Online vehicle auction company Copart (NASDAQ: CPRT) announced better-than-expected revenue in Q1 CY2026, with sales up 2.1% year on year to $1.24 billion. Its GAAP profit of $0.43 per share was 5.5% above analysts’ consensus estimates.
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Copart (CPRT) Q1 CY2026 Highlights:
- Revenue: $1.24 billion vs analyst estimates of $1.19 billion (2.1% year-on-year growth, 4.2% beat)
- EPS (GAAP): $0.43 vs analyst estimates of $0.41 (5.5% beat)
- Adjusted EBITDA: $523.4 million vs analyst estimates of $505.6 million (42.3% margin, 3.5% beat)
- Operating Margin: 37.5%, in line with the same quarter last year
- Free Cash Flow Margin: 40.7%, down from 47.3% in the same quarter last year
- Market Capitalization: $31.83 billion
Company Overview
Starting as a single salvage yard in California in 1982, Copart (NASDAQ: CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $4.64 billion in revenue over the past 12 months, Copart is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.
As you can see below, Copart’s 13.4% annualized revenue growth over the last five years was exceptional. This is a great starting point for our analysis because it shows Copart’s demand was higher than many business services companies.
Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Copart’s annualized revenue growth of 5.5% over the last two years is below its five-year trend, but we still think the results were respectable. 
Copart also breaks out the revenue for its most important segments, Service
and Vehicle Sales, which are 85.4% and 14.6% of revenue. Over the last two years, Copart’s Service
revenue (processing and selling cars) averaged 5% year-on-year growth while its Vehicle Sales revenue was flat. 
This quarter, Copart reported modest year-on-year revenue growth of 2.1% but beat Wall Street’s estimates by 4.2%.
Looking ahead, sell-side analysts expect revenue to grow 3.2% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Adjusted Operating Margin
Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.
Copart has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 37.6%.
Analyzing the trend in its profitability, Copart’s adjusted operating margin decreased by 3.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q1, Copart generated an adjusted operating margin profit margin of 37.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Copart’s remarkable 12.7% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Copart, its two-year annual EPS growth of 6.1% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.
In Q1, Copart reported EPS of $0.43, up from $0.41 in the same quarter last year. This print beat analysts’ estimates by 5.5%. Over the next 12 months, Wall Street expects Copart’s full-year EPS to grow 1.3% from $1.60 to $1.63.
Key Takeaways from Copart’s Q1 Results
We enjoyed seeing Copart beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The market seemed to be hoping for more, and the stock traded down 1.9% to $33.79 immediately after reporting.
Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
