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    CPRT
    Earnings call· Apr 2026(Q3 FY26)

    COPART Q3 FY26 earnings call CPRT

    May 21, 2026 Source

    Executive summary

    Copart Q3 FY26 — Record ASPs and Strong International Growth Offset Volume Headwinds

    Copart delivered solid Q3 FY26 results, leveraging its diversified global marketplace and strong auction liquidity to achieve record average selling prices and robust international growth. Despite cyclical headwinds impacting U.S. insurance unit volumes and claims frequency, the company's strategic investments in technology and infrastructure, coupled with a broad international buyer base, continue to drive superior auction returns and expand its non-insurance business. Management remains confident in its long-term growth algorithm and capital allocation strategy.

    Highlights

    5

    • Consolidated revenue grew 2.1% to $1.24 billion.

    • Global gross profit increased 3.7% to $572.6 million, with gross margins up 71 bps to 46.3%.

    • U.S. insurance ASPs increased 4.1% year-over-year, reaching a seasonally adjusted all-time record high.

    • International revenue grew 14.1% (7.9% ex-FX) to $234.2 million, driven by 11.2% non-insurance unit growth.

    • Purple Wave GTV grew over 25% for the last 12 months.

    Concerns

    4

    • Global insurance unit sales declined 2.7% (1.9% ex-catastrophic volume).

    • U.S. insurance unit volume declined 4.2% (3% ex-catastrophic volume).

    • U.S. inventory was down 4.7% year-over-year, and U.S. assignments declined at a low single-digit pace.

    • Copart direct unit volume declined 26.3% due to strategic shift to direct buy channel.

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Consolidated
    Strong consolidated performance driven by ASP expansion offsetting unit volume declines. Gross margins expanded by 71 basis points.
    Average selling prices: 4.6% increaseUnit volumes: 2.4% declineGlobal insurance units: 2.7% declineGlobal non-insurance units: 1.4% declineGlobal inventory: 2% declineGlobal assignment volumes: low single-digit pace growth
    		$1.24 billion2.1%—Gross profit: $572.6 million, 46.3% gross margin
    U.S.
    Higher revenue per unit largely offset volume headwinds. Non-insurance channels showed encouraging momentum despite overall unit declines.
    Total units: 4.2% declineTotal units (ex-Copart direct): 3.3% declineInsurance volumes: 4.2% declineDealer Services and powersports units: 1% growthBluCar commercial consignment units: over 4% growthCombined fleet and finance seller volume: healthy double-digit pace growthCopart direct unit volume: 26.3% declineU.S. inventory: 4.7% declineU.S. assignments: low single-digit pace declineInsurance ASPs: 4.1% increaseNon-insurance ASPs: 3.7% increasePurchased unit ASPs: 23% increaseOperating income: $390.4 million, 38.1% operating margin
    		essentially flat-0.4%—Gross profit: $484.1 million, 48.3% gross profit margin
    International
    Continued momentum with broad-based growth, particularly strong contributions from the U.K., Germany, and Canada. Service revenues were up 17.9%.
    Total units sold: 5.9% increaseInsurance units: 4.6% increaseNon-insurance units: 11.2% increaseInventory: over 10% increaseAssignments: low teens pace increaseFee revenue per unit: 10.5% increaseInsurance ASPs: 8.4% increaseNon-insurance ASPs: 16.7% increaseOperating income: $73.8 million, 31.5% operating margin
    		$234.2 million14.1%—Gross profit: 21.9% increase

    Operational metrics

    15
    Operating income growth
    2.8%YoY
    Q3 FY26

    Operating income grew to $464.3 million.

    U.S. Gross profit growth
    0.9%YoY
    Q3 FY26

    U.S. gross profit grew to $484.1 million.

    Net income
    $402.4 million
    Q3 FY26
    Earnings per diluted share
    $0.432.4% increase YoY
    Q3 FY26

    Benefiting in part from ongoing share repurchase activity.

    Liquidity
    $5.5 billion
    Q3 FY26 end

    Copart remains in an exceptionally strong financial position with no debt.

    Shares repurchased
    43.4 million
    FY26 YTD

    Repurchased through a combination of 10b5-1 and open market transactions.

    Total loss frequency
    23.6%almost 5 percentage points increase over 4 years
    Q1 CY26

    Underlying forces are rising repair costs and increasing auction returns at Copart. Copart actively helps drive this upwards.

    Earned car years decline
    4%YoY
    Q4 CY25

    According to ISS Fast Track, indicating consumer pullback on insurance coverage.

    Vehicles in operation growth
    1.4%YoY
    Q4 CY25

    Divergence with declining insurance coverage is clear evidence of consumer pullback.

    Self-pay repairs
    25%
    current

    CCC data, indicating consumers absorbing more financial burdens. CCC created a Buy Now, Pay Later product in response.

    International buyers contribution to volume
    over 1/3
    Q3 FY26

    Critical driver of auction returns, representing nearly half of auction proceeds.

    Pure sale units mix
    all-time highs
    Q3 FY26

    Insurance carriers have moved to a nearly 100% pure sale approach, recognizing Copart's liquidity. This is not contractual.

    Non-insurance vehicle value examples
    —
    current

    Vehicles that are drivable and worth $5,000, $10,000, $15,000, $20,000 plus are increasingly sold through Copart, expanding the addressable market.

    Purple Wave GTV growth
    over 25%YoY
    LTM

    Driven by territory expansion and deepening relationships with enterprise accounts. Team size is 2.5 to 3x what it was at acquisition.

    Long-haul delivery product cost increase
    $15 millionYoY
    Q3 FY26

    Related to the recent launch of domestic long-haul delivery services, which is generating a nice margin.

    Industry KPIs

    1
    MetricValueDetails
    Volume2.7% decline%

    Product announcements

    1
    ProductTypeDetails
    Domestic long-haul delivery serviceslaunch

    Risks & headwinds

    4
    Declining U.S. insurance unit volumesQ3 FY26

    Global insurance unit sales declined 2.7% (1.9% ex-catastrophic); U.S. insurance unit volume declined 4.2% (3% ex-catastrophic)

    Mitigation: Long-term growth algorithm remains intact, total loss frequency increasing, diversification of buyer base, non-insurance growth

    Softer claims activity due to consumer pullback on insurance coverageNear-term

    Earned car years declined 4% YoY in Q4 CY25; 25% of repairs are now self-pay

    Mitigation: Historically cyclical trend, likely counter-inflationary; total loss frequency partially offsets this

    Impact of global conflict on international buyer participationQ3 FY26

    Direct participation from certain Middle Eastern markets declined year-over-year

    Mitigation: Breadth and diversification of buyer base (160+ countries) sustained overall demand as other corridors expanded (Central Europe, West Africa, Central America, Caribbean)

    Higher repair activity among rental customersQ3 FY26

    Partially offset growth in combined fleet and finance seller volume

    Mitigation: Encouraging momentum across other diversified seller bases (Dealer Services, powersports, BluCar)

    What to watch in Q4 FY26

    5

    U.S. Insurance Unit Volume Trend

    Next quarter
    CurrentDeclined 4.2% (3% ex-catastrophic) in Q3 FY26
    TargetModeration or stabilization of decline, or return to growth

    Why it matters

    This is a key indicator of the health of Copart's core insurance business and reflects broader consumer behavior regarding auto insurance.

    We have observed a moderation in some of these trends among U.S. insurance carriers in recent quarters.

    Q&A highlights

    6

    How do rising fuel costs affect Copart's hybrid towing fleet and subcontractor network, and how does the company mitigate these costs or pass them on?

    Copart operates a hybrid towing model (in-house, "Truck In a Box" program, third-party subcontractors). Fuel costs are relevant to all. The company thoughtfully adjusts rates with partners to ensure ongoing service and their prosperity, acknowledging it's a microeconomic decision market by market.

    “So it's a microeconomic decision market by market, but we do have to account, of course, for that input cost in our business.”

    asked by Bob Labick · answered by Jeffrey Liaw

    2 min read6 chapters

    Detailed Narrative

    01

    Insurance Business Dynamics

    Global insurance unit sales declined 2.7% (1.9% excluding catastrophic volume), with U.S. insurance volume down 4.2% (3% excluding catastrophic volume). This reflects shifts in policy mix and softer claims activity, with earned car years declining 4% year-over-year in Q4 2025. However, total loss frequency reached 23.6% in Q1 2026, up almost 5 percentage points over 4 years, driven by rising repair costs and Copart's auction returns.

    02

    Auction Returns and International Buyers

    U.S. insurance ASPs increased 4.1% year-over-year, reaching a seasonally adjusted all-time record high. International buyers are critical, representing over one-third of U.S. volumes and nearly half of auction proceeds, demonstrating the breadth and diversification of Copart's buyer base across 160+ countries.

    03

    Non-Insurance Growth and Crossover Buyers

    Non-insurance units grew, with Dealer Services and powersports up 1%, and BluCar commercial consignment up over 4%. Combined fleet and finance seller volume grew double-digits. Crossover buyers, initially seeking non-insurance vehicles, often expand to bid on insurance vehicles, with a strong majority bidding on insurance vehicles within 90 days of engagement.

    04

    Strategic Investments and Client Engagement

    Copart continues to invest heavily in technology, physical infrastructure, and its global buyer network. The company recently completed its 2026 Insurance Advisory Board meeting, discussing industry catalysts like AI deployment and extending commercial relationships to handle more claims processes for clients.

    05

    International Segment Performance

    The international segment showed strong momentum, with total units up 5.9% (insurance up 4.6%, non-insurance up 11.2%). International revenue grew 14.1% (7.9% excluding FX), driven by a 10.5% increase in fee revenue per unit and strong volume growth, particularly in the U.K., Germany, and Canada.

    06

    Capital Structure and Share Repurchases

    Copart maintains a strong financial position with approximately $5.5 billion in liquidity, including $4.2 billion in cash and equivalents, and no debt. The company repurchased over 43.4 million shares for over $1.6 billion fiscal year-to-date, underscoring confidence in future growth.

    AI-generated summary of the company’s earnings call. Not investment advice.