Copart reports record earnings, CEO talks competition with shops and ‘less attractive’ repairs
While reporting that Copart sold a record number of vehicles during the 2024 fiscal year, earning record revenue and operating profits, CEO Jeff Liaw said the company continues to compete with collision repair shops for business as repairs become “less attractive.”
Copart’s Q4 revenue, gross profit, and net income were $1.1 billion, $510 million, and $396 million, respectively. These represent an increase in revenue of $56.1 million, or 5.2%; an increase in gross profit of $56.1 million, or 12.4%; and an increase in net income of $73.8 million, or 22.9% compared to the same period last year.
For the year ended July 31, revenue, gross profit, and net income were $4.6 billion, $2.1 billion, and $1.6 billion, respectively, representing an increase in revenue of $410.1 million, or 9.7%; an increase in gross profit of $192.4 million, or 10.1%; and an increase in net income of $189.4 million, or 13.9%.
During the company’s Q4 earnings call with investors, held on Sept. 4, Liaw was asked for a “deeper sense” of the current salvage auction market structure, particularly in terms of Copart’s share with the larger insurance carriers, and where he sees incremental share growth opportunities over the next couple of years.
“Even an insurance carrier can sell their cars through other intermediaries; they can have more of them repaired,” Liaw said. “In many respects, we compete with the repair shops. The higher the returns we generate, the more we can win the rights to resolve that claim versus the repair industry. The lower the returns we generate, the more we lose head-to-head against the repair shops as well. There are a number of competitive threats that we face on any given day.
“I think we still have a lot of conviction that if we deliver excellent auction returns and deliver excellent service… expediting cycle times, retrieving cars very quickly from where they sit, especially when they accrue storage, it means interacting with policyholders very effectively, in particular on the title procurement.”
Regarding industry trends, Liaw said accident frequency has declined virtually every year since Copart’s inception and for decades preceding that. Copart was founded in 1982.
“These declines have generally occurred very gradually as new safety technologies, such as anti-lock brakes in the 1970s and 1980s, penetrate the installed base with each vintage of newly manufactured vehicles,” Liaw said. “Over those same long-term horizons, however, total loss frequency has generally increased at a rate far exceeding the decline in accident frequency itself. In fact, for the quarter, total loss frequency has continued its long-term upward trend, consistent with, again, the entire history of our company. In the U.S., total loss frequency for the second calendar quarter of 2025 was 22.2%, up from 21.5% in the same quarter in 2024.
“As a tidbit for context, according to CCC’s most recently published Crash Course report, calibrations occurred on 31% of DRP estimates in the first calendar quarter, up from 24% a year ago — an indication of further vehicle complexity, complexity of repairs, and repair costs for vehicles that enter the repair window. We’ve long noted that vehicle repairs become less attractive with the passing of time. As vehicle complexity increases, parts and labor costs increase as well. We’ve also talked at length about how total loss itself becomes more attractive as growing economies seek more and more U.S. salvage vehicles to satisfy their demand for more mobility.”
Copart Chief Financial Officer Leah Stearns added that Copart’s overall U.S. inventory levels decreased 14.8% year-over-year during the quarter.
“There are three main drivers of the U.S. inventory decline,” she said. “First, we saw low double-digit declines in assignments. Second, faster cycle times overall for vehicles sold. Third, the reduction in overall aged inventory. Over the past several years, we have observed that trends in assignment volumes have proven to be a more accurate predictor of future unit sales than static inventory levels.”
Liaw also addressed Copart’s use of advanced technologies and AI in its operations when asked how both are changing the industry in terms of total loss decisions and cycle times.
“We equip many of our sellers with tools to allow them to make instantaneous total loss decisions informed by literally millions of similar vehicles we’ve sold over the years,” he said. “Those decision support tools are very much empowered by current-generation large language model technologies. Beyond that, certainly in the obvious arenas, such as customer support, and also in agent support here at Copart.
“Even the folks who still are interacting day-to-day with members and buyers are equipped with better information with LLM behind the scenes. I think we are still, like many companies, in the early stages, but have many different arenas in which we have that technology deployed today. We also have it at the auction level… I think it’s fair to say it is both allowing us to do what we do more efficiently, compressing cycle times for our clients, and compressing cycle times for us.”
In July, Copart’s Scott Webber sat on a panel at the Collision Industry Conference (CIC) meeting that discussed total loss best practices. Webber shared some of how Copart interacts with collision repair shops and how customer data is handled.
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