During its recent quarterly earnings call, auto salvage auction company Copart (NASDAQ: CPRT) announced strong quarterly sales results after setting new supply records. The company also noted historic total loss frequency, a key driver of its business performance.
During the call, executives for the Texas-based auctioneer – which reports based on a year that ends July 31 -- highlighted the 8% growth in global volume in Q2 2025 compared to the same period in 2024.
CEO Jeff Liaw noted that catastrophic events from late last year, including hurricanes Milton and Helene, contributed to the increased number of totaled vehicles. He said he expects the underlying trend of insurance-totaled cars to continue, especially in the aftermath of the Los Angeles wildfires.
"The full-year trend of 22.2% represents an all-time annual high, and the total loss frequency drivers certainly continue unabated," Liaw said during the call.
The increased supply contributed to impressive financial results, with global revenue increasing by 14% to nearly $1.2 billion. The company's U.S. insurance unit volume grew by approximately 9% year-over-year.
The earnings call was another strong performance for the auctioning company. Copart beat Wall Street’s expectations in Q1 2025 and has exceeded expectations for three of the past five quarters. In 2025, Copart maintains a commanding position in the American automotive auction market. The company accounts for nearly 40% of the industry’s market share.
Liaw added that insurance companies are more likely to total vehicles in today’s market. The expense of fixing vehicles, which are replete with computer chips, ADAS equipment and advanced electronics, is less enticing to insurance companies than paying out the vehicle's worth.
"Repairing cars becomes less attractive as time passes,” he said. “Labor costs increase, repair parts costs increase, and rental car rates do as well, while totaling vehicles becomes more attractive given the liquidity of our auctions.”
Copart impressed beyond its auto auction markets. The company continued expanding its services beyond traditional insurance customers, selling consumer vehicles and parts. Its Blue Car service, which caters to banks, rental car companies and fleet customers, showed year-over-year growth exceeding 27%. Purple Wave, which auctions parts for heavy machinery and farming equipment, also noted an 8% growth over the same time in 2024.
Despite the positive results, Copart faces significant headwinds and uncertainties. The company acknowledged a "modest increase in the uninsured population relative to pre-COVID levels." Fewer insured vehicles could disrupt the company’s flow of totaled cars and parts into its marketplaces.
Vehicle insurance rates have dramatically increased since the beginning of COVID-19 lockdowns, driving thousands of customers off their plans and forcing state regulators across the U.S. to consider regulatory action. Liaw described the change in insured drivers as "a modest offset to the growth in our insurance business."
Additionally, the company reported that facility-related costs in the U.S. increased by nearly 22%.
President Donald Trump announced potential tariffs on all Canadian and Mexican imports, starting March 4. The added taxes could impact Copart’s underlying numbers, potentially increasing repair costs while also raising pre-accident values.
"In sum, I think we believe that tariffs would have a likely neutral to modestly positive effect on our business," Liaw said.
Abroad, the company reported that international purchased vehicle revenue decreased by over $18 million or 22%. However, this was accompanied by an increase in gross profit, partly due to changes in the business model in Germany and stronger margins in the UK.
Ben Shimkus