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Held by 114 of 2,417 reporting institutions (91th percentile) — extremely crowded.
Data as of Q3 2026
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Solve the discounted cash flow backwards, then stress-test the assumptions.
Average free cash flow across the last 3 positive fiscal years (FY2023, FY2024, FY2025). Smooths the cycle. Stock compensation is NOT charged — it is added back inside operating cash flow.
To be worth $18.56 today, the market must believe free cash flow compounds -12.3%/yr for a decade (off $885.0M on the 3-yr avg basis).
On the basis ($850.3M) the requirement is -11.7%/yr. Shares issued to employees are added back in operating cash flow, so this basis treats them as free.
The market's -12.3% is more conservative than its 9-yr track record.
Default is 10.0% — this company's computed cost of capital (published default — this company's cost of capital could not be computed), the same rate the Analysis tab discounts at.
2-stage DCF · 0.25B shares (market data) · net debt -$319.0M
Today's price is outside this grid at every discount rate shown — the assumptions it requires lie beyond the plotted range, which is itself the finding.
mean 12.3% · volatility σ 35% · implied rate exceeded in 6/9 yrs
Central path = implied -12.3%/yr growth; shaded band = ±1σ (35%) of this company's historical FCF volatility, widening with time. The wider the band, the less certain the growth.
Reverse DCF: rather than guessing a fair value, we solve for the growth the current price implies, then you stress-test the assumptions. Enterprise value of the FCF stream, less net debt, ÷ shares. Educational — not a recommendation.
What the company returns to shareholders — and whether it's covered by cash.
The dividend is comfortably covered — only 37% of free cash flow, leaving room to grow it and fund buybacks. Last year: $310.0M dividends + $159.0M buybacks = $469.0M returned on $847.0M FCF.
Yields use the latest fiscal-year dividends/buybacks over current market cap. Dividends and buybacks from the SEC cash-flow statement; payout coverage vs net income and free cash flow. Educational — not a recommendation.
How management deployed cash over 10 years — and what it earned on reinvestment.
A balanced mix of reinvestment and shareholder returns.
Modest payoff on reinvested capital. Current ROIC on all capital: 9%. Rough measure (includes maintenance capex).
Cash uses aggregated from the SEC cash-flow statement over 10 fiscal years. "Return on reinvestment" is a rough proxy — operating-income change ÷ cumulative CapEx + M&A — and includes maintenance capex. Educational — not a recommendation.
EOD close · as of 2026-10-30
How a revenue dollar becomes profit — FY2025
Dividends and buybacks are cash paid out, shown here against the same year's profit for scale — not funded from it.
Each value shows its share of revenue below it (common-size).
| Line Item | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 | FY2018 | FY2017 | FY2016 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $13.65B 100.0% | $13.82B 100.0% | $13.27B 100.0% | $12.79B 100.0% | $13.09B 100.0% | $11.63B 100.0% | $12.51B 100.0% | $11.88B 100.0% | $9.74B 100.0% | $8.58B 100.0% |
| Cost of Revenue | $8.39B 61.4% | $8.44B 61.1% | $7.92B 59.7% | $7.57B 59.2% | $7.77B 59.3% | $7.04B 60.5% | $7.65B 61.2% | $7.30B 61.5% | $5.94B 61.0% | $5.23B 61.0% |
| Gross Profit | $5.26B 38.6% | $5.38B 38.9% | $5.35B 40.3% | $5.22B 40.8% | $5.32B 40.7% | $4.59B 39.5% | $4.85B 38.8% | $4.57B 38.5% | $3.80B 39.0% | $3.35B 39.0% |
| Selling, General & Admin | $3.81B 27.9% | $3.76B 27.2% | $3.70B 27.9% | $3.54B 27.7% | $3.57B 27.3% | $3.27B 28.1% | $3.58B 28.6% | $3.35B 28.2% | $2.72B 27.9% | $2.36B 27.5% |
| Operating Income | $993.0M 7.3% | $1.15B 8.3% | $1.32B 10.0% | $1.58B 12.4% | $1.47B 11.3% | $986.0M 8.5% | $896.6M 7.2% | $882.2M 7.4% | $845.0M 8.7% | $763.4M 8.9% |
| Interest Expense | -$224.0M -1.6% | -$238.0M -1.7% | -$214.0M -1.6% | -$78.0M -0.6% | -$72.0M -0.6% | -$104.0M -0.9% | $138.5M 1.1% | $146.4M 1.2% | $101.6M 1.0% | $88.3M 1.0% |
| Other Income (Expense), net | $193.0M 1.4% | $219.0M 1.6% | $101.0M 0.8% | -$63.0M -0.5% | -$75.0M -0.6% | -$101.0M -0.9% | -$105.6M -0.8% | -$138.8M -1.2% | -$78.4M -0.8% | -$86.1M -1.0% |
| Pretax Income | $800.0M 5.9% | $926.0M 6.7% | $1.22B 9.2% | $1.52B 11.9% | $1.40B 10.7% | $885.0M 7.6% | $791.0M 6.3% | $743.4M 6.3% | $766.6M 7.9% | $677.3M 7.9% |
| Income Tax Expense | $204.0M 1.5% | $265.0M 1.9% | $304.0M 2.3% | $385.0M 3.0% | $331.0M 2.5% | $250.0M 2.1% | $215.3M 1.7% | $191.4M 1.6% | $235.6M 2.4% | $220.6M 2.6% |
| Net Income | $608.0M 4.5% | $693.0M 5.0% | $938.0M 7.1% | $1.15B 9.0% | $1.09B 8.3% | $638.0M 5.5% | $541.3M 4.3% | $480.1M 4.0% | $533.7M 5.5% | $464.0M 5.4% |
| Per Share | ||||||||||
| EPS (Basic) | $2.36 | $2.62 | $3.50 | $4.15 | $3.68 | $2.10 | $1.75 | $1.53 | $1.73 | $1.51 |
| EPS (Diluted) | $2.35 | $2.62 | $3.49 | $4.13 | $3.66 | $2.09 | $1.74 | $1.52 | $1.72 | $1.50 |
| Weighted Avg Shares (Basic) | 257.5M | 263.6M | 267.6M | 277.1M | 296.8M | 304.6M | 310.2M | 314.4M | 308.6M | 306.9M |
| Weighted Avg Shares (Diluted) | 257.8M | 263.9M | 268.3M | 278.0M | 297.7M | 305.0M | 311.0M | 315.8M | 310.6M | 309.8M |
Source: SEC EDGAR XBRL filings (annual, fiscal year). Quarterly flow items are derived from cumulative filings; balance-sheet figures are as-of each period end. Ratios and margins are computed, not reported.
How much the company owes, how it's trended, and how comfortably it's serviced.
Cash of $319.0M covers the $32.0M due within a year 10.0× over. Scheduled principal only (excludes interest & revolver draws). As of 2025-12-31 (10-K).
Insufficient EBITDA/debt history.
Green ≤ 1.5× · amber ≤ 3× · red > 3× (leverage relative to cash earnings).
Coverage is adequate but not comfortable.
Cash vs short-term debt unavailable.
Short-term / long-term split not separately reported.
Debt, cash, interest and equity from the SEC balance sheet & income statement. Effective rate = interest ÷ average debt. Maturity ladder from the SEC long-term-debt repayment schedule. Educational — not a recommendation.
Total return (dividends reinvested) vs the market, from quarter-end prices.
Above 0 = ahead of the S&P 500 since the window start; below 0 = behind. Rising means it's pulling ahead.
How far the stock fell below its prior peak. Deeper, longer drawdowns = a rougher ride to the same return.
Quarter-end, dividend-adjusted (total return). Beta & volatility from quarterly returns (annualized). Benchmark is the S&P 500 (SPY total return). Annual returns compound the quarters ending in each calendar year; the first and last years in a window may be partial. Past performance doesn't predict future results.
Last reported position per insider, carried forward. Steps can be a holding disclosed for the first time rather than a trade.
| Date | Insider | What it was | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-01 | Clark Michael S. SVP - Policy & Administration | Tax withholding | 1,047 | $24.80 | $26k |
| 2026-09-01 | Dombrowski Genevieve L SVP -- Human Resources | Tax withholding | 1,424 | $24.80 | $35k |
| 2026-09-01 | Cunningham Todd G VP, Finance and Controller | Tax withholding | 313 | $24.80 | $8k |
| 2026-09-01 | Galloway Rick SVP and CFO | Tax withholding | 2,683 | $24.80 | $67k |
| 2026-09-01 |
Every row is classified by what it MEANT, not by its SEC code. A code is not a meaning: code P (“purchase”) also covers dividend reinvestment and employee stock purchase plans, and code S (“sale”) also covers 10b5-1 plan sales scheduled months earlier and option exercises sold the same day.
Across 30 days of all filings, $5.08bn of insider selling contained $3.50bn of plan sales and $0.46bn of exercise-and-sell. Only 29% was discretionary. Reading an unclassified feed badly overstates how much insiders decided.
Buys and sales are counted separately and never netted. They are different decisions by different people; a company where one officer bought while another sold is not “neutral”.
The holding line carries each insider's last reported position forward, so it shows the total held rather than a sawtooth of whoever traded that day. It covers only insiders who filed in the window.
“Filed late” counts calendar days past the two-business-day deadline with five days' grace, so a Thursday or Friday trade crossing a weekend is never flagged. It describes the company's filing discipline, not the trade.
Insider activity is descriptive. Nothing here is investment advice.
Mckay Matthew J SVP - General Counsel |
| Tax withholding |
| 2,409 |
| $24.80 |
| $60k |
| 2026-09-01 | Meyne John R President of Wholesale - NA | Tax withholding | 2,484 | $24.80 | $62k |
| 2026-09-01 | Hamilton Andrew C President of LKQ Europe | Tax withholding | 5,192 | $24.80 | $129k |
| 2026-09-01 | Jude Justin L President and CEO | Tax withholding | 7,808 | $24.80 | $194k |
| 2026-09-01 | Hanley Walter P SVP - Development & Strategy | Tax withholding | 2,377 | $24.80 | $59k |
| 2026-07-14 | Galloway Rick SVP and CFO | Tax withholding | 314 | $25.19 | $8k |
| 2026-07-14 | Hamilton Andrew C President of LKQ Europe | Tax withholding | 83 | $25.19 | $2k |
| 2026-07-14 | Cunningham Todd G VP, Finance and Controller | Tax withholding | 443 | $25.19 | $11k |
| 2026-07-14 | Meyne John R President of Wholesale - NA | Tax withholding | 313 | $25.19 | $8k |
| 2026-05-06 | Berard Patrick Director | Tax withholding | 1,253 | $28.93 | $36k |
| 2026-05-06 | Mendel John W Director | Grant | 12,101 | $0.00 | $0 |
| 2026-05-06 | 2 co-filers Group filing | Grant | 2,744 | $28.93 | $79k |
| 2026-05-06 | Divitto Meg Director | Grant | 5,705 | $0.00 | $0 |
| 2026-05-06 | 2 co-filers Group filing | Grant | 5,705 | $0.00 | $0 |
| 2026-05-06 | Powell Michael Scott Director | Grant | 5,705 | $0.00 | $0 |
| 2026-05-06 | Metcalf James S Director | Grant | 5,705 | $0.00 | $0 |
| 2026-05-06 | Gove Sue Director | Grant | 5,705 | $0.00 | $0 |
| 2026-05-06 | 2 co-filers Group filing | Grant | 5,705 | $0.00 | $0 |
| 2026-05-06 | 2 co-filers Group filing | Tax withholding | 1,253 | $28.93 | $36k |
| 2026-03-02 | Meyne John R President of Wholesale - NA | Tax withholding | 2,485 | $32.50 | $81k |
| 2026-03-02 | Hanley Walter P SVP - Development & Strategy | Tax withholding | 3,348 | $32.50 | $109k |
| 2026-03-02 | Hamilton Andrew C President of LKQ Europe | Tax withholding | 5,192 | $32.50 | $169k |
| 2026-03-02 | Cunningham Todd G VP, Finance and Controller | Tax withholding | 351 | $32.50 | $11k |
| 2026-03-02 | Clark Michael S. SVP - Policy & Administration | Tax withholding | 1,600 | $32.50 | $52k |
| 2026-03-02 | Dombrowski Genevieve L SVP -- Human Resources | Tax withholding | 1,767 | $32.50 | $57k |
| 2026-03-02 | Galloway Rick SVP and CFO | Tax withholding | 3,512 | $32.50 | $114k |
| 2026-03-02 | Mckay Matthew J SVP - General Counsel | Tax withholding | 3,099 | $32.50 | $101k |
| 2026-03-02 | Jude Justin L President and CEO | Tax withholding | 8,891 | $32.50 | $289k |
| 2026-02-20 | 2 co-filers SVP - Development & Strategy | Grant | 21,606 | $0.00 | $0 |
| 2026-02-20 | 2 co-filers SVP - Policy & Administration | Grant | 9,003 | $33.33 | $300k |
| 2026-02-20 | 2 co-filers VP, Finance and Controller | Grant | 5,252 | $33.33 | $175k |
| 2026-02-20 | 2 co-filers SVP - General Counsel | Grant | 25,507 | $33.33 | $850k |
| 2026-02-20 | 2 co-filers SVP and CFO | Grant | 29,258 | $33.33 | $975k |
| 2026-02-20 | 2 co-filers President and CEO | Grant | 97,525 | $33.33 | $3.3m |
| 2026-02-20 | 2 co-filers SVP -- Human Resources | Grant | 16,205 | $33.33 | $540k |
| 2026-02-20 | 2 co-filers President of LKQ Europe | Grant | 25,507 | $33.33 | $850k |
EOD close · as of 2026-10-30
Where each multiple sits in its own 14-yr range · 0th pct blended
Dot = today · shaded = middle 50% · line = median. Lower percentile = cheaper vs its own 14-yr history.
Is the profit real, and how strong is the balance sheet?
FY2025 · every deduction from revenue to net income
DuPont — the three levers
ROE 9% against ROIC 9% — 0% of the return on equity comes from leverage and buybacks rather than from the operating business.
What the company owes vs. what it holds
This shows debt/cash structure and net leverage. The year-by-year maturity schedule is on the Debt & Leverage tab.
Latest year: profit growth vs revenue growth
High operating leverage: profit moved 10.7× as fast as sales — great in an upturn, painful in a downturn.
Each line as % of revenue — the trend in color
| % of revenue | FY2018 | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|---|---|
| Cost of Revenue | 61.5 | 61.2 | 60.5 | 59.3 | 59.2 | 59.7 | 61.1 | 61.4 |
| Gross Profit | 38.5 | 38.8 | 39.5 | 40.7 | 40.8 | 40.3 | 38.9 | 38.6 |
| SG&A | 28.2 | 28.6 | 28.1 | 27.3 | 27.7 | 27.9 | 27.2 | 27.9 |
| Operating Income | 7.4 | 7.2 | 8.5 | 11.3 | 12.4 | 10.0 | 8.3 | 7.3 |
| Income Tax | 1.6 | 1.7 | 2.1 | 2.5 | 3.0 | 2.3 | 1.9 | 1.5 |
| Net Income | 4.0 | 4.3 | 5.5 | 8.3 | 9.0 | 7.1 | 5.0 | 4.5 |
Green = margin-favorable vs the row's own range · red = unfavorable.
The metrics that matter, over time
A 30-second read on LKQ: price, valuation and headline fundamentals from SEC filings. The four questions at the top of the page are where the judgements live.
Ranked against 19 sector peers with collected financials. Valuation from latest close × latest fiscal-year fundamentals; 13F conviction as of 2026-09-30.
Percentile is “goodness” within the peer set (100 = best). For valuation and leverage that means cheaper / less-levered ranks higher.
| Company | Mkt cap ▼ | P/E | EV/EBITDA | P/S | Rev gr | Gross | Net | ROE | ROIC | Net D/EBITDA | 13F |
|---|---|---|---|---|---|---|---|---|---|---|---|
| AIT | $10.7B | 26.9× | 18.9× | 2.2× | 8.8% | 30.3% | 8.3% | 22.3% | 19.5% | 0.2× | 153 |
| ARW | $10.6B | 19.1× | 13.9× | 0.3× | 10.5% | 11.2% | 1.9% | 8.7% | 5.9% | 2.9× | 140 |
| HSIC | $9.5B | 26.0× | 10.4× | 0.7× | 4.0% | 31.1% | 3.0% | 12.3% | 9.9% | 0.6× | 149 |
| CNM | $8.2B | 19.2× | 11.0× | 1.1× | 2.8% | 26.9% | 5.8% | 22.1% | 10.6% | 2.1× | 85 |
| POOL | $7.4B | 19.0× | 13.7× | 1.4× | -0.4% | 29.7% | 7.7% | 34.3% | 17.0% | 1.9× | 117 |
| AVT | $7.3B | 22.0× | — | 0.3× | 24.5% | 10.4% | 1.2% | 6.7% | 4.1% | — | 138 |
| MSM | $6.8B | 30.4× | 17.7× | 1.7× | 6.4% | 40.9% | 5.6% | 15.6% | 11.7% | 1.0× | 113 |
| INGM | $6.5B | 20.4× | 7.3× | 0.1× | 9.5% | 6.7% | 0.6% | 7.7% | 4.4% | 1.2× | 33 |
| SITE | $4.8B | 32.9× | — | 1.0× | 3.6% | 34.8% | 3.2% | 9.1% | 7.4% | — | 74 |
| LKQ | $4.7B | 7.9× | 3.1× | 0.3× | -1.2% | 38.6% | 4.5% | 9.3% | 9.3% | -0.2× | 114 |
| REZI | $2.8B | — | 7.9× | 0.4× | 10.5% | 29.4% | -7.1% | -18.1% | -8.6% | 3.7× | 101 |
| BCC | $2.8B | 22.3× | 8.0× | 0.4× | -4.8% | — | 2.1% | 6.4% | 5.3% | -0.1× | 62 |
| DXPE | $2.7B | 32.5× | 17.3× | 1.3× | 11.9% | 31.5% | 4.4% | 17.8% | 6.7% | 2.8× | 61 |
| PLUS | $2.4B | 18.5× | 10.4× | 1.0× | 22.1% | 25.2% | 5.4% | 12.4% | 12.4% | -2.1× | 62 |
| CNXN | $2.2B | 26.6× | 18.2× | 0.8× | 2.5% | 18.8% | 2.9% | 9.2% | 9.2% | -1.8× | 49 |
| GIC | $1.7B | 23.4× | 15.1× | 1.2× | 4.8% | 35.5% | 5.2% | 23.0% | 23.0% | -0.6× | 26 |
| DSGR | $1.6B | 194.3× | 14.2× | 0.8× | 9.8% | 33.4% | 0.4% | 1.3% | 0.6% | 4.0× | 25 |
| RYZ | $1.6B | — | 32.4× | 0.3× | -0.6% | 17.1% | -1.2% | -7.5% | -7.5% | -0.5× | — |
| SCSC | $1.2B | 15.8× | 9.7× | 0.4× | 6.1% | 13.6% | 2.4% | 8.7% | 7.8% | 0.1× | 46 |
| GOLD | $1.1B | 12.6× | 7.6× | 0.0× | 132% | 1.8% | 0.3% | 9.4% | 9.4% | 0.0× | 37 |
Peers = companies sharing LKQ's sector (Wholesale-Motor Vehicles & Motor Vehicle Parts & Supplies) with collected SEC financials. Multiples use the most recent end-of-day close and latest fiscal-year fundamentals (trailing, not forward). Missing cells mean the peer never reported that line item, has no collected price, or has a non-positive denominator. Not investment advice.
The spread has compressed 3 years running.
| Period | ROIC | Cost of capital | Spread |
|---|---|---|---|
| FY2019 | 10.3% | 3.7% (today's — no rate published for this year) | 6.7pts |
| FY2020 | 10.2% | 3.7% (today's — no rate published for this year) | 6.5pts |
| FY2021 | 15.0% | 6.0% | 9.0pts |
| FY2022 | 17.2% | 5.6% | 11.6pts |
| FY2023 | 12.8% | 4.0% | 8.9pts |
| FY2024 | 11.4% | 3.9% | 7.4pts |
| FY2025 | 9.2% | 2.9% | 6.3pts |
| Now | 9.3% | 3.7% | 5.6pts |
| Fiscal year | Gross margin | Operating margin | Net margin |
|---|---|---|---|
| FY2016 | 39.0% | 8.9% | 5.4% |
| FY2017 | 39.0% | 8.7% | 5.5% |
| FY2018 | 38.5% | 7.4% | 4.0% |
| FY2019 | 38.8% | 7.2% | 4.3% |
| FY2020 | 39.5% | 8.5% | 5.5% |
| FY2021 | 40.7% | 11.3% | 8.3% |
| FY2022 | 40.8% | 12.4% | 9.0% |
| FY2023 | 40.3% | 10.0% | 7.1% |
| FY2024 | 38.9% | 8.3% | 5.0% |
| FY2025 | 38.6% | 7.3% | 4.5% |
Return on equity (9%) and return on invested capital (9%) are within a couple of points in FY2025, so the headline return is the operating return — there is no meaningful leverage effect to strip out.
$5.4B of goodwill — 68% of invested capital. The gap is what was paid above the fair value of what was bought; it is real capital shareholders provided, so neither bar is the whole answer. With goodwill over half the base, the ex-goodwill figure divides by a small remainder and moves sharply — read it as a direction, not a precise rate.
ROIC ex-goodwill is 28.96% against 9.27% reported — the return is earned on a capital base inflated by what was paid for acquisitions, not by the operating business alone.
Converts 1.10x of reported profit into free cash flow over 5 years, with accruals negative.
The cash conversion cycle could not be computed — receivables, inventory or cost of revenue is not reported — so the earliest accrual warning is not part of this verdict.
Stressed coverage falls to -3.1x — below the level at which interest is reliably covered.
| EBITDA decline | Interest coverage |
|---|---|
| 0% | -4.43x |
| 5% | -4.21x |
| 10% | -3.99x |
| 15% | -3.77x |
| 20% | -3.55x |
| 25% | -3.32x |
| 30% | -3.10x |
| 35% | -2.88x |
| 40% | -2.66x |
| 45% | -2.44x |
| 50% | -2.22x |
| 55% | -1.99x |
| 60% | -1.77x |
Ladder as of 2025-12-31 (10-K); cash from the 2025-12-31 balance sheet; FCF from FY2025.
Balance sheet at 2025-12-31. Undrawn revolving credit is not shown: the tag is collected but not yet mapped through to the API.
Operating leases are $1,504,000,000 of the $1,504,000,000 total — a fixed obligation that does not appear in a headline debt figure.
At $18.56, free cash flow must compound -7.8%/yr for 10 years. It has done 0.99%/yr over 6 years.
| Fiscal year | FCF growth | Price requires |
|---|---|---|
| FY2020 | 59.2% | −7.8% |
| FY2021 | −15.5% | −7.8% |
| FY2022 | −4.3% | −7.8% |
| FY2023 | −2.9% | −7.8% |
| FY2024 | −18.8% | −7.8% |
| FY2025 | 4.6% | −7.8% |
The percentile ranks the FISCAL-YEAR point, because the distribution behind each strip is built from fiscal-year closes — ranking a TTM figure inside it would compare two different bases. TTM basis: TTM.
The cost of capital could not be computed for this company, so the requirement is solved at the published 10% default — a different rate would move it materially.
| Step | Amount | Running total |
|---|---|---|
| Net income | $608M | $608M |
| Share-based comp | $34M | $642M |
| Other non-cash & working capital | $421M | $1.06B |
| Operating cash flow | $1.06B | $1.06B |
| Capex | −$216M | $847M |
| Free cash flow | $847M | $847M |
| FCF after SBC | $813M | $813M |
| Fiscal year | Revenue growth | Receivables growth | Gap |
|---|---|---|---|
| FY2020 | -7.0% | not reported | not reported |
| FY2021 | 12.6% | not reported | not reported |
| FY2022 | -2.3% | not reported | not reported |
| FY2023 | 3.7% | not reported | not reported |
| FY2024 | 4.2% | not reported | not reported |
| FY2025 | -1.2% | not reported | not reported |
| Fiscal year | Accruals / assets |
|---|---|
| FY2019 | -4.1 percent |
| FY2020 | -6.5 percent |
| FY2021 | -2.2 percent |
| FY2022 | -0.8 percent |
| FY2023 | -2.8 percent |
| FY2024 | -2.9 percent |
| FY2025 | -3.0 percent |
Below the line, the asset base is being consumed faster than it is replaced.
Below the line for 2 consecutive years to the latest.
Depreciation here includes amortisation of acquired intangibles — goodwill written down over time, customer lists, acquired technology. Capex does not replace those and is not meant to, so an acquisitive or asset-light company sits below 1.0 permanently and correctly. The signal is cleanest for capital-intensive businesses, where the two measure the same physical base. For that reason this informs the earnings-quality verdict but never caps it.
SBC is added back inside operating cash flow, so reported free cash flow treats shares issued to employees as free. Percent of revenue says how expensive the payroll is; percent of operating cash flow says how much of the cash exists only because the charge was added back. The buyback offset is buybacks over SBC — below 1.0 the repurchase does not cover the shares issued.
Figures are the latest fiscal year (FY2025) from the company's own filings, not a trailing-twelve-month window — Q2 reads fiscal years throughout so the cash-conversion ratios and these share one basis. A blank is a line the filer did not report; it is never read as zero.