TLDR
- Copart Q4 revenue came in at $1.15 billion, up 2.4% year over year, beating estimates of $1.14 billion
- EPS of $0.35 missed the $0.39 forecast, down 14.6% from the prior-year quarter
- The stock fell 4% during the regular session to $30.75, then surged 8.59% in after-hours trading to $33.39
- Copart announced a $1.9 billion all-cash acquisition of ACV Auctions at $10.50 per share, a 45% premium
- Net income fell 17.4% to $327.4 million as gross profit dropped 5.5% and operating costs rose
Copart posted a mixed set of fourth-quarter results on Thursday, beating on revenue but falling short on earnings. The stock dropped 4% during the regular session before reversing course sharply in after-hours trading.
After the close, CPRT jumped 8.59% to $33.39, up from a regular session close of $30.75.
Revenue for the quarter came in at $1.15 billion, up 2.4% from a year earlier and just ahead of the Wall Street estimate of $1.14 billion. On the bottom line, Copart earned $0.35 per diluted share, missing the $0.39 consensus by about 10%.
Net income attributable to Copart fell 17.4% year over year to $327.4 million. Gross profit dropped 5.5% to $481 million, and gross margin came in at 41.8%.
Operating income declined 10.6% to $368.9 million, while operating expenses per vehicle rose 12.7% year over year. Management acknowledged the cost increase and said it expects to bring that figure down.
Global units sold fell 2.9% in the quarter and 5.5% for the full year, excluding catastrophe-related units. U.S. insurance volumes were weaker, reflecting lower claims frequency across the industry.
ACV Auctions Acquisition
The bigger story of the evening was Copart’s announcement that it agreed to acquire ACV Auctions in an all-cash deal valued at approximately $1.9 billion. The purchase price of $10.50 per share represents a 45% premium to ACV’s last close. ACV stock jumped more than 40% after the bell.
ACV operates a digital marketplace for wholesale vehicle transactions, connecting dealers, commercial buyers and sellers of used vehicles. Copart said the deal expands its reach into dealer-to-dealer wholesale remarketing.
The transaction is expected to close by the end of calendar year 2026. Copart said it expects the deal to be breakeven in the current fiscal year and accretive in fiscal 2028. The company also expects to retain more than $2 billion in cash after closing.
Evercore is advising Copart on the deal, while J.P. Morgan Securities is advising ACV.
International Growth and Balance Sheet
One bright spot in the quarter was international performance. International revenue rose 11.7% year over year to $222.1 million, outpacing the U.S. business.
Revenue per unit increased 5.4% in the quarter, and global average selling prices rose 3.5% from a year earlier. Non-insurance volumes in the U.S. returned to modest growth.
Copart ended the period with $5.7 billion in liquidity as of July 31, including $4.5 billion in cash equivalents and held-to-maturity securities. The company carries no debt and has $1.25 billion available under its revolving credit facility.
CEO Jay Adair said Copart thinks “in decades,” not quarters, and described AI as “a very important differentiator” the company plans to use to reduce costs and drive demand on its platform.
CPRT’s 52-week range sits between $26.81 and $49.05. The after-hours price of $33.39 puts the stock roughly 32% below that high.
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