Copart reports fourth-quarter 2026 results

On Thursday, Copart (NASDAQ: CPRT ) discussed fourth-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Copart's revenue for Q4 2026 was $1.2 billion, a 2.4% increase year over year, with fiscal year revenue at $4.7 billion, up 0.4%. The company is focusing on three pillars for growth: international expansion, domestic whole car expansion, and investment in technology and services. Copart announced the acquisition of ACV, a digital automotive marketplace, expected to be accretive to earnings in the first full year. Global unit sales declined 2.9%, with domestic sales down 5.7% and international sales up 10%.

Operating expenses per car increased by 12.7%, with efforts underway to address cost management. Management is optimistic about the integration of ACV, citing cultural alignment and strategic benefits. International operations showed strong performance with a 10% increase in units sold, driven by UK and Canadian operations. Full Transcript OPERATOR Good day everyone and welcome to Copart fourth quarter fiscal 2026 earnings call.

Just a reminder, today's conference is being recorded. Before turning the call over to management, I will share Copart's safe harbor statement. The Company's comments today include forward-looking statements within the meaning of the federal securities laws, including management's current views with respect to trends, opportunities, and uncertainties in the Company's industry. These forward-looking statements involve substantial risks and uncertainties.

For more detail on the risks associated with the Company's business, we refer you to the section titled Risk Factors in the Company's annual report on Form 10-K for the year ended July 31, 2025 and each of the Company's subsequent quarterly reports on Form 10-Q. Any forward-looking statements are made as of today and the Company has no obligation to update or revise any forward-looking statements. I will now turn the call over to the Company's CEO and Executive Chairman, Jay Adair. Jay Adair, Executive Chairman All right, thank you.

Well, welcome everyone to the fourth quarter earnings call for 2026. I've got some prepared remarks that I'll talk to and then I will turn it over to Leah Stearns, our CFO, and then we will open it up for questions. So I'll remind you that on the prior call I talked about the three pillars of growth for Copart. We will continue to focus on international expansion, on insurance, we'll continue to focus on whole car expansion domestically, and then we'll continue to invest in technology and services that assist all of our customers.

Additionally, we view the differentiators for Copart as, one, we are a business that is run by founders and that has a founder's mindset. We don't think in quarters or years, we think in decades. Very long term. Number two, I would say liquidity.

When you think about how our website functions, we are constantly focused on improving buyer activity and I'll talk more about some of the buyer data that we've got. But that liquidity continues to be a differentiator and then in the spirit of acting like a startup, we are very fast, we're moving very quickly and we're bringing products and services to market in quarters, not in years. So we expect to have some of that coming out in the next four quarters. Looking at global unit sales, we were down across the company 2.9%.

Domestically, that was down 5.7%. Internationally we were up 10%. Global insurance units were down 4.2%, with domestic insurance being down 7.5 and international insurance being up 11.2. With the exception of one single customer loss, domestic insurance assignments would be up 2.3%.

Collision claim frequency, we are down 3.4% year over year. This is a moderation from a high of single-digit declines through 2025. Total loss frequency reached 23.3% in the second quarter of 2026, the highest second quarter on record, up from 22.4% in the same quarter last year. Looking at severity, average collision severity was over $6,300 per claim, up nearly 8.8% year over year, fastest in more than three years and the fourth straight quarter of acceleration.

Repair costs are up more than 50% from 2019 levels per data from CCC. Looking at rental car rates, and that's something that obviously increases the cost of repair for insurers, that rose by 4.5% year over year. Obviously every additional day of repair and any costs associated with that increase the total cost of repair. Turning to the complexity of vehicles, I recently had a conversation with a client friend of mine that was talking about how complex cars are.

And there was a recent article by Parametric Technology Corporation that pointed out a military drone has 3.5 million lines of code, an Airbus aircraft has 30 million lines of code, and the Windows 10 operating system has 50 million lines of code. What makes this interesting is that a new Tesla has approximately 100 million lines of code. So when we think about cars, they really are becoming computers on wheels. We believe total loss frequency will continue to go up.

Vehicle miles traveled were up 0.27% year over year in the fourth quarter of 2026. Vehicles in operation, or what we refer to as the car park, was up 1.6% year over year in calendar quarter two, 2026. Looking at insurance ASPs, globally we were up 3.1% year over year in 4Q26. Domestically we were up 3.7% year over year in 4Q26.

And internationally we were up 3.3% year over year in 4Q26. Turning to the Mannheim Used Vehicle Value Index, it was up 2.8% year over year in 4Q26. So we are outpacing the Mannheim index. As we stated before, liquidity comes from buyers.

And so I'd like to give you some statistics now on why we believe and others believe that we have the greatest liquidity in the industry. Vehicles sold to buyers less than a year. This means that one year or more ago that buyer was not buying from Copart, was likely not aware of Copart. Vehicles that have been sold to buyers less than a year for 2026 were 8.9% of our total vehicles.

That number for fiscal year 25 was 8.3%. So we've seen nice growth there. Expanding it out an additional year, vehicles sold to buyers that have been with Copart less than two years for 2026, our total sales, they represented 21.7% of our vehicles. Now I'd like to turn to vehicles sold in the U.S.

to international buyers. These are buyers outside the U.S. Total units sold in fiscal year 26 represent 38.2% of our units. However, more importantly, the dollars purchased, the amount of dollars that were spent on the vehicles that we sold, represented 45.7% of the total amount of dollars that we sold in the vehicle.

So they're obviously buying a more valuable vehicle when they're purchasing it internationally. On the previous call, I spoke to AI and I think about AI as a very important differentiator for Copart. As we stated, we'll continue to lower costs through automation. This is an important part of our journey and we're very focused on that.

But I think even more important is using AI to create more demand for the vehicles that we're selling. The ability for a buyer to find that vehicle and to find a vehicle that matches their desired purchase is becoming more and more important every single day. So if you think about the journey of becoming aware of Copart, then signing up, becoming a member, and then from membership to bidding, and then to buying, us connecting that buyer to that vehicle we believe is more important than ever. And then finally, I think about accuracy.

Every time that we can automate something and use AI, we eliminate errors and improved accuracy is one of our core tenets in Copart, in continuing to make sure that we have less and less opportunity for mistakes. Looking at OPEX per car in Q4 26 versus Q4 25, we are up 12.7%. Leah will talk more about expense control. My point is that we are focused on it.

We are going to be working towards reducing our costs on a per-car basis. Finally, let me close by talking about our most recent announcement. We have agreed to acquire ACV, one of the largest primarily digital automotive marketplaces in the country. ACV sells more than 800,000 vehicles each year and, importantly, operates with virtually no land of its own.

We are excited about using our locations as staging areas for their vehicles and combining our global buyer base with their digital marketplace and remarketing technology. Copart and ACV are highly complementary. We bring physical scale, deep institutional relationships, salvage expertise, and international buyer demand. With more than 275 locations, over 4 million vehicles sold a year, and approximately 1 million members across more than 185 countries, ACV brings dealer liquidity and relationships and inspections and valuation technology, transacting approximately 10 billion of gross merchandise value in 2025 across more than 22,000 active buyers.

Together, Copart and ACV create a more complete automotive marketplace, connecting the right vehicle to the right buyer through the right channel without forcing every vehicle into a single operating model. For dealers, that means one partner to value, manage, and dispose of virtually every used vehicle they touch. For commercial consignors like banks, rental car companies, fleet and leasing companies, it means one national relationship across multiple disposition channels, optimizing net proceeds. For buyers, it means unparalleled wholesale selection at every price point with integrated transportation and complete vehicle marshaling.

Copart has a very strong track record of driving strong return on invested capital across the businesses it has acquired and we view this transaction in the same framework as our past acquisitions. We expect the transaction to be accretive to earnings in the first full year and we will provide more details after it closes. We are excited about ACV's people-first culture, which fits naturally with our own culture. This is an all-cash transaction funded from cash on hand with no financing conditions.

It's structured as a tender offer which supports a relatively quick and clean path to closing. It is subject to the customary conditions you would expect, including regulatory review. Both boards have unanimously approved the transaction. We expect to close by the end of the calendar year and ACV will operate as an independent subsidiary led by its existing team.

I will obviously explain more after the close. With that, let me hand it over to Leah, our CFO, who will give you an update on the numbers and then we will open it up for questions. Leah Stearns, Chief Financial Officer Thank you, Jay, and good afternoon to everyone on the call. I will lead today with our financial results and per unit economics for the fourth quarter and fiscal year 2026.

Then I'll walk you through our U.S. and international segments and close with capital structure and liquidity highlights. For the fourth quarter, consolidated revenue grew to $1.2 billion, up 2.4% year over year, driven by the strength in both service revenues and purchased vehicle sales. Global service revenue increased more than $13 million, or 1.4%, and global purchased vehicle sales increased $14 million, or 8.3%.

For fiscal year 2026, revenue was $4.7 billion, up 0.4%, with service revenue up $1 million, which was primarily due to increased international volumes and higher revenue per unit. As a reminder, FY25 included the benefit of Hurricanes Helene and Milton. Excluding the impact of these storms, FY26 total revenue grew 2.4%. Finally, purchased vehicle sales were up $18.4 million during the quarter, or approximately 2.7% on a per unit basis.

Fourth quarter revenue per unit increased 5.4% and approximately 5.7% for the full year. Average selling prices continue to expand across the platform, with global ASPs increasing 3.5% versus the prior-year quarter and 5.5% for the full year. We believe that continued growth in our ASPs reflects the strength of our auctions, as our global auction liquidity continues to deliver superior outcomes for our sellers. Global gross profit for the quarter was $481 million, a decrease of $28 million, or 5.5%, with gross margin of 41.8%.

Our gross profit declines primarily reflect the impact of costs associated with our continued investment across new products and services, including long-haul delivery, Title Express, and our dedicated wholesale facilities in the U.S. For the fiscal year, gross profit was $2.1 billion, down $15.8 million, or 0.8%, and was flat when you exclude the impact of CAT events in 2025. Gross margin was 44.7% for the full year. Fourth quarter operating income decreased 10.6% to $368.9 million, and for the fiscal year operating income decreased 2.6% to $1.7 billion.

Fourth quarter net income attributable to Copart decreased 17.4% to $327.4 million, or $0.35 per diluted common share, which was down 14.6%. As a reminder, we had a one-time $13 million gain on the disposal of assets in the fourth quarter of 2025. This, combined with lower interest income in the fourth quarter of 2026, which was a result of our deployment of $1.63 billion into share repurchases earlier in the fiscal year, contributed to the year-over-year decline in net income. For the fiscal year, net income attributable to Copart decreased 4.4% to $1.48 billion, or $1.55 per diluted common share.

On a global basis, total fourth quarter sold units declined 2.9% year over year, while fiscal 2026 units sold declined 5.5% or 3.1%. Excluding CAT units for the quarter, global assignment volumes decreased 2.2%, and as of year end global inventory was down 1% from the year-ago period. Turning to our U.S. segment, total revenue was up 0.4% in the quarter as higher revenue per unit largely offset a decline in volume.

U.S. service revenue decreased less than 1% for the quarter and less than 2% for the full year, with the full-year decline primarily related to the one-time revenue associated with Hurricanes Helene and Milton, which was recognized in fiscal 25, and offset by an increase in revenue per car. U.S. purchased vehicle revenue was up $11.1 million, or 10.9%, in the quarter, with purchased vehicle gross profit up half a million, or 8.7%.

For the fiscal year, U.S. purchased vehicle revenue increased $15.6 million, or 3.9%, and purchased vehicle gross profit increased $2.7 million, or 10.5%. For the full year, U.S. purchased unit margins were 6.7%, representing an increase of 40 basis points compared to fiscal 25.

U.S. facility-related costs increased $30 million, or 7.7%, in the fourth quarter, which is a 14.2% increase on a per unit basis and again reflects the ongoing investments I referenced earlier. For the full fiscal year, U.S. facility-related costs decreased $11.8 million, or 0.7%, while increasing 6.6% on a per unit basis.

We continue to invest across our U.S. business on behalf of our sellers and members to enhance the products and services we offer. That being said, cost management is an equally important component of our long-term strategy, and we believe we can execute on both dimensions. We are focused on managing our facility costs down on a per unit basis through focused cost management.

Across the company, U.S. gross profit was $403.8 million, down 8.3% for the quarter and down 2.7% for the fiscal year, with gross margin of 43.4% for the quarter and 46.8% for the full year. Our U.S. operating income was $312.2 million, reflecting a 33.6% operating margin.

The quarter total fourth quarter units sold declined 5.7% and 6.9% for the fiscal year 2026. U.S. insurance volumes decreased 7.5% in the quarter and 8% for the fiscal year, which is primarily a result of the industry trends around claims frequency which Jay described a few moments ago. Beyond insurance, our diversified seller base is showing signs of inflection.

While our U.S. non-insurance unit volume declined 3.9% for the full fiscal year, which was primarily a result of lower Copart Direct units, our non-insurance unit volume returned to modest growth in the fourth quarter, up 0.2%, marking a strong sequential improvement which we believe reflects the traction of our commercial and dealer initiatives. Our dealer units grew 5.8% in the quarter and 3.9% for the year.

Blue Car, which serves our bank, rental, and fleet partners, expanded nearly 20% over the prior-year quarter and 2.4% for fiscal 2026, with continued double-digit growth across our bank and fleet customers, and Copart Direct unit volume declined 11.7% in the quarter, or 34.5% for the fiscal year, as we continue to optimize our principal unit strategy. U.S. inventory was down 3.4% year over year, with the three main drivers being the decline in assignments of 5%, faster cycle times experienced by our customers, and the reduction in overall aged inventory in the U.S. ASPs increased 4.2% in the quarter, with full-year ASPs increasing 5.5%.

U.S. insurance ASPs increased 3.7%, or 5.5% for the full year. U.S. non-insurance ASPs increased 5.9% in the quarter, or 5.6% for the full year, and were led by bank and finance seller ASPs, which were up 12.4% year to date, with Copart Direct ASPs increasing 29.2%.

Turning to our international segment, fourth quarter revenue grew 11.7% to $222.1 million. The primary source of growth was service revenues, up 15.5% for the quarter and 12.4% for the year, driven by a 3.5% increase in fee revenue per unit and volume growth. International purchased vehicle revenue increased $2.9 million, or 4.4%, in the quarter, while purchased vehicle gross profit decreased $3.4 million, or 22.1%. For the full year, international purchased vehicle revenue increased $2.8 million, or 1%, and purchased vehicle gross profit increased $2.3 million, or 4.5%.