Sign in
CI

COPART INC (CPRT)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY25 EPS beat on stronger margins, while revenue was slightly below consensus: Diluted EPS of $0.41 vs S&P Global consensus $0.362 (+13.3% beat); revenue of $1.125B vs $1.135B consensus (-0.9% miss). EBITDA modestly trailed ($453.1M actual vs $460.8M est). Drivers: higher ASPs and lower cost of vehicle sales; headwinds: softer assignments and reported unit declines. (S&P Global estimates marked with *)
  • Mix/auction liquidity outperformance: global insurance ASPs +5.4% and U.S. insurance ASPs +5.7% YoY, well ahead of used vehicle indices and peers; gross margin reached 45.3%. Management emphasized Copart’s uniquely global, digital auction and deep buyer liquidity as key to price realization.
  • Volume backdrop mixed: global inventory -13.1% YoY (U.S. -14.8%), low single-digit declines in assignments, and U.S. unit sales -1.8% (normalized -0.6% after Copart Direct changes), while international units rose 3.3%.
  • No formal guidance; management highlighted storm season uncertainty (cat work not typically profit-accretive on a fully loaded basis), continued investments in auction liquidity/Title Express, and a long-term bias to return cash via buybacks with ample liquidity ($6B).

What Went Well and What Went Wrong

What Went Well

  • Gross margin expansion with strong pricing: Q4 gross profit $509.7M (+12.4% YoY) and gross margin 45.3% on higher ASPs and lower cost of vehicle sales. “We experienced ASP growth…of 5.4% for all insurance vehicles sold and…5.7% for the U.S.”
  • Liquidity and scale advantages: “International members account for ~40% of all vehicles sold at U.S. auctions…almost half of auction proceeds,” underpinning superior auction returns vs peers.
  • Solid international performance: International gross profit +47.1% in Q4; fee unit growth supported by Germany’s shift from purchase contracts to consignment and stronger UK purchase margins.

What Went Wrong

  • Softer supply signals: low single-digit declines in assignments and U.S. unit sales (-1.8%; normalized -0.6% after Copart Direct shift), with global inventory -13.1% YoY (U.S. -14.8%).
  • U.S. purchase vehicle margin pressure: U.S. purchase vehicle gross profit decreased ~14% in Q4 even as revenue rose modestly, reflecting mix and strategy shifts (Direct Buy vs Copart Direct).
  • Macro friction points persist: management cited cyclical under/under-insurance and a “disconnect” between accident activity and claims frequency; storm contributions not reliably profit-accretive.

Financial Results

Headline results vs prior year and prior quarter

MetricQ2 FY25Q3 FY25Q4 FY25
Revenue ($USD Millions)1,163.3 1,211.7 1,125.1
Gross Profit ($USD Millions)525.6 552.3 509.7
Operating Income ($USD Millions)426.2 451.5 412.6
Net Income Attributable to Copart ($USD Millions)387.4 406.6 396.4
Diluted EPS ($)0.40 0.42 0.41
Gross Margin (%)45.2% (calc from )46.0% (calc from )45.3%

Notes: Q4 YoY growth: revenue +5.2%, gross profit +12.4%, net income +22.9%, diluted EPS +24.2%.

Actual vs Wall Street consensus (S&P Global) – Q4 FY25

MetricActualConsensusVariance
Revenue ($USD Millions)1,125.1 1,135.0*-0.9%
Diluted EPS ($)0.41 0.3619*+13.3%
EBITDA ($USD Millions)453.1 [derived from S&P actual]*460.8*-1.7%

Values marked with * retrieved from S&P Global.

Revenue mix and costs (Q4 FY25 vs Q4 FY24)

Metric ($USD Thousands)Q4 FY24Q4 FY25YoY
Service Revenues893,091 956,209 +7.1%
Vehicle Sales175,908 168,888 -4.0%
Total Revenues1,068,999 1,125,097 +5.2%
Yard Operations407,044 418,500 +2.8%
Cost of Vehicle Sales161,891 147,398 -9.0%

Geographic profitability snapshot (Q4 FY25)

RegionGross Profit ($USD Millions)Gross Margin (%)
U.S.440.347.5%
International69.534.9%

Source: CFO remarks.

Guidance Changes

Copart did not provide quantitative guidance; management reiterated they “don’t tend to provide…guidance,” noted storm season unpredictability, and emphasized ongoing investments in auction liquidity, Title Express, and selective capital returns.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/QtrNoneNoneMaintained “no formal guidance” stance
MarginsFY/QtrNoneNoneN/A
OpEx/CapExFY/QtrNoneNoneN/A
OI&E / Tax RateFY/QtrNoneNo guide; Q4 tax rate was 17.4% (observed) N/A
SegmentsFY/QtrNoneNoneN/A
Capital ReturnsLTPrior buybacks historicallyShare buybacks likely long-term mechanism; no timing Qualitative reaffirmation

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25, Q3 FY25)Current Period (Q4 FY25)Trend
AI/Tech enablementAI-enabled decision tools, Title Express at 1M+ titles/year; cycle-time reduction focus Broad AI deployment in decision support, customer/agent support, search/recommendations; Title Express improving cycle times Expanding deployments
Supply chain/tariffs/macroTariffs likely neutral to modestly positive overall; complex offsets; diversified buyer base Continued tariff uncertainty; no observed buyer hesitation; strong ASPs vs indices/peers Neutral to positive
Insurance/claims dynamicsRising total loss frequency; cyclicality in uninsured/underinsured dampening volumes U.S. TLF 22.2% (CQ2’25) vs 21.5%; earned car years down 4.3% YoY; cyclical insurance coverage ebbs/flows Structural TLF up; cyclicality near-term
Storm/CATPreparedness; Q2 had cat costs; storm facilities/land readiness (Hall Ranch) Storm season unpredictable; CATs not per se profitable on fully loaded basis Cautious
Segment expansion (BlueCar/Wholesale)BlueCar growth; Purple Wave expansion despite industry caution BlueCar +15.3% FY25; Q4 +2.8%; wholesale liquidity experiments; Purple Wave TTM GTV +9.4% Positive, selective
International (Germany/UK)Germany shift to consignment; UK purchase margins stronger Intl units +3.3% Q4; fee units +3.6%; purchase revenue -14.2% with higher margins; mix shift continues Improving mix/margins
Regulatory/legalStorage fee caps could aid carriers; TLF threshold laws monitored Monitoring; no new impacts disclosedStable

Management Commentary

  • Strategic focus on auction liquidity: “If we deliver on [auction liquidity]…we will continue to earn the right to sell [vehicles]…and generate excellent selling prices.”
  • Differentiated global, digital marketplace: “Exclusively online since 2003…~300,000 paying registered members…International buyers ~40% of vehicles sold at U.S. auctions…almost half of proceeds.”
  • Insurance market dynamics: “Total loss frequency…continued its long-term upward trend…22.2% in CQ2’25 vs 21.5% in CQ2’24.”
  • Capital allocation: “Over the long haul…we have consistently returned cash to shareholders via buybacks…The cash doesn’t per se inform an M&A strategy.”

Q&A Highlights

  • Technology/AI: Broad deployments across decision support, service, and auction discovery; improving cycle times via Title Express.
  • EVs: EVs tend to total more easily given sensor-rich perimeter and recalibration needs; favorable returns observed.
  • Assignments/units: Clarified assignments declined low single-digit; Q4 global insurance volumes -1.9%, U.S. -2.1%.
  • Storm season and profitability: CAT activity uncertain and generally not profit-accretive on a fully loaded basis, despite required readiness.
  • Capital returns/M&A: Preference for buybacks over time; M&A must meet stand-alone and strategic fit tests.

Estimates Context

  • Q4 FY25 vs S&P Global consensus: EPS beat (+13.3%); revenue miss (-0.9%); EBITDA slight miss (-1.7%). Narrative: stronger ASPs/margins offset lower vehicle sales and softer assignments. (S&P Global estimates marked with *)
  • Forward look (Q1 FY26 Street): EPS $0.390*, revenue $1.178B*. Given management’s comments on inventory/assignments and continued investments, the Street may recalibrate mix and margin assumptions rather than top-line growth drivers. (Values from S&P Global; no company guidance)

Values marked with * retrieved from S&P Global.

Q1 FY26 consensus (S&P Global)

MetricQ1 FY26 Consensus
Primary EPS ($)0.390*
Revenue ($USD Millions)1,176.5*

Values marked with * retrieved from S&P Global.

KPIs and Operating Metrics (Q4 FY25)

KPIQ4 FY25
Global ASP change+5.6% YoY
U.S. insurance ASP change+5.7% YoY
Global insurance ASP change+5.4% YoY
Global unit sales-0.9% YoY
U.S. unit sales-1.8% YoY; normalized -0.6% after Direct shift
Insurance volumes (global/U.S.)~-2% YoY in Q4
International units+3.3% YoY
Global inventory-13.1% YoY (U.S. -14.8%)
AssignmentsLow single-digit decline YoY
Tax rate17.4% (Q4)
Liquidity~$6B total; ~$4.8B cash & HTM

Key Takeaways for Investors

  • Margin-led EPS beat despite modest revenue shortfall; strength anchored in global digital auction liquidity and international buyer depth.
  • Watch supply signals: lower assignments and leaner inventory suggest tight near-term volumes; normalized U.S. units only slightly down as Copart migrates low-value flows to Direct Buy.
  • Mix shifts should continue to favor fee units (e.g., Germany consignment), supporting margin resilience even with softer purchase volumes.
  • Title Express, loan payoff digitization (including One Inc partnership) and AI-enabled decision tools compress cycle times and support pricing.
  • CAT volatility is a swing factor but not a profit engine; focus on secular total loss frequency tailwinds and auction share gains.
  • Capital returns likely via buybacks over time; $6B liquidity provides strategic flexibility without signaling near-term M&A urgency.
  • Near-term trading frame: EPS resilience and ASP outperformance vs peers are positives; bears may press on revenue/EBITDA slight misses and assignment softness—monitor Street revisions to mix/margin vs top-line.

Citations:

  • Q4 FY25 8-K/press release figures and financial statements:
  • Q4 FY25 earnings call transcript (prepared remarks and Q&A):
  • Q3 FY25 8-K and call for trend:
  • Q2 FY25 8-K and call for trend:
  • Other press releases (context): One Inc lienholder payments integration

S&P Global estimates disclaimer: All values marked with * are retrieved from S&P Global.