Copart Sets Stage for a Stormy 2025 with Record-Breaking Infrastructure and Unwavering Commitment to Growth
Copart, the world's leading online vehicle auction company, recently wrapped up its third quarter fiscal 2025 earnings call, providing investors and analysts with a comprehensive update on the company's financial performance and strategic initiatives. As the global economy navigates uncertain waters, Copart has positioned itself as a stalwart of stability, leveraging its cutting-edge technology, operational prowess, and unwavering commitment to growth to stay ahead of the curve.
One of the key highlights from the quarter was Copart's insurance business, which remained relatively flat year-over-year with a nominal decline of 0.3% globally in unit sales and 0.9% in the United States. However, accounting for the extra business day of leap year 2024, global insurance and U.S. insurance units sold grew by 1.3% and 0.6%, respectively.
Copart's CEO, Jeff Liaw, noted that total loss frequency continues to rise as it has throughout the vast majority of the history of our industry. In the United States, total loss frequency reached 22.8% in the first calendar quarter of 2025, up 100 basis points or thereabouts in comparison to last year. While individual quarters can fluctuate and from time to time, we observed even seasonal effects, the underlying drivers of total loss frequency remain quite consistent over time.
Liaw attributed this trend to the increasing complexity of vehicle repairs, rising parts prices, labor rates, storage fees, rental car expenses, and other factors that make total loss a more attractive option for insurance companies. Conversely, emerging economies around the world have made salvaged vehicles an essential source of mobility for them, further underscoring Copart's value proposition.
Copart's auction technology and ecosystem of sellers and members are uniquely well-suited to finding the highest and best use for every vehicle they touch. This has allowed them to navigate the complex landscape of total loss frequency with ease, even as cyclical forces like an increase in uninsured and underinsured drivers impact the industry.
Looking ahead to 2025 storm season, Copart is preparing for potential disruptions by investing in real estate, infrastructure, technology, people, and operational readiness. The company has acquired Hall Ranch, a property located in South Florida that offers nearly 400 usable acres of vehicle storage for a storm, effectively tripling their capacity to handle large-scale storms.
This strategic move underscores Copart's commitment to growth and resilience in the face of uncertainty. As Liaw noted, "Our preparation is not an ad hoc spring event, but in fact, a year-round exercise for us as a company." With this unwavering dedication to excellence, Copart is poised to continue its leadership position in the online vehicle auction market.
