Copart Q4 profit misses as margins compress despite revenue near consensus

The quarter missed on earnings even though revenue was broadly on target. Published expectations were roughly $1.16 billion of revenue and $0.38 of diluted EPS; Copart delivered $1.152 billion and $0.35, respectively. The revenue gap was small, but the per-share shortfall was meaningful.

The core problem was profitability, not demand. Revenue increased 2.4%, but gross profit fell 5.5% as facility operations rose 7.7% and cost of vehicle sales rose 11.4% (Income Statement). Copart itself said, "These represent an increase in revenue of $27.3million, or 2.4 %; a decrease in gross profit of $28.3million, or (5.5)%; and a decrease in net income attributable to Copart, Inc. of $68.9million, or (17.4)%, respectively, from the same period last year."

The earnings miss is broader than the headline EPS number. Operating income declined 10.6%, while other income fell 45.6%, including a move to a $3.8 million other expense from $16.0 million of other income a year earlier (Income Statement). The full-year picture also deteriorated: revenue was essentially flat at $4.666 billion, gross profit declined 0.8%, net income fell 4.4%, and operating cash flow dropped nearly 11% (Income Statement; Cash Flow statement). Copart reported, "Fully diluted earnings per share for the three months ended July 31, 2026 declined to $0.35compared to $0.41last year, or (14.6)%"

Share repurchases softened the per-share impact but did not change the underlying result. The diluted share count fell 4.7% year over year, and the company repurchased $1.633 billion of stock during the fiscal year (Income Statement; Cash Flow statement). That capital return helped support EPS, but it cannot offset the more important signal: revenue growth has stalled while operating costs are growing faster than sales. Net read: a clear earnings miss, with margin compression and weaker cash generation outweighing roughly in-line revenue.