In fiscal 2025, Copart opened six new operational facilities: one in the U.K., two in Spain, and three in the U.S., following similar expansion in fiscal 2024 (three in U.K., one in Spain, one in Canada, four in U.S.). This consistent development of new vehicle storage facilities aligns with the strategy to increase geographic coverage and market share.

In fiscal 2024, Copart acquired an 80% controlling ownership in Purple Wave, an online offsite heavy equipment auction company. This acquisition expands Copart's service offerings into complementary market segments, leveraging its proven ability to acquire and integrate new businesses.

While insurance companies remain primary sellers (81% of vehicles processed in FY2025), Copart continues to expand its service offerings to include dealers, individuals, charities, rental car companies, banks, finance companies, and fleet operators. Initiatives like 'Buy It Now' and 'Make An Offer' aim to maximize returns for sellers and value for members, supporting organic growth.

Management, including the CEO and CFO, assessed and concluded that the Company maintained effective internal control over financial reporting as of July 31, 2025, based on COSO criteria. This indicates strong governance and operational oversight in financial processes.

In the first quarter of fiscal 2025, Copart began implementing a new financial system in stages, with the initial stage covering U.S. member billing. This ongoing digital transformation effort aims to improve controls, increase efficiency, and enhance the overall internal control environment.

Management highlighted its ability to mobilize personnel and engage service providers to timely retrieve, store, and remarket tens of thousands of flood-damaged vehicles in South Florida following Hurricanes Helene and Milton in Fall 2024. While these events incurred substantial additional costs ($56 million in FY2025), the proactive response demonstrates effective crisis management.

The U.S. Department of Justice is conducting an ongoing investigation into potential violations of money laundering laws related to Copart's auction platform members. The Company received a letter in October 2023 indicating potential exposure, which could lead to legal and financial penalties, and reputational harm, though the duration and outcome are uncertain.

Facility operations expenses in the U.S. increased by $205.5 million (14.3%) in fiscal 2025, including $56 million in one-time costs associated with Hurricanes Helene and Milton. This highlights the significant financial impact of severe weather on operational costs, including subhaul, labor, security, travel, and lodging.

Copart acknowledges increased information security risks for online commerce companies, citing the proliferation of new technologies, organized crime, hackers, and human error. A ransomware attack on an immaterial subsidiary in March 2023 underscores the ongoing threat, which could lead to system disruptions, data breaches, and financial exposure.

Copart's Virtual Bidding Third Generation (VB3) internet auction technology allows it to sell virtually all vehicles online, eliminating the need for physical auctions. This, combined with a comprehensive suite of services like Co.ai for salvage estimation and IntelliSeller for auction optimization, positions Copart as a leading global provider in online vehicle remarketing.

The Company operates an integrated network of 281 facilities across the U.S., U.K., Germany, Brazil, Canada, UAE, Spain, Finland, Oman, Republic of Ireland, and Bahrain. This geographic coverage enables efficient response to natural disasters and provides sellers with enhanced selling prices due to a broad domestic and international buyer pool.

Copart offers sophisticated value-added services such as mobile applications, predictive analytics (Recommendations Engine), 'Buy It Now' and 'Make An Offer' options, and expedited total loss assessment tools (Total Loss Express 360 and Co.ai). These technological enhancements improve operating efficiency and enhance the competitive bidding process.

Facility operations expenses increased by 13.7% to $1,944.3 million in fiscal 2025 from $1,710.1 million in fiscal 2024. This rise was attributed to increased volume, higher non-CAT related subhaul and labor costs, and a one-time $56 million cost related to Hurricanes Helene and Milton, indicating pressure on operational efficiency.

Copart continues to invest in proprietary software systems and technology enhancements for management information systems. These systems provide vehicle sellers with online access to data, streamline vehicle sales processes, and minimize administrative costs, aiming to generate improved capacity and financial returns.

Total cost of vehicle sales decreased by $16.5 million, or 2.7%, to $603.0 million in fiscal 2025 compared to $619.5 million in fiscal 2024. This was primarily due to an $81.1 million decrease in International cost of vehicle sales, attributed to a lower average purchase price and a change in the mix of vehicles sold, with sellers switching to a consignment model.

Total gross capitalized software increased to $120.0 million as of July 31, 2025, up from $105.0 million in 2024. This reflects ongoing investment in internal-use software and major software enhancements, crucial for supporting the company's online auction platform and expanding service offerings.

Copart is actively evaluating emerging technologies such as artificial intelligence, machine learning, and generative artificial intelligence for incorporation into its products and services. This proactive approach aims to enhance existing services and develop new capabilities to meet sophisticated customer needs, despite associated legal and regulatory risks.

The Company has established a comprehensive cybersecurity program with strategic investments in security toolsets, people, policies, and third-party service providers. This 'defense in depth' strategy, including the use of the NIST framework, is critical for protecting its online auction platform and confidential information from evolving cyber threats, as highlighted by a ransomware attack on a subsidiary in March 2023.

Cash, cash equivalents, and restricted cash increased significantly by $1,266.4 million, reaching $2,780.5 million as of July 31, 2025, up from $1,514.1 million in 2024. This surge was primarily due to strong cash generated from operations and proceeds from held-to-maturity securities, enhancing the company's liquidity position.

Capital expenditures, including acquisitions, increased to $570.2 million in fiscal 2025 from $493.3 million in fiscal 2024. These investments are primarily directed towards acquiring land, opening and improving facilities, and developing software, aligning with the company's strategy to expand its network and enhance its technological capabilities.

The Board of Directors has a substantial stock repurchase program with 325.8 million shares available for repurchase as of July 31, 2025. However, the Company did not repurchase any shares under this program in fiscal years 2025, 2024, or 2023, indicating a focus on retaining earnings for business use and strategic investments rather than returning capital through buybacks in these periods.

Copart's core business of remarketing vehicles through online auctions facilitates the global re-use and recycling of vehicles, parts, and raw materials. This process extends vehicle useful life and reduces the need for new vehicle and auto parts manufacturing, thereby decreasing the overall environmental footprint of the transportation industry.

The Company emphasizes attracting, retaining, and developing diverse talent, with 64% of employees in the U.S. and 36% internationally. Its People and Culture department fosters a culture of growth and well-being, providing competitive compensation, comprehensive benefits, and training programs to support employee success and career progression.

Copart plays an important social role by responding to and managing catastrophic weather events, as demonstrated by its mobilization of resources to retrieve, store, and remarket tens of thousands of flood-damaged vehicles in South Florida after Hurricanes Helene and Milton in Fall 2024. This showcases its commitment to community support.

Automobile manufacturers continuously incorporate new standard features, making newer vehicles more costly to repair. This trend, as noted in the filing, increases the likelihood of vehicles being deemed a total loss by insurance companies, which could positively impact the supply of salvage vehicles for Copart's auctions.

Adverse macroeconomic factors such as rising inflation, economic downturns, and high fuel prices can lead to reduced miles driven, fewer accidents, and decreased salvage vehicle supply. Additionally, adverse credit markets may affect buyers' ability to secure financing, potentially dampening demand for salvaged vehicles.

Copart's international operations, spanning multiple countries, are exposed to foreign currency exchange rate risk. Fluctuations in currencies like the Pounds Sterling, Canadian dollar, Brazilian real, and European Union euro can create volatility in reported revenues and earnings, as the company does not engage in foreign currency hedging arrangements.