Copart Q4 Revenue Up 2.4% as International Sales Offset US Volume Drop
Copart posted higher quarterly revenue despite falling unit sales, driven by international growth and price increases that masked domestic insurance volume declines.
Copart reported fourth-quarter fiscal 2026 revenue of $1.2 billion, a 2.4% year-over-year increase. This growth was achieved despite a 2.9% decline in global units sold, as higher selling prices and revenue per unit offset weaker domestic demand. The company’s international operations served as a primary growth engine, with overseas revenue and gross profit both rising by approximately 12%.
Profitability metrics contracted during the period. Net income attributable to Copart fell 17.4% to $327.4 million, while operating income decreased 10.6% to $368.9 million. CFO Leah Stearns attributed the net income drop partly to a $13 million gain on asset disposals in the prior-year period and reduced interest income following the deployment of $1.63 billion toward share repurchases earlier in the fiscal year.
Domestic Volume Falls Amid Insurance Shifts
U.S. unit sales declined by 5.7% in the fourth quarter, driven by a 7.5% drop in domestic insurance volume. CEO Jay Adair noted that excluding the loss of one major customer, domestic insurance assignments would have increased by 2.3%. He cited lower collision claim frequency, which fell 3.4% year-over-year, as a key factor in the volume reduction.
However, the severity of claims has intensified. Total-loss frequency reached 23.3% in the second quarter of fiscal 2026, the highest level on record for that period. Average collision severity exceeded $6,300 per claim, an increase of nearly 8.8%. Adair suggested that increasing vehicle complexity, such as the high software content in modern cars, could support future total-loss frequency.
International Expansion Drives Price Growth
International units grew by 10% in the fourth quarter, contrasting with the domestic decline. Global average selling prices increased by 3.5% for the quarter and 5.5% for the full year. These price gains allowed the company to maintain revenue growth even as overall unit volumes decreased globally.
ACV Acquisition Adds Digital Marketplace
Copart agreed to acquire ACV, a digital automotive marketplace, in an all-cash deal expected to close by the end of the calendar year. ACV will operate as a separate subsidiary. The company targets initial breakeven for the acquisition and expects it to become accretive to earnings by fiscal 2028. This move aligns with the company’s stated focus on technology and services for customers.
