COPART INC

uidity and Capital Resources

The following table presents a comparison of key components of our liquidity and capital resources at January 31, 2026 and July 31, 2025 and for the six months ended January 31, 2026 and 2025, respectively, excluding additional funds available to us through our Revolving Loan Facility:

Cash, cash equivalents, and restricted cash and working capital increased $2,321.3 million and $491.0 million at January 31, 2026, respectively, as compared to July 31, 2025. Cash, cash equivalents, and restricted cash increased due to cash generated from operations, maturity of held to maturity securities as a result of maximizing our return on U.S. Treasury Bills, not fully offset by capital expenditures and the repurchase of common stock as part of our stock repurchase program. Working capital increased primarily from cash generated from operations and timing of cash receipts, partially offset by capital expenditures, and timing of cash payments. Cash equivalents consisted of bank deposits, U.S. Treasury Bills, and funds invested in money market accounts, which bear interest at variable rates.

Historically, we have financed our growth through cash generated from operations, public offerings of common stock, equity issued in conjunction with certain acquisitions and debt financing. Our primary source of cash generated by operations is from the collection of service fees and funds received from the sale of vehicles. We expect to continue to use cash flows from operations to finance our working capital needs and to develop and grow our business. In addition to our stock repurchase program, we are considering a variety of alternative potential uses for our remaining cash balances and our cash flows from operations. These alternative potential uses include additional stock repurchases, acquisitions and the payment of dividends. For further detail, see Note to Unaudited Consolidated Financial Statements, NOTE 2 – Long-Term Debtand NOTE 6 – Stock Repurchases in this Quarterly Report on Form 10-Q and under the subheading “Credit Agreement” below.

Our business is seasonal as inclement weather during the winter months increases the frequency of accidents and consequently, the number of cars involved in accidents which the insurance companies salvage rather than repair. During the winter months, most of our facilities process 5% to 20% more vehicles than at other times of the year. Severe weather events, including but not limited to hurricanes, tornadoes, and hailstorms, can also impact our volumes. These increased volumes require the increased use of our cash to pay out advances and handling costs of the additional business.

We believe that our currently available cash and cash equivalents and cash generated from operations will be sufficient to satisfy our operating and working capital requirements for the foreseeable future. We expect to acquire or develop additional locations and expand some of our current facilities in the foreseeable future. We may raise additional cash through drawdowns on our Revolving Loan Facility or potentially issue equity to fund this expansion. Although the timing and magnitude of growth through expansion and acquisitions are not predictable, the opening of new greenfield facilities is contingent upon our ability to locate property that (i) is in an area in which we have a need for more capacity; (ii) has adequate size given the capacity needs; (iii) has the appropriate shape and topography for our operations; (iv) is reasonably close to a major road or highway; and (v) most importantly, has the appropriate zoning for our business.

As of January 31, 2026, $362.8 million of the $5.1 billion of cash, cash equivalents, and restricted cash was held by our foreign subsidiaries. If these funds are needed for our operations in the U.S., the repatriation of these funds could be subject to the foreign withholding tax. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not require repatriation to fund our U.S. operations.

Net cash provided by operating activities increased for the six months ended January 31, 2026 as compared to the same period in 2025 as a result of changes in operating assets and liabilities. The changes in operating assets and liabilities were primarily the result of an increase in cash provided by a decrease in income tax receivable of $48 million, decrease in inventory of $14.6 million, decrease in accounts receivable of $8.2 million and an increase in income tax payable of $4.3 million These changes were offset by cash used due to a decrease in accounts payable and accrued liabilities of $83.4 million.

Net cash provided by investing activities increased for the six months ended January 31, 2026 as compared to the same period in 2025 due primarily to an increase in proceeds from maturing held to maturity securities, and proceeds from the sale of equipment, and a decrease in capital expenditures. Our capital expenditures are primarily related to lease buyouts of certain facilities, acquiring land, opening and improving facilities, capitalized software development costs for new software for internal use and major software enhancements, and acquiring facility equipment. We continue to develop, expand and invest in new and existing facilities.

Net cash used in financing activities decreased for the six months ended January 31, 2026 as compared to the same period in 2025 due primarily due to repurchases of common stock as part of our stock repurchase program.

Credit Agreement

On January 23, 2026, the Company entered into a Senior Revolving Credit Agreement (the “2026 Credit Agreement”) by and among the Company, certain subsidiaries of the Company party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent. The 2026 Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of up to $1,250 million, including subfacilities for standby letters of credit and swingline loans. The 2026 Credit Agreement matures on January 23, 2031. The 2026 Credit Agreement replaced the previous secured credit facility under the credit agreement dated December 21, 2021 by and among the Company, certain subsidiaries of the Company party thereto, the lenders party thereto, and Bank of America, N.A., as the administrative agent (the “Second Amended and Restated Credit Agreement”), which was scheduled to mature on December 21, 2026.

Borrowings under the 2026 Credit Agreement bear interest based on the Company’s option, either (1) the applicable fixed rate plus 0.75% to 1.125% or (2) the daily rate plus 0.0% to 0.125%, in each case, depending on the Company’s consolidated total net leverage ratio. Additionally, the unused revolving commitments under the 2026 Credit Agreement are subject to the payment of a customary commitment fee at a range of 0.05% to 0.125%, depending on the Company’s consolidated total net leverage ratio. As of January 31, 2026, the unused capacity of $1,250 million was fully available to us.

The 2026 Credit Agreement contains representations and warranties, conditions, and covenants. As of January 31, 2026, we were in compliance with these financial covenants.

In connection with entering into the 2026 Credit Agreement, the Company incurred $1.5 million in costs, which were capitalized as debt issuance fees. The debt issuance cost is amortized to interest expense over the term of the debt instrument and is included in other assets on the consolidated balance sheet.

Stock Repurchases

On September 22, 2011, our Board of Directors approved a 320 million share increase in our stock repurchase program, bringing the total current authorization to 784 million shares. The repurchases may be effected through solicited or unsolicited transactions in the open market or in privately negotiated transactions. No time limit has been placed on the duration of the stock repurchase program. Subject to applicable securities laws, such repurchases will be made at such times and in such amounts as we deem appropriate and may be discontinued at any time. We repurchased 5,480,191 shares of our common stock under the program during the six months ended January 31, 2026 at a weighted average price of $39.82 per share totaling $218.2 million. We did not repurchase any common stock under the program during the six months ended January 31, 2025. As of January 31, 2026, the total number of shares repurchased under the program was 464 million, and subject to applicable limitations under Delaware law, 320 million shares were available for repurchase under the program. See NOTE 11 – Subsequent Events in the Notes to Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q for information regarding share repurchases completed subsequent to January 31, 2026.

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