On September 4, 2024, Copart Inc (CPRT, Financial) released its 8-K filing for the quarter and year ended July 31, 2024. The company reported a mixed performance with revenue growth but a decline in net income.
Company Overview
Based in Dallas, Copart operates an online salvage vehicle auction with operations in 11 countries across North America, Europe, and the Middle East, facilitating over 3.5 million transactions annually. The company utilizes its virtual bidding platform, VB3, to connect vehicle sellers with over 750,000 registered buyers around the world. Buyers primarily consist of vehicle dismantlers, rebuilders, individuals, and used vehicle retailers. About 80% of Copart's vehicle volume is supplied by auto insurance companies holding vehicles deemed a total loss. Copart also offers services such as vehicle transportation, storage, title transfer, and salvage value estimation. The company primarily operates on a consignment basis and collects fees based on the vehicle's final selling price.
Quarterly Performance
For the three months ended July 31, 2024, Copart Inc (CPRT, Financial) reported:
| Metric | Q4 2024 | Q4 2023 | % Change |
|---|---|---|---|
| Revenue | $1.1 billion | $997.6 million | 7.2% |
| Gross Profit | $454 million | $457.6 million | (0.9)% |
| Net Income | $323 million | $347.8 million | (7.3)% |
| EPS (Diluted) | $0.33 | $0.36 | (8.3)% |
While revenue increased by 7.2% to $1.1 billion, net income decreased by 7.3% to $323 million. The diluted earnings per share (EPS) for the quarter was $0.33, missing the analyst estimate of $0.36.
Annual Performance
For the year ended July 31, 2024, Copart Inc (CPRT, Financial) reported:
| Metric | FY 2024 | FY 2023 | % Change |
|---|---|---|---|
| Revenue | $4.2 billion | $3.9 billion | 9.5% |
| Gross Profit | $1.9 billion | $1.7 billion | 9.8% |
| Net Income | $1.4 billion | $1.2 billion | 10.1% |
| EPS (Diluted) | $1.40 | $1.28 | 9.4% |
Annual revenue grew by 9.5% to $4.2 billion, and net income increased by 10.1% to $1.4 billion. The diluted EPS for the year was $1.40, slightly below the annual estimate of $1.44.
Financial Metrics and Analysis
Key financial metrics from the income statement, balance sheet, and cash flow statement include:
- Operating Income: $359.5 million for Q4 2024, down 8.0% from $390.6 million in Q4 2023.
- Cash and Cash Equivalents: $1.5 billion as of July 31, 2024, up from $957.4 million as of July 31, 2023.
- Total Assets: $8.4 billion as of July 31, 2024, compared to $6.7 billion as of July 31, 2023.
- Net Cash Provided by Operating Activities: $1.47 billion for FY 2024, up from $1.36 billion in FY 2023.
The increase in cash and cash equivalents, along with the growth in total assets, indicates a strong liquidity position for Copart Inc (CPRT, Financial). However, the decline in operating income and net income for the quarter suggests potential challenges in managing operating expenses and maintaining profitability.
Conclusion
Copart Inc (CPRT, Financial) demonstrated robust revenue growth for both the quarter and the fiscal year, reflecting its strong market position and operational efficiency. However, the decline in net income and EPS for the quarter highlights the need for the company to address rising operating expenses and other financial challenges. Investors and stakeholders will be keenly watching how Copart navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from Copart Inc for further details.
