Good day, everyone. Welcome to the Copart, Incorporated second quarter fiscal 2023 earnings call. Just a reminder, today's conference is being recorded. For opening remarks, I would like to turn the call over to Jeff Liaw, CEO of Copart, Incorporated. Please go ahead, sir. Thank you, Maria. Good morning, everyone. Welcome to our second quarter call. Thanks for joining us. I'll actually start briefly with the Safe Harbor. Good morning. During today's call, we'll discuss certain non-GAAP measures, including adjustments to income tax benefits related to stock-based compensation. We've provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures on our investor relations website and in our press release issued yesterday. We believe these non-GAAP measures, together with the corresponding GAAP measures, are relevant in analyzing our results and assessing our business trends and performance. In addition, our comments today include forward-looking statements within the meaning of federal securities laws, including management's current views with respect to trends, opportunities, and uncertainties in our markets. These forward-looking statements involve substantial risks and uncertainties. For more detail on the risks associated with our business, we refer you to the section titled "Risk Factors" in our annual report on Form 10-K for the year ended July 31st, 2022, and each of our subsequent quarterly reports on Form 10-Q. Forward-looking statements are made as of today, and we have no obligation to update or revise any forward-looking statements. I wanted to start today by introducing our new Chief Financial Officer, Leah Stearns, who will provide additional data and context in a few minutes as well. We're very excited to have her join the leadership team here at Copart after an expansive search. We hired Leah for the richness and relevance of her prior experience, both at CBRE and American Tower, two industry leaders and public companies in their own right. She has experience with institutional customers, complex regulatory environments, real estate, certainly as well, and brings exceptional analytical capabilities and leadership skills as well. We're very quite excited to have her on board. I'll start my comments today, starting with our customers. We aspire to be a customer-centric organization, first and foremost, and I'll start with our insurance business. Our insurance customers certainly have experienced a rapidly changing industry environment now for three years with remote work volatility in driving patterns and across-the-board cost inflation. They've made a number of business process and personnel adaptations that in many cases have proven more durable than they'd initially expected, and now we think may persist forever. We have likewise adapted our business processes to help them navigate this environment, including providing more virtual inspection, loan payoff, and title services and the like. For the quarter, in terms of unit volume, we achieved U.S. insurance volume growth of 9% year-over-year, in large part attributable to the sell-through of volume from Hurricane Ian. The single most unexpected change, as most of you know, for our insurance comp-customers, has been the suspension and reversal of the rising total loss frequency trend that we had experienced almost completely uninterrupted for the past 40 years. According to CCC, total loss frequency increased from 17.4% in the third calendar quarter of 2022 to 19.7% in the fourth quarter. We think approximately half of this increase was attributable to flood vehicles from Hurricane Ian. Today, as has nearly always been true, total loss frequency is rising due to a combination of two forces. First, repairs are more expensive and less attractive due to increasing accident severity, vehicle complexity, labor costs, and rental car costs. Secondly, salvage economics are more attractive because the fastest-growing economies in the world in Central and South America, Africa, and Eastern Europe lean on our damaged vehicles to provide the mobility they need. We've discussed on prior calls what would happen if and when used vehicle prices were to decline. We've said that we think our selling prices may compress somewhat but would be offset by increasing volume. We're seeing the beginnings of that phenomenon unfold today. In the fourth quarter, pardon me, in our second fiscal quarter, if total loss frequency had been at historical levels, we think our insurance volume sold would have been 10%-20% higher than it was. Turning our attention to the non-insurance space. We've made a proactive effort to grow our business in the bank and finance fleet and rental car segments, a group we collectively call Blue Car. Blue Car volume for the quarter and the first half of the year has grown approximately 20% versus the prior year, despite a still supply-constrained environment. We believe we've outperformed the overall wholesale vehicle auction industry. The technology and service offerings required to support these customers is different, and we've invested meaningfully in our sub-capabilities to enable us to serve these sellers, and our auction returns have enabled us to grow with them. Finally, I wanted to mention our members. In a supply-constrained inflationary environment, our buyers have certainly seen Copart as a valuable source of increasingly newer, lower damaged and whole cars. We've noted often that the fastest-growing economies in the world generally have the fewest vehicles per capita. We invest significantly in our staff in traditional and digital marketing and in our global lounge network to expand our member base. We remain committed to empowering more buyers, driving auction returns, which in turn enables our sellers to consign still more vehicles through us. In closing, I wanted to note the bedrock principles that have guided us. The foundation of our success. These principles certainly long predate both Leah and me, and there's nothing particularly magical about them. We continue to make decisions for the 30-year prosperity of our customers and our shareholders. We will invest in the technology of today and tomorrow to enable us to serve both our members and our sellers. We will invest to recruit members, to engage them, and to expand the marketplace of services available to them to continue to expand the buyer universe. For every vehicle we sell, we are committed to finding the highest and best use of that vehicle anywhere in the world. Finally, we will invest in land. We will own our land whenever possible to ensure that our ability to serve our customers is never compromised by the whims or economic optimizations of third-party landlords. With that, I'll turn it over to our CFO, Leah Stearns, to provide some additional commentary and data to walk through some key statistics, then we'll open it up for Q&A. Thank you, Jeff. Good morning, everyone. I'd like to start by saying how excited I am to join Copart. For me, the opportunity was compelling for a number of reasons, including the collaborative and entrepreneurial culture, Copart's enduring focus on delivering best-in-class service to our customers, the business's natural position at the center of the circular economy and automotive, as well as our solid financial foundation. I believe that with these factors, Copart is positioned to deliver exceptional results for our customers and create enduring value for our shareholders over the long term. I couldn't be more energized to help drive these objectives forward. Turning to the quarter, global unit sales increased 4.7% year-over-year, including an increase of nearly 4% in the U.S. and over 10% internationally. In the U.S., our fee units grew about 5%, primarily due to growth across our insurance business. Our purchase units declined 23%. Internationally, our unit growth came from a mix of fee and purchased units, which increased nearly 9% and over 23%, respectively. During the quarter, our U.S. insurance business grew relative to its one- and two-year comps of 9% and 35%, respectively. This was primarily due to the continued recovery in driving activity, increasing accident frequency and severity, total loss frequency, and share gains. Our auction returns remain strong as we continue to invest in growing our global buyer base by driving member recruitment, registration, and retention. As a result, Copart's auctions provide our insurance customers with best-in-class liquidity and returns, ultimately providing a more cost-effective way to manage growing claims costs by making it a more cost-effective way to deem vehicles a total loss. Turning to our financial results. For the second quarter, global revenue increased $89 million or just over 10%, including a nearly 2% or $15 million headwind due to currency. Global service revenue increased $79 million or over 11% for the second quarter, primarily due to a higher average revenue per unit and increased volume. U.S. and international service revenue grew nearly 12% and 5%, respectively, for the quarter. ASPs were flat year-over-year for the quarter, with U.S. ASPs up nearly 1% compared to a nearly 13% decline in the Manheim Index, ending January at 224.8. Purchased vehicle sales for the quarter increased $11 million or nearly 7%, with U.S. purchased vehicle revenue for the quarter down 15% and international up 42% for the quarter. Our reduced purchase unit activity in the U.S. during the quarter was a result of a proactive approach to mitigate our principal unit exposure in a softening vehicle pricing environment. We continue to believe that this portion of our business provides an opportunity for future growth and is an important enabler for us in new adjacent asset classes and geographies. Purchased vehicle cost of sales grew more than $14 million or 10% in the second quarter. As a result, purchased vehicle gross profit decreased by $4 million or approximately 24% during the quarter. Global gross profit in the second quarter increased by more than $23 million or 5.7%, while our gross margin percentage decreased by approximately 200 basis points to 44.6%. U.S. margins decreased to 48.9%, and international margins decreased to 24.3%. The year-over-year margin decline on a consolidated basis was driven primarily by cost inflation in towing and labor of about 200-250 basis points. Over the last two years, our direct costs have seen pressures from inflation, primarily related to labor and fuel. We will continue to manage these costs with a long-term perspective. We view the increase in labor costs as a direct investment in our people, which will translate into best-in-class service for our customers. We constantly seek to optimize our operational processes through technology and automation. We are committed to investing in our real estate, logistics, and technology assets to ensure we are positioned to scale appropriately to meet the demand of our customers. We believe with this approach, we can increase margins and returns on capital over time. Turning to general and administrative expenses, excluding stock-based compensation and depreciation, G&A spend in the quarter increased $5 million or 12%. While G&A can be volatile from period to period, over the longer term, we anticipate G&A to decline as a percentage of revenue as we benefit from the scale of our corporate infrastructure. As a result of our strong revenue growth offset by the cost increases experienced in our business, our GAAP operating income increased by more than 5% to $366 million for the second quarter. Our second quarter income tax expense was $83 million, which reflects a 22.1% effective tax rate. Finally, second quarter GAAP net income increased about 2% to $294 million or $0.61 per diluted common share. Our global inventory at the end of January decreased 1% from last year. When excluding low value units like wholesalers and charities, global inventory increased by 1%. That is comprised of a year-over-year decrease of 3% for U.S. inventory, which is actually down less than 1% when excluding low value units, and an increase of 12% for our international inventory. Turning to our liquidity and financial position. We remain in a solid position with respect to liquidity, which stands at $2.9 billion as of the end of the quarter, which is comprised of $1.7 billion in cash and cash equivalents and an undrawn revolving credit facility with capacity of over $1.2 billion. Year-to-date, we have generated operating cash flow of $500 million, which is an increase of nearly 12% from the prior year period. We have invested nearly $257 million in capital expenditures, with over 80% of this amount attributable to our physical infrastructure, primarily capacity expansion. Year-to-date, if you take our operating cash flow less CapEx, we've generated more than $243 million of free cash flow. Given the strong financial position, we intend on continuing to invest in our business to meet our customers' needs. These investments include yard expansion, new yard acquisitions, our logistics and technology platform. We believe that these types of historical investments have differentiated Copart as a service provider, while ensuring that we have the capacity necessary to serve our industry's future growth. With that, I've completed my prepared remarks, and I'll turn the call over to Maria, and we're happy to take your questions. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Bob Labick with CJS Securities. Please proceed with your question. Good morning. This is Stefanos Crist calling in for Bob. Thanks for taking our questions. Morning. You touched on this during the call, but could you provide a little more detail on the cost structure of the yards, how it's changed since pre-COVID, and maybe how much of those changes are permanent versus temporary? Sure, I can take that one. In terms of our yard expenses, the majority of that cost comes from our labor as well as the cost associated with our subhaul and towing. As we think about how those costs are either permanent or temporarily impacted as a result of the overall economic environment post-COVID, labor costs certainly have increased, and we don't expect those to abate. Although we do focus on technology investments which will over time, make us more efficient in our processes and hopefully help to mitigate future growth on that line item. From a subhaul perspective, a portion of that is directly attributable to fuel costs, and that is certainly something that we do see fluctuate. That could be more of a temporary phenomenon. Those really account for the majority of the increase that we've seen from a yard ops expense, over the last couple of years. That's great. Thank you. Just to follow up, can you just talk about what Copart's sweet spot is for non-salvage cars in terms of age and miles driven, and if you see that evolving any direction over the next five years? Yes. I think it's fair to say it has evolved and very steadily so since the company's inception. If you look at the cars, if somehow there were a website in 1982, and you could see all the cars we had for sale, they would look markedly different from the cars that were available 5 years later, 5 years later, 5 years later, and so on. Over time, the sweet spot for us has expanded. And today, I think it's safe to say it includes vehicles you would customarily see at dealerships and so forth, that are very, very much whole cars that are drivable off the lot. I think that sweet spot does move and shift over time. I think we'll expect the continued expansion. It's not a static view, right? It definitely expands progressively over time. Great. Thanks so much. Our next question comes from Craig Kennison with Baird. Please proceed with your question. Hey, good morning. Thanks for taking my questions, and congratulations, Leah. I had a housekeeping question first. Just what was the U.S. insurance volume growth ex Ian? Approximately flat. It's thereabouts, flat or thereabouts. Correct. I think you mentioned Ian was 70,000 cars, but did you get more cars post the quarter last time? In terms of post this quarter, you mean? Post your last conference call when you said you had about 70,000 car assignments. A few more, but that was the strong majority of them. Perfect. Sort of a big picture question for you on AI making headlines across many industries. I'm just curious, you know, in your world, how you see AI impacting Copart, since you guys like to think in decades. I think, I think we are certainly following it closely and think that AI will be deployed. Well, in some respects, if you, if you're viewing the AI and machine learning, you know, all collectively as the future of technology and neural computing and so forth, we do deploy some of those tools in our systems today, most notably for our vehicle valuation guide ProQuote, which helps insurance carriers make the optimal real-time decisions about total losses, when and when not to total vehicles. I think you're referring specifically to, I think, the notion of automated chat and so forth. That is the evolution, of course, of where FAQs eventually go. You end up with smarter and more informed answers on some of the questions you most frequently get here at Copart. I'd say today, with our sellers and members, the questions are often nuanced enough, specific enough to individual circumstances, lots purchased and so forth, that it's not a ready solution for us today. We follow the space. Our tech team certainly are avid students of the space as well. If and when relevant for our business to deploy much more broadly, we will certainly do so. Great. Thank you. Our next question comes from Chris Bottiglieri with BNP Paribas. Please proceed with your question. Hey, thanks for taking the question. First what I wanted to follow up on is kind of what's the non-insurance. You maybe bifurcate the non-insurance a little bit further. I heard you right, you said 20% for what you've now defined as Copart Blue, which is a combination of your dealer consignment and the commercial channels. I assume your kind of historical legacy, charity, municipalities, it sounds like there's a bad actor competing on price there that might be offsetting some of that growth. Can you just give a sense for, like, the bifurcation of the two? That'd be the first question. Directionally speaking, what we characterize as non-insurance includes those Blue Car sales, which are rental cars, banks and financial institutions, fleets, rental car companies and the like. That's a meaningful portion of our non-insurance volume. Copart Dealer Services, we didn't talk about specifically today. That's also a sizable portion of our non-insurance business. They are also performing well and growing the business in a difficult and challenging environment. The other elements of our non-insurance business include Copart Direct, which is our cash for cars business, in which we buy cars directly from consumers and sell them at auction here at Copart. Leah mentioned that in her comments as well as one of the elements of our quote, principal business that has proven very successful for us over the years, but we also want to be thoughtful about how aggressive we are buying cars in a volatile price environment. The portion you mentioned as well, which is the charities and wholesalers business, relatively lower value vehicles. We have, in some cases, optimized our business to serve insurance companies, Blue Car, Copart Direct, Copart Dealer Services and the like, and have foregone some of the volume in those lower value segments. Got you. Okay, that's helpful. Then, just a bigger picture question. One of your closest peers is having to merge with an auctioneer of heavy machinery. You know, has this led you to rethink the opportunity at all for TAM expansion of your business? Do you think these businesses are synergistic? Is there a place for Copart in those types of end markets? Just kind of curious how you think about TAM expansion. Yes. generally speaking. I think it's a fair question, Chris. I don't think it specifically is a catalyst for us to consider it, but it's a topic we have wrestled with ourselves. When evaluating our own strategy and our opportunities to expand into new arenas, we take stock first of our core strengths. We think we are, we excel at managing high volume online auctions and recruiting the sellers and buyers for them. We think we excel at physical infrastructure, both the development of greenfield facilities and the acquisition of existing ones, and then managing the physical logistics to and from those facilities of high volumes of physical equipment and high volumes of vehicles historically. We, the third natural capability of ours that I characterize is our ability to navigate complex regulatory environments. We have 50 different DMVs in the U.S. alone, as well as a number of other relative regulatory layers here and certainly worldwide, tax and otherwise, we think we are uniquely equipped to address. We've taken and looked at those capabilities and asked ourselves the question, where can we deploy those into adjacent spaces to grow the business over time? Have done so selectively and very conservatively. As you know, we've expanded with our acquisition of NPA five and a half years ago or thereabouts, into the powersport arena. We today are expanding this Blue Car initiative into the whole car space as well. Frankly, within yellow iron, as you just inquired, we already sell, you know, within yellow iron specialty equipment, trucks and trailers and the like, many hundreds of millions of dollars of that equipment every year without per se a dedicated effort to expand our business there. It's something that we revisit on an ongoing basis. I think this transaction doesn't per se affect it negatively or positively in terms of our interest in the space. Got you. Very helpful. Thanks, Jeff. Our next question comes from Bret Jordan with Jefferies. Please proceed with your question. Hey, good morning, guys. Hey, Bret. On that quick discussion of that other company's transaction, the buyer is certainly making a pitch that there are services that could be offered in the salvage space that would sort of add another lever on the revenue side. Do you see that? I mean, is there an opportunity? I mean, obviously, if you're selling scrap cars to LKQ, they don't want them waxed first. Are there things you could be doing as you whether it's Blue Car or CopartDealer Services where you could attach ancillary services? In short, I think the answer to that is yes, Yes, that there are additional services to be offered to both sides of the marketplace, we are doing that today. We haven't talked about them at great length on earnings calls. We find those more relevant in discussions with our sellers and our members themselves. Those services certainly include things like delivery, financing, title services, and the like. The buyers. That universe is expanding real time. As you noted, if you went back 30 years ago, and the buyers are largely dismantlers and so forth, they're not that interested, in other services we have to offer, waxing or otherwise. Today, as we expand our universe into more drivable vehicles, lighter damaged cars, I think that becomes more relevant over time. I'd argue that we are the industry leaders in that regard in terms of the mix in that direction. That, that thesis is arguably more relevant for us than it is for anyone else, anyone else who is, you know, loosely in our industry. Okay. Then a quick question on the supply side, which seller is most dependent upon you being the purchaser as opposed to an agent? Does that most impact? I mean, obviously, Copart Direct is probably the most, but Blue Car versus Copart Dealer Services, are those sellers expecting you to own the car as opposed to just consigning? No, they're not. The principal business is largely Copart Direct, in which we buy cars from consumers at some modest residual volume in the UK. I think you know that when we entered that business in 2007, probably four out of five cars or thereabouts was managed on a principal basis. Today, I think that's reversed and then some. We are largely, when you're looking at principal volume for Copart, you're talking about Copart Direct. Germany is really not. Is Germany still mostly agent or? In Germany is a mix of both. That's fair. Germany, we are doing both. We're selling consignment cars on behalf of insurance companies, and we are also buying cars both directly from consumers and on residual value platforms. I guess, does the temporary move away from or maybe cutting back on purchased vehicles impact Germany in the short term, or is it not meaningful enough to really move the needle? No. That's principally the principal car, the moderation in principal car volume is principally here in the U.S. Okay. Great. Thank you. Thanks, Chris. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Joseph Enderlin with Stephens Inc. Please proceed with your question. Hey, guys. This is Joe Enderlin on for Daniel. Thanks for taking the question. No problem. With total loss rate moving higher again this quarter and inventory bottlenecks improving, do you expect the industry to return to historically normal unit growth rates from here? From here, yes. Precisely when, I think is harder to forecast. That's a function of the variables we talked about, which is the value of used cars, and therefore ACV or pre-accident value, as the Europeans call it, and what the car is worth before it's in an accident, what happened to repair costs and rental car costs and the like. I think we have total conviction that total loss frequency will revert to historical levels and continue to grow from there. The precise trajectory from today until that point, I think is more difficult to forecast. This is an unabated 40 or 50-year trend, with the exception of the past 18- 24 months. I think we do believe that it will revert. That's helpful. Thank you. As a follow-up, we wanted to ask about ASP trends during the quarter. Did we see ASPs decline and then increase along with Manheim, or was there a more consistent trend? You mean within the quarter? Within the quarter, yes. I don't, I don't even know that we know offhand. I think the prices, I think, have remained quite strong at Copart and have meaningfully outperformed at least the headline numbers we're aware of for the Manheim Used Vehicle Value Index. I don't know that there was any meaningful intra-quarter volatility at Copart. Super helpful. Thank you, guys. Thank you. Our next question comes from Gary Prestopino with Barrington Research. Please proceed with your question. Hey, good morning, everyone. I just want to get a couple of statistics, go over correctly. units processed, we were up 7% globally. Is that correct? Five. Total units were up, yeah, about 5%. 5%? Okay. Then getting back to ASPs, I didn't quite get what you said on ASPs as you went through all these numbers. What were ASPs up year-over-year and sequentially? Do you have that? Yep. ASPs in total were basically flat year-over-year. Okay. Sequentially, they were down about 3%. Okay. Just wanted to move down 3%. Okay. Lastly, with total loss ratios, you said, Jeff, they were 19.7% in Q4? Correct. Versus 17.4%, but a lot of that was flood vehicles, right? That led to that sequential increase. Yeah, we think half of that or thereabouts was flood related. I should have noted then, I will now, that there is some natural lag then between when cars are, quote, "deemed a total loss" and when, of course, they're processed by companies like us. The title process loans paid off and the car is sold. Okay. Just for comparative purposes, what were total losses, the ratios running in Q4 2021? Do you have that handy? We do. This is all straight from CCC, Gary, in the fourth quarter, nineteen two a year ago. Okay. Is there with the non-insurance business that you're doing, I mean, it had always been kind of at about a 19%, 20% of percentage of vehicles. How much has that moved up over time as you've grown this business? There's some seasonality to it. I think to be fair, I would say it's between 18% and 25% just from memory, you know, going quarter to quarter. It has grown over the very long term. To be fair, over the past few years, we've grown our insurance business as well. They've both grown. We don't, we don't generally think in mixed terms. We think in terms of growing Blue Car or growing Copart Dealer Services, growing Copart Direct and the like, the mix number is not one we particularly focus on. Both have grown meaningfully, of course, over the past 5 years. Okay. Thank you. Thanks, Gary. There are no further questions at this time. I would now like to turn the floor back over to Jeff Liaw for closing comments. Great. Thanks, everybody for joining us, and we'll talk to you next quarter. Bye. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.