Copart's Q3 Earnings In Line With Estimates But Sales Miss

Company Performance - Copart, Inc. reported third-quarter fiscal 2025 adjusted earnings per share of 42 cents, in line with the Zacks Consensus Estimate, representing a year-over-year increase of 7.7% [1] - The company generated revenues of $1.21 billion, which fell short of the Zacks Consensus Estimate of$1.24 billion, but still marked a 7.5% increase from the previous year [1] - Service revenues for the quarter were $1.03 billion, up from$946.6 million year-over-year, but below the Zacks Consensus Estimate of $1.06 billion, accounting for 85.4$176.8 million, a decline from $180.6 million in the prior-year quarter and below the Zacks Consensus Estimate of$187 million, with U.S. sales increasing by 22% while international revenues dropped by 25% [4] Financial Metrics - Gross profit increased by 5.1% year-over-year to $552 million, while total operating expenses rose by 10.2$760 million [5] - Operating income rose to $451.5 million from$437.2 million recorded in the year-ago quarter, and net income grew 6.1% year-over-year to $405.3 million [5] - As of April 30, 2025, the company had cash, cash equivalents, and restricted cash of$2.36 billion, compared to $1.5 billion as of July 31, 2024 [5] Management Insights - Management noted that total loss frequency in the U.S. rose to 22.8% in the first calendar quarter of 2025, up about 100 basis points from the prior year, which is beneficial for Copart's business model as it leads to more salvage vehicles [7] - The company is making ongoing investments in storage capacity, technology, and operations to prepare for both everyday needs and storm-related surges, with expectations that rising total loss frequency will support long-term growth [8]