Copart, which helps insurers and other sellers auction damaged and used vehicles, faces two growth challenges after its fiscal year ended July 31, 2026. U.S. operating profit fell 4.2%, and growth abroad only partly offset the decline. Its planned $1.9 billion purchase of ACV would expand sales between vehicle dealers, making the financial task clear: turn a well-funded acquisition into profitable growth while restoring momentum in the larger U.S. business.
Reporting basis: COPART INC, ticker CPRT, CIK 0000900075; Form 10-K filed September 29, 2026; accession 0001193125-26-405731. Fiscal 2026 covers August 1, 2025–July 31, 2026. Comparisons use the corresponding fiscal years ended July 31. Figures are consolidated under U.S. generally accepted accounting principles (GAAP), including controlled subsidiaries. Information cutoff: October 3, 2026. The ACV agreement occurred after year-end and is not part of fiscal 2026 operating results.
Sources: SEC filing identification; Copart fiscal 2026 Form 10-K, Note 14, pp. 81–82, and Note 19, p. 84.
1. International growth kept revenue steady, but could not protect profit
Copart’s nearly flat revenue concealed a weaker U.S. business and a growing international operation. Most revenue comes from fees for arranging auctions, transporting vehicles, processing ownership documents and providing related services. For these vehicles, Copart records its fees as revenue, not the full price paid by the buyer. When Copart buys a vehicle itself and resells it, it records the full selling price and the vehicle’s purchase cost separately.
That distinction matters because a shift from buying vehicles to selling them for somebody else can reduce reported vehicle sales without losing the underlying customer relationship. Some international sellers made that shift during fiscal 2026. Revenue growth alone therefore does not tell the whole story about auction activity or profit.
Operating profit is what remains after the costs of running the business, before interest, other nonoperating items and income taxes. The operating margin shows how much of each revenue dollar remains at that stage.
| Consolidated results; US$ millions except percentages and per-share amounts | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| Revenue | 4,236.823 | 4,646.958 | 4,666.209 |
| Operating profit | 1,572.023 | 1,696.714 | 1,652.590 |
| Operating margin, calculated | 37.10% | 36.51% | 35.42% |
| Net income attributable to Copart | 1,363.020 | 1,552.449 | 1,484.270 |
| Net margin attributable to Copart, calculated | 32.17% | 33.41% | 31.81% |
| Diluted earnings per share, US$ | 1.40 | 1.59 | 1.55 |
Source: Fiscal 2026 Form 10-K, consolidated income statements, p. 58; revenue policies, pp. 42–43 and Note 1.
Calculation notes: Margins divide the relevant profit by revenue for the same fiscal year. Net income attributable to Copart excludes the share of subsidiary results allocated to minority owners. Diluted earnings per share also allows for potential additional shares from employee awards.
Revenue rose only 0.4% after growing 9.7% in fiscal 2025. Operating profit fell 2.6%, and net income attributable to Copart fell 4.4%. The company remains highly profitable, but its operating margin narrowed across both annual comparisons in the table.
| Geographic evidence; US$ millions | FY2025 | FY2026 |
|---|---|---|
| U.S. service revenue | 3,451.558 | 3,388.287 |
| International service revenue | 517.104 | 581.233 |
| U.S. total revenue | 3,855.104 | 3,807.430 |
| International total revenue | 791.854 | 858.779 |
| U.S. operating profit | 1,480.886 | 1,419.040 |
| International operating profit | 215.828 | 233.550 |
Source: Fiscal 2026 Form 10-K, Item 7, pp. 37–39, and Note 14, pp. 81–82.
Reporting basis: These are the company’s two reporting segments. Their operating profits reconcile to the consolidated total.
U.S. service revenue declined by $63.3 million. Management attributes the decline primarily to the comparison with hurricane-related revenue in fiscal 2025 and lower volume, partly offset by more revenue per vehicle.
International service revenue increased by $64.1 million, almost exactly replacing the U.S. decline. Favorable exchange rates contributed $21.9 million of that international increase. Excluding that disclosed currency effect leaves approximately $42.2 million, or 8.2% growth against the prior-year base. Management attributes the remaining increase primarily to higher volume and revenue per vehicle, without providing a complete numerical split.
Costs explain why steady revenue still produced lower profit. Facility expenses rose $21.6 million, the cost of vehicles sold rose $13.5 million and administrative expenses rose $28.3 million. Together, these increases exceeded the $19.3 million revenue gain, reducing operating profit by $44.1 million.
U.S. facility costs benefited from the absence of some prior-year hurricane costs, but transportation-related costs increased. International processing costs per vehicle also increased. Administrative spending included U.S. sales-force expansion and higher labor and outside-service costs abroad. These investments may help win and serve more sellers, but their expense arrives before any resulting sales are assured.
The international operation added $17.7 million of operating profit, against a $61.8 million decline in the U.S. Its improvement is meaningful, but the U.S. still supplies approximately 86% of consolidated operating profit. Restoring that business therefore matters more to near-term earnings than international growth alone.
Source: Fiscal 2026 Form 10-K, Item 7, pp. 37–39; Note 14, pp. 81–82.
Calculation notes: Calculations use the exact statement amounts. Currency-adjusted growth removes only the disclosed exchange-rate contribution; it does not establish growth excluding acquisitions or other changes in business scope.
2. A higher total-loss share does not guarantee more auctions
An insurer usually declares a vehicle a total loss when repairing it is no longer economical. Copart then helps find a buyer who can repair it, reuse its parts or recycle its materials. Insurers supplied 79% of vehicles processed in fiscal 2026, down from 81% in each of the preceding two years. That remains a large dependence on insurance claims, even though no individual customer represented more than 10% of revenue.
A rising share of total losses can coexist with fewer damaged vehicles reaching auction. CCC Intelligent Solutions’ 2026 Crash Course report supplies useful counterevidence to a simple growth story. In its calendar-2025 claims data, the share marked as total losses rose by 0.8 percentage points to 23.1%, yet total-loss valuation counts declined 2.9%. Fewer claims can outweigh a greater probability that each claim becomes a total loss.
CCC also reports that consumers are absorbing more small losses themselves and that comprehensive claims, including weather and theft claims, declined sharply in 2025. These industry observations are consistent with a difficult volume environment. They do not establish how much of Copart’s decline came from industry conditions, seller changes or competition.
Sources: Fiscal 2026 Form 10-K, Item 1, pp. 11–12, and Item 7, pp. 34–35; CCC, Crash Course 2026: Complexity Compounds, claims-volume discussion and Figure 17; CCC report announcement, March 31, 2026.
Reporting basis: CCC’s calendar-year industry sample is not Copart’s fiscal-year vehicle count.
Copart’s response combines physical capacity with services that help sellers complete claims faster. Its Co.ai tools estimate salvage values; Title Express helps obtain ownership documents; and its auction platform connects sellers with a broad buyer population. These capabilities can improve proceeds and reduce delays, making Copart more useful to insurers. The filing does not separately quantify their contribution to fiscal 2026 growth.
Competition still limits what those advantages guarantee. Copart names RB Global’s IAA, Manheim, Carvana, Openlane and ACV among auction competitors, while dismantlers can sometimes buy directly from insurers.
RB Global reported 11% growth in automotive units sold for the quarter ended June 30, 2026. Its automotive category includes both salvage and nonsalvage passenger vehicles across its marketplace brands.
| RB Global automotive activity; thousands of units | Three months ended June 30, 2025 | Three months ended June 30, 2026 |
|---|---|---|
| Automotive units sold | 595.9 | 658.8 |
Source: RB Global second-quarter 2026 results, August 4, 2026, “Lots Sold by Sector” and sector definitions.
Reporting basis: RB Global reports growth rounded to 11%. This calendar-quarter measure differs from Copart’s fiscal-year results in both period and business scope.
That result cannot prove a Copart market-share loss, but it cautions against treating every weakness as universal across competitors.
Storm comparisons also cut both ways. Hurricanes can bring more vehicles but require urgent towing, storage and extra spending before auctions occur. Copart says Hurricanes Helene and Milton previously strained capacity in affected areas. Because the filing does not disclose a complete revenue-and-cost reconciliation for those storms, adjusting for revenue alone would not isolate their profit effect.
The evidence supports the business case for continued investment in service and capacity, while leaving the scale of a volume recovery unproven.
Source: Fiscal 2026 Form 10-K, service offerings, pp. 8–10; competition, p. 12; capacity risk, pp. 16–17; Item 7, pp. 37–40.
3. Lower investment spending offset the drop in operating cash
Cash left after equipment and property purchases increased because spending fell, not because operations produced more cash. Cash generated by operations fell 10.8% to $1.604 billion. Payments for property and equipment fell even faster, leaving $1.267 billion after those purchases.
| Consolidated cash allocation; US$ millions | FY2025 | FY2026 |
|---|---|---|
| Cash generated by operations | 1,799.750 | 1,604.492 |
| Property and equipment purchases, positive cash spending | 568.990 | 337.363 |
| Remainder: free cash flow, calculated | 1,230.760 | 1,267.129 |
| Cash paid for repurchases under the share program | 0.000 | 1,632.538 |
| Remainder after those repurchases, calculated | 1,230.760 | -365.409 |
Reporting basis: Free cash flow here means operating cash flow less the cash-flow statement’s property and equipment purchases. It excludes acquisitions, purchases of Treasury bills, asset-sale proceeds and property acquired through settlement of earlier deposits. It is not a GAAP subtotal. The final row precedes other investing and financing movements; it is not the total change in cash. No cash dividends appear in either year’s financing cash flows.
Source: Fiscal 2026 Form 10-K, consolidated cash-flow statements, p. 61.
The profit-to-cash reconciliation begins with consolidated net income of $1.480 billion, before allocating the minority owners’ share of losses. Noncash and other reconciliation adjustments added $331.7 million. Changes in operating assets and liabilities then absorbed $207.6 million, producing the $1.604 billion operating cash total.
The comparison with fiscal 2025 explains the decline more clearly. Operating assets and liabilities had supplied $22.6 million of cash that year, so their move to absorbing cash reduced the annual comparison by $230.2 million. Consolidated net income also fell $68.0 million, while larger noncash and other adjustments offset $102.9 million of those reductions. Together, these changes explain the $195.3 million decline in operating cash.
The largest fiscal 2026 adjustments included $238.5 million of depreciation and amortization, including debt costs, $47.4 million of deferred tax expense and $38.8 million of stock compensation. Depreciation and amortization spread asset costs across the periods they benefit; they reduce profit without repeating the original purchase payment. Deferred tax expense reflects differences between when accounting and tax rules recognize items. Stock compensation also reduces profit without an immediate equivalent cash payment, but can create additional shares.
Meanwhile, money tied up in receivables used $80.6 million, versus $34.0 million a year earlier. Copart often pays towing or other charges for insurers before recovering the money when a vehicle sells. Those advances alone were $559.2 million at year-end.
Trade receivables include both fees and full auction proceeds awaiting collection. Dividing all receivables by Copart’s mostly fee-based revenue would therefore mix unlike amounts.
Income-tax receivables used another $49.3 million, and reductions in income-tax payables used $47.4 million. Other prepaid and noncurrent assets absorbed $47.6 million. Rising accounts payable and accrued liabilities supplied $32.5 million, but this was less support than the prior year’s $69.6 million.
In everyday terms, more money waited in customer and tax balances, while supplier and other unpaid bills provided less incremental funding than before.
Sources: Fiscal 2026 Form 10-K, cash-flow statements, p. 61; Note 3, p. 69.
Reporting basis: The cash-flow statement governs cash movements. Balance-sheet changes can differ because of currency translation, noncash items and other adjustments.
The full cash movement also reflects how Copart held and used its savings. Investing used $877.6 million, including $544.1 million of net Treasury-bill purchases. Financing used $1.607 billion, mainly for share repurchases. After a $7.3 million favorable exchange-rate effect, reported cash, cash equivalents and restricted cash fell from $2.781 billion to $1.908 billion.
Combining that cash line with separately classified Treasury bills gives a smaller decline: from $4.789 billion to $4.490 billion. Some cash was moved into securities rather than spent on operations. Nevertheless, repurchases exceeded the year’s free cash flow, so accumulated financial resources helped fund capital allocation.
Source: Fiscal 2026 Form 10-K, balance sheets, p. 57; cash-flow statements, p. 61; Note 1, pp. 66–67.
Reporting basis: Both cash balances include restricted cash—money subject to limits on its use. The combined cash-and-securities total is not entirely unrestricted cash.
4. The balance sheet supports expansion, with little borrowing pressure
Copart has substantial funding capacity even after its large repurchases. At July 31, 2026, it reported $4.490 billion in the combined cash-and-Treasury-bill measure and no drawn revolving loan. The separately classified Treasury bills mature within 12 months. It also had $1.228 billion of unused revolving borrowing capacity after outstanding letters of credit.
| Consolidated financial position; US$ millions | July 31, 2025 | July 31, 2026 |
|---|---|---|
| Cash, cash equivalents and restricted cash | 2,780.531 | 1,907.901 |
| Held-to-maturity Treasury bills | 2,008.539 | 2,581.901 |
| Net receivables | 762.811 | 809.247 |
| Deferred vehicle processing costs | 116.145 | 122.948 |
| Owned vehicle inventory | 39.661 | 51.382 |
| Net property and equipment | 3,598.093 | 3,733.220 |
| Total assets | 10,090.902 | 10,027.810 |
| Total liabilities | 883.411 | 913.930 |
| Redeemable minority ownership | 20.458 | 16.585 |
| Stockholders’ equity | 9,187.033 | 9,097.295 |
Source: Fiscal 2026 Form 10-K, balance sheets, p. 57; Notes 1, 3 and 9.
Reporting basis: Deferred vehicle processing costs are the filing’s “vehicle pooling costs.” Redeemable minority ownership represents outside owners’ interests in a subsidiary that they can require to be bought back under specified terms. It is presented between liabilities and stockholders’ equity.
Net receivables rose $46.4 million, with trade receivables rising $29.7 million and insurer advances rising $18.5 million. The allowance for expected credit losses increased from $12.9 million to $18.6 million. These movements show more funds awaiting recovery and a larger estimate of amounts that may not be collected; they do not, by themselves, establish widespread collection failure.
Owned vehicle inventory rose $11.7 million. Most vehicles on Copart’s sites belong to sellers, so this inventory line does not measure every vehicle awaiting auction.
Separately, $122.9 million of processing costs remained on the balance sheet until the associated vehicles sell. That accounting delays expense recognition to match auction revenue and makes the timing of auctions important to both profit and cash.
The physical business continued to expand despite lower annual purchase payments. Net property and equipment rose $135.1 million. Gross land increased $106.7 million and buildings and improvements increased $190.9 million.
Management identifies land purchases, facility openings and improvements, software, equipment and lease buyouts as investment uses. It does not separate spending to maintain existing operations from spending to expand them. The difference between spending and depreciation cannot supply that missing split.
Net intangible assets declined from $62.8 million to $50.5 million as acquired customer relationships and other assets with limited useful lives continued to be amortized. Intangible assets have no physical form. Costs of those with limited useful lives are spread over those lives; the balance also includes trade names with indefinite lives that are not amortized.
Goodwill—the acquisition value recorded beyond separately identified net assets—declined $6.5 million. A $7.4 million adverse currency effect exceeded $0.9 million of business-combination adjustments. Copart recorded no goodwill impairment, or write-down for lost value. ACV’s future purchase accounting is not included in these balances.
Sources: Fiscal 2026 Form 10-K, Item 7, p. 41; Note 1, pp. 64–67; Notes 3–7, pp. 69–72; Note 19, p. 84.
Most liabilities relate to operating obligations and taxes. Accounts payable and accrued liabilities rose $42.8 million, including $27.1 million more owed to vehicle sellers and $5.4 million more buyer deposits and prepayments. Those obligations help explain why the headline cash balance is not simply spare money.
Deferred income-tax liabilities increased $47.3 million, while current and noncurrent income-tax payables together declined $46.3 million. These are different balances: deferred taxes reflect accounting-versus-tax timing differences, while tax payables represent recorded amounts owed to tax authorities.
Lease liabilities declined from $103.7 million to $88.4 million. Future lease payments before discounting total $109.2 million, including approximately $17.6 million in fiscal 2027. Most liabilities are for operating leases, whose weighted-average remaining term is 9.53 years. They are ongoing facility commitments rather than a large near-term refinancing problem.
The replacement revolving agreement moved the facility’s maturity from December 2026 to January 23, 2031. This borrowing line lets Copart draw funds when needed, subject to its terms. Interest pricing depends on the chosen rate and the company’s debt relative to earnings.
Copart reported compliance with its loan conditions, including the maximum net-leverage requirement. With no drawn balance, there is no large scheduled bank principal repayment, although future borrowing would create interest-rate exposure.
Reporting basis: The filing specifies interest margins of 0.75%–1.125% above its “applicable fixed rate” option and 0%–0.125% above its daily-rate option. These are contractual additions to the underlying rates, not all-in borrowing rates. Unused commitments carry an annual fee of 0.05%–0.125%.
Copart also held $598.3 million of its reported cash line in foreign subsidiaries and intended to keep those funds invested abroad. That intention means the entire consolidated cash balance should not be treated as immediately earmarked for a U.S. transaction. Transfers could incur foreign withholding taxes, although Copart did not anticipate a significant tax liability from repatriating undistributed foreign earnings. Securities maturities, ongoing operating receipts and the undrawn facility nevertheless provide several funding routes.
Sources: Fiscal 2026 Form 10-K, liquidity and credit agreement, pp. 40–41; Note 5, pp. 69–71; Notes 8–9, p. 73; Note 13, p. 81; debt risk, Item 1A.
5. Repurchases softened the per-share profit decline but reduced retained earnings
Fewer shares limited the decline in earnings per share without reversing the fall in total profit. Diluted average shares fell from 977.563 million to 956.860 million, a 2.1% reduction. Reported diluted earnings per share fell 2.5%, compared with a 4.4% decline in net income attributable to Copart.
Repurchases return cash to selling shareholders and, by reducing outstanding shares, increase the ownership share represented by each remaining share. They can also offset shares issued to employees. Copart repurchased 43.433 million shares under its program. Employee-related issuance partly offset that reduction, leaving issued and outstanding shares down 41.180 million to 926.298 million at year-end.
The annual diluted share count also changed for a separate reason: fewer potential shares from employee awards entered the earnings-per-share calculation. The basic average share count fell by 15.666 million, while the additional shares included for dilution fell by 5.037 million. Together, these explain the 20.703 million decline in diluted average shares; repurchases alone do not explain the full change.
The equity statement removes repurchased shares from outstanding shares and charges common capital and retained earnings; it does not build a separate treasury-share balance. The program is discretionary, without a time limit, and 282 million authorized shares remained available for repurchase. That authorization allows future purchases but creates no contractual cash obligation.
The filing does not provide a detailed economic rationale for the timing of fiscal 2026 purchases. Their observable tradeoff was a larger ownership share for remaining shareholders and less dilution, in exchange for substantial cash use and less funding available for expansion or acquisitions. With ACV pending, management can preserve flexibility by adjusting further discretionary purchases.
Stockholders’ equity fell $89.7 million despite $1.484 billion of attributable profit. The main offset was a $1.649 billion repurchase entry in equity.
Additional paid-in capital—the amount recorded in that equity account from share issuance and compensation—still increased $12.2 million. Employee issuance and compensation entries exceeded the portion of repurchases charged to that account. Retained earnings, the accounting balance of accumulated profits kept in the business, fell $112.4 million. Favorable currency translation reduced accumulated comprehensive losses by $10.5 million.
Source: Fiscal 2026 Form 10-K, income statements, p. 58; changes in equity, p. 60; Notes 11–12, pp. 74–78.
Reporting basis: Retained earnings are not a separate cash account. The $1.649 billion repurchase entry in equity differs from the $1.633 billion cash-flow payment. The difference is not treated as additional cash paid during the year.
Profit also lost support from items outside the auction operation. Net interest income increased slightly to $181.9 million, but other net income fell from $20.0 million to $0.5 million. The cash-flow reconciliation shows a $1.1 million loss on property sales in fiscal 2026 versus a $13.7 million gain in fiscal 2025. Management also identifies lower currency gains.
These are pretax effects. The filing does not supply the item-specific after-tax information needed to calculate comparable adjusted net income.
The effective income-tax rate—the share of pretax profit recorded as tax expense—rose from 18.3% to 19.3%. Tax benefits associated with employee option exercises fell from $36.7 million to $6.6 million. The benefit from the foreign-derived intangible income deduction fell from $55.0 million to $46.7 million. This deduction reduces U.S. tax on qualifying income from serving foreign customers.
Together, those two benefits fell by $38.4 million. Partly offsetting that change, the disclosed state income-tax effect fell from $38.6 million to $21.5 million, a $17.1 million reduction. Other tax items also changed, so the lost benefits should not be read as an equal increase in total tax expense.
The higher tax rate helps explain why net profit declined faster than operating profit. Neither a repeat of option-related benefits nor today’s interest income should be assumed to supply future operating growth.
Source: Fiscal 2026 Form 10-K, Item 7, p. 39; income and cash-flow statements, pp. 58 and 61; Note 13, pp. 79–81.
6. ACV expands the customer base, but brings a business still reporting losses
Management’s stated purpose for buying ACV is to strengthen sales between dealers and add inspection, vehicle-data and valuation tools. The intended mechanism is practical: connect more buyers and sellers, offer more transport services and combine ACV’s dealer relationships with Copart’s physical network. The acquisition offers a new source of growth, but its profit contribution still has to be built.
Copart agreed to pay $10.50 per ACV share in cash, implying approximately $1.9 billion of equity consideration. Management planned to fund the purchase with cash on hand and expected closing by calendar year-end 2026. Completion depends on shareholders tendering a majority of ACV’s outstanding shares, antitrust clearance and other conditions.
Management expected the deal to be neutral to earnings per share in the first full year of ownership and to increase earnings per share in fiscal 2028 and beyond. Those are forecasts. The announcement does not quantify how savings and additional revenue would produce that result.
Sources: Copart and ACV acquisition announcement, September 10, 2026, strategic benefits and transaction details; Fiscal 2026 Form 10-K, Note 19, p. 84.
ACV’s latest reported quarter illustrates both the opportunity and the limitation. For the three months ended June 30, 2026, revenue increased 10% to approximately $214 million, while marketplace units were approximately flat at 211,472. Its reported GAAP net loss was approximately $8 million, compared with $7 million a year earlier. ACV’s August outlook still called for a full-calendar-year GAAP loss of $44 million–$49 million.
That means Copart is adding capabilities and customer access rather than an already profitable operation on reported net-income measures. Combining customer networks may improve sales, but integration spending, employee compensation and the interest income forgone on cash used for the purchase all matter.
Copart had not completed its assessment of the acquired assets and liabilities when it filed its 10-K. A precise combined earnings model would therefore go beyond the disclosed evidence.
Sources: ACV second-quarter 2026 earnings release, August 10, 2026, quarterly highlights and calendar-2026 guidance; Fiscal 2026 Form 10-K, Note 19.
Reporting basis: ACV’s calendar periods are not combined with Copart’s fiscal-year actuals.
The funding requirement looks manageable at the disclosed scale. Subtracting the approximate $1.9 billion consideration from July’s $4.490 billion combined cash-and-securities balance leaves approximately $2.590 billion. That is before intervening cash flows, transaction expenses, any additional obligations and cash restrictions. It is a funding illustration, not a forecast of cash at closing or an assumption that all securities can be used immediately.
The larger question is execution. Copart must keep funding yards, technology and seller service while developing ACV’s contribution. Further repurchases remain optional. A successful expansion would show up in profitable dealer activity and cash generation, alongside better U.S. auction results.
Source: Fiscal 2026 Form 10-K, balance sheets, p. 57; liquidity discussion, pp. 40–41; Notes 1 and 19.
Calculation notes: The funding illustration uses reported balances and the approximate announced equity consideration. A larger consolidated revenue total alone would not establish successful integration.
7. Compliance and seller trust remain conditions for growth
Copart’s financial strength does not remove the business risk of its unresolved money-laundering investigation. The Department of Justice is examining whether Copart’s controls for detecting and preventing money laundering by auction members complied with applicable laws. Copart received a letter concerning possible exposure in October 2023 and says it is cooperating. It cannot predict the duration or result of potential proceedings or the range of possible losses.
The consequences could extend beyond a fine. Additional buyer checks, restrictions or compliance requirements could increase costs or complicate participation in the marketplace. That is a possible business effect, not a forecast of an enforcement outcome. The disclosed inability to estimate a loss does not establish that the exposure is zero.
International access is also central to the auction model. Changes in tariffs, import rules or customs practices can make a vehicle less economical for an overseas buyer, reducing demand or bids. Copart does not quantify a fiscal 2026 earnings loss caused by tariffs. The relevant operational test is whether buyers continue participating at prices that preserve sellers’ proceeds and Copart’s fee revenue.
The recorded amount of uncertain tax benefits has narrowed, but tax uncertainty has not disappeared. These are claimed tax benefits that do not yet meet the accounting requirements for recognition. The balance fell from $25.2 million to $2.7 million.
That decline reflects $11.2 million of cash settlements, $9.0 million of reductions for prior-year positions and $2.5 million of expired assessment periods, partly offset by a small increase. Audits remain open in specified U.S. and U.K. periods. The reduction should not be treated as an annual source of future profit.
Sources: Fiscal 2026 Form 10-K, regulatory and trade risks, pp. 21–23; Note 13, pp. 80–81; Note 15, p. 83.
8. Copart can finance the next stage; profitable execution is the test
Copart has the resources to expand, but fiscal 2026 did not establish a recovery in its core U.S. business. International growth preserved consolidated revenue, yet higher costs and weaker U.S. results reduced operating profit. Cash left after property and equipment purchases improved only because those purchases slowed, while repurchases consumed more than that remainder.
The planned ACV acquisition gives Copart a credible route into more dealer transactions and vehicle services. Its balance sheet gives management room to pursue that route without an immediate large bank refinancing need.
The next stage will be stronger if U.S. vehicle activity and profit improve, receivables absorb less cash, and ACV contributes to earnings on the timetable management described. The evidence supports a well-funded expansion with significant operating work still to do.
Sources: Fiscal 2026 Form 10-K, Item 7, consolidated statements and Notes 9, 14 and 19; September 10 acquisition announcement.
Calculation notes
Reporting basis: Financial-statement inputs below are in US$ millions unless stated otherwise. The filing reports them in thousands; dividing by 1,000 preserves the amounts. Growth equals current-period amount divided by the comparable prior-period amount, minus one. Margins use revenue for the same year. Rounded narrative figures can differ slightly from sums of rounded components.
Earnings and segment reconciliation. Revenue growth is 4,666.209 / 4,646.958 − 1 = 0.414%; the prior comparison is 4,646.958 / 4,236.823 − 1 = 9.680%. Operating-profit growth is 1,652.590 / 1,696.714 − 1 = −2.601%; attributable net-income growth is 1,484.270 / 1,552.449 − 1 = −4.392%. U.S. operating-profit growth is 1,419.040 / 1,480.886 − 1 = −4.176%. U.S. and international operating profit sum to 1,419.040 + 233.550 = 1,652.590. The operating-profit change is +19.251 revenue −21.570 facility costs −13.466 vehicle costs −28.339 administration = −44.124. International service growth excluding the disclosed currency contribution is (581.233 −517.104 −21.9) / 517.104 = approximately 8.17%; this does not remove any other changes in business scope.
Profit to operating cash. Consolidated net income 1,480.397 + noncash and other adjustments 331.698 − changes in operating assets and liabilities 207.603 = 1,604.492. The adjustment total comprises 238.466 depreciation/amortization including debt costs +5.599 allowance for credit losses +0.326 affiliate losses +38.818 stock compensation +1.130 asset-sale loss +47.359 deferred taxes. The operating-balance total is −80.629 receivables −6.358 vehicle processing costs −11.443 inventory −47.613 other assets +0.690 leases +32.507 payables +1.908 deferred revenue −49.277 tax receivables −47.388 tax payables. This uses the cash-flow statement’s reported depreciation/amortization amount rather than substituting the differently stated segment-note total.
The fiscal 2025 comparison is 1,548.363 net income +228.827 adjustments +22.560 operating-balance movements = 1,799.750. Its adjustment total is 217.784 +0.354 −0.149 +38.004 −13.726 −13.440 = 228.827. Its operating-balance movements are −33.950 +16.705 +4.655 +7.748 +0.478 +69.599 +2.159 −0.575 −44.259 = 22.560. The annual operating-cash decline therefore reconciles as −67.966 net income +102.871 adjustments −230.163 operating-balance movements = −195.258.
Cash allocation and reconciliation. Free cash flow is 1,604.492 −337.363 = 1,267.129 for fiscal 2026, versus 1,799.750 −568.990 = 1,230.760 for fiscal 2025, an increase of 2.955%. Earlier property deposits settled into property purchases were 6.222 and 64.050, respectively. These are disclosed as noncash supplemental items rather than added to current cash spending. Closing cash including restricted cash reconciles as 2,780.531 +1,604.492 −877.601 −1,606.854 +7.333 = 1,907.901. Combined cash and securities equal 1,907.901 +2,581.901 = 4,489.802, compared with 2,780.531 +2,008.539 = 4,789.070. Net Treasury-bill purchase payments were 2,889.072 −2,345.000 = 544.072; this cash movement is distinct from the securities’ carrying-value change.
Balance-sheet and equity reconciliation. Fiscal 2026 assets 10,027.810 = liabilities 913.930 + redeemable minority ownership 16.585 + equity 9,097.295. Fiscal 2025 assets 10,090.902 = 883.411 +20.458 +9,187.033. Redeemable minority ownership declined by its 3.873 share of losses. Equity reconciles as 9,187.033 +1,484.270 net income +10.505 currency translation +12.966 net option-exercise entry +37.065 compensation entry +14.312 employee purchase-plan issuance −1,648.856 repurchase entry = 9,097.295. Additional paid-in capital is 1,214.150 +16.702 +37.065 +14.312 −55.875 = 1,226.354. Retained earnings are 8,093.069 +1,484.270 −3.736 employee withholding entry −1,592.977 repurchase allocation = 7,980.626. Common capital declines by 0.004 to 0.093; accumulated comprehensive loss improves from −120.283 to −109.778. The 16.318 difference between the repurchase equity entry and cash payment is not assigned an unsupported cause.
Share-count scope. Year-end issued and outstanding shares reconcile as 967,478,690 +1,529,369 net option shares +213,253 compensation shares +510,145 employee purchase-plan shares −43,433,164 program repurchases = 926,298,293. These are point-in-time counts, unlike the annual diluted weighted averages of 956.860 million and 977.563 million used for earnings per share. The average share count fell 2.118%. Basic weighted-average shares declined from 965.306 million to 949.640 million, a reduction of 15.666 million. Dilutive potential shares declined from 12.257 million to 7.220 million, a reduction of 5.037 million. Those reductions sum to 20.703 million. The 2.516% decline in earnings per share is calculated from the reported, rounded amounts of $1.55 and $1.59. The equity compensation entry and the cash-flow compensation adjustment are different reported amounts and are not substituted for one another.
Consolidated reporting scope. Cash figures include restricted cash at July 31, 2026 and July 31, 2025. Operating cash flow covers each full fiscal year from August 1 through July 31. No parent-only or subsidiary-only amounts replace consolidated totals. The corresponding embedded XBRL tags are
us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsandus-gaap:NetCashProvidedByUsedInOperatingActivities, with USD units and scale 3. Facility-opening counts are not used because the risk discussion and detailed opening table give different counts for fiscal 2026 U.S. openings.
Source: Fiscal 2026 Form 10-K and embedded XBRL, pp. 17, 36–41, 57–61 and Notes 1–19. Calculation inputs preserve the reported statement scope, including restricted cash and redeemable minority ownership.
This analysis is for general information and is not investment advice.