Copart Inc (NASDAQ:CPRT) stock plunges 11.05% (As on May 23, 11:24:58 AM UTC-4, Source: Google Finance) after the company reported third-quarter revenue and net income below Wall Street estimates, as weak vehicle sales and higher expenses offset growth in its services segment. Third-quarter revenue from vehicle sales reached $177 million, a 2.1% decline compared to last year, contrasting with an 8.6% year-over-year increase in the second quarter. The Dallas, Texas-based company also saw its quarterly facility operating expenses rise by 12.3% to $439 million, while the cost of vehicle sales increased 4.2% to $170 million. Meanwhile, its service segment grew 9.3% to nearly $1.04 billion during the quarter. Net income for the quarter came in at $406.6 million, slightly below the expected $407.34 million, according to data compiled by LSEG.

Moreover, the company’s gross profit rose by 5.1%, reaching $552.3 million. The company has reported a global revenue increase to $1.2 billion, with global service revenue rising over 9% from the previous year. The company observed a 1% increase in global unit sales, with a more than 2% increase on a per business day basis. The company continues to invest in real estate, infrastructure, technology, and operational readiness, exemplified by the acquisition of Hall Ranch in South Florida for vehicle storage. The company’s Blue Car service, which caters to bank, rental, and fleet partners, showed strong year-over-year growth of almost 14%. International segment unit sales grew by 6%, with fee units increasing by 9%, indicating strong performance outside the US market. Global insurance volume remained relatively flat year-over-year, with a nominal decline of 0.3% globally and 0.9% in the United States. US insurance unit volume decreased close to 1% year-over-year, reflecting challenges in the domestic insurance market. The company observed softness in the heavy equipment auction space due to uncertainty regarding infrastructure spending and tariffs. Global purchased vehicle sales for the third quarter decreased by approximately 2%, with a decrease in global purchased vehicle gross profit.

CPRT in the third quarter of FY25 has reported the adjusted earnings per share of 42 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 42 cents. The company had reported the adjusted revenue growth of 7.5 percent to $1.21 billion in the first quarter of FY25, missing the analysts’ estimates for revenue of $1.23 billion.