LKQ says alternative parts utilization hit record high of 40% in Q1
Alternative Parts Utilization (APU) reached a record high of 40% in the first quarter of 2026, providing a strong performance for LKQ in its aftermarket collision product line, LKQ President, CEO, and Director Justin Jude said during an investor call.
Jude said the company anticipates the favorable trends to continue.
The company also saw comparable claims start to recover but remained down 2-4%, he said.
A renewal of several multi-shop operators (MSOs), along with ordering capability integration with new partners, is another positive for the company, he said.
“These integrations are designed to increase the ease and velocity of ordering, improve procurement workflows, and position us to capture more share of wallet,” Jude said.
Later in the call, Jude explained that MSOs are higher utilizers of alternative parts. He added that they have better lead times and cycle times with insurance carriers.
“We win with the MSOs,” Jude said.
Jude said Elitek, the company’s calibration and diagnostic business, also delivered strong organic growth and healthy EBITDA margins in the quarter.
“For context, an increasing share of collision repairs require calibration and diagnostics,” Jude said. “And we estimate that requirement has risen to roughly 75% today from about 62% three years ago. We view this as a durable, long-term tailwind and a compelling opportunity to extend our service offering.”
Used car prices are also helping the company, Jude said. He said that as used-car prices climb, non-comprehensive total loss rates are declining.
“Used car values improved every month this quarter, with March alone up 6.2%,” Jude said. “These trends will drive a reduction in total loss frequency and boost the proportion of accidents that translate into repairable claims, supporting continued growth and opportunity for our company.”
Jude said the indicators are moving in the direction that supports a broader recovery.
LKQ financial results for Q1 show revenue increased by 4.3% to $3.4 billion. Total parts and service revenue increased by 3.6%, including a 5.1% increase from foreign exchange rates.
The company also saw a 1.5% decrease in parts and services.
Net income was $77 million compared to $158 million for the same period of 2025.
A press release states, “Net income for the three months ended March 31, 2026, included a $44 million (or $0.17) impairment of our equity method investment in Mekonomen.”
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Featured image: LKQ’s headquarters in Nashville, Tennessee. (Provided by LKQ)