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- **Strategic Divestiture Success**: Sold Self Service segment for $410M, reducing debt and improving balance sheet flexibility.
- **Cost Savings Progress**: Achieved $35M in cost savings toward $75M 2025 target, with Europe leading transformation.
- **Specialty Segment Recovery**: 9.4% organic growth, first positive quarter in 14 quarters, driven by improved execution and market share gains.
- **Europe Margin Improvement**: EBITDA margin rose to 10.0% (60bp sequential increase), despite 4.0% organic revenue decline.
- **Financial Strength**: Free cash flow $387M in Q3, narrowing full-year EPS guidance to $3.00-$3.15 with midpoint $3.07 (+$0.07 vs. prior).
- **Tariff Mitigation**: Passed through $35M in tariffs, maintaining service levels to outperform market in North America.


**【CEO Summary Section】**
- **Revenue Growth and Strategic Initiatives**: Q3 revenue of $3.5 billion, up 1.3% YoY. Completed sale of Self Service segment for $410M, reducing debt and strengthening balance sheet. Achieved $35M in cost savings toward $75M 2025 target, driven by European transformation. North America outperformed market with 30bp/day revenue decline vs. 6% repairable claims decline. Specialty segment grew 9.4% organically, first positive growth in 14 quarters.
- **Europe Performance**: Organic revenue down 4.0% per day, but EBITDA margin improved to 10.0% (60bp sequential increase). Focused on profitable growth, avoiding low-margin business. Rolled out common operating platform in Europe, with 30% of revenue on new system by early 2026.
- **AI and Margin Focus**: Emphasized investment in AI for long-term growth. Maintained service levels and inventory fill rates despite market challenges, gaining share with MSOs.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP EPS $0.69, Non-GAAP EPS $0.84 (vs. $0.86 prior year). Free cash flow $387M, year-to-date $573M. Returned $118M to shareholders (1.2M shares repurchased, $78M dividend). Total debt $4.2B, leverage ratio 2.5x EBITDA.
- **Segment Performance**: Wholesale North America EBITDA margin 14.0% (down 180bp YoY due to gross margin and overhead pressures). Europe EBITDA margin 10.0% (down 20bp YoY but +60bp sequentially). Specialty EBITDA margin 7.3% (stable YoY).
- **Guidance Update**: Narrowed full-year 2025 Non-GAAP EPS to $3.00-$3.15 (midpoint $3.07, +$0.07 vs. prior). Organic revenue decline guidance narrowed to -200bp to -300bp. Free cash flow $600M-$750M, despite $75M headwind from Self Service sale.

**【Q&A Key Highlights】**
- **Europe Strategy**: Focused on profitable growth, avoiding low-margin business. New leadership driving lean operating model, with EBITDA margin improvement to 10.0%. Cars aging in Europe (average age 11.5 years) supports long-term aftermarket demand.
- **Specialty Growth**: 9.4% organic revenue growth driven by improved pricing, channel relationships, and service level maintenance. Outperformed market despite industry softness.
- **Capital Allocation**: Target leverage ratio below 2.0x. Will balance debt repayment with share buybacks as leverage improves. October 2025 debt repayment reduced variable rate debt to $1.1B.
- **Tariffs and Pricing**: Passed through $35M in tariffs, maintaining service levels to gain share with MSOs. APU (alternative parts utilization) stable at 30%, with opportunities to grow with carriers.


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