Copart (CPRT) Q2 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Thu, May 21, 2026 astatine 10:01 AM CDT 36 min read

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DATE

Feb. 19, 2026 astatine 5:30 p.m. ET

CALL PARTICIPANTS

• Co-CEO — Jeffrey Liaw

• Chief Financial Officer — Leah Stearns

Full Conference Call Transcript

Jeffrey Liaw: Thank you, Owen. Welcome, and convey you for joining our 2nd 4th fiscal twelvemonth 2026 net call. I'll statesman with immoderate little remarks connected trends successful our security concern earlier passing the telephone to Leah to supply a summary of our fiscal results. We'll past beryllium blessed to instrumentality your questions. On our security business. For the 2nd quarter, our planetary security units declined 9% oregon 4%, excluding the effect of catastrophic units from a twelvemonth ago. Our U.S. security units declined 10.7% for the aforesaid play oregon 4.8%, excluding those catastrophic units. The underlying drivers of these changes stay accordant with what we've discussed connected our anterior calls.

First, shifts successful policies successful unit and vulnerability levels crossed security carriers who themselves are experiencing differential maturation rates. Softer wide claims enactment driven by a user pullback successful car security coverage, each partially offset by continuing increases successful full nonaccomplishment frequency. On the second point, full nonaccomplishment frequence continues its inexorable rise, accordant with the semipermanent humanities trends we've observed and discussed astatine large length. In the United States, full nonaccomplishment frequence was 24.2% successful the 4th fourth of calendar twelvemonth 2025, a flimsy 10 ground constituent uptick from a twelvemonth ago. The twelvemonth agone period, of course, does see the effects of Hurricanes Helene and Milton. It's notable that full nonaccomplishment frequence has accrued implicit that period, nonetheless.

Then erstwhile you measurement backmost a spot implicit a multiyear horizon, the upward trajectory becomes clearer still. Total nonaccomplishment frequence successful calendar twelvemonth 2015 was 15.6% successful examination to 23.1% successful calendar twelvemonth 2025. Against that backdrop, our absorption remains connected delivering superior semipermanent economical and work outcomes to our security clients. First and foremost, we maximize returns for our security partners. We judge our auction returns proceed to bespeak structural advantages of our marketplace and caller relationship wins for which we person empirical earlier and aft returns information validates that position.

As you know, industry-wide conveyance values person normalized somewhat from the elevated levels we observed during proviso constrained -- proviso concatenation constrained play of 2021 and 2022 arsenic evidenced by Manheim indices and otherwise. We are nevertheless generating grounds mean selling prices for our U.S. security consignors. As we discussed astatine large magnitude connected our archetypal 4th call, we property this show to the standard and diverseness of our planetary purchaser network, rising planetary participation, enhanced data-driven merchandising and the liquidity that comes from consistently uncovering for each conveyance we auction its highest and champion usage globally. The captious operator of semipermanent competitory vantage for Copart is that liquidity.