COPART INC Q1 FY2026 earnings call

• Insurance business: Global and U.S. insurance units declined, underlying drivers include market share evolution, soft claims counts, and rising total loss frequency. Copart sustains advantage in generating best-in-class auction returns. - Non-insurance wholesale business: Rising total loss frequency enables progress, with purpose-built enhancements for commercial sellers. Auction liquidity is key. - Auction returns: Core indicators like pure sale rates, international participation, unique bidders per auction, preliminary bid activity, and gross returns show Copart's competitive advantage is durable and expanding. - Financial results: Consolidated revenue, gross profit, operating income, and earnings per diluted share increased. U.S. and International segments performance details discussed. - Operational initiatives: Reducing cycle time, managing title procurement, investing in Purple Wave.

Consolidated: Total global units sold decreased 6.7% with fee units decreasing 6.3%. Consolidated revenue grew just under 1% year over year, or 2.9% excluding cat, to $1.16 billion. Global gross profit increased 4.9% or 3.7% excluding CAT, to $537 million. U.S. Segment: Total units sold declined 7.9%, or 5.2% excluding cat and direct buy units. U.S. insurance volumes declined 9.5% or 7.3% excluding cat. U.S. non-insurance business performed well with dealer unit sales up 5.3%. U.S. purchase units increased 6.2% normalized. U.S. purchased vehicle sales increased 10.9%. U.S. segment total revenue increased 0.5% to 2.3% excluding cat. U.S. gross profit increased 3.7%, and gross margin to 48.7%. International Segment: Total units sold declined by less than 1%, or grew 4.5%, excluding the cat units in the prior year. International insurance units increased less than 1% or 8.3% excluding CATs. International revenue increased 1.6% or 5.7% excluding CAT year over year. International service revenues increased 7.9% or 13.9%, excluding CABP. International segment gross profit grew 13%, and operating income was $56 million with a 27.5% operating margin.

Q: Bob Labick asked about reconciling larger than expected decline in unit volumes and factors behind total loss frequency.

A: Jeff Liaw discussed insurance coverage changes, accident frequency trends, and volatility in input variables.

Q: Craig Kennison asked about accident claims trend and ADAS technology.

A: Jeff Liaw said safety technologies have moved the needle but total loss frequency has dwarfed accident frequency changes.

Q: Chris Bottiglieri asked about 38% disparity between international and U.S. bidders and capacity investment.

A: Leah Stearns and Jeff Liaw discussed international bidders favoring higher value vehicles and disciplined capacity allocation.

Q: Bret Jordan asked about share and non-insurance CDS vs Blue Card.

A: Jeff Liaw and Leah Stearns discussed insurance industry share dynamics and CDS being larger.

Q: Jeff Licht asked about factors driving the business and acquisition thoughts.

A: Jeff Liaw discussed vehicle depreciation, parts inflation, insurance rates, and organic vs acquisition approach.

Q: John Healy asked about consumer premium and cash on balance sheet.

A: Jeff Liaw and Leah Stearns discussed complex consumer premium factors and capital deployment for shareholders.