Item 16. Form 10-K Summary

None.

EXHIBIT INDEX

The following Exhibits are filed as part of, or incorporated by reference into this report.

												Incorporated by reference herein
Exhibit Number						Description						Form						Date
3.1						Amended and Restated Certificate of Incorporation of Copart, Inc.						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 3.1						November 2, 2022
3.2						Amended and Restated Bylaws of Copart, Inc.						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 3.1						March 12, 2024
4.1						Description of Capital Stock						Annual Report on Form 10-K (File No. 000-23255), Exhibit No. 4.1						September 30, 2019
10.1			*			Copart Inc. 2007 Equity Incentive Plan, as Amended and Restated (2007 EIP)						—						Filed herewith
10.2			*			Form of Performance Share Award Agreement for use with 2007 EIP						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1						December 12, 2007
10.3			*			Form of Restricted Stock Unit Award Agreement for use with 2007 EIP						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.3						December 12, 2007
10.4			*			Form of Stock Option Award Agreement for use with 2007 EIP						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.5						December 12, 2007
10.5			*			Form of Restricted Stock Award Agreement for use with 2007 EIP						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.4						December 12, 2007
10.6			*			Copart, Inc. Executive Bonus Plan						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1						March 5, 2021
10.7			*			Form of Indemnification Agreement signed by executive officers and directors						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1						May 26, 2023
10.8			*			Copart, Inc. 2014 Employee Stock Purchase Plan						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1						December 5, 2014
10.9			*			Executive Officer Employment Agreement, effective January 4, 2016, between the Registrant and Jeffrey Liaw.						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.26						November 23, 2015
10.10						Second Amended and Restated Credit Agreement, dated as of December 21, 2021, by and among Copart, certain subsidiaries of Copart. the lenders party thereto, and Bank of America,N.A., as administrative agent.						Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1						December 27, 2021
10.11						Executive Officer Employment Agreement, effective December 5, 2022, between the registrant and Leah Stearns						Quarterly Report on Form 10-Q (File No. 000-23255), Exhibit No. 10						February 24, 2023

												Incorporated by reference herein
Exhibit Number						Description						Form						Date
10.12			*			Outside Director Compensation Program						Annual Report on Form 10-K (File No. 000-23255), Exhibit 10.12						September 30, 2024
10.13						Corporate Aircraft Personal Use Policy						Current Report on Form 8-K (File No. 000-23255), Exhibit 10.1						March 12, 2024
19.1						Insider Trading Policy						—						Filed herewith
21.1						List of subsidiaries of Registrant						—						Filed herewith
23.1						Consent of Independent Registered Public Accounting Firm						—						Filed herewith
24.1						Power of Attorney (included on signature page)						—						Filed herewith
31.1						Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002						—						Filed herewith
31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002						—						Filed herewith
32.1			(1)			Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002						—						Filed herewith
32.2			(1)			Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002						—						Filed herewith
97.1						Compensation Recovery Policy						Annual Report on Form 10-K (File No. 000-23255), Exhibit 97.1						September 30, 2024
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Extension Definition
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL).
(1)						In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

• Management contract, plan or arrangement

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			COPART, INC.
			By:						/s/ JEFFREY LIAW
									Jeffrey Liaw Chief Executive Officer (Principal Executive Officer)

Date: September 26, 2025

			COPART, INC.
			By:						/s/ LEAH STEARNS
									Leah Stearns Chief Financial Officer (Principal Financial and Accounting Officer and duly Authorized Officer)

Date: September 26, 2025

POWER OF ATTORNEY

KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jeffrey Liaw and Leah Stearns, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature						Capacity in Which Signed						Date
/s/ JEFFREY LIAW						Chief Executive Officer (Principal Executive Officer)						September 26, 2025
Jeffrey Liaw
/s/ LEAH STEARNS						Chief Financial Officer (Principal Financial and Accounting Officer)						September 26, 2025
Leah Stearns
/s/ A. JAYSON ADAIR						Executive Chairman						September 26, 2025
A. Jayson Adair
/s/ WILLIS J. JOHNSON						Chairman of the Board						September 26, 2025
Willis J. Johnson
/s/ MATT BLUNT						Director						September 26, 2025
Matt Blunt
/s/ STEVEN D. COHAN						Director						September 26, 2025
Steven D. Cohan
/s/ DANIEL ENGLANDER						Director						September 26, 2025
Daniel Englander
/s/ STEPHEN FISHER						Director						September 26, 2025
Stephen Fisher
/s/ CHERYLYN HARLEY LEBON						Director						September 26, 2025
Cherylyn Harley LeBon
/s/ JAMES E. MEEKS						Director						September 26, 2025
James E. Meeks
/s/ DIANE M. MOREFIELD						Director						September 26, 2025
Diane M. Morefield
/s/ CARL SPARKS						Director						September 26, 2025
Carl Sparks
/s/ THOMAS N. TRYFOROS						Director						September 26, 2025
Thomas N. Tryforos

Copart, Inc.

Index to Consolidated Financial Statements

and Financial Statement Schedule

Consolidated Financial Statements						Page Number
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)						53
Consolidated Balance Sheets as of July 31, 2025 and 2024						54
Consolidated Statements of Income for the years ended July 31, 2025, 2024 and 2023						55
Consolidated Statements of Comprehensive Income for the years ended July 31, 2025, 2024 and 2023						56
Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Stockholders' Equity for the years ended July 31, 2025, 2024 and 2023						57
Consolidated Statements of Cash Flows for the years ended July 31, 2025, 2024 and 2023						58
Notes to Consolidated Financial Statements						59

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Copart, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Copart, Inc. (the Company) as of July 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in redeemable noncontrolling interest and stockholders’ equity, and cash flows for each of the three years in the period ended July 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at July 31, 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended July 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of July 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated September 26, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006.

Dallas, Texas

September 26, 2025

COPART, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

						July 31,
						2025						2024
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash						$	2,780,531					$	1,514,111
Investment in held to maturity securities						2,008,539						1,908,047
Accounts receivable, net						762,811						785,877
Vehicle pooling costs						116,145						132,638
Inventories						39,661						43,639
Income taxes receivable						580						—
Prepaid expenses and other assets						46,361						33,872
Total current assets						5,754,628						4,418,184
Property and equipment, net						3,598,093						3,175,838
Operating lease right-of-use assets						99,708						116,301
Intangibles, net						62,832						74,088
Goodwill						517,779						513,909
Other assets						57,862						129,444
Total assets						$	10,090,902					$	8,427,764
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities						$	591,831					$	518,148
Deferred revenue						30,440						28,121
Income taxes payable						41,141						60,994
Current portion of operating and finance lease liabilities						19,869						21,304
Total current liabilities						683,281						628,567
Deferred income taxes						80,625						93,653
Income taxes payable						35,635						59,560
Operating and finance lease liabilities, net of current portion						83,870						97,429
Total liabilities						883,411						879,209
Commitments and contingencies
Redeemable non-controlling interest						20,458						24,544
Stockholders’ equity:
Preferred stock: $0.0001 par value—5,000,000 shares authorized; none issued						—						—
Common stock: $0.0001 par value—1,600,000,000 shares authorized; 967,478,690 and 962,967,011 shares issued and outstanding, respectively						97						96
Additional paid-in capital						1,214,150						1,120,985
Accumulated other comprehensive loss						(120,283)						(142,972)
Retained earnings						8,093,069						6,545,902
Total stockholders’ equity						9,187,033						7,524,011
Total liabilities, redeemable noncontrolling interests and stockholders’ equity						$	10,090,902					$	8,427,764

The accompanying notes are an integral part of these consolidated financial statements.

COPART, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

						Year Ended July 31,
						2025						2024						2023
Service revenues and vehicle sales:
Service revenues						$	3,968,662					$	3,561,002					$	3,198,128
Vehicle sales						678,296						675,821						671,390
Total service revenues and vehicle sales						4,646,958						4,236,823						3,869,518
Operating expenses:
Facility operations						1,944,318						1,710,084						1,518,029
Cost of vehicle sales						602,997						619,487						614,498
General and administrative						402,929						335,229						250,422
Total operating expenses						2,950,244						2,664,800						2,382,949
Operating income						1,696,714						1,572,023						1,486,569
Other income (expense):
Interest income (expense), net						178,909						145,673						65,928
Other income (expense), net						19,958						(3,095)						1,831
Total other income						198,867						142,578						67,759
Income before income taxes						1,895,581						1,714,601						1,554,328
Income tax expense						347,218						352,254						316,587
Net income						1,548,363						1,362,347						1,237,741
Less: Net income (loss) attributable to redeemable noncontrolling interest						(4,086)						(673)						—
Net income attributable to Copart, Inc.						$	1,552,449					$	1,363,020					$	1,237,741
Basic net income per common share						$	1.61					$	1.42					$	1.30
Weighted average common shares outstanding						965,306						960,739						953,574
Diluted net income per common share						$	1.59					$	1.40					$	1.28
Diluted weighted average common shares outstanding						977,563						974,798						966,647

The accompanying notes are an integral part of these consolidated financial statements.

COPART, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

						Year Ended July 31,
						2025						2024						2023
Comprehensive income, net of tax:
Net income						$	1,548,363					$	1,362,347					$	1,237,741
Other comprehensive income:
Foreign currency translation adjustments						22,689						(1,966)						28,359
Comprehensive income						$	1,571,052					$	1,360,381					$	1,266,100
Less: Comprehensive income/(loss) attributable to redeemable noncontrolling interest						$	(4,086)					$	(673)					$	—
Comprehensive income attributable to Copart, Inc.						$	1,575,138					$	1,361,054					$	1,266,100

The accompanying notes are an integral part of these consolidated financial statements.

COPART, INC.

CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

						Common Stock																		Accumulated Other Comprehensive Income (Loss)
									Additional Paid-in Capital
						Outstanding Shares						Amount												Retained Earnings												Total Stockholders’ Equity			Redeemable Noncontrolling Interest
Balances at July 31, 2022						952,163,896						$	96					$	838,460					$	(169,365)					$	3,956,408											$	4,625,599		$	—
Net income						—						—						—						—						1,237,741												1,237,741			—
Currency translation adjustment						—						—						—						28,359						—												28,359			—
Exercise of stock options, net of repurchased shares						4,473,888						—						49,679						—						(4,709)												44,970			—
Employee stock-based compensation						257,700						—						39,673						—						—												39,673			—
Shares issued for Employee Stock Purchase Plan						448,678						—						11,098						—						—												11,098			—
Balances at July 31, 2023						957,344,162						96						938,910						(141,006)						5,189,440												5,987,440			—
Net income						—						—						—						—						1,363,020												1,363,020			(673)
Currency translation adjustment						—						—						—						(1,966)						—												(1,966)			—
Acquisition of controlling interest						2,499,993						—						112,075						—						—												112,075			25,217
Exercise of stock options, net of repurchased shares						2,560,852						—						24,260						—						(6,558)												17,702			—
Employee stock-based compensation						246,962						—						33,334						—						—												33,334			—
Shares issued for Employee Stock Purchase Plan						315,042						—						12,406						—						—												12,406			—
Balances at July 31, 2024						962,967,011						96						1,120,985						(142,972)						6,545,902												7,524,011			24,544
Net income						—						—						—						—						1,552,449												1,552,449			(4,086)
Currency translation adjustment						—						—						—						22,689						—												22,689			—
Acquisition of controlling interest						—						—						—						—						—												—			—
Exercise of stock options, net of repurchased shares						3,961,105						1						42,759						—						(5,282)												37,478			—
Employee stock-based compensation						212,867						—						35,727						—						—												35,727			—
Shares issued for Employee Stock Purchase Plan						337,707						—						14,679						—						—												14,679			—
Balances at July 31, 2025						967,478,690						$	97					$	1,214,150					$	(120,283)					$	8,093,069											$	9,187,033		$	20,458

The accompanying notes are an integral part of these consolidated financial statements.

COPART, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

						Year Ended July 31,
						2025						2024						2023
Cash flows from operating activities:
Net income						$	1,548,363					$	1,362,347					$	1,237,741
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost						217,784						190,256						159,684
Allowance for credit losses						354						3,914						1,946
Gain on extinguishment of liabilities						—						(4,058)						—
Equity in (income) losses of unconsolidated affiliates						(149)						2,241						5,347
Stock-based compensation						38,004						35,234						39,673
Gain on sale of property and equipment						(13,726)						(2,386)						(1,846)
Deferred income (benefits) taxes						(13,440)						(847)						9,946
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable						(33,950)						(145,385)						(123,207)
Vehicle pooling costs						16,705						(9,542)						(10,989)
Inventories						4,655						(3,698)						26,549
Prepaid expenses and other current and non-current assets						7,748						(71,067)						(59,949)
Operating lease right-of-use assets and lease liabilities						478						1,064						350
Accounts payable and accrued liabilities						69,599						59,528						18,010
Deferred revenue						2,159						1,867						5,896
Income taxes receivable						(575)						6,561						33,193
Income taxes payable						(44,259)						46,535						21,866
Net cash provided by operating activities						1,799,750						1,472,564						1,364,210
Cash flows from investing activities:
Purchases of property and equipment						(568,990)						(510,990)						(516,636)
Assets and liabilities acquired in connection with acquisition						(1,223)						17,662						—
Proceeds from sale of property and equipment						31,831						4,166						33,919
Investment in held to maturity securities						(4,001,918)						(4,087,162)						(1,406,588)
Proceeds from held to maturity securities						3,960,000						3,645,000						—
Investment in unconsolidated affiliate						(7,148)						(8,755)						(2,744)
Net cash used in investing activities						(587,448)						(940,079)						(1,892,049)
Cash flows from financing activities:
Proceeds from the exercise of stock options						42,759						24,260						49,679
Proceeds from the issuance of Employee Stock Purchase Plan shares						14,679						12,406						11,098
Payments for employee stock-based tax withholdings						(5,282)						(6,558)						(4,709)
Issuance of principal on revolver facility						—						—						44,494
Principal payments on revolver facility						—						(10,821)						(33,924)
Payments of finance lease obligations						(49)						(14)						(23)
Net cash provided by financing activities						52,107						19,273						66,615
Effect of foreign currency translation						2,011						4,958						34,383
Net increase (decrease) in cash, cash equivalents, and restricted cash						1,266,420						556,716						(426,841)
Cash, cash equivalents, and restricted cash at beginning of period						1,514,111						957,395						1,384,236
Cash, cash equivalents, and restricted cash at end of period						$	2,780,531					$	1,514,111					$	957,395
Supplemental disclosure of cash flow information:
Interest paid						$	2,019					$	3,127					$	2,614
Income taxes paid, net of refunds						$	409,003					$	285,891					$	257,514
Purchase of property and equipment through settlement of deposit						$	64,050					$	—					$	—

The accompanying notes are an integral part of these consolidated financial statements.

COPART, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2025

NOTE 1 — Summary of Significant Accounting Policies

Basis of Presentation and Description of Business

Copart, Inc. (“the Company”) provides vehicle sellers with a full range of services to process and sell vehicles over the internet through the Company’s Virtual Bidding Third Generation (“VB3”) internet auction-style sales technology. Vehicle sellers consist primarily of insurance companies, but also include dealers, individuals, charities, rental car companies, banks, finance companies, and fleet operators. The Company sells principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and directly to the general public. The majority of vehicles sold on behalf of insurance companies are either damaged vehicles deemed a total loss or not economically repairable by the insurance companies or are recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made. The Company offers vehicle sellers a full range of services that expedite each stage of the vehicle sales process, minimize administrative and processing costs and maximize the ultimate sales price through the online auction process. In the United States (“U.S.”), Canada, Brazil, the Republic of Ireland, Finland, the United Arab Emirates (“U.A.E.”), Oman, and Bahrain, the Company sells vehicles primarily as an agent and derives revenue primarily from auction and auction-related sales transaction fees charged for vehicle remarketing services as well as fees for services subsequent to the auction, such as delivery and storage. In the United Kingdom (“U.K.”), Germany, and Spain, the Company operates both as an agent and on a principal basis, in some cases purchasing salvage vehicles outright and reselling the vehicles for its own account. In Germany the Company also derives revenue from listing vehicles on behalf of insurance companies and insurance experts to determine the vehicle’s residual value and/or to facilitate a sale for the insured.

The consolidated financial statements of the Company include the accounts of the parent company and its wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation.

On August 4, 2023, the Company’s Board of Directors approved a two-for-one common stock split effected in the form of a stock dividend entitling each stockholder of record to receive one additional share of common stock for every one share owned. On August 21, 2023, the Company effected the two-for-one stock dividend to stockholders of record as of August 14, 2023.

The stock dividend increased the number of shares of common stock outstanding and all share and per share amounts have been retroactively adjusted for the stock dividends, as of the date earliest presented in these financial statements to the conform to current year presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, but are not limited to, vehicle pooling costs; income taxes; stock-based compensation; and contingencies. Actual results may differ from these estimates.

Revenue Recognition

The Company’s primary performance obligation is the auctioning of consigned vehicles through an online auction process. Service revenue and vehicle sales revenue are recognized at the date the vehicles are sold at auction, excluding annual registration fees. Costs to prepare the vehicles for auction, including inbound transportation costs and titling fees, are deferred and recognized at the time of revenue recognition at auction.

The Company’s disaggregation between service revenues and vehicle sales at the segment level reflects how the nature, timing, amount and uncertainty of its revenues and cash flows are impacted by economic factors. The Company reports sales taxes on relevant transactions on a net basis in the Company’s consolidated results of operations, and therefore does not include sales taxes in revenues or costs.

Service Revenues

The Company’s service revenues consist of auction and auction-related sales transaction fees charged for vehicle remarketing services. Within this revenue category, the Company’s primary performance obligation is the auctioning of consigned vehicles through an online auction process. These auction and auction-related services may include a combination of (i) vehicle purchasing fees, vehicle listing fees, and vehicle selling fees that can be based on a predetermined percentage of the vehicle sales price, tiered vehicle sales price driven fees, or at a fixed fee based on the sale of each vehicle regardless of the selling price of the vehicle; (ii) transportation fees for the cost of transporting the vehicle to or from the Company’s facility; (iii) title processing and preparation fees; (iv) vehicle storage fees; (v) bidding fees; and (vi) vehicle loading fees. These services are not distinct within the context of the contract. Accordingly, revenue for these services is recognized when the single performance obligation is satisfied at the completion of the auction process. The Company does not take ownership of these consigned vehicles, which are stored at the Company’s facilities located throughout the U.S. and at its international locations. These fees are recognized as net revenue (not gross vehicle selling price) at the time of auction in the amount of such fees charged.

The Company has a separate performance obligation related to providing access to its online auction platform as the Company charges members an annual registration fee for the right to participate in its online auctions and access the Company’s bidding platform. This fee is recognized ratably over the term of the arrangement, generally one year, as each day of access to the online auction platform represents the best depiction of the transfer of the service.

No provision for returns has been established, as all sales are final with no right of return or warranty, except for separately identified vehicles subject to an arbitration policy, although the Company provides for expected credit losses in the case of non-performance by its buyers or sellers.

									Year Ended July 31,
(In thousands)									2025						2024						2023
Service revenues
			United States						$	3,451,558					$	3,126,102					$	2,841,641
			International						517,104						434,900						356,487
Total service revenues									$	3,968,662					$	3,561,002					$	3,198,128

Vehicle sales

Certain vehicles are purchased and remarketed on the Company’s own behalf. The Company has a single performance obligation related to the sale of these vehicles, which is the completion of the online auction process. Vehicle sales revenue is recognized on the auction date. As the Company acts as a principal in vehicle sales transactions, the gross sales price at auction is recorded as revenue.

									Year Ended July 31,
(In thousands)									2025						2024						2023
Vehicle sales
			United States						$	403,546					$	338,633					$	348,007
			International						274,750						337,188						323,383
Total vehicle sales									$	678,296					$	675,821					$	671,390

Contract assets

The Company capitalizes certain contract assets related to obtaining a contract, where the amortization period for the related asset is greater than one year. These assets are amortized over the expected life of the customer relationship. Contract assets are classified as current or long-term other assets, based on the timing of when the Company expects to recognize the related revenues and are amortized as an offset to the associated revenues on a straight-line basis. The Company assesses these costs for impairment at least quarterly and as “triggering” events occur that indicate it is more likely than not that an impairment exists. The contract asset costs where the amortization period for the related asset is one year or less are expensed as incurred and recorded within general and administrative expenses in the accompanying consolidated statements of income.

The change in the carrying amount of contract assets was as follows (In thousands):

Balance as of July 31, 2023						$	25,726
Capitalized contract assets during the period						32,622
Costs amortized during the period						(9,017)
Effect of foreign currency exchange rates						(93)
Balance as of July 31, 2024						$	49,238
Capitalized contract assets during the period						22
Costs amortized during the period						(9,149)
Effect of foreign currency exchange rates						(4)
Balance as of July 31, 2025						$	40,107

Vehicle Pooling Costs

The Company defers costs that relate directly to the fulfillment of its contracts associated with vehicles consigned to and received by the Company, but not sold as of the end of the period. The Company quantifies the deferred costs using a calculation that includes the number of vehicles at its facilities at the beginning and end of the period, the number of vehicles sold during the period, and an allocation of certain facility operation costs for the period. The primary expenses allocated and deferred are inbound transportation costs, titling fees, certain facility costs, labor, and vehicle processing costs. If the allocation factors change, then facility operation expenses could increase or decrease correspondingly in the future. These costs are expensed into facility operations expenses as vehicles are sold in subsequent periods on an average cost basis.

Foreign Currency Translation

The Company records foreign currency translation adjustments from the process of translating the functional currency of the financial statements of its foreign subsidiaries into the U.S. dollar reporting currency. The Pounds Sterling, Canadian dollar, Brazilian real, European Union euro, U.A.E. dirham, Omani rial, and Bahraini dinar are the functional currencies of the Company’s foreign subsidiaries as they are the primary currencies within the economic environment in which each subsidiary operates. The original equity investment in the respective subsidiaries is translated at historical rates. Assets and liabilities of the respective subsidiary’s operations are translated into U.S. dollars at period-end exchange rates, and revenues and expenses are translated into U.S. dollars at average exchange rates in effect during each reporting period. Adjustments resulting from the translation of each subsidiary’s financial statements are reported in other comprehensive income.

The cumulative effects of foreign currency exchange rate fluctuations were as follows (In thousands):

Cumulative loss on foreign currency translation as of July 31, 2023						$	(141,006)
Loss on foreign currency translation						(1,966)
Cumulative loss on foreign currency translation as of July 31, 2024						$	(142,972)
Gain on foreign currency translation						22,689
Cumulative loss on foreign currency translation as of July 31, 2025						$	(120,283)

Fair Value of Financial Instruments

The Company records its financial assets and liabilities at fair value in accordance with the framework for measuring fair value in U.S. GAAP. In accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, the Company considers fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants under current market conditions. This framework establishes a fair value hierarchy that prioritizes the inputs used to measure fair value:

Level I Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

Level II Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly.

Level III Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate.

The amounts recorded for financial instruments in the Company’s consolidated financial statements, which included cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, and amounts outstanding under the Revolving Loan Facility approximated their fair values as of July 31, 2025 and 2024, due to the short-term nature of those instruments and are classified within Level II of the fair value hierarchy. Cash equivalents and long-term debt are classified within Level II of the fair value hierarchy because they are valued using market based inputs. Held to maturity investments are classified within Level I of the fair value hierarchy because they are valued at quoted prices for identical assets that are traded in active markets. See Note 9 – Long-Term Debt and Note 10 – Fair Value Measurements.

Cost of Vehicle Sales

Cost of vehicle sales includes the purchase price of vehicles sold for the Company’s own account.

Facility Operations

Facility operations expenses consist primarily of: (i) labor (operating personnel at facilities); (ii) transportation primarily provided by third-party (miles traveled and fuel rates); (iii) facilities (maintenance, property-related taxes, rent, and insurance); (iv) other (marketing and auction related costs); and (v) costs of vehicles sold.

General and Administrative Expenses

General and administrative expenses consist primarily of executive management, accounting, data processing, sales personnel, professional services, marketing expenses, and system maintenance and enhancements.

Advertising

All advertising costs are expensed as incurred and are included in facility operations expenses for costs directly related to the auction process and the remainder in general and administrative expenses on the consolidated statements of income. Advertising expenses were $33.6 million, $26.1 million, and $17.8 million for the years ended July 31, 2025, 2024, and 2023, respectively.

Other Income (Expense)

Other income (expense) consists primarily of interest income on U.S. Treasury Bills on held to maturity securities, interest expense on long-term debt; foreign exchange rate gains and losses; gains and losses from the disposal of assets, which will fluctuate based on the nature of these activities each period; and earnings from unconsolidated entities.

Income Taxes and Deferred Tax Assets

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax basis, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company considers the need to maintain a valuation allowance on deferred tax assets based on an assessment of whether it is more likely than not that the Company would realize those deferred tax assets based on future reversals of existing taxable temporary differences and the ability to generate sufficient taxable income within the carryforward period available under the applicable tax law. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Excess tax benefits and deficiencies related to exercises of stock options are recognized as expense or benefit in the consolidated statements of income as discrete items in the reporting period in which they occur.

The Company applies the provisions of the accounting standard for uncertain tax positions to its income taxes. In determining net income for financial statement purposes, the Company makes certain estimates and judgments in the calculation of tax provisions and the resultant tax liabilities. In the ordinary course of business, there may be transactions and calculations where the ultimate tax outcome is uncertain. The calculation of tax liabilities involves dealing with uncertainties in the interpretation and application of complex tax laws, and judgment may be necessary to (i) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (ii) measure the amount of tax benefit that qualifies for recognition. The Company recognizes potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on an estimate of the ultimate resolution of whether, and the extent to which, additional taxes will be due. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different from what is reflected in the historical income tax provisions and accruals. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Net Income Per Share

Basic net income per share amounts were computed by dividing consolidated net income by the weighted average number of common shares outstanding during the period. Diluted net income per share amounts were computed by dividing consolidated net income by the weighted average number of common shares outstanding plus dilutive potential common shares calculated for stock options, restricted stock, restricted stock units, and performance stock units outstanding during the period using the treasury stock method.

Redeemable Noncontrolling Interest

Redeemable noncontrolling interests represent a 20% noncontrolling ownership in Purple Wave, a consolidated subsidiary of the Company. Redeemable noncontrolling interests are presented outside of permanent equity on the consolidated balance sheets as they are redeemable by the holders of the noncontrolling interest and the redemption is outside the control of the Company. The redeemable noncontrolling interests were initially recorded at their issuance date fair value of $25.2 million. We record the carrying amount of the redeemable noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss, and dividends or (ii) the redemption value. For interests that are redeemable in the future, we recognize changes in the redemption value immediately as they occur. Shares are redeemable at adjusted fair value from the third anniversary of the acquisition through the 10th anniversary of acquisition, and are redeemable at fair value thereafter.

Cash, Cash Equivalents, and Restricted Cash and Investments

The Company considers all highly liquid investments purchased with original maturities of three months or less at the time of purchase to be cash equivalents. Cash, cash equivalents, and restricted cash include cash held in checking, certificates of deposit, U.S. Treasury Bills, and money market accounts. The Company periodically invests its excess cash in money market funds and U.S. Treasury Bills. The Company’s cash, cash equivalents, and restricted cash are placed with high credit quality financial institutions.

The Company has held to maturity securities comprised of U.S. Treasury Bills. These investments are classified as held to maturity as the Company has the intent and ability to hold these investments until they mature. The held to maturity securities mature within the next 12 months. The table below shows the amortized cost, associated gross unrealized gains and associated fair value of held to maturity securities (in thousands).

(In thousands)			July 31, 2025
			Amortized Cost						Gross Unrealized Gains						Fair Value
Investment in held to maturity securities			$	2,008,539					$	15,575					$	2,024,114

(In thousands)			July 31, 2024
			Amortized Cost						Gross Unrealized Gains						Fair Value
Investment in held to maturity securities			$	1,908,047					$	18,298					$	1,926,345

Inventory

Inventories of purchased vehicles are stated at the lower of cost or estimated realizable value. Cost includes the Company’s cost of acquiring ownership of the vehicle. The cost of vehicles sold is charged to cost of vehicle sales as sold on a specific identification basis.

Accounts Receivable

Accounts receivable, which consist primarily of advance charges receivable from the Company’s sellers and the gross sales price of the vehicle due from buyers, are recorded when billed, advanced or accrued and represent claims against third parties that will be settled in cash. Advance charges receivable represents amounts paid to third parties on behalf of insurance companies for which the Company will be reimbursed when the vehicle is sold.

Concentration of Credit Risk

Financial instruments, which subject the Company to potential credit risk, consist of its cash, cash equivalents, and restricted cash, short-term investments and accounts receivable. The Company adheres to its investment policy when placing investments. The investment policy has established guidelines to limit the Company’s exposure to credit risk by placing investments with high credit quality financial institutions, diversifying its investment portfolio, limiting investments in any one issuer or pooled fund and placing investments with maturities that maintain safety and liquidity. Deposits with these financial institutions may exceed the amount of insurance provided; however, these deposits typically are redeemable upon demand and, therefore, the Company believes that the financial risks associated with these financial instruments are minimal.

The Company generally does not require collateral on its accounts receivable. The Company estimates its allowances for credit loss based on historical collection trends, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due account balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amounts due. The Company does not have off-balance sheet credit exposure related to its customers, and to date, the Company has not experienced significant credit-related losses.

No single customer accounted for more than 10% of the Company’s consolidated revenues for the years ended July 31, 2025, 2024, and 2023.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and amortization. Property and leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful lives of the respective improvements, which is between seven and ten years. Significant improvements which substantially extend the useful lives of assets are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives: three to seven years for internally developed or purchased software; three to twenty years for transportation and other equipment; three to five years for office furniture and equipment; and seven to forty years or the lease term, whichever is shorter, for buildings and improvements. Amortization of equipment under finance leases is included in depreciation expense.

Goodwill

In accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not amortized but is tested for potential impairment, at a minimum on an annual basis, or when indications of potential impairment exist. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The Company has identified two reporting units, which are consistent with its two operating and reportable segments, U.S. and International. The Company evaluates goodwill for impairment annually as of the beginning of the fourth quarter, or when an indicator of impairment exists.

Capitalized Software Costs

The Company capitalizes system development costs and website development costs related to the enterprise computing services during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three to seven years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that impact the recoverability of these assets. Total gross capitalized software as of July 31, 2025 and 2024 was $120.0 million and $105.0 million respectively. Accumulated amortization expense related to software as of July 31, 2025 and 2024 totaled $81.6 million and $68.0 million, respectively.

Stock-Based Compensation

The Company accounts for stock-based awards to employees and non-employees using the fair value method as required by ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, consultants and directors based on estimated fair value. ASC 718 requires companies to estimate the fair value of stock-based awards on the measurement date. The value of the portion of the award that is ultimately expected to vest is recognized in expense over the requisite service periods.

Comprehensive Income

Comprehensive income includes all changes in stockholders’ equity during a period from non-stockholder sources. For the years ended July 31, 2025, 2024 and 2023, accumulated other comprehensive income (loss) was the effect of foreign currency translation adjustments. Deferred taxes are not provided on cumulative translation adjustments where the Company expects earnings of a foreign subsidiary to be indefinitely reinvested.

Recently Issued Accounting Pronouncements

Adopted

In March 2023 the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323), which allows the option for reporting entities to elect to account for their tax equity investments, using the proportional amortization method if certain conditions are met. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company’s adoption of ASU 2023-02 did not have a material impact on the Company’s consolidated results of operations and financial position.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company’s adoption of ASU 2023-07 did not have a material impact on the Company’s disclosures.

Pending

On December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

On November 2024, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires disclosure of specified information about certain costs and expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

Note 2 — Acquisitions

Fiscal Year 2024 Transactions

On October 6, 2023, the Company acquired an 80% controlling ownership in Purple Wave, an online offsite heavy equipment auction company. The Company acquired the controlling ownership by issuing 2.5 million shares of the Company’s

common stock which was equal to the $108.0 million acquisition price divided by the 10-day volume average weighted price of the Company’s common stock prior to closing. Under U.S. GAAP, the fair value of the merger consideration paid for Purple Wave was $112.1 million and was determined on the basis of the closing price of the Company’s common stock on October 6, 2023. Substantially all of the merger consideration has been allocated to intangible assets, including goodwill. The fair value of the 20% redeemable noncontrolling interest in Purple Wave was $25.2 million, and was estimated by applying the transaction method. Refer to Note 1 — Summary of Significant Accounting Policies for more details regarding the redeemable noncontrolling interests. Acquisition costs reflected in the general administrative line on the income statement were $1.2 million. The Company has finalized the allocation of fair value for acquired assets and liabilities. The resulting impact to the balance sheet and income statement were immaterial.

NOTE 3 — Accounts Receivable, Net

Accounts receivable, net consisted of:

						July 31,
(In thousands)						2025						2024
Advance charges receivable						$	540,747					$	598,805
Trade accounts receivable						200,969						173,652
Other receivables						34,040						25,953
						775,756						798,410
Less: Allowance for credit loss						(12,945)						(12,533)
Accounts receivable, net						$	762,811					$	785,877

Advance charges receivable represents amounts paid to third parties on behalf of insurance companies for which the Company will be reimbursed when the vehicle is sold. Advance charges are recovered within one year. Trade accounts receivable includes fees and gross auction proceeds to be collected from insurance companies and buyers.

NOTE 4 — Property and Equipment, Net

Property and equipment, net consisted of the following:

						July 31,
(In thousands)						2025						2024
Land						$	2,394,553					$	2,027,639
Buildings and improvements						1,684,171						1,482,891
Transportation and other equipment						580,029						604,977
Office furniture and equipment						100,894						97,576
Internal-use software						120,031						105,001
						4,879,678						4,318,084
Less: Accumulated depreciation and amortization						(1,281,585)						(1,142,246)
Property and equipment, net						$	3,598,093					$	3,175,838

Depreciation expense on property and equipment was $188.9 million, $167.7 million and $139.9 million for the years ended July 31, 2025, 2024, and 2023, respectively. Amortization expense of software was $13.0 million, $8.6 million, and $7.2 million for the years ended July 31, 2025, 2024 and 2023, respectively.

NOTE 5— Leases

The Company has both lessee and lessor arrangements. The Company determines whether a contract is or contains a lease at the inception of the contract or at any subsequent modification. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment. Depending on the terms, leases are classified as either operating or finance leases if the Company is the lessee, or as operating, sales-type, or direct financing leases if the Company is the lessor. Certain of the Company’s lessee and lessor leases have renewal options to extend the leases for additional periods at the Company’s discretion.

Leases - Lessee

The Company leases certain facilities and certain equipment under non-cancelable finance and operating leases, which are recorded as right-of-use assets and lease liabilities. Certain leases provide the Company with either a right of first refusal to acquire or an option to purchase a facility at fair value. Certain leases also contain escalation clauses and renewal option clauses calling for increased rents. Where a lease contains an escalation clause or a concession, such as a rent holiday or tenant improvement allowance, the Company includes these items in the determination of the right-of-use asset and the lease liabilities. The effects of these escalation clauses or concessions have been reflected in lease expense on a straight-line basis over the expected lease term and any variable lease payments subsequent to establishing the lease liability are expensed as incurred. The lease term commences on the date when the Company has the right to control the use of the leased property, which is typically before lease payments are due under the terms of the lease. Certain of the Company’s leases have renewal periods up to 40 years, exercisable at the Company’s option, and generally require the Company to pay property taxes, insurance and maintenance costs, in addition to the lease payments. At lease inception, the Company includes all renewals or option periods that are reasonably certain to be exercised when determining the expected lease term, as failure to renew the lease would impose an economic penalty.

Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the expected lease term. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates based on the information available at the lease commencement date, as rates are not implicitly stated in the Company’s leases.

Components of lease expense were as follows:

									Year Ended July 31,
(In thousands)									2025						2024
Operating lease expense									$	28,383					$	26,222
Finance lease expense:
			Amortization of right-of-use assets						101						14
			Interest on finance lease liabilities						249						—
Short-term lease expense									6,627						4,371
Variable lease expense									1,407						1,359
Total lease expense									$	36,767					$	31,966

The components of right-of-use assets and lease liabilities on the consolidated balance sheets were as follows (In thousands):

Lease Asset and Liabilities						Balance Sheet Classification (In thousands)						July 31, 2025						July 31, 2024
Operating lease right-of-use assets						Operating lease right-of-use assets						$	99,708					$	116,301
Finance lease right-of-use assets						Property and equipment, net						2,648						—
Total lease assets, net												$	102,356					$	116,301
Operating lease liabilities - current						Current portion of operating and finance lease liabilities						$	19,810					$	21,304
Finance lease liabilities - current						Current portion of operating and finance lease liabilities						59						—
Operating lease liabilities - non-current						Operating and finance lease liabilities, net of current portion						81,224						97,429
Finance lease liabilities - non-current						Operating and finance lease liabilities, net of current portion						2,646						—
Total lease liabilities												$	103,739					$	118,733

The weighted-average remaining lease terms and discount rates as of July 31, 2025 were as follows:

						Weighted-Average Remaining Lease Term (In years)						Weighted-Average Discount Rate**(1)**
Operating leases						8.52						4.29		%
Finance leases						30.35						4.48		%

(1)The Company cannot determine the interest rate implicit in the Company’s leases. Therefore, the discount rate represents the Company’s incremental borrowing rate and is determined based on the risk-free rate, adjusted for the risk premium attributed to the Company’s imputed corporate credit rating for a secured or collateralized instrument.

Supplemental cash flow information related to leases as of July 31, 2025 were as follows (In thousands):

									Year Ended July 31,
(In thousands)									2025						2024
Cash paid for amounts included in the measurement of lease liabilities
			Operating cash flows related to operating leases						$	28,026					$	25,320
			Operating cash flows related to finance leases						260						—
			Financing cash flows related to finance leases						49						14
Right-of-use assets obtained in exchange for new operating lease liabilities									9,516						37,172
Right-of-use assets obtained in exchange for new finance lease liabilities									2,653						—

The annual maturities of the Company’s lease liabilities as of July 31, 2025 were as follows:

Fiscal Year (In thousands)						Finance Leases						Operating Leases
2026						$	135					$	22,407
2027						135						18,104
2028						135						16,625
2029						135						13,956
2030						135						8,534
Thereafter						4,536						39,670
Total future lease commitments						$	5,211					$	119,296
Less: imputed interest						(2,506)						(18,262)
Present value of lease liabilities						$	2,705					$	101,034

Leases - Lessor

The Company’s lessor arrangements include certain facilities and various land locations, of which each qualifies as an operating lease. Certain leases also contain escalation clauses and renewal option clauses calling for increased rents. Where a lease contains an escalation clause or a concession, such as a rent holiday or tenant improvement allowance, the Company includes these items in the determination of the straight-line rental income. The effects of these escalation clauses or concessions have been reflected in lease payments receivable on a straight-line basis over the expected lease term and any variable lease income subsequent to establishing the receivable will be recognized as earned.

Future lease payments receivable under operating leases with terms greater than one year as of July 31, 2025 were as follows:

Fiscal Year (In thousands)						Operating Leases
2026						$	5,077
2027						5,093
2028						4,361
2029						3,263
2030						27
Thereafter						135
Total future lease payments receivable						$	17,956

The cost of the leased space was $58.8 million and $50.3 million as of July 31, 2025 and 2024, respectively. The accumulated depreciation associated with the leased assets was $6.7 million and $4.6 million as of July 31, 2025 and 2024, respectively. Both the leased assets and accumulated depreciation are included in Property and equipment, net on the consolidated balance sheets. Rental income from these operating leases was $20.7 million and $17.6 million for the years ended July 31, 2025 and 2024, respectively, and is included within service revenues on the consolidated statements of income.

NOTE 6 — Goodwill

The change in the carrying amount of goodwill was as follows:

						July 31,
(In thousands)						2025						2024
Beginning balance						$	513,909					$	394,289
Adjustments related to business combinations						207						120,153
Effect of foreign currency exchange rates						3,663						(533)
Ending balance						$	517,779					$	513,909

In accordance with the guidance in ASC 350, goodwill is tested for impairment on an annual basis or upon the occurrence of circumstances that indicate that goodwill may be impaired.

The Company’s annual goodwill impairment analysis, which was performed qualitatively during the fourth quarter of fiscal 2025 and 2024, did not result in an impairment charge. This qualitative analysis considered all relevant factors specific to the reporting units, including macroeconomic conditions; industry and market considerations; overall financial performance; and relevant entity-specific events.

NOTE 7 — Intangibles, Net

The following table sets forth intangible assets by major asset class:

						Gross Carrying Amount												Accumulated Amortization												Net Book Value												Weighted Average Remaining Useful Life (in years)
						July 31,												July 31,												July 31,												July 31,
(In thousands, except remaining useful life)						2025						2024						2025						2024						2025						2024						2025						2024
Amortized intangibles:
Supply contracts and customer relationships						$	86,956					$	84,228					$	(58,747)					$	(47,864)					$	28,209					$	36,364					3						4
Trade names						19,327						19,299						(14,451)						(12,705)						4,876						6,594						3						4
Licenses and databases						16,608						16,571						(3,622)						(1,996)						12,986						14,575						8						9
Indefinite-lived intangibles:
Trade names:						16,761						16,555						—						—						16,761						16,555						0						0
Total intangibles						$	139,652					$	136,653					$	(76,820)					$	(62,565)					$	62,832					$	74,088

Aggregate amortization expense on intangible assets was $13.9 million, $13.4 million, and $12.4 million for the years ended July 31, 2025, 2024, and 2023, respectively.

Intangible amortization expense for the next five fiscal years based upon July 31, 2025 intangible assets is expected to be as follows (In thousands):

2026						$	(12,784)
2027						(12,651)
2028						(11,659)
2029						(2,066)
2030						(1,678)
Thereafter						(5,233)
Total future intangible amortization expense						$	(46,071)

NOTE 8 — Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:

						July 31,
(In thousands)						2025						2024
Accounts payable to sellers						$	184,697					$	169,413
Buyer deposits and prepayments						169,629						155,911
Trade accounts payable						29,705						23,920
Accrued compensation and benefits						67,057						64,036
Taxes payable						12,789						8,220
Accrued insurance						30,165						11,065
Other accrued liabilities						97,789						85,583
Total accounts payable and accrued expenses						$	591,831					$	518,148

The Company is required to charge for and collect value added taxes ("VAT") on its sales on behalf of various international taxing authorities. The Company records VAT that the Company has billed to the buyers as VAT payable. In addition, the Company is required to pay VAT on its purchases. The Company records VAT that is charged by its vendors as VAT receivable. The Company is required to file VAT returns on at least a quarterly basis with the various international taxing authorities and is entitled to claim the VAT charged by the Company's vendors as VAT credit and these credits can be applied to the Company's VAT payables billed to the buyers. Accordingly, these VAT payables and receivables are presented as net amounts for financial statement purposes and are shown in the taxes payable line in the table above.

The Company is partially self-insured for certain losses related to general liability, workers’ compensation and auto liability. Accrued insurance liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date, including an estimate for reported and unreported claims. The estimated liability is not discounted and is established based upon analysis of historical data, including the severity of the Company’s frequency of claims, actuarial estimates and is reviewed periodically by management to ensure that the liability is appropriate.

NOTE 9 – Long-Term Debt

Credit Agreement

On December 21, 2021, the Company entered into a Second Amended and Restated Credit Agreement by and among the Company, certain subsidiaries of the Company party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement amends and restates certain terms of the First Amended and Restated Credit Agreement, dated as of July 21, 2020, by and among the Company, the lenders party thereto, and Bank of America, N.A., as administrative agent (as successor in interest to Wells Fargo Bank, National Association) (the “Existing Credit Agreement”). The Second Amended and Restated Credit Agreement provides for, among other things, (a) an increase in the secured revolving credit commitments by $200.0 million, bringing the aggregate principal amount of the revolving credit commitments under the Second Amended and Restated Credit Agreement (the “Revolving Loan Facility”) to $1,250.0 million, (b) an increase in the letter of credit sublimit from $60.0 million to $100.0 million, (c) addition of Copart UK Limited, CPRT GmbH and Copart Autos España, S.L.U., each a wholly-owned direct or indirect foreign subsidiary of the Company, as borrowers, (d) addition of the ability to borrow under the Second and Amended and Restated Credit Agreement in certain foreign currencies including Pounds Sterling, Euro and Canadian Dollars, (e) extension of the maturity date of the revolving credit facility under the Existing Credit Agreement from July 21, 2023 to December 21, 2026, (f) replacing the LIBOR interest rate applicable to U.S. Dollar denominated borrowings with a SOFR-based interest rate, and (g) changing the pricing levels with respect to the revolving loans as further described below.

The Second and Amended and Restated Credit Agreement provides for a revolving loan facility (the “Revolving Loan Facility”) of $1,250.0 million maturing on December 21, 2026 (including up to $550.0 million equivalent of borrowings in Pounds Sterling, European Union euro and Canadian dollars) with a $150.0 million equivalent sub-facility available to CPRT GmbH, a $150.0 million equivalent sub-facility available to Copart Autos España, S.L.U. and a $250.0 million equivalent sub-facility available to Copart UK Limited. The proceeds may be used for general corporate purposes, including working capital and capital expenditures, potential share repurchases, acquisitions, or other investments relating to the Company’s expansion strategies in domestic and international markets.

Borrowings under the Second Amended and Restated Credit Agreement bear interest based on, at our option, either (1) the applicable fixed rate plus 1.00% to 1.75% or (2) the daily rate plus 0.0% to 0.75%, in each case, depending on the Company’s consolidated total net leverage ratio. Additionally, the unused revolving commitments under the Second Amended and Restated Credit Agreement are subject to the payment of a customary commitment fee at a range of 0.175% to 0.275%, depending on the Company’s consolidated total net leverage ratio. The applicable fixed rates described above with respect to borrowings denominated in (1) U.S. Dollars is SOFR plus certain “spread adjustments” described in the Second Amended and Restated Credit Agreement, (2) Pounds Sterling is SONIA plus certain “spread adjustments” described in the Second Amended and Restated Credit Agreement, (3) the European Union euro is EURIBOR, and (4) Canadian dollars is CDOR. The Company had no outstanding borrowings under the Revolving Loan Facility as of July 31, 2025 and July 31, 2024.

The Company’s obligations under the Second Amended and Restated Credit Agreement are guaranteed by certain of the Company’s domestic subsidiaries meeting materiality thresholds set forth in the Second Amended and Restated Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the assets of the subsidiary guarantors pursuant to a Security Documents Confirmation Agreement as part of the Second Amended and Restated Credit Agreement.

The Second Amended and Restated Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends, or make distributions on and repurchase stock, in each case subject to certain exceptions. The Company is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio. The Second Amended and Restated Credit Agreement contains no restrictions on the payment of dividends and other restricted payments, as defined, as long as (1) the consolidated total net leverage ratio, as defined, both before and after giving effect to any such dividend or restricted payment on a pro forma basis, is less than 3.25:1,

in an unlimited amount, (2) if clause (1) is not available, so long as the consolidated total net leverage ratio both before and after giving effect to any such dividend on a pro forma basis is less than 3.50:1, in an aggregate amount not to exceed the available amount, as defined, and (3) if clauses (1) and (2) are not available, in an aggregate amount not to exceed $50.0 million; provided, that, minimum liquidity, as defined, shall be not less than $75.0 million both before and after giving effect to any such dividend or restricted payment. As of July 31, 2025, the consolidated total net leverage ratio was (2.35):1. Minimum liquidity requirement as of July 31, 2025 was $6.0 billion. Accordingly, the Company does not believe that the provisions of the Second Amended and Restated Credit Agreement represent a significant restriction to its ability to pay dividends or to the successful future operations of the business. The Company has not paid a cash dividend since becoming a public company in 1994. The Company was in compliance with all covenants related to the Second Amended and Restated Credit Agreement as of July 31, 2025.

Related to execution of the Second Amended and Restated Credit Agreement, the Company incurred $2.7 million in costs, which were capitalized as debt issuance fees. The debt discount is amortized to interest expense over the term of the respective debt instruments and is included in other assets on the consolidated balance sheet.

NOTE 10 – Fair Value Measurements

The following table summarizes the carrying values and fair values of the Company’s financial instruments that were not carried at fair value in the consolidated balance sheets:

			July 31, 2025												July 31, 2024
(In thousands)			Carrying Value Total												Fair Value Total						Carrying Value Total												Fair Value Total
Assets
Cash equivalents			$	2,196,593											$	2,204,512					$	1,125,231											$	1,127,275
Investment in held to maturity securities			2,008,539												2,024,114						1,908,047												1,926,345
Total assets			$	4,205,132											$	4,228,626					$	3,033,278											$	3,053,620

The Company has investments in U.S. Treasury Bills some of which mature over a period greater than 90 days and are classified as short-term investments. The U.S. Treasury Bills are carried at amortized cost and classified as held to maturity as the Company has the intent and the ability to hold them until they mature. The carrying value of the U.S. Treasury Bills are adjusted for accretion of discounts over the remaining life of the investment. Income related to the U.S. Treasury Bills is recognized in interest income in the Company’s consolidated statements of income. The U.S. Treasury Bills are classified within Level I of the fair value hierarchy.

During the year ended July 31, 2025, no transfers were made between any levels within the fair value hierarchy. See Note 1 — Summary of Significant Accounting Policies and Note 9 – Long-Term Debt.

NOTE 11 — Net Income Per Share

The table below reconciles basic weighted average shares outstanding to diluted weighted average shares outstanding:

						Year Ended July 31,
(In thousands)						2025						2024						2023
Weighted average common shares outstanding						965,306						960,739						953,574
Effect of dilutive securities						12,257						14,059						13,073
Weighted average common and dilutive potential common shares outstanding						977,563						974,798						966,647

There were no material adjustments to net income required in calculating diluted net income per share. Excluded from the dilutive net income per share calculation were 4,523,264; 2,612,116; and 8,333,268 options to purchase the Company’s common stock and restrictive stock for the years ended July 31, 2025, 2024 and 2023, respectively, because their inclusion would have been anti-dilutive.

NOTE 12 — Stockholders’ Equity

General

The Company has authorized the issuance of 1.6 billion shares of common stock, with a par value of $0.0001, of which 967,478,690 shares were issued and outstanding at July 31, 2025. As of July 31, 2025 and 2024, the Company had reserved 45,431,198 and 49,707,714 shares of common stock, respectively, for the issuance of options, restricted stock (“RSA”), restricted stock units (“RSU”), or performance stock units (“PSU”) granted under the Company’s equity incentive plans and 3,300,386 and 3,638,112 shares of common stock, respectively, for the issuance of shares under the Copart, Inc. Employee Stock Purchase Plan (“ESPP”). The Company has authorized the issuance of five million shares of preferred stock, with a par value of $0.0001, none of which were issued or outstanding at July 31, 2025 or 2024, which have the rights and preferences as the Company’s Board of Directors shall determine, from time to time.

Stock Repurchases

On September 22, 2011, the Company’s Board of Directors approved a 320 million share increase in the 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 the Company deems appropriate and may be discontinued at any time. For fiscal 2025, 2024 and 2023, the Company did not repurchase any shares of its common stock under the program. As of July 31, 2025, the total number of shares repurchased under the program was 458,196,792, and subject to applicable limitations under Delaware law, 325,803,208 shares were available for repurchase under our program.

In fiscal 2025, certain employees held stock option awards that could be exercised through a cashless exercise. For the years ended July 31, 2025, 2024 and 2023, no employee exercised stock options through a cashless exercise. If exercised a portion of the options exercised will be net settled in satisfaction of the exercise price and employees’ statutory withholding requirements. Any shares withheld for taxes are treated as a repurchase of shares for accounting purposes but do not count against our stock repurchase program.

Employee Stock Purchase Plan

The ESPP provides for the purchase of up to an aggregate of 40 million shares of common stock of the Company by employees pursuant to the terms of the ESPP. The Company’s ESPP was adopted by the Board of Directors and approved by the Company’s stockholders in 1994. The ESPP was amended and restated in 2003 and again approved by the stockholders. In 2014, a new ESPP was approved by the Board of Directors and approved by the Company’s stockholders. Under the ESPP, employees of the Company who elect to participate have the right to purchase common stock at a 15% discount from the lower of the market value of the common stock at the beginning or the end of each six month offering period. The ESPP permits an enrolled employee to have contributions withheld from their salary an amount up to 10% of their compensation (which amount may be increased from time to time by the Company but may not exceed 15% of compensation). No employee may purchase more than $25,000 worth of common stock (calculated at the time the purchase right is granted) in any calendar year. The Compensation Committee of the Board of Directors administers the ESPP. The number of shares of common stock issued pursuant to the ESPP during the years ended July 31, 2025, 2024 and 2023 was 337,707; 315,042; and 448,714; respectively. As of July 31, 2025, there were 37,019,910 shares of common stock issued pursuant to the ESPP and 3,300,386 shares remain available for purchase under the ESPP.

Stock Options

In December 2007, the Company adopted the Copart, Inc. 2007 Equity Incentive Plan (“Plan”), presently covering an aggregate of 144 million shares of the Company’s common stock. The Plan provides for the grant of incentive stock options, restricted stock, restricted stock units and other equity-based awards to employees and non-qualified stock options, restricted stock, restricted stock units and other equity-based awards to employees, officers, directors and consultants at prices not less than 100% of the fair market value for incentive and non-qualified stock options, as determined by the Board of Directors at the grant date. Incentive and non-qualified stock options may have terms of up to ten years and vest over periods determined by the Board of Directors. Options generally vest ratably over a five year period. The Plan replaced the Company’s 2001 Stock Option Plan. As of July 31, 2025, 20,577,321 shares were available for grant under the Plan and the number of options that were in-the-money was 17,210,911 at July 31, 2025.

The table below sets forth the stock-based compensation recognized by the Company for stock options, restricted stock, restricted unit awards, and performance stock units:

						Year Ended July 31,
(In thousands)						2025						2024						2023
General and administrative						$	29,897					$	28,284					$	32,747
Facility operations						8,107						6,950						6,926
Total stock-based compensation						$	38,004					$	35,234					$	39,673

Additionally, Purple Wave maintains an equity-based compensation plan for certain executives. Compensation cost attributable to Purple Wave equity-based compensation plan was $2.3 million and $1.9 million included in stock based compensation for the fiscal years ended July 31, 2025 and 2024, respectively.

There were no material compensation costs capitalized as part of the cost of an asset as of July 31, 2025 and 2024. The Company recognizes compensation expense for stock option awards on a straight-line basis over the requisite service period of the award.

The fair value of each stock option without a market-based condition was estimated on the measurement date using the Black-Scholes Merton (“BSM”) option-pricing model. For options that included a market-based condition either the Monte Carlo simulation model or a lattice model was used. The BSM option-pricing model utilized the following assumptions:

						July 31,
						2025																		2024																		2023
Expected life (in years)						5.0						—			5.7									5.0						—			6.3									5.0						—			6.3
Risk-free interest rate						3.5			%			—			4.03			%						3.86			%			—			4.43			%						3.67			%			—			3.88			%
Estimated volatility						29.6			%			—			30.3			%						30.1			%			—			30.6			%						29.6			%			—			32.0			%
Expected dividends						—												%						—												%						—												%
Weighted average fair value at measurement date						$	20.58																	$	9.93																	$	12.10

Expected life— Expected life represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based awards.

Risk-free interest rate—The Company bases the risk-free interest rate used in the BSM option-pricing model on the implied yield currently available on U.S. Treasury zero-coupon issues with the same or substantially equivalent expected life.

Estimated volatility—The Company uses the trading history of its common stock in determining an estimated volatility factor when using the BSM option-pricing model to determine the fair value of options granted.

Expected dividend—The Company does not expect to declared dividends. Therefore, the Company uses a zero value for the expected dividend value factor when using the BSM option-pricing model to determine the fair value of options granted.

Net cash proceeds from the exercise of stock options were $42.8 million, $24.3 million and $49.7 million for the years ended July 31, 2025, 2024 and 2023, respectively.

A summary of the status of the Company’s unvested stock options awards and activity during the year ended July 31, 2025 was as follows:

(In thousands, except per share amounts)						Shares						Weighted Average Grant- date Fair Value
Unvested shares at July 31, 2024						4,178						$	9.80
Grants of non-vested shares						159						20.58
Vested						(2,226)						10.73
Forfeitures or expirations						(22)						1.03
Unvested shares at July 31, 2025						2,089						$	14.30

The following is a summary of activity for the Company’s stock options for the year ended July 31, 2025:

(In thousands, except per share and term data)						Shares						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term (In years)						Aggregate Intrinsic Value
Outstanding as of July 31, 2024						16,310						$	18.60					4.34						$	550,115
Grants of options						159						58.34
Exercises						(3,961)						10.79
Forfeitures or expirations						(21)						4.41
Outstanding as of July 31, 2025						12,487						$	21.61					3.87						$	302,750
Exercisable as of July 31, 2025						11,069						$	19.21					3.42						$	291,821
Vested and expected to vest as of July 31, 2025						12,481						$	21.61					3.87						$	302,636

The Company grants option awards to certain executives that contain service and market conditions. The options will become exercisable over five years, subject to continued service by the executive, with 20% vesting on the first anniversary of the grant date and the balance vesting monthly over the subsequent four years. Separate and apart from the time-based vesting schedule, the options are also subject to a market condition requiring the trading price of Copart, Inc. common stock on the NASDAQ Global Select Market to be greater than or equal to 125% of the exercise price of the options, determined both (i) at the time of any exercise, and (ii) based on the closing price on each of the twenty consecutive trading days preceding the date of any exercise. The exercise price of the options is equivalent to the closing price of the Company’s common stock on the grant date. The fair value of the awards is determined at the grant date using either the Lattice or Monte Carlo model, risk-free interest rates ranging from 0.71% to 4.37%, estimated volatility ranging from 25.2% to 29.8%, and no expected dividends. The total estimated compensation expense to be recognized by the Company over the five-year service period for these options was $50.1 million as of July 31, 2025 and will be recognized using the accelerated attribution method over each vesting tranche of the award. The Company recognized $3.8 million, $7.4 million and $12.2 million in compensation expense related to these awards for the years ended July 31, 2025, 2024 and 2023, respectively.

The following is a summary of activity for the Company’s stock option awards subject to market conditions for the year ended July 31, 2025:

(In thousands, except per share and term data)						Shares						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term (In years)						Aggregate Intrinsic Value
Outstanding as of July 31, 2024						5,995						$	24.70					6.47						$	165,656
Grants of options						—						—
Exercises						—						—
Forfeitures or expirations						—						—
Outstanding as of July 31, 2025						5,995						$	24.70					5.47						$	124,108
Exercisable as of July 31, 2025						5,302						$	23.64					5.28						$	115,169
Vested and expected to vest as of July 31, 2025						5,994						$	24.70					5.47						$	124,085

The aggregate intrinsic value in the tables above represents the total pre-tax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the year ended July 31, 2025 and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their options on July 31, 2025. The aggregate intrinsic value of options exercised was $188.3 million, $105.5 million and $131.1 million in the years ended July 31, 2025, 2024 and 2023, respectively, and represents the difference between the exercise price of the option and the estimated fair value of the Company’s common stock on the dates exercised. As of July 31, 2025, the total compensation cost related to non-vested stock options granted to employees under the Company’s stock equity incentive plans but not yet recognized was $22.1 million. This cost will be amortized on a straight-line basis over a weighted average remaining term of 2.17 years. The fair value of options vested for the years ended July 31, 2025, 2024 and 2023 was $23.9 million, $21.5 million and $24.5 million, respectively.

The following table summarizes stock options outstanding and exercisable as of July 31, 2025:

(In thousands, except per share amounts)												Options Outstanding																		Options Exercisable
Range of Exercise Prices												Number						Weighted Average Remaining Contractual Life						Weighted Average Exercise Price						Number						Weighted Average Exercise Price
$4.76			—			$8.7						1,876						1.59						$	7.43					1,876						$	7.43
$9.08			—			$11.80						1,885						2.05						9.85						1,885						9.85
$14.57			—			$31.22						9,938						4.32						20.79						9,613						20.58
$31.42			—			$62.08						4,783						6.54						37.38						2,997						35.91
Outstanding as of July 31, 2025												18,482						4.39						$	22.61					16,371						$	20.65

The Company’s restricted stock awards (“RSA”), RSUs, and PSUs have generally been issued with vesting periods ranging from two years to five years. RSAs and RSUs vest solely on service conditions while PSUs will vest over five years, when and if certain financial performance targets are met. Accordingly, the Company recognizes compensation expense for RSA and RSU awards on a straight-line basis over the requisite service period of the award. Compensation expense for PSU awards is recognized on an accelerated attribution method when the achievement of certain financial performance targets appear probable and is recognized over the remaining requisite service period.

The following is a summary of activity for the Company’s RSAs, RSUs, ans PSUs for the for the year ended July 31, 2025:

(In thousands, except per share data)						Restricted and Performance Shares						Weighted Average Grant Date Fair Value
Outstanding as of July 31, 2024						1,873						$	47.29
Grants						250						51.51
Vested						(318)						39.99
Forfeitures or expirations						(27)						45.18
Outstanding as of July 31, 2025						1,778						$	48.93

NOTE 13 — Income Taxes

Income before taxes consisted of the following:

						Year Ended July 31,
(In thousands)						2025						2024						2023
U.S.						$	1,686,794					$	1,593,381					$	1,437,126
International						208,787						121,220						117,202
Total income before taxes						$	1,895,581					$	1,714,601					$	1,554,328

Income tax expense (benefit) from continuing operations consisted of the following:

						Year Ended July 31,
(In thousands)						2025						2024						2023
Federal:
Current						$	272,836					$	271,820					$	243,253
Deferred						(12,654)						(1,174)						(4,642)
						260,182						270,646						238,611
State:
Current						37,487						49,539						47,507
Deferred						(2,576)						(1,611)						813
						34,911						47,928						48,320
International:
Current						51,113						34,179						26,150
Deferred						1,012						(499)						3,506
						52,125						33,680						29,656
Income tax expense						$	347,218					$	352,254					$	316,587

A reconciliation of the expected U.S. statutory tax rate to the actual effective income tax rate is as follows:

						Year Ended July 31,
(In thousands)						2025						2024						2023
Federal statutory rate						21.0		%				21.0		%				21.0		%
State income taxes, net of federal income tax benefit						2.1		%				2.4		%				2.0		%
International rate differential						0.3		%				0.1		%				(0.3)		%
Compensation and fringe benefits						(1.6)		%				(0.7)		%				(1.0)		%
FDII and/or GILTI						(2.8)		%				(2.8)		%				(2.8)		%
Federal return to provision adjustment						(0.1)		%				—		%				(0.1)		%
Other differences						(0.6)		%				0.5		%				1.6		%
Effective tax rate						18.3		%				20.5		%				20.4		%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are presented below:

						July 31,
(In thousands)						2025						2024
Deferred tax assets:
Allowance for credit loss						$	2,794					$	2,483
Accrued compensation and benefits						24,868						22,957
Operating lease liabilities						21,213						24,897
Accrued other						3,233						5,528
Deferred revenue						5,989						5,544
Losses carried forward/interest disallowance						52,256						48,599
Federal tax benefit						7,974						12,821
Total gross deferred tax assets						118,327						122,829
Less: Valuation allowance						(50,311)						(47,377)
Net deferred tax assets						68,016						75,452
Deferred tax liabilities:
Vehicle pooling costs						(25,018)						(27,716)
Property and equipment						(58,782)						(74,741)
Operating lease right-of-use assets						(21,655)						(24,612)
Other prepaids						(2,420)						(2,339)
Intangibles and goodwill						(38,586)						(38,279)
Total gross deferred tax liabilities						(146,461)						(167,687)
Net deferred tax liabilities						$	(78,445)					$	(92,235)

On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 (the “OBBBA”) which includes, among other provisions, changes to the U.S. corporate income tax system including extensions and modifications of the Tax Cuts and Jobs Act of 2017. The OBBBA did not have a material impact on the Company results of operations and financial position as of and for the fiscal year ended July 31, 2025.

The Company’s effective income tax rates were 18.3%, 20.5%, and 20.4% for fiscal 2025, 2024 and 2023, respectively. The Company’s U.S. federal statutory tax rate for fiscal years 2025, 2024, and 2023 was 21.0%. The effective tax rate for the fiscal year ended July 31, 2025 was favorably impacted by a $55.0 million tax benefit related to the FDII deduction and $36.7 million in excess tax benefits from the exercise of employee stock options and negatively impacted by $38.6 million related to state income taxes. The effective tax rate for the fiscal year ended July 31, 2024 was favorably impacted by a $47.7 million tax benefit related to the FDII deduction and $14.8 million in excess tax benefits from the exercise of employee stock options and negatively impacted by $40.6 million related to state income taxes. The effective tax rate for the fiscal year ended July 31, 2023 was favorably impacted by a tax benefit of $42.6 million related to the FDII deduction and $21.0 million tax benefits from the exercise of employee stock options and negatively impacted by $30.3 million related to state income taxes.

The Company’s ability to realize deferred tax assets is dependent on its ability to generate future taxable income. Accordingly, the Company has established a valuation allowance in taxable jurisdictions where the utilization of the tax assets does not meet the more-likely-than-not threshold of recognition. Additional timing differences or future tax losses may occur which could warrant a need for establishing additional valuation allowances against certain deferred tax assets. During fiscal year 2025, the Company recorded a $2.9 million increase in valuation allowances primarily due to additional operating losses and interest disallowance carryforward generated in foreign jurisdictions unlikely to be realized.

As of July 31, 2025 and 2024, the Company had foreign operating losses and interest disallowance carryforward of $52.3 million and $48.6 million (tax effected), respectively. The foreign operating losses, subject to certain limitations, usually can be carried forward indefinitely. However, these losses are subject to valuation allowance based on realizability. The valuation allowance for the fiscal year ended July 31, 2025 and 2024 was $50.3 million and $47.4 million, respectively, which are primarily related to operating losses in certain foreign jurisdictions.

The following table summarizes the activities related to the Company’s unrecognized tax benefits resulting from uncertain tax positions.

						July 31,
(In thousands)						2025						2024						2023
Beginning balance						$	45,725					$	57,445					$	55,754
Increases related to current year tax positions						—						2,955						10,006
Prior year tax positions:
Increases recognized during the period						126						11						1,388
Decreases recognized during the period						(9,724)						(7,070)						(7,623)
Cash settlements during the period						(8,951)						(6,062)						(403)
Lapse of statute of limitations						(1,950)						(1,554)						(1,677)
Ending balance						$	25,226					$	45,725					$	57,445

As of July 31, 2025 and 2024, if recognized, the portion of liabilities for unrecognized tax benefits resulting from uncertain tax positions that would favorably affect the Company’s effective tax rate was $19.9 million and $36.1 million, respectively. It is possible that the amount of unrecognized tax benefits will change in the next twelve months, due to tax legislation updates or future audit outcomes; however, an estimate of the range of the possible change cannot be made at this time.

The Company recognizes interest and penalties related to income tax matters in income tax expense. As of July 31, 2025, 2024 and 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $10.4 million, $13.8 million and $11.7 million, respectively.

The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is currently under examination by certain taxing authorities in the U.S. for fiscal years between 2020 and 2022. At this time, the Company does not believe that the outcome of any examination will have a material impact on the Company’s consolidated results of operations and financial position.

As of July 31, 2025, the Company has undistributed earnings of approximately $688.5 million generated by its foreign subsidiaries. As the Company determined these undistributed foreign earnings along with any additional outside basis differences were indefinitely reinvested as of July 31, 2025, no deferred tax was therefore provided. The Company believes it is not practicable to estimate the amount of deferred tax liability related to the entire outside basis differences due to the complexity of the calculation and the uncertainty regarding assumptions necessary to compute the tax. However, the Company would not anticipate any significant tax liability associated with the repatriation of the undistributed earnings.

NOTE 14 — Segments and Other Geographic Reporting

The Company’s U.S. and International regions are considered two separate operating segments and are disclosed as two reportable segments. The segments represent geographic areas and reflect how the chief operating decision maker “CODM”, the Company’s Chief Executive Officer, allocates resources and measures results. The primary financial measures used by the CODM for assessing performance and allocating resources are service revenue, vehicle sales, and operating income.

The following tables present financial information by segment:

						Year Ended July 31, 2025
(In thousands)						United States						International						Total
Service revenues						$	3,451,558					$	517,104					$	3,968,662
Vehicle sales						403,546						274,750						678,296
Total service revenues and vehicle sales						3,855,104						791,854						4,646,958
Facility operations						1,646,183						298,135						1,944,318
Cost of vehicle sales						378,100						224,897						602,997
General and administrative						349,935						52,994						402,929
Operating income						$	1,480,886					$	215,828					$	1,696,714
Depreciation and amortization, excluding debt costs						$	184,026					$	31,823					$	215,849
Interest income						168,641						10,268						178,909
Capital expenditures, including acquisitions						490,965						79,248						570,213
Total assets						8,834,063						1,256,839						10,090,902
Goodwill						390,422						127,357						517,779

						Year Ended July 31, 2024
(In thousands)						United States						International						Total
Service revenues						$	3,126,102					$	434,900					$	3,561,002
Vehicle sales						338,633						337,188						675,821
Total service revenues and vehicle sales						3,464,735						772,088						4,236,823
Facility operations						1,440,707						269,377						1,710,084
Cost of vehicle sales						313,449						306,038						619,487
General and administrative						282,545						52,684						335,229
Operating income						$	1,428,034					$	143,989					$	1,572,023
Depreciation and amortization, excluding debt costs						$	161,685					$	28,076					$	189,761
Interest income						140,728						4,945						145,673
Capital expenditures, including acquisitions						491,497						113,906						605,403
Total assets						7,386,103						1,041,661						8,427,764
Goodwill						390,421						123,488						513,909

						Year Ended July 31, 2023
(In thousands)						United States						International						Total
Service revenues						$	2,841,641					$	356,487					$	3,198,128
Vehicle sales						348,007						323,383						671,390
Total service revenues and vehicle sales						3,189,648						679,870						3,869,518
Facility operations						1,292,527						225,502						1,518,029
Cost of vehicle sales						326,764						287,734						614,498
General and administrative						202,260						48,162						250,422
Operating income						$	1,368,097					$	118,472					$	1,486,569
Depreciation and amortization, excluding debt costs						$	135,804					$	23,674					$	159,478
Interest income						64,082						1,846						65,928
Capital expenditures, including acquisitions						373,190						143,446						516,636
Total assets						5,825,064						912,815						6,737,879
Goodwill						270,269						124,020						394,289

NOTE 15 — Commitments and Contingencies

Commitments

Letters of Credit

Under a letter of credit facility separate from our Revolving Loan Facility, the Company had outstanding letters of credit of $15.0 million at July 31, 2025, which are primarily used to secure certain insurance obligations.

Contingencies

Legal Proceedings

The Company is subject to threats of litigation and is involved in actual litigation and damage claims arising in the ordinary course of business, such as actions related to injuries, property damage, contract disputes, and handling or disposal of vehicles. In addition, from time to time, the Company receives communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which the Company operates. Except as otherwise noted in this Note 15, there are no material pending legal proceedings to which the Company is a party, or with respect to which any of the Company’s property is subject.

The Company provides accruals for matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of any such matters on the Company’s future consolidated results of operations and cash flows cannot be predicted because any such effect depends on future results of operations and the amount and timing of the resolution of any such matters. The Company believes that any ultimate liability regarding existing litigation and claims would not have a material effect on its consolidated results of operations, financial position, or cash flows. However, legal and regulatory proceedings are inherently unpredictable, and the amount of the liabilities associated with claims, if any, cannot be determined with certainty. If one or more matters were resolved against us for amounts in excess of the Company’s expectations, the impact on the Company’s consolidated results of operations, financial position, or cash flow could be material. The Company maintains insurance which may or may not provide coverage for claims made against the Company. There is no assurance that there will be insurance coverage available when and if needed. Additionally, the insurance that the Company carries requires that the Company pay for costs and/or claims exposure up to the amount of the insurance deductibles.

The U.S. Department of Justice, Consumer Protection Branch (DOJ) is conducting an ongoing investigation into potential violations by the Company of certain money laundering laws related to its practices and procedures for preventing and detecting money-laundering activity by its auction platform members. In connection with this investigation, the Company received a letter from the DOJ in October 2023 in which the DOJ indicated the Company may have exposure as a result of potential violations of such money laundering statutes and regulations. The Company is cooperating with the DOJ’s investigation. At this time, we are unable to predict the duration, scope, or result of any potential governmental, criminal, or civil proceeding that

may result, the imposition of fines and penalties, and/or other remedies, and as a result, are unable to predict the range of possible loss.

NOTE 16 — Guarantees — Indemnifications to Officers and Directors

The Company typically enters into indemnification agreements with its directors and certain of its officers to indemnify them to the extent permitted by law against any and all liabilities, costs, expenses, amounts paid in settlement and damages incurred by the directors and officers as a result of any lawsuit, or any judicial, administrative or investigative proceeding in which the directors and officers are sued as a result of their service to the Company.

NOTE 17 — Related Party Transactions

There were no amounts due to or from related parties as of July 31, 2025 and 2024.

NOTE 18 — Employee Benefit Plan

The Company sponsors a 401(k) defined contribution plan covering its eligible employees. The plan is available to all U.S. employees who meet minimum age and service requirements and provides employees with tax deferred salary deductions and alternative investment options. The Company matches 20% of employee contributions up to 15% of employee salary deferral. The Company recognized expenses of $3.1 million, $2.3 million, and $2.2 million for the year ended July 31, 2025, 2024, and 2023, respectively, related to this plan.

The Company also sponsors an additional defined contribution plan for its U.K. employees, which is available to all U.K. employees who meet minimum service requirements. The Company matches up to 5% of employee contributions. The Company recognized expenses of $2.6 million, $2.1 million, and $1.6 million for the year ended July 31, 2025, 2024, and 2023, respectively, related to this plan.