# Copart, Inc. (CPRT) — Fiscal 2026 Narrative

Copart's fiscal year ends July 31. Fiscal 2026 is the year ended July 31, 2026. Business, risk and full-year discussion come from the fiscal 2026 Form 10-K (accession 0001193125-26-405731, filed September 29, 2026). The third-quarter discussion comes from the Form 10-Q for the quarter ended April 30, 2026 (accession 0001193125-26-245578). Fourth-quarter figures come from the earnings release furnished on September 10, 2026 (Form 8-K, accession 0001193125-26-387902), and they match the 10-K full year less the 10-Q nine months. All amounts are in US dollars.

## Business

*Source: fiscal 2026 Form 10-K, Items 1 and 2 (accession 0001193125-26-405731).*

Copart runs online auctions for vehicles. Insurance companies are its main sellers, and the cars are mostly total losses after accidents or recovered stolen vehicles. Copart collects, stores, titles and sells them on its VB3 online platform to about 1 million registered members worldwide. Buyers include dismantlers, rebuilders, repair licensees, used-car dealers, exporters and, where allowed, the general public. Insurance sellers supplied 79% of the vehicles processed in fiscal 2026, down from 81% in fiscal 2025 and fiscal 2024. Other sellers are dealers, banks and finance companies, rental and fleet operators, charities and individuals. No single customer was more than 10% of revenue in any of the last three years. Fiscal 2026 revenue was $4.67 billion and operating income $1.65 billion.

Revenue comes in two forms:

- **Service revenues** ($3.97 billion, 85% of the total). These are fees charged to buyers and sellers: purchasing, listing and selling fees (fixed, tiered, or a percentage of the sale price), plus transport, title processing, storage, bidding and loading fees. They are booked net, at auction, and not as the gross vehicle price. This is the main model in the U.S., Canada, Brazil, Ireland, Finland and the Middle East, where Copart acts as an agent.
- **Vehicle sales** ($697 million, 15%). This is the gross price of vehicles Copart buys and resells for its own account. It comes from purchase contracts with U.K. insurers, open-market purchases from individuals (through the CashForCars sites), and dismantled-parts sales by its U.K. recycler Green Parts Specialist. In the U.K., Germany and Spain, Copart works both as agent and as principal. In Germany and Spain it also earns listing fees for setting residual values on insured vehicles.

Sellers choose one of three programs: a fixed-fee **Consignment Program**; a **Percentage Incentive Program**, where Copart sells all of a seller's vehicles in a market for a percentage of the sale price and pays the tow to its yard; or a **Purchase Program**, offered mainly in the U.K., where Copart buys at a formula price based on pre-accident value. Copart also sells tools to sellers: Copart Access for managing inventory and titles, Co.ai machine-learning total-loss and salvage-value estimates, IntelliSeller for minimum-bid and re-run decisions, title and loan-payoff processing, and on-site inspection stations for insurers (more than 100). The VB3 auction runs in two steps: an open preliminary bidding period, then a live internet auction. Buy It Now and Make An Offer options sit alongside it.

**Segments.** Copart reports two geographic segments, judged on segment operating income:

| Fiscal 2026 | United States | International | Total |
|---|---|---|---|
| Revenue | $3,807.4M | $858.8M | $4,666.2M |
| Share of revenue | 81.6% | 18.4% | 100% |
| Operating income | $1,419.0M | $233.6M | $1,652.6M |

International covers the U.K., Germany, Spain, Canada, Brazil, Finland, the Republic of Ireland, the U.A.E., Oman and Bahrain.

**Adjacent businesses.** National Powersport Auctions sells powersports vehicles (motorcycles, boats, RVs) wholesale and publishes the NPA Value Guide. Purple Wave runs no-reserve online auctions for construction, agricultural and fleet equipment. Copart owns 80% of Purple Wave, and the other 20% is a redeemable noncontrolling interest. In the U.K., Copart also runs two U-Pull-It parts yards and Green Parts Specialist. BluCar handles bank, fleet and rental-car remarketing, and a dealer program sells trade-ins.

**Footprint and people.** Headquarters are in Dallas, Texas. Copart has 286 operating facilities worldwide, with facilities in every U.S. state. Outside the U.S., Brazil has 25, the U.K. 22, Germany 9, Spain 8 plus 3 leased storage sites, Finland 4, and Ireland, the U.A.E., Oman and Bahrain one each, with more in five Canadian provinces. In fiscal 2026 Copart opened two facilities in Brazil (Eusebio, Ceará and Caçapava, São Paulo) and seven in the U.S. (Cedar Rapids, Clewiston, La Grange, Vinton, Spanaway, Cusseta and Tampa). It had about 11,900 employees at July 31, 2026, 62% of them in the U.S.

**Strategy.** The 10-K names three growth areas:

- expanding insurance-vehicle remarketing internationally;
- growing whole-car (non-salvage) volume and services for dealers, manufacturers, finance companies and fleets;
- technology-enabled services for sellers and buyers.

The 10-K presents the ACV Auctions acquisition, which was completed on October 16, 2026 (see Subsequent events), as part of the whole-car strategy. Long-term demand depends on total-loss frequency. Copart believes it has risen over the past 30 years, possibly because repair costs and used-car values have trended upward. It also says newer vehicles with more advanced features cost more to repair and are more likely to be totaled. The average age of U.S. cars has gone from 11.4 years in 2013 to 13.0 years in 2026. The business is seasonal: most facilities process 5% to 20% more vehicles in winter. Severe weather such as hurricanes can cause large volume and cost swings.

**Competition.** The U.S. competitors named are RB Global (including Insurance Auto Auctions), Carvana, Openlane, Manheim and ACV Auctions. ACV has since become a Copart subsidiary, on October 16, 2026. Dismantlers such as LKQ and dismantler trade groups can buy salvage directly from insurers and bypass auction companies.

## Risk factors

*Source: fiscal 2026 Form 10-K, Item 1A and Note 15 (accession 0001193125-26-405731).*

- **Concentrated, cancellable supply.** A small number of large sellers, mostly insurers, account for much of revenue. Some contracts are non-exclusive and can be ended on short notice, and sellers have dropped Copart in specific markets before. Supply also depends on accident rates and total-loss frequency. Mild weather, less driving (from fuel costs, inflation or a downturn), accident-avoidance technology and eventually autonomous vehicles could reduce it. So could sharp rises in used-car prices, which make repair more economic than a total loss.
- **Weather and capacity.** Extreme weather adds volume but can fill yards and drive abnormal costs. Hurricanes Helene and Milton brought large extra costs in fiscal 2025 and hurt results in some quarters. Adding capacity depends on finding land with the right zoning, and local opposition has hindered permits before.
- **DOJ anti-money-laundering investigation.** The DOJ Consumer Protection Branch is investigating possible violations of money-laundering laws tied to Copart's procedures for detecting money laundering by auction members. A DOJ letter in October 2023 said Copart may have exposure. Copart is cooperating but cannot predict the duration, scope or result, or estimate a range of possible loss. It says other regulatory inquiries could follow.
- **Acquisitions and the ACV deal.** Growth has relied on acquisitions and new facilities. The 10-K notes that the ACV merger depended on a majority tender and HSR antitrust clearance. Both conditions were later satisfied: the HSR waiting period expired, and the minimum tender was met when the offer expired on October 15, 2026. The deal closed on October 16, 2026 (see Subsequent events). The 10-K also notes that acquired businesses can take years to integrate, may earn below Copart's margins, and may carry liabilities not covered by indemnities.
- **International exposure.** Foreign markets bring currency, tariff, sanctions, export-control and anti-corruption risk (FCPA, UK Bribery Act, Brazil Clean Companies Act). The 10-K highlights recent regulatory proposals in Brazil. It also says markets such as Germany, where insurers have played a small role in salvage disposal, may not accept the insurer-sourced online model.
- **Export demand and tariffs.** Foreign importers are a large part of the buyer base; 38.2% of U.S. units sold in fiscal 2026 went to international members. Since 2025, U.S. tariffs and retaliatory tariffs have risen sharply and become volatile. Import restrictions such as Mexico's 2008 decree can cut demand.
- **Technology, cyber and AI.** The whole business runs on an in-house platform (G2/VB3), and outages, ransomware or data breaches could stop auctions. One small subsidiary was hit by ransomware in March 2023. The 10-K also covers risks from AI and machine-learning tools used in valuation, total-loss decisions, pricing and fraud detection: flawed outputs, fast-changing AI rules, and uncertain IP ownership of AI-generated work. It also covers credit-card fraud and payment-dispute liability.
- **Principal-basis inventory risk.** Buying vehicles for its own account, mainly in the U.K., lowers gross margin percentages and exposes Copart to inventory losses.
- **Privacy, environment and tax.** Copart is subject to GDPR (fines up to 4% of global revenue), CCPA and Brazil's LGPD. Stored wrecked vehicles carry contamination liability, and climate-disclosure rules such as California's are a cost. Tax risk includes audits by the IRS, HMRC and other authorities, and changes in international tax rules, including OECD initiatives.
- **Debt covenants.** Copart has a $1.25 billion unsecured revolver with a maximum net-leverage covenant. It is undrawn apart from letters of credit, but any borrowing would carry variable interest rates.
- **Ownership and governance.** Executive officers, directors and their affiliates own more than 10% of the stock. The board can issue up to 5 million preferred shares without a stockholder vote, and Delaware Chancery is the exclusive forum for most stockholder disputes. Cash invested in Treasuries and money-market funds carries market and credit risk. Self-insured medical, liability, workers' compensation and auto claims could exceed reserves.

## Management's discussion: fiscal 2026

*Source: fiscal 2026 Form 10-K, Item 7 and financial statements (accession 0001193125-26-405731).*

Fiscal 2026 was a flat year. Revenue rose 0.4% to $4,666.2 million, operating income fell 2.6% to $1,652.6 million, and net income attributable to Copart fell 4.4% to $1,484.3 million. Diluted EPS was $1.55, down from $1.59. Growth came from International, while U.S. results fell against a fiscal 2025 that included one-time hurricane revenue.

- **Service revenues** were flat at $3,969.5 million (+$0.9 million). U.S. service revenue fell $63.3 million (−1.8%) because of the non-recurring Helene and Milton revenue in fiscal 2025 and lower volume, partly offset by higher revenue per car. International rose $64.1 million (+12.4%). Excluding $21.9 million of favorable currency, the gain came from higher revenue per car and higher volume.
- **Vehicle sales** rose 2.7% to $696.7 million. Mix raised revenue per car in both segments, while volumes fell. Internationally the decline was partly because sellers switched to consignment.
- **Facility operations expense** rose 1.1% to $1,965.9 million. The U.S. fell $11.8 million because fiscal 2025 carried one-time hurricane costs, partly offset by higher subhaul, freight and postage. International rose $33.3 million on a higher cost to process each car. Facility depreciation increased as new and expanded yards came into service.
- **Cost of vehicle sales** rose 2.2% to $616.5 million, mainly from vehicle mix.
- **General and administrative expense** rose 7.0% to $431.3 million. In the U.S., labor (including a larger sales force), travel, insurance and outside services rose, partly offset by lower legal, compliance and stock-based compensation costs. International G&A rose 28.9% on labor, stock compensation and consulting and legal fees. Technology assets placed in service raised G&A depreciation.
- **Segment results.** U.S. revenue fell 1.2% to $3,807.4 million and U.S. operating income fell 4.2% to $1,419.0 million. International revenue rose 8.5% to $858.8 million and International operating income rose 8.2% to $233.6 million.
- **Other income** fell 8.3% to $182.4 million. Net interest income rose slightly to $181.9 million on higher Treasury-bill interest, but gains on asset sales and realized and unrealized foreign-exchange gains fell.
- **Income taxes.** The effective tax rate rose to 19.3% from 18.3%. Excess tax benefits from option exercises fell to $6.6 million from $36.7 million, and the FDII benefit fell to $46.7 million from $55.0 million. State taxes were a smaller drag, at $21.5 million versus $38.6 million.

**Cash flow and balance sheet.** Operating cash flow fell 10.8% to $1,604.5 million. The causes were lower net income and working-capital changes: receivables grew $46.8 million, income tax receivable $48.7 million, vehicle pooling costs $23.1 million and inventory $16.1 million. Capital expenditures, including acquisitions, fell to $342.4 million from $570.2 million. Cash, cash equivalents and restricted cash fell $872.6 million to $1,907.9 million, mainly because of share repurchases and a shift into held-to-maturity Treasury bills, which rose to $2,581.9 million. At July 31, 2026, $598.3 million of cash was held by foreign subsidiaries, which Copart intends to permanently reinvest abroad. Copart has no borrowings. Total liabilities were $913.9 million against stockholders' equity of $9,097.3 million.

**Capital allocation.** Copart resumed buybacks, after none in fiscal 2025 or 2024: 43,433,164 shares at an average $37.63, about $1.6 billion in total, under the 2011 authorization. The 10-Q shows all of the buying happened by the end of March 2026, at $39.82 average through January and $37.01 and $37.69 in February and March. The fiscal-year total equals the nine-month total, so no shares were bought in the fourth quarter. Shares outstanding fell to 926.3 million from 967.5 million, and 282 million shares remain authorized. Copart has never paid a cash dividend. In the 10-K, written before the deal closed, management said it expected to use operating cash flow to pay the expected $1.9 billion aggregate cash purchase price for ACV. That price became payable when the deal closed on October 16, 2026.

**Credit facility.** On January 23, 2026, Copart replaced its secured Bank of America facility, which was due December 2026, with an unsecured $1,250 million revolver agented by Wells Fargo and maturing January 23, 2031. Pricing is the fixed rate plus 0.75% to 1.125% or the daily rate plus 0.0% to 0.125%, depending on net leverage. At year-end only $22.5 million of letters of credit were outstanding, leaving $1,227.5 million unused.

## Fourth quarter and third quarter of fiscal 2026

*Sources: earnings release furnished September 10, 2026 (8-K, accession 0001193125-26-387902, Exhibit 99.1); Form 10-Q for the quarter ended April 30, 2026 (accession 0001193125-26-245578).*

**Fourth quarter (May–July 2026).** The full-year profit decline came in this quarter: nine-month net income attributable to Copart was flat at $1,156.8 million versus $1,156.1 million. Revenue rose 2.4% to $1,152.4 million: service revenues +1.4% to $969.5 million and vehicle sales +8.3% to $182.9 million. Operating income fell 10.6% to $368.9 million. Net income attributable to Copart fell 17.4% to $327.4 million, and diluted EPS fell to $0.35 from $0.41. Facility operations expense, including depreciation and stock compensation, rose 8.3% to $506.8 million, and G&A, including depreciation and stock compensation, rose 15.9% to $112.5 million. Total other income nearly halved to $35.8 million from $65.8 million: interest income fell to $39.6 million from $49.8 million, and other items swung to a $3.8 million expense from $16.0 million of income. U.S. operating income fell 12.7% to $312.2 million on U.S. revenue up 0.4% to $930.3 million. International operating income rose 3.0% to $56.8 million on revenue up 11.7% to $222.1 million. The release does not explain the quarter's cost increases.

**Third quarter (February–April 2026).** The third quarter was stronger. Revenue rose 2.1% to $1,237.1 million, operating income rose 2.8% to $464.3 million, and diluted EPS was $0.43 versus $0.42. Net income attributable to Copart fell 1.0% to $402.4 million. Total other income fell 26.2% on lower Treasury-bill interest and smaller currency gains, and income tax expense rose 3.3%. U.S. service revenue slipped 0.4% as lower volume outweighed higher revenue per car. International service revenue rose 17.9% ($8.7 million of it from currency) on both volume and revenue per car. U.S. cost of vehicle sales fell 13.0% on lower volume. The nine-month effective tax rate was 19.4% versus 18.6%.

None of these filings provides financial guidance.

## Leadership and governance changes

*Sources: 8-Ks, accessions 0001193125-26-286982, 0001193125-26-298722, 0001193125-26-356968, 0001193125-26-354640.*

Copart's senior leadership changed around fiscal year-end. Executive Chairman A. Jayson Adair, who previously led Copart as CEO, became CEO again on July 31, 2026. He replaced Jeffrey Liaw, who left the CEO role and the board and stays on as an advisor through July 31, 2027. Copart says the departure was not due to any disagreement over financial reporting. Jane Pocock, head of Copart UK since 2019, became President on August 1, 2026, a post that had been vacant. David J. Berger, a senior partner at Wilson Sonsini Goodrich & Rosati, Copart's outside counsel, joined the board on August 13, 2026.

## Subsequent events

*Sources: fiscal 2026 Form 10-K, Note 19 and Item 7 (accession 0001193125-26-405731); 8-K of September 10, 2026 with merger exhibits (accession 0001193125-26-388064); Schedule TO tender-offer filings as cited, including the final-results Amendment No. 5 (accession 0001193125-26-423456); 8-K of October 16, 2026 (accession 0001193125-26-423478).*

**Completed acquisition of ACV Auctions Inc. (NYSE: ACVA), about $1.9 billion.** On September 10, 2026, Copart signed a merger agreement to buy ACV for $10.50 per share in cash, an implied equity value of about $1.9 billion. The deal was structured as a tender offer followed by a merger. ACV runs a digital marketplace and data-services business for dealer-to-dealer and commercial wholesale vehicle sales. Copart says ACV gives it an immediate, scaled position in the dealer-to-dealer auction channel and supports two of Copart's three strategic priorities: whole-car growth and technology services. Copart said it would pay from cash on hand, with no financing condition. It expects the deal to be EPS-neutral in the first full year of ownership and accretive from fiscal 2028. The offer required a majority of ACV shares to be tendered and clearance of the Hart-Scott-Rodino waiting period. At signing, closing was expected by the end of calendar 2026. The 10-K says the deal is not reflected in the fiscal 2026 statements and that Copart has not yet estimated its accounting effect.

**Tender offer status.** The tender offer began on September 17, 2026 (Schedule TO-T, accession 0001193125-26-393827). Its expiration was extended twice, most recently to 5:00 p.m. Eastern Time on October 15, 2026. About 52.84% of ACV shares (90,199,271) had been tendered as of the October 7 expiration (Amendment No. 3, accession 0001193125-26-417451). Amendment No. 4 (accession 0001193125-26-421044, October 14, 2026) reported that the HSR waiting period had expired. The offer expired at 5:00 p.m. Eastern Time on October 15, 2026 and was not extended again. By then 116,818,409 ACV shares had been validly tendered. Together with shares owned by Copart and its affiliates, that was about 68.43% of ACV's outstanding shares, which met the minimum tender condition. Apple Merger Sub, Copart's wholly owned subsidiary, accepted all tendered shares for payment. Copart then completed the merger under Section 251(h) of the Delaware General Corporation Law, without a vote of ACV stockholders. Each untendered share was converted into the right to receive the same $10.50 in cash. ACV is now a wholly owned subsidiary of Copart, and its shares have ceased trading on the NYSE. Copart announced completion on October 16, 2026 (final-results Schedule TO Amendment No. 5, accession 0001193125-26-423456; Form 8-K, Item 2.01, accession 0001193125-26-423478).

The fiscal 2026 10-K reports no other subsequent events.