Copart (CPRT) 10-K: A Deep Dive into Profitability and Growth

Copart, Inc. (CPRT), a global leader in online vehicle auctions, primarily deals with salvage, clean-title, and used vehicles for a variety of sellers, including insurance companies, banks, and rental car agencies. To understand the company's financial performance, let's dive into the details of its income statement from its latest annual 10-K filing for the fiscal year ended July 31, 2025.

Copart reported a strong year, with total revenues climbing to $4.65 billion. The company efficiently converted this revenue into profit, demonstrating the strength of its business model.

The flow of money from revenue sources through costs and expenses to the final net income is visualized in the chart below.

Revenue Streams and Profit Drivers

Copart's business is split into two primary revenue streams:

• Service Revenues: This is the company's core business, generating $3.97 billion. It consists of fees collected for auctioning vehicles on behalf of sellers. This segment saw healthy growth of 11.4% from the prior year, indicating strong demand for its auction platform.
• Vehicle Sales: This smaller segment, which brought in $678 million, involves Copart purchasing vehicles outright and reselling them. While revenue here was relatively flat year-over-year, the significant growth in the higher-margin service business is a positive sign for overall profitability.

The company's total operating expenses were $2.95 billion, with the largest cost being "Facility operations" at $1.94 billion. Despite these costs, Copart achieved an impressive operating income of $1.7 billion, resulting in a robust operating margin of 36.5%.

U.S. Dominance and International Growth

A closer look at the geographical breakdown reveals the powerhouse that is Copart's U.S. operation, alongside a promising international expansion.

• United States: The U.S. segment is the company's main profit engine, accounting for $3.86 billion in revenue and delivering an impressive $1.48 billion in operating income. This translates to a remarkable operating margin of 38.4%, showcasing the efficiency and scale of its domestic operations.
• International: The international segment contributed $792 million in revenue and $216 million in operating income. While its operating margin of 27.3% is lower than in the U.S., the international service revenue grew by a substantial 18.9%, highlighting successful global expansion and a significant runway for future growth.

The Bottom Line

After accounting for other income (primarily $179 million in interest income) and taxes, Copart reported a net income of $1.55 billion. This represents a net margin of 33.3%, meaning the company kept more than 33 cents of every dollar of revenue as pure profit. This led to a diluted earnings per share (EPS) of $1.59.

In conclusion, Copart's latest filing paints a picture of a highly profitable and efficient company. Its ability to grow its core service revenue, particularly in international markets, while maintaining exceptional margins in its dominant U.S. segment, underscores its strong position in the global vehicle remarketing industry. While operating margins saw a slight dip from previous years, they remain at a level that reflects a well-managed and resilient business.