Copart, Inc.

Core growth thesis reiterated (3 pillars) + near-term execution focus - Management emphasized continued growth via (1) international expansion, (2) whole-car expansion domestically, and (3) technology/services investment. - Differentiators stressed: founder mindset / decades-long view, liquidity/marketplace engine (buyer activity), and speed (products in quarters vs. years). - Buyer/liquidity strategy highlighted with data: vehicles sold to newer buyers growing (buyers buying from Copart <1 year rose to 8.9% of FY26 vehicles vs 8.3% FY25; <2 years rose to 21.7% FY26).

Operating environment: units down, but pricing/value power and insurance trends show moderation - Global unit sales down 2.9% YoY in Q4; domestic down 5.7%, international up 10%. - Insurance units down 4.2%, with domestic insurance down 7.5% and international insurance up 11.2% (noted an exception tied to a single domestic customer; otherwise domestic insurance “up 2.3%”). - Collision claim frequency down 3.4% YoY (moderating trend), but severity rising: average collision severity >$6.3k per claim (+8.8% YoY); rental car rates +4.5% YoY. - Vehicle complexity framed as “computers on wheels,” implying total loss frequency likely continues to increase. - Manheim Used Vehicle Value Index up 2.8% YoY in Q4, with management claiming Copart outpaced the index.

Financial results: revenue slightly up, profitability down due to investment and costs - Q4 revenue $1.2B (+2.4% YoY) driven by service revenue +$13M (+1.4%) and purchased vehicle sales +$14M (+8.3%). - FY26 revenue $4.7B (+0.4% YoY); excluding Hurricane impacts from FY25, management says FY26 revenue +2.4%. - Gross profit down: Q4 gross profit $481M (-5.5%); FY26 gross profit $2.1B (-0.8%) (flat ex-cat events); gross margin 41.8% (Q4) and 44.7% (FY). - Operating income down: Q4 $368.9M (-10.6%); FY $1.7B (-2.6%). - Net income down: Q4 net income attributable to Copart $327.4M (-17.4%) (EPS $0.35); FY $1.48B (-4.4%) (EPS $1.55). - Management tied net income weakness mainly to lower interest income after $1.63B deployed into share repurchases plus higher cost investments.