Copart (CPRT) Financials

Copart’s latest results show continued top-line growth and strong profitability, although cash generation softened in the third quarter of fiscal 2026. Revenue increased to $1.24 billion in Q3 2026 from $1.21 billion in the restated year-earlier quarter, a gain of approximately 2%. Operating income rose 3% to $464.3 million, while the gross margin improved to approximately 87% from 86%. However, net income declined slightly to $401.4 million from $405.3 million, partly reflecting lower interest and investment income.

Over the available period, Copart has expanded meaningfully. Quarterly revenue rose from $939.9 million in Q3 2022 to $1.24 billion in Q3 2026, while quarterly net income increased from $278.6 million to $401.4 million. Plant, property and equipment also grew from $2.40 billion to $3.72 billion, indicating continued investment in the company’s operating footprint.

The balance sheet remains particularly strong. At April 30, 2026, Copart held $3.35 billion in cash and equivalents plus $845.6 million in short-term investments, compared with total liabilities of only $857.6 million. The company reported no material long-term debt in the latest period. Still, the quarter included substantial cash uses: $1.41 billion for share repurchases, $80.9 million for capital expenditures and $845.6 million for investment purchases. These outflows drove a $1.75 billion decline in cash and equivalents during the quarter.

• Revenue continues to grow: Q3 2026 revenue increased approximately 2% year over year and is about 32% above Q3 2022 levels.
• Operating profitability improved: Operating income rose to $464.3 million, and the operating margin expanded to roughly 37.5% from 37.2% in the restated Q3 2025.
• Gross margins remain exceptionally high: Gross profit was $1.08 billion, representing approximately 87% of revenue.
• Long-term earnings growth is evident: Quarterly net income increased from $278.6 million in Q3 2022 to $401.4 million in Q3 2026.
• Copart maintains substantial financial flexibility: Cash, equivalents and short-term investments totaled approximately $4.20 billion, far exceeding reported liabilities of $857.6 million.
• Debt exposure is minimal: Copart’s latest balance sheet contains no significant long-term debt, limiting interest-rate and refinancing risk.
• Share repurchases supported per-share results: Basic weighted-average shares declined to 936.3 million from 966.2 million year over year, helping basic EPS rise to $0.43 from $0.42 despite slightly lower net income.
• Capital investment remains elevated: Quarterly capital expenditures were $80.9 million, below the year-earlier $128.0 million but still indicative of ongoing expansion and infrastructure spending.
• Operating cash flow weakened: Cash flow from operations fell to $584.2 million from $700.9 million year over year, primarily because the benefit from changes in operating assets and liabilities declined to $112.9 million from $233.7 million.
• Cash balances contracted sharply: Net cash declined by $1.75 billion in Q3 2026, with share repurchases and investment purchases substantially exceeding operating cash flow. Continued capital returns at this pace could reduce liquidity available for acquisitions or expansion.

Investor takeaway: Copart’s core business continues to produce high margins, rising revenue and strong balance-sheet returns. The main issues to monitor are weaker working-capital cash generation and the aggressive use of cash for buybacks and investments. Comparisons should also be made carefully because several prior-period statements in the supplied data were marked as restated.