Copart Inc (CPRT) Q2 2026 Earnings Call Highlights: Navigating Revenue Declines with Strategic …

GuruFocus News

Fri, February 20, 2026 at 2:04 PM GMT+9 4 min read

In this article:

•                                       StockStory Top Pick 
  

  CPRT

  -0.26%

This article first appeared on GuruFocus.

**Consolidated Revenue:** Declined 3.6% year over year to $1.12 billion; increased 1.3% excluding CAT-related vehicles.

**Service Revenue:** Declined 4%.

**Purchased Vehicle Sales:** Decreased 1.4%.

**Average Selling Prices (ASPs):** Increased 6% on a reported basis and 7.1% excluding CAT.

**Global Gross Profit:** Decreased 6.2% to $492.8 million; increased 0.4% adjusting for CAT and one-time expenses.

**Global Gross Margin:** Increased 178 basis points to 45%.

**Operating Income:** Declined 8.8% to $388.7 million.

**Net Income:** $350.7 million, down 9.5% from last year.

**Earnings Per Diluted Share:** Decreased 9.2% to $0.36.

**US Insurance ASPs:** Increased 6% or 9% excluding CAT.

**US Gross Profit:** Decreased 7.2% to $430 million; gross margin was 46.6%.

**US Operating Income:** $341.5 million, down 9.2% year over year.

**International Revenue:** Increased 6.1% or 7.7% excluding CAT to $200 million.

**International Insurance ASPs:** Rose 9%.

**Liquidity:** Approximately $6.4 billion, including cash and cash equivalents of $5.1 billion and no debt.

**Free Cash Flow:** Increased 58% year to date.

**Share Repurchase:** Over 13 million shares repurchased for over $500 million fiscal year-to-date.

Warning! GuruFocus has detected 4 Warning Signs with CPRT.

Is CPRT fairly valued? Test your thesis with our free DCF calculator.

Release Date: February 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Copart Inc (NASDAQ:CPRT) reported a 6% year-over-year increase in average selling prices (ASPs) for US insurance consignors, excluding catastrophic events.

The company has a strong liquidity position with approximately $6.4 billion, including $5.1 billion in cash and no debt.

Copart Inc (NASDAQ:CPRT) has successfully integrated artificial intelligence across multiple dimensions, enhancing productivity and service delivery.

The company has a robust global buyer network, contributing to record auction returns and strong price discovery.

Copart Inc (NASDAQ:CPRT) has repurchased over 13 million shares, returning capital to shareholders and demonstrating confidence in its valuation.

Negative Points

Consolidated revenue declined 3.6% year over year, impacted by lower unit volumes and a decrease in service revenue.

Global insurance units declined 9.3%, with US insurance units specifically declining 10.7%, reflecting softer claims activity.

Operating income decreased by 8.8%, and net income fell by 9.5% compared to the previous year.

The company faces challenges from a rising mix of uninsured customers, impacting overall volume growth.

There was a $6.8 million one-time expense accrual related to international operations, affecting gross profit.

 






Story Continues  

Q & A Highlights

Q: What macro factors are you watching to change the trend line and get industry volumes back to growth? A: Jeffrey Liaw, CEO: We are observing cyclicality in the auto insurance industry, including premium growth and contraction. Many carriers have passed rate increases, affecting growth. Historically, these trends ebb and flow, and we expect some carriers to reinvest in growth, impacting policy growth and industry volumes.

Q: Can you provide insights on the sales force buildup and its expected returns? A: Jeffrey Liaw, CEO: The sales force is part of broader investments in commercial capabilities, product, and tech. These investments drive unit volume, better selling prices, and overall economics. Each expenditure is justified by its economics, and we aim for profitable growth.

Q: How do you frame your need to invest in additional land capacity? A: Leah Stearns, CFO: We are in a strong position due to disciplined investment in land. Faster cycle times allow more efficient land use. We continue to invest in land to ensure future capacity and capabilities, maintaining a disciplined approach.

Q: What are the potential disruption risks from AI, and how is Copart defending its position? A: Jeffrey Liaw, CEO: We are aware of potential disruptions and focus on enhancing productivity and delivering better experiences. Our moats include physical storage capacity, a global buyer base, an online auction platform, and regulatory knowledge. We aim to disrupt ourselves with technology.

Q: How is the heavy equipment expansion performing, and why hasn’t Copart pursued more M&A activity? A: Jeffrey Liaw, CEO: The heavy equipment expansion has faced challenges due to industry uncertainty. We focus on organic growth through sales talent and tech investments. M&A is an option, but we prioritize building durable value organically, maintaining a high bar for acquisitions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Terms and Privacy Policy

Privacy Dashboard

More Info