Copart Inc 10-Q for FY2024 Q2

Copart Inc (CPRT)

10-Q 2024-02-27 For: 2024-01-31

Added on April 11, 2026

About this 10-Q

Copart Inc filed this 10-Q on February 27, 2024, covering the quarter ended January 31, 2024 (FY2024 Q2).

Headline figures

Quarter ended January 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.02B; up 6.6% from $956.72M a year earlier
Net income: $325.64M; up 10.9% from net income of $293.68M a year earlier
Diluted EPS: $0.33; up 10.0% from $0.30 a year earlier

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Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001	CPRT	The Nasdaq Global Select Market


Table of Contents						Page Number
PART I - Financial Information
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets						3
Consolidated Statements of Income						4
Consolidated Statements of Comprehensive Income						5
Consolidated Statements of Stockholders’ Equity						6
Consolidated Statements of Cash Flows						8
Notes to Consolidated Financial Statements						9

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview						20
Acquisitions and New Operations						22
Results of Operations						23
Liquidity and Capital Resources						27
Critical Accounting Policies and Estimates						28

Contractual Obligations and Commitments						29
Off-Balance Sheet Arrangements						29

Item 3 - Quantitative and Qualitative Disclosures About Market Risk						29

Item 4 - Controls and Procedures
Evaluation of Disclosure Controls and Procedures						30
Changes in Internal Control Over Financial Reporting						30

PART II - Other Information
Item 1 - Legal Proceedings						31
Item 1A - Risk Factors						31
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds						44
Item 3 - Defaults Upon Senior Securities						44
Item 4 - Mine Safety Disclosures						44
Item 5 - Other Information						44
Item 6 - Exhibits						45
Signatures						46


(In thousands, except share amounts)	January 31, 2024		July 31, 2023
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	1,256,948	$	957,395
Investment in held to maturity securities	1,411,122		1,406,589
Accounts receivable, net	846,357		702,038
Vehicle pooling costs	137,907		123,725
Inventories	42,812		39,973
Income taxes receivable	17,030		6,574
Prepaid expenses and other assets	36,310		26,310
Total current assets	3,748,486		3,262,604
Property and equipment, net	3,042,711		2,844,339
Operating lease right-of-use assets	112,838		108,139
Intangibles, net	84,049		62,702
Goodwill	510,563		394,289
Other assets	99,873		65,806
Total assets	$	7,598,520	$	6,737,879
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	473,856	$	440,810
Deferred revenue	26,204		26,117
Income taxes payable	4,740		4,374
Current portion of operating and finance lease liabilities	21,223		21,468

Total current liabilities	526,023		492,769
Deferred income taxes	94,140		89,492
Income taxes payable	71,314		69,193
Operating and finance lease liabilities, net of current portion	93,876		88,082
Long-term debt and other liabilities	453		10,903

Total liabilities	785,806		750,439
Commitments and contingencies

Redeemable non-controlling interest	25,114		—
Stockholders’ equity:
Preferred stock: $0.0001 par value - 5,000,000 shares authorized; none issued	—		—
Common stock: $0.0001 par value - 1,600,000,000 shares authorized; 961,311,496 and 957,344,162 shares issued and outstanding, respectively.	96		96
Additional paid-in capital	1,087,345		938,910
Accumulated other comprehensive loss	(145,279)		(141,006)
Retained earnings	5,845,438		5,189,440
Total stockholders’ equity	6,787,600		5,987,440
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	7,598,520	$	6,737,879


	Three Months Ended January 31,				Six Months Ended January 31,
(In thousands, except per share amounts)	2024		2023		2024		2023
Service revenues and vehicle sales:
Service revenues	$	861,745	$	789,797	$	1,721,281	$	1,516,637
Vehicle sales	158,404		166,927		319,284		333,459
Total service revenues and vehicle sales	1,020,149		956,724		2,040,565		1,850,096
Operating expenses:
Yard operations	409,178		375,497		817,679		748,274
Cost of vehicle sales	146,819		154,727		294,715		305,839
General and administrative	84,252		60,975		152,895		118,955

Total operating expenses	640,249		591,199		1,265,289		1,173,068
Operating income	379,900		365,525		775,276		677,028
Other income (expense):
Interest income, net	33,956		14,480		65,961		18,902
Other expense, net	(3,103)		(2,902)		(7,175)		(5,724)
Total other income	30,853		11,578		58,786		13,178
Income before income taxes	410,753		377,103		834,062		690,206
Income tax expense	85,226		83,426		176,003		150,681
Net income	325,527		293,677		658,059		539,525
Less: Net income/(loss) attributable to redeemable noncontrolling interest	(108)		—		(103)		—
Net income attributable to Copart, Inc.	$	325,635	$	293,677	$	658,162	$	539,525

Basic net income per common share	$	0.34	$	0.31	$	0.69	$	0.57
Weighted average common shares outstanding	960,525		952,752		959,326		952,474

Diluted net income per common share	$	0.33	$	0.30	$	0.68	$	0.56
Diluted weighted average common shares outstanding	974,589		965,072		973,135		964,476


	Three Months Ended January 31,				Six Months Ended January 31,
(In thousands)	2024		2023		2024		2023
Comprehensive income, net of tax:
Net income	$	325,527	$	293,677	$	658,059	$	539,525



Other comprehensive income:
Foreign currency translation adjustments	32,080		42,429		(4,273)		12,858
Comprehensive income	357,607		336,106		653,786		552,383
Less: Comprehensive income/(loss) attributable to redeemable noncontrolling interest	(108)		—		(103)		—
Comprehensive income attributable to Copart, Inc.	$	357,715	$	336,106	$	653,889	$	552,383


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock					Accumulated Other Comprehensive Income (Loss)						Redeemable Noncontrolling Interest
				Additional Paid-in Capital						Total Stockholders’ Equity
(In thousands, except share amounts)	Outstanding Shares	Amount						Retained Earnings
Balances at July 31, 2023	957,344,162	$	96	$	938,910	$	(141,006)	$	5,189,440	$	5,987,440	$	—
Net income	—	—		—		—		332,527		332,527		5
Currency translation adjustment	—	—		—		(36,353)		—		(36,353)		—
Acquisition of noncontrolling interest	2,499,993	—		112,075		—		—		112,075		25,217
Exercise of stock options, net of repurchased shares	331,358	—		8,123		—		(711)		7,412		—
Stock-based compensation	32,761	—		8,316		—		—		8,316		—

Balances at October 31, 2023	960,208,274	96		1,067,424		(177,359)		5,521,256		6,411,417		25,222
Net income/(loss)	—	—		—		—		325,635		325,635		(108)
Currency translation adjustment	—	—		—		32,080		—		32,080		—
Exercise of stock options, net of repurchased shares	828,799	—		5,359		—		(1,453)		3,906		—
Stock-based compensation	119,004	—		8,601		—		—		8,601		—
Shares issued for Employee Stock Purchase Plan	155,419	—		5,961		—		—		5,961		—

Balances at January 31, 2024	961,311,496	96		1,087,345		(145,279)		5,845,438		6,787,600		25,114


Balance as of July 31, 2023	$	25,726
Capitalized contract assets during the period	32,000
Costs amortized during the period	(4,129)
Effect of foreign currency exchange rates	(51)
Balance as of January 31, 2024	$	53,546


Cumulative loss on foreign currency translation as of July 31, 2022	$	(169,365)
Gain (Loss) on foreign currency translation	28,359
Cumulative loss on foreign currency translation as of July 31, 2023	$	(141,006)
Gain (Loss) on foreign currency translation	(4,273)
Cumulative loss on foreign currency translation as of January 31, 2024	$	(145,279)


(In thousands)	January 31, 2024
	Amortized Cost		Gross Unrealized Gains		Fair Value
Investment in held to maturity securities	$	1,411,122	$	3,391	$	1,414,513


(In thousands, except per share and term data)	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In years)	Aggregate Intrinsic Value
Outstanding as of July 31, 2023	17,825	$	15.47	4.67	$	512,045
Grants of options	931	49.79
Exercises	(1,160)	11.62
Forfeitures or expirations	—	—
Outstanding as of January 31, 2024	17,596	$	17.54	4.59	$	538,438
Exercisable as of January 31, 2024	14,810	$	14.24	3.93	$	500,518


(In thousands, except per share data)	Restricted Shares	Weighted Average Grant Date Fair Value
Outstanding as of July 31, 2023	800	$	31.77
Grants	266	48.85
Vested	(144)	29.48
Forfeitures or expirations	(7)	32.56
Outstanding as of January 31, 2024	915	$	37.08


	Three Months Ended January 31, 2024						Three Months Ended January 31, 2023
(In thousands)	United States		International		Total		United States		International		Total
Service revenues	$	756,036	$	105,709	$	861,745	$	705,733	$	84,064	$	789,797
Vehicle sales	74,690		83,714		158,404		82,196		84,731		166,927
Total service revenues and vehicle sales	830,726		189,423		1,020,149		787,929		168,795		956,724
Yard operations	343,689		65,489		409,178		323,397		52,100		375,497
Cost of vehicle sales	70,128		76,691		146,819		79,040		75,687		154,727
General and administrative	69,571		14,681		84,252		49,328		11,647		60,975

Operating income	$	347,338	$	32,562	$	379,900	$	336,164	$	29,361	$	365,525

Depreciation and amortization	$	38,344	$	6,918	$	45,262	$	34,121	$	4,293	$	38,414
Capital expenditures and acquisitions	83,861		39,168		123,029		89,428		14,636		104,064


	Six Months Ended January 31, 2024						Six Months Ended January 31, 2023
(In thousands)	United States		International		Total		United States		International		Total
Service revenues	$	1,518,561	$	202,720	$	1,721,281	$	1,357,390	$	159,247	$	1,516,637
Vehicle sales	153,072		166,212		319,284		179,387		154,072		333,459
Total service revenues and vehicle sales	1,671,633		368,932		2,040,565		1,536,777		313,319		1,850,096
Yard operations	693,283		124,396		817,679		649,641		98,633		748,274
Cost of vehicle sales	142,150		152,565		294,715		171,480		134,359		305,839
General and administrative	126,572		26,323		152,895		96,865		22,090		118,955

Operating income	$	709,628	$	65,648	$	775,276	$	618,791	$	58,237	$	677,028

Depreciation and amortization	$	75,280	$	13,146	$	88,426	$	69,057	$	8,415	$	77,472
Capital expenditures and acquisitions	299,992		79,710		379,702		225,711		31,008		256,719


(In thousands)	January 31, 2024		July 31, 2023
Land	$	1,953,497	$	1,812,001
Buildings and improvements	1,413,781		1,339,820
Transportation and other equipment	539,461		490,136
Office furniture and equipment	94,634		91,031
Software	95,227		89,575
	4,096,600		3,822,563
Less: Accumulated depreciation and amortization	(1,053,889)		(978,224)
Property and equipment, net	$	3,042,711	$	2,844,339


(In thousands)	January 31, 2024		July 31, 2023
Amortized intangibles:
Supply contracts and customer relationships	$	84,133	$	84,614
Trade names	19,204		19,304
Licenses and databases	20,070		682

Indefinite-lived intangibles:
Trade names	16,543		7,443
Accumulated amortization	(55,901)		(49,341)
Intangibles, net	$	84,049	$	62,702


		Three Months Ended January 31,								Six Months Ended January 31,
(In thousands)		2024		2023		Change		% Change		2024		2023		Change		% Change
Yard operations expenses
	United States	$	343,689	$	323,397	$	20,292	6.3	%	$	693,283	$	649,641	$	43,642	6.7	%
	International	65,489		52,100		13,389		25.7	%	124,396		98,633		25,763		26.1	%
	Total yard operations expenses	$	409,178	$	375,497	$	33,681	9.0	%	$	817,679	$	748,274	$	69,405	9.3	%

Yard operations expenses, excluding depreciation and amortization
	United States	$	309,147	$	293,472	$	15,675	5.3	%	$	625,626	$	589,322	$	36,304	6.2	%
	International	58,823		47,955		10,868		22.7	%	111,742		90,522		21,220		23.4	%

Yard depreciation and amortization
	United States	$	34,542	$	29,925	$	4,617	15.4	%	$	67,657	$	60,319	$	7,338	12.2	%
	International	6,666		4,145		2,521		60.8	%	12,654		8,111		4,543		56.0	%


	Three Months Ended January 31,				Six Months Ended January 31,
(In percentages)	2024		2023		2024		2023
Service revenues and vehicle sales:
Service revenues	84	%	83	%	84	%	82	%
Vehicle sales	16	%	17	%	16	%	18	%
Total service revenues and vehicle sales	100	%	100	%	100	%	100	%

Operating expenses:
Yard operations	41	%	39	%	41	%	40	%
Cost of vehicle sales	14	%	16	%	14	%	17	%
General and administrative	8	%	6	%	7	%	6	%

Total operating expenses	63	%	61	%	62	%	63	%
Operating income	37	%	39	%	38	%	37	%
Other income (expense)	3	%	1	%	3	%	1	%
Income before income taxes	40	%	40	%	41	%	38	%
Income taxes	8	%	9	%	9	%	8	%
Net income	32	%	31	%	32	%	30	%


3.1						Amended and Restated Certificate of Incorporation of Copart, Inc. (incorporated by reference from Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on November 2, 2022)
3.2						Amended and Restated Bylaws of Copart, Inc. (incorporated by reference from Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on March 31, 2022)
31.1*						Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3*						Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**						Certification of Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification of Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3**						Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Date File, formatted in Inline Extensible Business Reporting Language (iXBRL) and contained in Exhibit 101
*						Filed herewith
**						The certifications furnished in Exhibits 32.1, 32.2 and 32.3 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.


			COPART, INC.

			/s/ LEAH STEARNS
			Leah Stearns, Chief Financial Officer
			(Principal Financial and Accounting Officer and duly Authorized Officer)


			Date: February 27, 2024

			/s/ A. JAYSON ADAIR
			A. Jayson Adair
			Co-Chief Executive Officer
			(Principal Executive Officer), Director


			Date: February 27, 2024

			/s/ JEFFREY LIAW
			Jeffrey Liaw
			Co-Chief Executive Officer
			(Principal Executive Officer)


			Date: February 27, 2024

			/s/ LEAH STEARNS
			Leah Stearns
			Chief Financial Officer
			(Principal Financial and Accounting Officer)