AutoZone’s QQ3 2025 results show solid top-line momentum and sustained margin discipline, underscored by a revenue increase of 5.4% year over year to $4.464 billion and a gross margin of 52.7%. Net income rose sequentially on a QoQ basis, delivering $608.4 million and EPS of $36.33 (diluted $35.36). EBITDA stood at $1.01 billion with an EBITDA margin of 22.6%, while operating income was $866.2 million (operating margin ~19.4%). The company generated operating cash flow of $769.0 million and free cash flow of $423.1 million, supporting a substantial share repurchase program ($268.8 million) alongside a moderate equity issuance ($46.7 million).\n\nHowever, the quarter also highlights leverage and balance sheet considerations. Net debt stood at approximately $11.92 billion with cash and cash equivalents of about $268.6 million, resulting in a low liquidity cushion relative to the scale of debt. Total liabilities ($22.60 billion) exceeded total assets ($18.62 billion), yielding negative reported stockholders’ equity of about $(3.97) billion. These dynamics underline a disciplined cash-flow generation story but warrant close monitoring of leverage, balance sheet resilience, and debt maturity risk. The backdrop remains a favorable secular tailwind for automotive aftermarket parts, supporting a constructive but cautious investment stance given the balance sheet position and ongoing capital allocation choices.