Copart Inc. (NASDAQ: CPRT) reported its second‑quarter fiscal 2026 results, posting revenue of $1.12 billion, down 3.6% year‑over‑year, and earnings per share of $0.36, a 10.0% decline from the prior year’s $0.40 per share. The company missed consensus estimates of $1.14 billion in revenue and $0.40 in earnings per share, reflecting softer insurance volume and a 6.2% drop in gross profit to $492.8 million.
Revenue fell 3.6% to $1.12 billion, driven by a 4.8% decline in U.S. insurance vehicle sales when excluding the impact of last year’s catastrophic events. International revenue grew 6.1% to $1.02 billion, and when adjusted for CAT events, the international segment expanded 7.7%. In the prior quarter (Q1 FY2026), Copart generated $1.16 billion in revenue and reported an EPS of $0.41, indicating a modest QoQ decline in top‑line momentum.
Gross profit declined 6.2% to $492.8 million, and operating income fell 8.8% to $388.7 million. General and administrative expenses increased 4.0%, while the company’s cash balance stood at $5.2 billion with no debt, underscoring a strong liquidity position that can support future investments or share repurchases.
Management highlighted that U.S. insurance units fell 9% year‑over‑year, or 4% when excluding last year’s CAT units, and U.S. insurance units declined 10.7% or 4.8% excluding CAT. The CFO noted a one‑time $6.8 million expense related to international VAT, which, when removed, lifted gross profit by 0.4% and expanded gross margin to 45%.
Investors reacted negatively to the earnings miss and revenue shortfall, citing the company’s challenges with declining insurance volumes and the impact of the one‑time VAT expense on profitability. The results underscore the need for Copart to navigate softer claims activity while leveraging its cash‑rich balance sheet to sustain long‑term growth.
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