01—Abstract
Summary
Summary of the 10-K filed September 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Copart's fiscal 2026 (year ended July 31, 2026) showed a modest top-line picture with margin compression and heavier capital return.
Total service revenues and vehicle sales were $4.67 billiona, up roughly 0.4% from $4.65 billion in fiscal 2025, while operating income fell to $1.65 billion from $1.70 billion and the operating margin slipped to about 35.4% from 36.5%. Net income attributable to Copart was $1.48 billion, down about 4.4%, and diluted EPS was $1.55 versus $1.59. Growth was concentrated internationally: International service revenues rose 12.4%, while U.S. service revenues declined 1.8%, largely because fiscal 2025 included one-time hurricane Helene and Milton revenue.
Operating costs rose faster than revenue, with facility operations up 1.1%, G&A up 7.0%, and International facility costs up 11.2%. Cash generation and capital allocation were the major stories. Operating cash flow fell 10.8% to $1.60 billionb.
Copart repurchased 43.4 million shares for $1.6 billionc, its first buybacks in several years, and cash, equivalents and restricted cash fell $872.6 million to $1.91 billion. Cash held in held-to-maturity Treasury bills rose to $2.58 billion, so total liquidity remains substantial. The company also refinanced into a $1.25 billion unsecured revolver maturing in 2031, with $1.23 billion unused.
The most significant forward-looking item is the September 10, 2026 agreement to acquire ACV Auctions for $10.50d per share in cash, an implied equity value of about $1.9 billion, expected to close by calendar year-end 2026 subject to a tender of a majority of shares and HSR clearance. This would be a meaningful strategic move into whole-car remarketing and will consume most of the company's cash. Investors should also weigh the disclosed U.S. Department of Justice money-laundering investigation, which the company says it cannot yet size, along with ongoing tariff and cross-border trade risks.
02—Key points
Key Highlights
- Total revenue of $4.67B rose about 0.4% year over year, but operating income fell 2.6% to $1.65B and operating margin declined to about 35.4% from 36.5%.
- International service revenues grew 12.4% to $581M, while U.S. service revenues declined 1.8% to $3.39B, partly reflecting non-recurring hurricane Helene and Milton revenue in fiscal 2025.
- Net income attributable to Copart fell 4.4% to $1.48B; diluted EPS was $1.55 versus $1.59 in fiscal 2025.
- Copart repurchased 43.4M shares for $1.6B at an average of $37.63, and 282M shares remain available under the authorization.
- Operating cash flow declined 10.8% to $1.60B, and cash plus restricted cash fell $873M to $1.91B, while held-to-maturity Treasury investments rose to $2.58B.
- Agreed to acquire ACV Auctions for $10.50 per share in cash (~$1.9B implied equity value), expected to close by end of calendar 2026, subject to tender of a majority of shares and HSR clearance.
- The U.S. DOJ is investigating potential money-laundering violations related to auction platform members; the company cannot predict the outcome or range of loss.
03—Questions
Frequently Asked Questions
Why did operating income decline in fiscal 2026 despite flat revenue?
Operating expenses grew 2.2% while revenue grew only 0.4%. General and administrative expenses rose 7.0%, driven by labor, sales force expansion, travel, insurance and outside services, and International facility costs rose 11.2% as the company expanded and processed more costly vehicles. Fiscal 2025 also benefited from one-time hurricane-related revenue, which did not recur.
How significant is the ACV Auctions acquisition for Copart?
The roughly $1.9B all-cash deal is large relative to Copart's cash balance, which was $1.91B in cash and restricted cash plus $2.58B in Treasury bills at fiscal year-end. It would extend Copart into whole-car remarketing in the U.S., a stated growth priority. The company has not yet completed its accounting evaluation, so the financial impact cannot be estimated, and regulatory and tender conditions still need to be satisfied.
Is Copart's balance sheet still strong enough to fund growth and buybacks?
Yes, by most measures. Working capital was $4.86B, the company has no funded debt beyond undrawn revolver capacity of $1.23B, and it was in compliance with its financial covenants at year-end. However, operating cash flow is trending lower, and the combination of buybacks and the ACV purchase will substantially reduce the cash cushion, so investors should watch future free cash flow closely.
What are the main legal and regulatory risks disclosed?
The most notable is an ongoing U.S. Department of Justice investigation into potential money-laundering violations tied to how Copart screens its auction platform members. Copart says it is cooperating but cannot predict the duration, scope, or potential penalties. Additional risks include evolving data privacy laws (GDPR, CCPA, LGPD), tariffs affecting vehicle imports, anti-corruption compliance in international markets, and tax audits.
04—Continue