Copart Inc (NASDAQ:CPRT) stock fell 4.46% (As on February 20, 11:29:00 AM UTC-4, Source: Google Finance) after the company reported earnings and revenue that fell short of Wall Street estimates for the period ended January 31, 2026. Net income attributable to Copart fell to $350.7 million for the three months, marking a 9.5% drop from last year’s $387.4 million. Operating income declined 8.8% to $388.7 million. Gross profit also faced pressure, contracting 6.2% to settle at $492.8 million. The quarter included a $6.8 million one-time expense accrual related to international VAT. Adjusting for CAT and that VAT item, she said gross profit increased 0.4% and gross margin increased 178 basis points to 45%. Operating expenses for the quarter were $732.9 million, a slight decrease of 0.6% from the previous year. Despite the narrower top line, general and administrative costs rose 3.2% to $89.4 million.

Moreover, Copart reported a roughly 9% decline in global insurance units (about 4% excluding CAT impacts) — U.S. insurance units fell 10.7% (4.8% ex‑CAT) — which management attributed to softer claims activity and consumers foregoing collision coverage or raising deductibles, even as long‑term total‑loss frequency trends higher. Despite lower volumes, Copart generated record U.S. insurance average selling prices (ASPs) (up ~6% reported, ~9% ex‑CAT), helping consolidated revenue hold to $1.12 billion and lift adjusted gross margin by 178 basis points to 45%, while international revenue grew about 6%. The company finished the quarter with approximately $6.4 billion of liquidity (including $5.1 billion cash), no debt, free cash flow up 58% YTD, and has repurchased over 13 million shares for more than $500 million as management stepped up opportunistic buybacks.

CPRT in the second quarter of FY26 has reported the adjusted earnings per share of $0.36, missing the analysts’ estimates for the adjusted earnings per share of $0.39. The company had reported the adjusted revenue decline of 3.6 percent to $1.12 billion in the second quarter of FY26, missing the analysts’ estimates for revenue of $1.15 billion. Service revenue declined 4% and purchased vehicle sales decreased 1.4%. Stearns said higher ASPs—up 6% on a reported basis and 7.1% excluding CAT—were offset by lower unit volumes, which declined 8% globally (down 3.6% excluding CAT). Global insurance units fell 9.3% (down 4.1% excluding CAT), while global non-insurance units decreased 2.7%. U.S. revenue declined 5.5% but was flat excluding prior-year CAT events. International revenue increased 6.1% (up 7.7% excluding CAT) to $200 million.