Copart, Inc.

Q3 FY26 headline performance (mostly solid): Revenue $1.24B (+2.1% YoY), with unit volume down ~2.4% offset by higher average selling prices (+4.6%). Profitability improved: gross profit $572.6M (+3.7%) and gross margin 46.3% (+71 bps). Operating income $464.3M (+2.8%); EPS $0.43 (+2.4%). Capital return continued: 43.4M shares repurchased YTD (~$1.6B); quarter liquidity remains very strong (~$5.5B, all cash/securities, no debt).

Insurance volume headwinds remain, but pricing/returns strong (the key mix story): Global insurance units -2.7% YoY (or -1.9% excluding catastrophic volume). U.S. insurance units -4.2% (or ~-3% excluding catastrophic volume). Management attributes softness to (1) policy mix shifts among carriers, and (2) consumer pullback on coverage / softer claims activity due to higher premiums. Negative/surprising datapoint: earned car years (ISS Fast Track) -4% YoY in 4Q25 while vehicles in operation +1.4% → declining insurance coverage despite a growing fleet.

Big positive: auction economics improving for insurers/sellers (ASP up at record levels): Despite volume softness, U.S. insurance ASPs +4.1% YoY, reaching a seasonally adjusted all-time record high in Q3. International buyers are a major driver: they represent >1/3 of U.S. volume and nearly half of U.S. auction proceeds; demand is resilient via buyer/corridor diversification (even when certain regions moderated due to conflict). Management also emphasizes their role in raising “total loss frequency” economics—viewing it not as passive tailwind but as a responsibility they actively enable through better auction outcomes.