Copart (CPRT) Financials

Copart’s latest financial data shows continued revenue growth and a strong balance sheet, but profitability and operating cash flow weakened in fiscal 2026. Fourth-quarter revenue increased 2.4% year over year to $1.15 billion. However, net income fell 17.3% to $326.8 million, while diluted earnings per share declined from $0.41 to $0.35.

For fiscal 2026 as a whole, revenue was approximately $4.67 billion, up only modestly from roughly $4.65 billion in fiscal 2025. Net income declined approximately 4.4% to $1.48 billion. This indicates that Copart’s top-line growth has slowed, while margin pressure and other operating expenses have reduced earnings growth.

• Revenue remains on an upward long-term trend: Quarterly revenue increased from $883.4 million in Q4 2022 to $1.15 billion in Q4 2026, a gain of approximately 30% over the period.
• Copart continues to generate substantial operating cash flow: Fiscal 2026 operating cash flow totaled approximately $1.80 billion, providing significant internal funding for capital expenditures and investments.
• The company maintains strong liquidity: At April 30, 2026, cash and short-term investments totaled approximately $4.20 billion, compared with total current liabilities of $685.3 million. This represents considerable short-term financial flexibility.
• Balance-sheet leverage remains limited: Copart reported no material long-term debt in the latest balance-sheet data, reducing interest-rate and refinancing risk.
• Investment income has become a meaningful earnings contributor: Interest and investment income was $39.6 million in Q4 2026 and remained above $38 million in each of the first four quarters of fiscal 2026.
• Cash management shifted toward short-term investments: Cash declined from $5.10 billion at January 31, 2026, to $3.35 billion at April 30, while short-term investments increased to $845.6 million. This appears to reflect treasury allocation rather than a deterioration in liquidity, but investors should monitor the composition and returns of these investments.
• Capital spending remains elevated: Fiscal 2026 quarterly purchases of property, plant and equipment ranged from $69.6 million to $108.0 million. These investments may support future capacity, although they also reduce near-term free cash flow.
• Profitability weakened in the latest quarter: Q4 operating income fell 10.6% year over year to $368.9 million, and the operating margin declined to approximately 32.0% from 36.7% in Q4 2025.
• Operating cash flow declined: Q4 operating cash flow fell 18.5% year over year to $357.5 million. Fiscal 2026 operating cash flow was also below the prior year, suggesting that earnings growth is not currently translating into stronger cash generation.
• Share repurchases reduced liquidity in Q3: Copart spent approximately $1.41 billion repurchasing common stock in Q3 2026. Although buybacks can support per-share value, the spending contributed to a $1.75 billion quarterly decline in cash and equivalents and occurred while earnings and operating cash flow were under pressure.

Overall, Copart remains financially well positioned, with a large investment portfolio, limited debt and consistently positive cash generation. The primary concern is a recent divergence between revenue and earnings: revenue has held near record levels, but operating income, net income, EPS and operating cash flow have all weakened. Investors may want to watch whether margin pressure is temporary or becomes a more persistent trend.