Copart Posts 24% EPS Jump in Fiscal Q4

Key Points

• Earnings per share (GAAP) rose 24.2% to $0.41, while revenue increased 5.2 % for the quarter ended July 31, 2025.

• Net income and gross profit (GAAP) outpaced revenue growth, up 22.9% and 12.4% year over year.

• No forward financial guidance was provided.

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Copart (NASDAQ:CPRT), a global player in online vehicle auctions, delivered its earnings release for the fourth quarter of fiscal 2025 on September 4, 2025. The most notable news was a significant jump in GAAP earnings per share, reaching $0.41, up from $0.33 in the prior-year quarter, alongside a 5.2% increase in GAAP revenue, which totaled $1.1 billion. Gross profit and net income (GAAP) grew even faster than revenue, up 12.4% and 22.9%, respectively. Overall, the quarter shows operational strength despite flat vehicle volumes and ongoing cost pressures.

Copart’s Business and Strategic Focus

Copart builds and operates a global auction platform for vehicles, connecting sellers like insurance companies, fleet operators, and dealerships with buyers in over 185 countries. Its core business centers on facilitating online auctions for cars, trucks, and other vehicles—primarily those deemed total losses by insurance carriers or fleet retired units.

The company relies on a vast facility network that processes, stores, and displays vehicles, supported by proprietary technology platforms. Recent business strategy has focused on expanding both its geographic footprint and technology capabilities—namely, the VB3 auction platform and services such as Title Express, which help insurers and sellers manage paperwork more efficiently. Success depends on its longstanding relationships with insurance companies, global reach, and ongoing investments in automation and storage capacity.

Quarterly Highlights: What Happened This Quarter

Service revenue increased 7.1% for the quarter ended July 31, 2025, while vehicle sales revenue, which comes from outright vehicle purchases and resales, dipped 4.0% (GAAP).

Operating income also grew faster than revenue, up 14.8% (GAAP), and net income attributable to Copart rose nearly 23 %. The company benefited from particularly strong cost control in yard operations and operating expenses, with operating costs rising only 0.4% even as revenue grew more than 5%. Additionally, gains from interest and other income, up 34.6% year-over-year, further boosted profits. Lower tax expense added to bottom-line growth, helping propel GAAP EPS to its 24.2% year-over-year increase.

On the operational front, Copart now manages over 250 locations across 11 countries processing more than 4 million vehicles for sale in FY2025. The recent acquisition of a 400-acre storage facility in South Florida highlights the company's preparation for catastrophic weather events, which are a recurring source of vehicle supply after disasters. The company also continues to invest in technology—its VB3 auction platform allows international participation and quicker cycle times, while automation tools help maintain lean inventory levels and capital efficiency.

Industry-wide changes were reflected in Copart’s results. Most of its auction volume still comes from insurance companies, but management recently noted that more uninsured or underinsured drivers have affected the supply of vehicles from insurers—especially as vehicle repair and insurance costs have risen. The long-term trend toward higher “total loss frequency”—or the rate at which damaged vehicles are written off by insurers rather than repaired—should continue to feed supply over time. Geographic expansion and mix shifts, such as more consignment volume in Germany, contributed to strong margin improvement.

Looking Ahead: Outlook and Watchpoints

For the upcoming quarters, management did not provide specific forward guidance or forecasts on expected revenue, earnings, or volumes, following the pattern of recent quarters. As a result, visibility for fiscal 2026 remains limited regarding potential changes in supply trends, volume normalization, or further cost growth.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Copart. The Motley Fool has a disclosure policy.