O REILLY AUTOMOTIVE INC Segments Disclosure
NOTE 2 – SEGMENT REPORTING
The Company conducts its operations in the U.S., Canada, and Mexico, and collectively this represents its operating segment, referred to as its automotive aftermarket parts segment, which is its only . There have been no changes in the determination of segmentation or the measurements used to determine reported segment net income during the year ended December 31, 2025. The measure of segment assets is reported as “Total assets” on the accompanying Consolidated Balance Sheets as of December 31, 2025 and 2024. At December 31, 2025 and 2024, the Company’s consolidated long-lived assets were located primarily in the United States and consolidated revenue was primarily generated within the United States for the years ending December 31, 2025, 2024 and 2023, with immaterial assets and revenues associated with international operations.
The table below identifies the Company’s significant segment expenses regularly provided to the chief operating decision maker that are included in reported segment profit or loss, which is consolidated net income, for the years ended December 31, 2025, 2024 and 2023 (in thousands):
For the Year Ended | ||||||||||
December 31, | ||||||||||
2025 | 2024 | 2023 | ||||||||
Automotive aftermarket parts segment: | ||||||||||
Sales | $ | 17,781,992 | $ | 16,708,479 | $ | 15,812,250 | ||||
Cost of goods sold, including warehouse and distribution expenses | 8,607,851 | 8,153,990 | 7,707,447 | |||||||
Gross profit | 9,174,141 | 8,554,489 | 8,104,803 | |||||||
Less: | Team Member compensation expense (1) | 3,587,196 | 3,334,574 | 3,139,448 | ||||||
Rent expense (2) | 461,744 | 429,686 | 402,572 | |||||||
Depreciation and amortization expense | 415,209 | 372,878 | 333,678 | |||||||
Advertising expense | 91,061 | 90,744 | 85,706 | |||||||
Other segment items (3) | 1,143,696 | 1,058,995 | 936,981 | |||||||
Interest expense | 235,064 | 222,548 | 201,668 | |||||||
Provision for income taxes | 701,962 | 658,384 | 658,169 | |||||||
Consolidated net income | $ | 2,538,209 | $ | 2,386,680 | $ | 2,346,581 | ||||
(1) | Team Member compensation expense derived from selling, general and administrative expenses included in Segment net income includes payroll expense, benefits and withholdings expense, share-based compensation expense, and nonqualified deferred compensation expense. |
(2) | Rent expense derived from selling, general and administrative expenses included in Segment net income includes rent and common area maintenance expense. |
(3) | Other segment items included in Segment net income includes vehicle expenses, utilities expense, real estate taxes and insurance expense, bad debt and banking fees expense, interest income, and other operating expenses. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.