Online vehicle auction company Copart (NASDAQ:CPRT) missed Wall Street’s revenue expectations in Q2 CY2025, but sales rose 5.2% year on year to $1.13 billion. Its GAAP profit of $0.41 per share was 13.3% above analysts’ consensus estimates.
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Copart (CPRT) Q2 CY2025 Highlights:
- Revenue: $1.13 billion vs analyst estimates of $1.16 billion (5.2% year-on-year growth, 3.2% miss)
- EPS (GAAP): $0.41 vs analyst estimates of $0.36 (13.3% beat)
- Adjusted EBITDA: $466.6 million vs analyst estimates of $460.8 million (41.5% margin, 1.3% beat)
- Operating Margin: 36.7%, up from 33.6% in the same quarter last year
- Free Cash Flow Margin: 31.2%, up from 28.2% in the same quarter last year
- Market Capitalization: $46.53 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
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $4.65 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 sales grew at an incredible 16.1% compounded annual growth rate over the last five years. 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 9.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
We can better understand the company’s revenue dynamics by analyzing its most important segment, Service
. Over the last two years, Copart’s Service
revenue (processing and selling cars) averaged 11.5% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance. 
This quarter, Copart’s revenue grew by 5.2% year on year to $1.13 billion, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 9% over the next 12 months, similar to its two-year rate. This projection is admirable and implies the market is baking in success for its products and services.
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Operating Margin
Copart has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 38.4%.
Analyzing the trend in its profitability, Copart’s operating margin decreased by 5.7 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.
This quarter, Copart generated an operating margin profit margin of 36.7%, up 3 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Copart’s astounding 16.9% 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 more recent period because it can provide insight into an emerging theme or development for the business.
For Copart, its two-year annual EPS growth of 12.2% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q2, Copart reported EPS of $0.41, up from $0.33 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Copart’s full-year EPS of $1.60 to grow 6%.
Key Takeaways from Copart’s Q2 Results
It was good to see Copart beat analysts’ EBITDA and EPS expectations this quarter despite a revenue miss. Overall, this print was decent. The stock traded up 2% to $51 immediately following the results.
Copart may have had a good quarter, but does that mean you should invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.