Copart Reports Q3 2026 Earnings: Financial Highlights and Industry Impact

Copart, Inc., a leading online vehicle auction platform specializing in salvage and total-loss vehicles, reported a revenue of $1.24 billion for fiscal Q3 2026, marking a 2.1% increase year-over-year. This positive financial outcome exceeded analyst expectations set at $1.20 billion. Earnings per diluted share climbed to $0.43, up 2.4% from the previous year, surpassing consensus forecasts by $0.02. These results were strengthened by a strategic buyback program that retired over 43.4 million shares, worth over $1.6 billion in fiscal year-to-date buybacks.

The company’s gross profit rose by 3.7% to $572.6 million, enhancing gross margins by 71 basis points to 46.3%. EBITDA experienced a 3.4% increase, outpacing revenue growth, which indicates improved operating leverage despite a decline in unit volumes. Global unit volumes saw a 2.4% drop, including a 4.2% decrease in U.S. insurance unit volumes. This decline reflected a reduction in claims frequency as consumers reconsidered their insurance coverage amidst rising auto insurance premiums.

Trends and Consumer Behavior

CEO Jeff Liaw highlighted this trend as cyclical during the Q3 earnings call, noting that such consumer behavior often runs counter to inflationary periods. Despite the challenges, the total loss frequency for Q1 2026 reached 23.6%, nearly 5 percentage points higher than four years prior, providing a structural advantage against the decline in claims.

The drop in volume was offset by an uptick in average selling prices (ASP). ASPs globally increased by 4.6%, with U.S. insurance ASPs rising by 4.1%, reaching a record high for the third quarter. A third of the auction volume now stems from international buyers, who contribute to nearly half of the auction proceeds, thus establishing a supportive price floor for Copart.

International Growth and Financial Stability

International operations posted significant growth, with revenue increasing by 14% to $234.2 million. Service revenues climbed by 18%, while international gross profit rose by 22%, and operating income reached $73.8 million with a 32% margin. Key markets contributing to these successes include the U.K., Germany, and Canada.

By the quarter's conclusion, Copart maintained $5.5 billion in liquidity with no debt. Analysts uphold a consensus buy rating on Copart stock, projecting a mean 12-month price increase to $41, approximately 35% above its June closing price. Copart’s Q3 FY26 EBITDA totaled $520 million, a 3% increase from the previous year, with margins extending to 42%. Analysts forecast near-term EBITDA growth may decelerate, but longer-term projections suggest a recovery with notable increases expected in Q3 and Q4 FY27.