Is Copart's operating income growing as fast as its net income?

No. Operating income rose 12.2% to $426.2 million in the quarter, while net income grew 19.0%. The difference was helped by a 10.2% decline in income tax expense and higher interest income, which rose 20.0% to $40.7 million.

What is driving the increase in costs?

Facility operations expense rose 19.9% and G&A expense rose 19.2% in the quarter, both faster than the 14.0% revenue growth. Over six months, G&A grew 36.3%, which investors may want to examine on the earnings call for whether it reflects one-time items or a sustained cost increase.

Why did cash and investments change so much on the balance sheet?

Cash, cash equivalents and restricted cash rose to $3.34 billion from $1.51 billion at July 31, 2024, as held-to-maturity securities fell to $459 million from $1.91 billion. The shift reflects maturities of investments into cash rather than a new financing event, since financing cash flow was modest at $37.7 million.

Where can investors find more detail on the results?

The full press release is Exhibit 99.1 to this 8-K. The company is holding a conference call on February 20, 2025 at 5:30 p.m. Eastern Time, with a webcast and replay available at www.copart.com/investorrelation.

CPRT 8-K: Earnings & Results

Q: How did Copart perform in its fiscal Q2 2025 compared with the prior year?

Copart grew revenue 14.0% to $1.16 billion, gross profit 13.2% to $525.6 million, and net income attributable to Copart 19.0% to $387.4 million. Diluted EPS rose 21.2% to $0.40 from $0.33.

01—Abstract

Summary

Summary of the 8-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.

Copart, Inc. (CPRT) reported fiscal Q2 2025 results for the quarter ended January 31, 2025, showing continued top-line and profit growth.

Total service revenues and vehicle sales rose 14.0% year over year to $1.16 billion^a, gross profit increased 13.2% to $525.6 million, and net income attributable to Copart grew 19.0% to $387.4 million. Fully diluted EPS was $0.40, up 21.2% from $0.33 a year earlier. For the six-month period, revenue reached $2.31 billion (up 13.2%), and diluted EPS was $0.77 versus $0.68.

Operating income grew a more modest 12.2% to $426.2 million^b, with general and administrative expenses rising 19.2% for the quarter and 36.3% for the six months, a pace that outstripped revenue growth and is worth monitoring. Facility operations expense rose 19.9% in the quarter, faster than service revenue growth of 15.0%, suggesting some margin pressure at the facility level even as overall gross profit expanded. Income tax expense fell 10.2% in the quarter, which helped bottom-line growth outpace operating income growth.

The balance sheet strengthened materially. Cash, cash equivalents and restricted cash increased to $3.34 billion^c from $1.51 billion at fiscal year-end July 2024, largely as held-to-maturity securities of $1.91 billion matured and were reduced to $459 million. Operating cash flow for the six months was $660.4 million, up from $537.0 million, while capital expenditures rose to $353.4 million, reflecting continued investment in property and equipment.

Total stockholders' equity reached $8.30 billion^d. This filing is a Item 2.02 furnishing of the earnings press release and contains no new material event beyond the reported results.

02—Key points

Key Highlights

Quarterly revenue rose 14.0% to $1.16 billion; service revenues grew 15.0% while vehicle sales grew 8.6%.
Diluted EPS of $0.40 for the quarter, up 21.2% from $0.33 a year earlier; six-month diluted EPS of $0.77, up 13.2%.
Net income attributable to Copart increased 19.0% to $387.4 million in the quarter, outpacing operating income growth of 12.2%.
Cash and cash equivalents (including restricted cash) nearly tripled to $3.34 billion from $1.51 billion at July 31, 2024, as held-to-maturity securities were largely redeemed.
Six-month operating cash flow of $660.4 million, up from $537.0 million, supporting $353.4 million of property and equipment purchases.
G&A expenses rose 36.3% over six months, and facility operations costs rose 19.9% in the quarter, both ahead of revenue growth and warranting attention on cost discipline.
Income tax expense declined 10.2% in the quarter, a meaningful contributor to net income growth.

03—Questions

Frequently Asked Questions

How did Copart perform in its fiscal Q2 2025 compared with the prior year?
Copart grew revenue 14.0% to $1.16 billion, gross profit 13.2% to $525.6 million, and net income attributable to Copart 19.0% to $387.4 million. Diluted EPS rose 21.2% to $0.40 from $0.33.
Is Copart's operating income growing as fast as its net income?
No. Operating income rose 12.2% to $426.2 million in the quarter, while net income grew 19.0%. The difference was helped by a 10.2% decline in income tax expense and higher interest income, which rose 20.0% to $40.7 million.
What is driving the increase in costs?
Facility operations expense rose 19.9% and G&A expense rose 19.2% in the quarter, both faster than the 14.0% revenue growth. Over six months, G&A grew 36.3%, which investors may want to examine on the earnings call for whether it reflects one-time items or a sustained cost increase.
Why did cash and investments change so much on the balance sheet?
Cash, cash equivalents and restricted cash rose to $3.34 billion from $1.51 billion at July 31, 2024, as held-to-maturity securities fell to $459 million from $1.91 billion. The shift reflects maturities of investments into cash rather than a new financing event, since financing cash flow was modest at $37.7 million.
Where can investors find more detail on the results?
The full press release is Exhibit 99.1 to this 8-K. The company is holding a conference call on February 20, 2025 at 5:30 p.m. Eastern Time, with a webcast and replay available at www.copart.com/investorrelation.

04—Continue

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