Copart, Inc. (NASDAQ:CPRT) Q2 2024 Earnings Conference Call February 22, 2024 5:30 PM ET

Company Participants

Jeff Liaw - Co-CEO

Leah Stearns - CFO

Conference Call Participants

Peter Lukas - CJS Securities

Daniel Imbro - Stephens Inc.

Ian Davis - BNP Paribas

Craig Kennison - Baird

Bret Jordan - Jefferies

Operator

Good day, everyone, and welcome to the Copart Incorporated Second Quarter Fiscal 2024 Earnings Call. Just a reminder, today's conference is being recorded.

Before turning the call over to management, I will share Copart's Safe Harbor Statement. The company's comments today include forward-looking statements within the meaning of Federal Securities laws, including management's current views with respect to trends, opportunities, and uncertainties in the company's markets.

These forward-looking statements involve substantial risks and uncertainties. For more detail on the risks associated with the company's business, we refer you to the section titled Risk Factors in the company's annual report on Form 10-K for the year ended July 31, 2023, and each of the company's subsequent quarterly reports on Form 10-Q. Any forward-looking statements are made as of today, and the company has no obligation to update or revise any forward-looking statements.

I'll now turn the call over to the company's Co-CEO, Jeff Liaw.

Jeff Liaw

Thank you. Good evening. And thank you for joining us. We're pleased to report our results for the second quarter of fiscal 2024. I'll start my comments today with commentary about our business, I’ll than talk about a few recent additions to our senior leadership team before handing the call to Leah to review our financial results. And then she and I will take your questions.

First on our insurance business for the quarter. We're pleased with our ongoing profitable growth with our insurance sellers, albeit with the year-over-year noise of a significant catastrophic event in the first and second quarters of last year in the form of hurricane Ian, which I'll comment on in a moment.

As anticipated, new and used vehicle prices have decreased somewhat steeply in the past few quarters while repair costs continue to increase. Those factors have driven a strong and continued recovery in total loss frequency. For the months that comprise our second fiscal quarter, we noted a 7% year-over-year decline in the Manheim Used Vehicle Value Index.

At the same time accident severity as measured in cost of repair increased 1.7%, over that same period -- or pardon me, during the third calendar quarter of 2023. The most recently available measurement period, as reported by ISS Fast Track. Despite the decrease of 7% in the Manheim Used Vehicle Value Index, our U.S. insurance selling prices by comparison have remained flat year-over-year, a reflection of our auction liquidity and buyer activity after adjusting for the removal of hurricane Ian from the prior year.