Copart 2026 Q1 Earnings Net Income Surges 11.4%

Online vehicle auction company Copart (CPRT) reported mixed results for Q1 2026, with revenue slightly below expectations but earnings per share (EPS) exceeding forecasts. The company’s profitability continued to strengthen, driven by higher average selling prices and operational efficiency. Management emphasized long-term strategic priorities, including international expansion and technology investments, despite near-term market challenges.

Revenue

Copart’s total revenue rose 0.7% year-over-year to $1.16 billion, with service revenues forming the bulk of its income. Service revenues, which include fees from auction services and logistics, increased marginally to $991.85 million, while vehicle sales—primarily from remarketing totaled-loss vehicles—climbed 1.7% to $163.19 million. The combined contribution of these segments underscored the company’s diversified revenue streams, though growth was tempered by weaker demand for used cars.

Earnings/Net Income

The company’s EPS improved by 10.5% to $0.42, outperforming the prior year’s $0.38, while net income surged 11.4% to $402.21 million from $361.18 million. This growth highlights Copart’s ability to maintain profitability despite macroeconomic headwinds, with management crediting disciplined cost management and pricing power. The sustained earnings momentum reflects over two decades of consistent quarterly profitability.

Price Action

Copart’s stock experienced a 0.88% decline in the latest trading day, extending to a 1.44% drop over the past week and a 10.36% pullback month-to-date. The post-earnings price reaction was mixed, with shares falling 1.8% in after-hours trading following the revenue miss.

Post-Earnings Price Action Review

The strategy of purchasing Copart shares after a quarterly revenue drop on the earnings report date and holding for 30 days has historically delivered favorable returns. Over the past three years, this approach yielded an average return of 10.47%, with a high of 15.25% and a low of 6.5%. The consistent performance suggests a viable risk-adjusted investment approach, particularly for investors capitalizing on post-earnings volatility.

CEO Commentary

Jeffrey Liaw, CEO, emphasized Copart’s resilience in a challenging insurance market, noting global insurance unit declines but outperforming industry benchmarks in U.S. insurance ASPs. Strategic priorities include expanding noninsurance/wholesale growth, enhancing commercial platforms like BluCar, and leveraging international demand. Liaw expressed cautious optimism, balancing near-term challenges with confidence in long-term operational and technological advantages.

Guidance

Copart reported Q1 2026 revenue of $1.16 billion and EPS of $0.41, slightly below official guidance. While no explicit future guidance was provided, management reiterated commitments to margin expansion, international growth, and disciplined capital allocation. CFO Leah Stearns highlighted ongoing investments in capacity and technology, with share repurchases contingent on valuation opportunities.

Additional News

1. Revenue Miss Amid EPS Beat: Copart’s Q1 revenue fell short of estimates by $20 million, attributed to weak used-car demand and declining vehicle values. Despite this, the company’s EPS exceeded expectations, driven by improved gross margins.

2. CEO on Market Dynamics: Jeffrey Liaw highlighted challenges in the U.S. insurance segment, including reduced coverage and soft claims, while underscoring growth in international markets and noninsurance channels.

3. International Expansion: The company’s international segment saw 7.9% year-over-year revenue growth, outpacing U.S. operations, with international buyers paying 38% higher value for vehicles compared to U.S. buyers.