01—Abstract
Summary
Summary of the 8-K filed February 19, 2026. Cited figures are marked; the original filing is the authoritative source.
Copart reported fiscal Q2 2026 results (quarter ended January 31, 2026) that show a softer quarter.
Three-month revenue fell 3.6% to $1.12 billiona, gross profit declined 6.2% to $492.8 million, and net income attributable to Copart dropped 9.5% to $350.7 million. Diluted EPS was $0.36 versus $0.40 a year earlier, a 10% decline. The decline was driven mainly by a 4.0% drop in service revenues to $952.1 million and a 2.7% decrease in facility operations expense, while the U.S. segment's operating income fell 9.2% year over year.
International operating income also declined, from $50.3 million to $47.2 millionb, despite International revenue growing 6.1%. On a six-month basis, results were roughly flat. Revenue declined 1.4% to $2.28 billion, but net income attributable to Copart rose 0.7% to $754.4 million, and diluted EPS was unchanged at $0.77.
Operating income for the half was $819.4 millionc, down 1.6%. Interest income rose 19.9% to $103.5 million, which cushioned the earnings decline and helped offset the weaker operating performance. The balance sheet strengthened considerably.
Cash and equivalents rose to $5.10 billiond from $2.78 billion at fiscal year-end, helped by maturing held-to-maturity securities. Shareholders' equity increased to $9.79 billion. During the six months, the company repurchased $218.2 million of common stock and spent $177.7 million on capital expenditures, down sharply from $353.4 million a year earlier.
Operating cash flow was $662.8 million, essentially flat. The filing is an earnings release furnished under Item 2.02 and contains no guidance or new forward-looking commitments.
02—Key points
Key Highlights
- Q2 FY2026 revenue fell 3.6% to $1.12 billion, with service revenues down 4.0% to $952.1 million.
- Q2 gross profit declined 6.2% to $492.8 million, and gross margin compressed given the revenue decline and a 2.7% reduction in facility operations expense.
- Q2 net income attributable to Copart fell 9.5% to $350.7 million; diluted EPS was $0.36 versus $0.40 last year (-10%).
- Six-month net income rose 0.7% to $754.4 million and diluted EPS held flat at $0.77, supported by a 19.9% increase in net interest income.
- U.S. segment operating income declined 9.2% in Q2 to $341.5 million, while International operating income fell to $47.2 million from $50.3 million despite 6.1% revenue growth.
- Cash and equivalents rose to $5.10 billion from $2.78 billion at July 31, 2025, as held-to-maturity securities matured; capital expenditures fell to $177.7 million from $353.4 million year over year.
- The company repurchased $218.2 million of common stock in the first half of FY2026, a new capital return activity compared with none in the prior-year period.
03—Questions
Frequently Asked Questions
Why did Copart's quarterly earnings decline despite a stable six-month picture?
Q2 revenue and gross profit both fell year over year, driven mainly by lower U.S. service revenues. Net income for the first half still rose slightly because of higher interest income and a stronger Q1, so the Q2 weakness is partly masked on a year-to-date basis.
Is Copart's cash position a meaningful change for investors?
Yes. Cash and equivalents increased by roughly $2.3 billion in six months, largely from maturing held-to-maturity investments rather than operating cash generation. Operating cash flow was about $663 million, essentially unchanged. The increase gives the company substantial liquidity for buybacks, capital spending, or acquisitions.
How is the company's capital allocation changing?
Copart repurchased $218.2 million of stock in the first half of FY2026 after no buybacks in the prior-year period. Capital expenditures dropped by about half to $177.7 million, suggesting a slowdown in the facility build-out cycle relative to last year.
Which segment is driving the weakness?
The U.S. segment accounts for most of the decline. Its Q2 operating income fell 9.2%, and its service revenues fell 5.6%. International revenue grew 6.8% in service revenues, but its operating income declined modestly because of higher cost of vehicle sales and G&A.
Does this filing include updated guidance?
No. The 8-K furnishes the press release under Item 2.02 and does not contain forward-looking guidance. Investors should consult the earnings call, scheduled for February 19, 2026, and the Form 10-Q for management's commentary on outlook.
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