Executive Summary

Revenue $1.15B (+12.4% YoY) and diluted EPS $0.37 (+8.8% YoY); gross margin fell ~82 bps to 44.7% as hurricane-related costs weighed on profitability .
U.S. insurance unit volume grew ~12% YoY (~9% ex-CAT); Blue Car (bank/finance, fleet, rental) grew >20%, while global unit sales rose ~12% and inventory +6% YoY .
Management highlighted exceptional CAT execution (3 of 4 Florida CAT units sold in October were on Copart), Title Express scaling (~1M titles per year), and strong liquidity ($4.9B) to fund land, logistics, and technology investments .
Wall Street consensus estimates from S&P Global were unavailable due to API limits; traders will focus on margin trajectory, CAT cost normalization, and continued share gains with insurers (catalysts: Title Express adoption, Germany consignment shift, resilient ASPs vs Manheim) .

What Went Well and What Went Wrong

What Went Well

CAT execution and share: “3 out of every 4 catastrophic units sold in Florida during the month of October were sold on Copart’s auction platform” with ~1,000 acres reserved locally and ~2,000 acres nationwide for storm capacity .
Insurance growth and ASP resilience: U.S. insurance ASPs declined only ~1% YoY and rose ~1% sequentially vs Manheim’s ~4% YoY decline; global service revenue +15% on volume strength .
Title Express scaling and cycle-time edge: Management is “approaching a run rate of 1 million titles obtained per year” for insurers, reducing cycle times and cost burdens .

What Went Wrong

Gross margin compression: Global gross margin fell to 44.7% (-82 bps) as facility-related costs rose ~22%, including ~$29M of hurricane costs recognized in the quarter; U.S. gross margin down 260 bps to 47.2% .
Elevated G&A: G&A was $106M (+$37M YoY), reflecting specialty sales team expansion and platform services investments; management expects partial receding over ~12 months .
Dealer softness: Dealer Services (CDS) volumes dipped slightly (<1%) amid September wholesale softness before October improvement .

Financial Results

Quarterly Trends (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$1.127	$1.069	$1.147
Gross Profit ($USD Millions)	$525.5	$453.6	$512.1
Operating Income ($USD Millions)	$437.2	$359.5	$406.4
Net Income Attributable ($USD Millions)	$382.3	$322.6	$362.1
Diluted EPS ($USD)	$0.39	$0.33	$0.37
Gross Margin %	46.6%	42.4%	44.7%

Year-over-Year Change (Q1 2025 vs Q1 2024)

Metric	YoY Change
Revenue	+12.4%
Gross Profit	+10.4%
Net Income Attributable	+8.9%
Diluted EPS	+8.8%

Segment/Geography Margins (oldest → newest)

Segment Margin %	Q3 2024	Q4 2024	Q1 2025
U.S. Gross Margin %	50.9%	46.5%	47.2%
International Gross Margin %	27.6%	24.2%	32.3%

KPIs and Operational Metrics (oldest → newest where applicable)

KPI	Q3 2024	Q4 2024	Q1 2025
Global Unit Sales YoY	+11%	+8%	+12%
Global Inventory YoY	+4%	+7%	+6%
U.S. Insurance Unit Volume YoY	+6.8%	+6%	+12% (≈9% ex-CAT)
Blue Car Volume YoY	+23%	+20.4%	>20%
Dealer Volume YoY	+18%	+~10%	+~2% (CDS ~-1%, NPA ~+14%)
U.S. Insurance ASP YoY	~-2%	~-4%	~-1% (seq +~1%)
International Unit Growth YoY	+21%	+17%	~16%
Free Cash Flow ($USD Millions)	$408 (Q3)	$962 (FY24)	~$246 (Q1)
Liquidity ($USD Billions)	~$4.3 (end Apr)	~$4.6 (end Jul)	~$4.9 (end Oct)
Cash & Equivalents ($USD Billions)	$1.090 (Apr 30)	$1.514 (Jul 31)	$3.698 (Oct 31)

Actual vs Consensus (S&P Global)

Consensus estimates were unavailable due to S&P Global daily request limits. Values from S&P Global could not be retrieved.

Metric	Q3 2024 Actual	Q4 2024 Actual	Q1 2025 Actual	Consensus
Revenue ($USD Billions)	$1.127	$1.069	$1.147	N/A (SPGI limit)
Diluted EPS ($USD)	$0.39	$0.33	$0.37	N/A (SPGI limit)

Guidance Changes

Copart did not issue formal numerical guidance (revenue, EPS, margins, tax rate ranges, etc.) in Q1 FY2025; management provided qualitative direction on costs and investments.

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q2 2025+	None	None	Maintained (no formal guidance)
Gross Margin %	Q2 2025+	None	Hurricane costs recognized in Q1; remaining $18M capitalized to be recognized as units sell	Informational
G&A Spend	Next 12 months	N/A	Expect partial receding as third-party support wanes; specialty sales hires opportunistic	Qualitative
Capex Focus	Ongoing	N/A	Primarily land, development, and technology; quarter-to-quarter variability normal	Qualitative
Tax Rate	Current quarter	N/A	~20% in Q1	Informational

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3–Q4 FY2024)	Current Period (Q1 FY2025)	Trend
Insurance total loss frequency	Recovered to pre-pandemic; CCC ~21.1% (Q1 CY24); +200 bps YoY in Q2 CY24; share gains	CCC ~21.7% (Q3 CY24); insurance units +12% YoY (~9% ex-CAT)	Strengthening
CAT response	Active 2024 season; mobilization costs with trivial Q4 volumes	Helane/Milton: 3 of 4 Florida CAT units sold on Copart; sold ~¼ of assigned units within 3 weeks; ~1,000 local acres reserved	Strong execution
Title Express	Approaching ~1M titles/year; cycle-time and cost advantages	Expanded adoption; advantage in Florida salvage title processing speed	Scaling
ASPs vs Manheim	ASPs outperform Manheim; Q3: Manheim -14% YoY, U.S. insurance ASP ~-2%	U.S. ASPs -1% YoY, +1% seq; Manheim -4% YoY	Resilient
Blue Car growth	+23% (Q3), +20.4% (Q4)	>20% growth; off-lease softness affects CDS more than Blue Car	Sustained
Dealer services	+18% (Q3), ~+10% (Q4)	+~2% (CDS ~-1%, NPA +14%); Sept softness, Oct rebound	Mixed
International mix	+21% units (Q3), +17% (Q4)	~16% unit growth; floods (UAE, Brazil); Germany shift to consignment improves margin	Positive
Cost and margins	Q4: gross margin 42.4% with nonrecurring yard ops costs	Gross margin 44.7% (-82 bps YoY); hurricane costs +$29M recognized; facility costs +22%	Normalizing post-CAT

Management Commentary

Strategic positioning: “Our baseline expectation continues to be of ongoing organic industry growth… total loss frequency… more than offset declining accident frequency” .
CAT readiness: “Dedicated owned storage capacity… nearly 2,000 acres nationwide… ~1,000 acres specifically for Helane and Milton areas” with rapid retrieval/logistics response .
Title Express advantage: “We’re now managing the titles for approximately 1 million vehicles per year… yields a competitive advantage” .
Investment focus: “Capex… largely land and development and technology… we’re delighted to invest… to serve our insurance clients” .
Financial discipline: “We expect [G&A] expenses to partially recede over the next 12 months… business will be well positioned to generate strong operating leverage” .

Q&A Highlights

Total loss dispersion: Practices vary widely by carrier and region; Copart tools help optimize and speed decisions (statutory thresholds vs case-by-case economics) .
Blue Car and off-lease: Off-lease softness impacts CDS more than Blue Car; Blue Car units often have damage and are less directly impacted .
Tariffs/macros: No isolated impact in 2018–19; future effects uncertain and potentially offsetting; China not a major Copart export market .
G&A and specialty sales: Headcount roughly doubled; hiring is opportunistic; partial G&A receding expected over ~12 months .
Germany consignment shift: Transition from purchased to consignment models driving higher margins and better alignment with sellers .
Capex cadence: Mostly land/technology; quarter-to-quarter variability reflects deal timing rather than strategy changes .

Estimates Context

S&P Global consensus for Q1 FY2025 (revenue and EPS) was unavailable due to API daily request limits; as a result, we cannot quantify beats/misses relative to consensus. Analysts should incorporate: hurricane-related costs ($29M recognized, $18M remaining on balance sheet), resilient ASPs vs Manheim, Germany consignment-driven margin uplift internationally, and continued unit growth in insurance and Blue Car .

Key Takeaways for Investors

CAT execution and infrastructure are differentiators: strong share in Florida events, accelerated sales cycles, and reserved acreage underpin service reliability in volatile storm seasons .
Insurance engine remains robust: total loss frequency tailwinds and share gains drove double-digit service revenue growth; ASPs remain resilient vs Manheim .
Margin watch: near-term compression from CAT costs and facility investments; expect normalization as capitalized CAT costs roll through and G&A partially recedes over the next 12 months .
Title Express as sticky value-add: scaling to ~1M titles/year enhances insurer cycle times and deepens relationships—supports durable share capture .
International momentum: floods drove CAT units; Germany consignment shift improved margins; international gross margin up to 32.3% .
Balance sheet strength as strategic asset: ~$4.9B liquidity and ~$3.7B cash support land/logistics/tech investments and rapid CAT deployments .
Monitor Blue Car and dealer trends: Blue Car >20% growth continues; dealer softness was transient (Sept), with October rebound—mix optimization away from low-value units ongoing .

COPART INC (CPRT)·Q1 2025 Earnings Summary