023 and the storm impacts across the US in Q4, the North American decline in collision parts revenue was roughly 4% compared to repairable claims decreasing almost 6% in the quarter. The revenue declined, it was another period of outperformance for our North American operations on a relative basis,” said Jude.
“We are seeing some positive trends as we enter 2025, including favorable inclement weather and ongoing dynamics in the auto insurance market that combined could benefit our North American collision business,” continued Jude.
The company expects insurance premium increases to moderate in 2025, leading to insurance carriers seeking cost reductions. This, in turn, could benefit LKQ’s alternative parts offering, which provides a cost-effective solution for repairs.
“Historically, this will lead to insurance carriers looking to take costs out of their network, and the value proposition of our alternative parts offering is one area they can quickly flex, which would be a favorable trend for APU,” explained Jude.