Good day, everyone, and welcome to this Copart, Inc. conference call. Just a reminder, today's conference is being recorded. Before turning the call over to management, I will share Copart's Safe Harbor statement. The company's comments today include forward-looking statements within the meaning of the federal securities laws, including management's current views with respect to trends, opportunities, and uncertainties in the company's industry. These forward-looking statements involve substantial risks and uncertainties. For more detail on the risks associated with the company's business, we refer you to the section titled Risk Factors in the company's annual report on Form 10-K for the year ended July 31st, 2025, and each of the company's subsequent quarterly reports on Form 10-Q. Any forward-looking statements are made as of today, and the company has no obligation to update or revise any forward-looking statements. I will now turn the call over to the company's Executive Chairman and incoming Chief Executive Officer, Jay Adair. Thank you, Joe. Well, good morning, everyone. I was reflecting, and the last time that I did analyst calls was a couple of years ago, but I started doing analyst calls in 1996. I thought I'd give you a little background on myself. I think I know most of the people on this call, but for those that don't know me, I started with Copart 37 years ago in the summer of 1989 when Copart was a relatively small business. We went through a private equity or private fundraising period in 1993, and by 1994, we were publicly held. I had the pleasure of going on that road show, and it was the first time that I'd been to New York. To say it was an interesting experience was an understatement. It was an amazing experience. Within a couple of years, we were reserving copart.com. I was building out and spending most of my time building out web pages and web products for copart.com. By 1998, we had gone with online. We had invented, I should say, the first online bidding product. By 1999, we had vehicle images, and I remember getting a phone call from Scott McNealy, who worked down in Silicon Valley and wanted to see what we were doing and came up to Fairfield to see what company was taking so many images and changing the industry the way we were. By 2003, we had moved everything completely to online. I built that product with our team. We patented that product, and we would effectively be the only fully digital auction for the next 20 years. In 2004, we decided we wanted to expand and go outside the U.S. by going to Canada, followed that in 2006 by going to the U.K., then followed that by going to Spain and Germany and Brazil and the Middle East and Ireland. I'll talk more about our growth, but I've got a lot of background in international expansion with the company as well. I guess first I'll start by talking about the CEO transition. Let me just make it very clear. Jeff and I worked together for 11 years, and I consider him a dear friend. I'm thankful to him for everything that he did for this company as CFO, as President, as co-CEO, and as CEO. My return back to CEO is something that Jeff and I decided on together. We both agreed that it was the right thing for Copart. My intent is to lead the company for the next 10+ years. This is not an interim arrangement. I won't be going through a process of finding my successor. I'm just going to focus and double down on all of our initiatives to build Copart and to grow Copart. We'll talk about that. There's really three growth pillars that we focus on: international expansion on insurance, whole car expansion domestically, then technology services for our customers. I want to be very clear. This is a growth company. There is a lot of noise and a lot of rhetoric out there. I have a pretty good history of saying I don't listen to the noise. I don't respond to things. I'm going to continue that. I might be asked questions that I won't answer or that I don't want to answer. At the end of the day, it's because we're going to focus on what it takes to win. I don't plan to put my playbook for winning out there publicly for my competitor to see. I know our customers personally. I believe our customer relationships are stronger than ever. The idea that that is not the case, I believe, is just false. During our Q3 earnings call, we shared that total loss frequency reached approximately 23.6% in the most recent period, up nearly five points over the past four years. Driven by repair costs and by the record auction returns we generate, which make the total loss decision more attractive to carriers. When I started, total loss frequency was 8%. We've watched that continue to improve and continue to increase over the decades. We believe that'll continue. Another point on our Q3 earnings call was that U.S. insurance ASPs reached an all-time high in the most recent quarter, up approximately 4.1% year-over-year. International buyers, crossover buyers, and finance buyers continue to be critical drivers of our auction returns. Our global buyer network now spans more than 160 countries. I'll talk a little bit about the cyclical headwinds that we're facing. I think it's very important to realize that we are not only the largest, you can look at all the activity that comes onto our website, and you will see that we have the best auction liquidity in the industry. On cyclical headwinds, we are experiencing the impact of a cyclical and, in our view, unprecedented dislocation across the U.S. insurance industry. The 2022 to 2024 inflationary cycle pushed carrier combined ratios out of balance, driving rate increases, which drove consumers to pull back their level of insurance coverage, which was observed through a shift toward higher deductibles and liability-only policies. I believe that is now softening, we are starting to see insurance companies become more aggressive again. Much of this is from 2020 COVID, the impact of that, the impact of insurers cutting dividends back and reducing insurance rates. Now we've seen kind of the flip side of that as we have seen in the past year or two, I think we're now going to see things kind of normalize. We believe the consumer retrenchment is cyclical, not structural. I want to make that very clear. On international momentum, we are going to be firing that machine back up again. We have slowed that historically as we were figuring out different models to the Copart model in Germany. We have figured that out now. We are profitable, and we know how to grow in that market, and so we'll be expanding in other international markets in Europe and other locations as well. International unit volumes grew 5.9%, and international revenue grew 14.1% year-over-year in Q3 2026, with both insurance and non-insurance channels contributing. It's an area of significant focus for us as a team, and we will be, for lack of a better term, speeding that up as we go forward. Looking at our balance sheet as of Q3 fiscal year 2026, we have nearly $4.2 billion of cash. This is after recently deploying $1.6 billion into share repurchases. We have no debt on the balance sheet to speak of. We believe we have the liquidity to continue to look at all strategic options available to us. Before I open it up to questions, I'll point out that Leah Stearns is here in the room with me, our CFO. If there's some questions that are financially focused, I'm going to let her answer those. I'll say this. We continue to deliver for our customers. We will continue to focus and be a customer-centric company. We'll continue to provide the best liquidity in the industry. I will tell you after, I'm not saying I ever left because I've been executive chairman, I've been involved, and Jeff and I, over the last two years, two plus years, we speak regularly, if not daily, multiple times a week. I have dug in heavily in just the last week, and I'm excited, and I'm looking forward to the changes we're going to make. I'm back, so it's not like I'm here temporary. I'm here to stay, and I'm excited for everything that we plan to do for this company. On that note, I'd like to open it up for questions. Thank you, sirs. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate 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 speakerphone, it may be necessary to pick up your handset before pressing the star keys. One moment please while we call for questions. Our first question comes from the line of Bob Labick with CJS Securities. Please proceed. Good morning and welcome back to the calls, Jay. Thanks, Bob. How are you? Yes, I'm doing well, thank you. It's great to hear your voice. I know you've stayed active with the company, but we haven't talked in quite a while, so it's really nice. Jeff was really good at investor relations, so you are correct. I was not that engaged in that component, but good to hear your voice as well. Thank you. Thanks for the background. Obviously, we've known you guys forever. Wanted to get your thoughts on how AI is shaping the industry and how Copart is positioned and positioning yourselves to excel and how you see the industry evolving over the next 5- 10 years, with the understanding that you don't want to give away too much of your playbook. Kind of big picture on that stuff, if you could. It won't be 5- 10. It's less than five. We think of AI in quarters, not years. It might be the only time in my life that I've thought in quarters and not years, but it's happening that quick. AI is something that if you're not doing it, you're missing out. We often refer to it. We've actually given guidance to our team on what tools are the best, and we often refer to AI as if you're not utilizing it, you're doing the company a disservice. There's a big focus internally. We have a head of AI. The obvious things are efficiencies, and we're doing that already. The less obvious is strategic, and that I won't comment on, but we are looking at strategic availabilities in AI as well. Okay, great. Just kind of also big picture, just remind us in terms of, you outlined your priorities for growth, but how do you think about build versus buy, given the fortress balance sheet that you have, and what are your thoughts there? We're going to do both. We will be doing M&A obviously, and we'll be building as well. As you all know, we're sitting on a ton of cash, and we have the ability to do both. We will. Super. Maybe last one, I'll certainly jump back in queue, but kind of in your mind, what do you think investors are missing on the Copart story now? How can you guys get that best out there? I think, one, Wall Street's fickle, two, I never like to predict what investors are going to do and how they're going to think. I think they're hearing a narrative, potentially that's out there in the industry, potentially from a competitor. There's always two sides to the story. At the end of the day, we're a phenomenal company. We've got amazing people. We've got phenomenal relationships with our customers. We're going to do what Copart has always done. We're just going to execute. We're not going to talk about it. We're not going to tell people what we're about to do. When we do win, we're not going to tell people that we won. We're just going to do it. Let the results speak for themselves. Super. Well, welcome back, and thanks. Thanks, Bob. The next question comes from the line of Gary Prestopino with Barrington Research. Please proceed. Jay, how are you? I'm good, Gary. How are you? Oh, just fine. It's been a while. Good. Hey, a couple of questions. How's it been? Welcome back. Really looking forward to working with you again. A couple of questions here. Well, one question, you talked about the changes that you're going to implement. Does that really revolve around the growth pillars, the international salvage, whole car U.S., and tech services customers? It does, yeah. We're going to be speeding up some of those initiatives. To do that, we've got to have a more robust team. Okay. In terms of starting that whole process, how long does it take you? I realize that your leadership in there for about a week now. How long does it take for you to reinvigorate that growth engine? Well, I think that everyone in the company is excited. I think they're all ready, feeling like, "Let's go do some of these things." It's going to take me time. We're promoting people already, but it's going to take time to hire people. It's not years, it's quarters, but it's going to take some time. Okay. That's great. Just in terms of what's going on in the industry, the cyclical headwinds. In terms of the consumers actually repairing their cars versus just getting a check or whatever, do you think that if the premiums just continue to stabilize, you'll see a shift, or do we have to see more downtrend in the policy costs for consumers for them to step up to the plate and get a car repaired? I think as things normalize, people will get coverage again. I just think when insurance rates get that outrageous, it causes people to drop their coverage and go with liability only. I think as rates come back down and things normalize, you'll see people saying, "Okay, yeah, that's only X a year more. Go ahead and get me collision or comprehensive coverage. Okay. One last quick question, I'll jump off. You've gone through a pretty strong exercise of buying land over the last couple of years. Are you at the point now where you don't need to buy any more land, particularly for catastrophic events, and you can shift resources to your three growth pillars in a bigger way? Yeah, we've got an amazing network of locations, not just the number of locations, but the number of acres per location. I think we're in a good spot. We'll have to do a little bit of development still, we've got a little bit of add-ons, nothing like you saw the last 10 years. The last 10 years was just half a billion a year in buying land and developing those locations. That's definitely going to slow down. Okay. Thank you so much. Thank you, Gary. The next question comes from the line of Chris Bottiglieri with BNP Paribas. Please proceed. Hey, Jay. This is Ian Davis on for Chris. Thanks for the time here. Wanted to ask you one on Purple Wave. I know that Jeff and Leah had sounded constructive on the expansion there. How are you thinking about the go-forward strategy for this segment? Is it reasonable to think that some of your more recently acquired land is going to perhaps be targeted more towards supporting heavy equipment? Just want to get some of your thoughts and thinking there. Yeah, we've already got access to our locations for Purple Wave. I am focused right now on international and domestic Copart. I'll focus on that next. I can give you a better answer in a quarter. Leah's here. She's happy to give you her response. I just have not been that close to it. Ian, I think what we've primarily focused on with respect to Purple Wave has been the expansion of the territory sales force, and that was foundational to our ability to serve enterprise accounts. As we think about the continuation of the expansion strategy for Purple Wave, it will be principally focused on the execution on that front. Again, Purple Wave is domestically focused, we're effectively taking a sales team with territory coverage primarily in the Central Time Zone of the U.S., and pushing it out to the coast, initially focused on the areas where the highest GMP exists. As we're successful in those markets, continuing to further penetrate into some of the secondary and tertiary markets. That is our current strategic roadmap that we're executing on with respect to Purple Wave, and would expect that to continue through 2027. Got it. That's helpful. Then I know you spoke to it, Jay, whole Copart domestically, maybe just some brief thoughts on where you're most excited, some of the unturned stones that you think are going to help support the next leg of growth. Just maybe one or two pieces or thoughts there. Well, it's historically been a nice growth engine for Copart. I'd like to see that increase dramatically. To do that, we're looking at restructuring, and we're looking at some other strategic moves that would help that. I'm not going to tell you exactly how we're going to get there, but I'll tell you that the goal is that it looks very different in three to four quarters. Got it. Thank you. You bet. The next question comes from the line of Craig Kennison with Baird. Please proceed. Hey, good morning. Thanks for taking my question, Jay. Good to hear from you as well. Hey, Craig. Good to hear you. Yeah, I'm doing great. Thank you for taking my question as well. You mentioned, Jay, three growth pillars, international, whole car domestic, and then tech services. Where do you need to invest the most in terms of resources, and how do you intend to fund that? Is it a reallocation, or could you be looking at an era of investment before we start to see sort of the returns on the bottom line? Well, I think we've got to focus on M&A for all three. In addition to doing M&A for all three, we've got to focus on investing and making some of the products that we've got already more robust. It's hard for me to tell you it's a third, a third, a third, or 40, 40, 20. I will tell you they're all going to be material investments. When you look at your own M&A history, what sort of lessons do you lean on in terms of what makes for successful M&A within Copart? If you look historically, all of the M&A that we have done has been in our industry. They've been acquisitions that made sense. They plug into Copart, and we can utilize our land or utilize our auction technology or our knowledge, we're going to continue to do that. We're not going to go out and buy something that has nothing to do with our industry. Look, it's no secret, you guys know how we think about ROI. We will be disciplined. We will be focused on making sure that we're getting the right return for our investments, it's to buy and to build in our respective industries, I'm not going to go jump into something totally different. Just thinking about your balance sheet, any of us who have read "Junk to Gold" know your aversion to debt, but is that still true, or could you lean into the balance sheet to do the right deal and take on some debt? To do the right deal, I would take on some debt. Got it. Well, thanks. Look forward to working with you again, Jay. Yeah, you too, Craig. Look forward to it. The next question comes from the line of Bret Jordan with Jefferies. Please proceed. Hey, good morning. Good morning, Bret. I guess when you think about the margin profile, in the last few years, you've added some operating expense for CDS and BluCar and Purple Wave. Are we going to start leveraging that in the nearer term, or is there sort of another phase of investment to get to the end game? Obviously, you're talking a lot of growth and maybe some hiring, but how do we sort of think about the cadence of the SG&A growth in the last three years versus levering that maybe in the next year or two? It's not an easy answer because I think we can leverage it, but I don't want to be pigeonholed. I'm going to tell you, I think we can leverage it, but I'm not going to make a statement like that on a call stop me from making a good long-term decision to invest in the company. That would be my intent, but if something comes along and I see that I need to make the investment to grow even faster. When we talk about growth, our growth is the right kind of growth. You don't see us growing and doing enormous volume and not bringing that to the bottom line. Given that, I would say I think we can leverage it, but I would leave our options open. All right. That's fair. Thank you. You bet. The next question comes from the line of John Healy with Northcoast Research. Please proceed. Thanks. Stick to my question. Welcome back, Jay. Thank you, John. I wanted to ask a question about the timing of all of this. I appreciate all of the initiative, but I was just trying to maybe dig in just a little bit more on why in July of 2026 is this happening and the impetus of the timing per se right now. Thank you. Well, I think from a timing standpoint, I'm not technically CEO yet. We're going to transition that at the end of the month. I was back and forth with Jeff this morning. That's all coming, and I'm digging in, but I'm digging in in a very short period of time compared to being in an executive chairman role. I think it was the right thing to do. Jeff and I had these conversations, and as I said already, we're friends, and he lives maybe 10 houses down from where I live. At the end of the day, I've got enormous respect for him. He does for me. None of that changes. What was decided in our conversations was for me to get back involved and start to drive the company as CEO. That's what we decided. Understood. Thank you. You talked about the competitive set and not putting your cards on the table about what the playbook is, but trust us, you got a playbook. I'm curious your thoughts of while you've kind of taken a reprieve, your competitor has obviously changed and evolved and new owners and all those things. What do you think the biggest difference is in terms of how you're competing with them? Is this just them, they have caught up a little bit to you guys in terms of maybe service and attention? Or I guess as you look at your competitor, maybe just talk to us how you feel the landscape has changed a little bit. Yeah, I think they've espoused some rhetoric that's out there in the marketplace. I haven't seen where their products have dramatically changed. Historically, you can go back and listen to 30 years of transcripts from me, and you're not going to see me talk about my competitor a lot. I'm not going to change that. Copart, just in the last year, has invested in a number of initiatives that we're working on, just like we had a decade ago and two decades before that. Online bidding started in 1998. That's almost 30 years ago. When you think about digital auctions and virtual bidding, we were signing people onto AOL, and they were dialing in to be able to bid in our auctions. We have tried to be very cutting edge, not bleeding edge, and we'll continue that. We'll continue to have differentiators in the space. I look at a number of our products are just significantly better today than they were a year ago, and we're going to double down on those initiatives. There will be a little bit more spending, but it'll drive the business forward, so it's necessary. Got it. Thank you and good luck. Thanks, John. The next question comes from the line of Jeff Lick with Stephens. Please proceed. Good morning. Thanks very much for taking my question. Jay, I was wondering, you talk about the narrative that's developed, which is primarily, I think the simple narrative is if you look at your competitor's units which are positive and your insurance units or different units that you disclose have been negative. It has the look that you're losing share. When you dig in, whether you want to look at the Progressive or the underinsured and uninsured, maybe it isn't the case. Could you maybe just expound upon anything that you're looking at, whether you want to talk about Pure Sale or how should investors just focus on Copart and see that you're going in the right direction and maybe not even- Yeah. Focus on the differential between units? Yeah, there is a unit loss. There was an account that was lost in some ways, and in some ways, Copart chose not to do business. That has historically happened, and I won't mention the company. I don't view that as some fundamental change in the relationship we have with all of our clients. If you look at the rest of our clients, we've got great relationships with them. They recognize us for delivering not just the service, but the liquidity, and being not just the largest, but the best place for them to liquidate their vehicles. If we didn't have the kind of liquidity that we're talking about, we couldn't be growing all the non-insurance business. We couldn't be growing all the dealer volume. These are folks that would look at that and say, "Why would we give you more cars unless you're getting the return?" There has been that. I don't think that that's going to continue throughout the organization, and I think Copart has the ability to win that business back. I suspect over time, you'll see that kind of behavior. You'll see us winning business. That's our plan, Jeff. On the whole car front, the one asset you appear to have is the ability to take your international buyer base and liquidity and offer that to the dealers and the commercial sellers. Is that an area I think that you guys would incrementally focus on and try to build relationships that way? We have historically, but you said dealers and whole car, but it's also insurance. We were the first to build an international buyer base. That was back in the '90s. I remember seeing buyers from Tijuana coming into our website first. Then it got to a point where I was looking up to see where countries were from, because there were so many different countries that were buying at Copart. Not just the fact that we've been marketing and working that for 30 years, but the fact that we've got Middle Eastern presence, European presence, Eastern European presence. All of that is part of what drives that buyer base and that buyer liquidity. Yeah, we'll continue to do that. We're not going to move away from that. That's a big differentiator for our sellers, is to see where those vehicles are selling to when we actually sell them. From an educational point of view, how does an insurer become the owner of record of a whole car? I thought it was usually the transmission mechanism is it's a salvage and the title's transferred to them. When we talk about whole car, we're talking about non-insurance. We're talking about banks, finance companies, and things like that. Insurance is going to be a damaged vehicle for the most part. Okay. Might be a recovered theft that has very little damage to it. For the most part, it's a damaged vehicle. Okay. Thanks very much, and best of luck. Look forward to working with you. Thank you. Appreciate that. The next question comes from the line of John Babcock with Barclays. Please proceed. All right. Good morning, and thanks for taking my questions. I guess just the first is on really overall strategy. I was wondering how much, as you're focusing on growth, you're thinking about the salvage auction business versus some of the other areas, like international, whole car, and tech. If you could just broadly talk about where perhaps more emphasis is needed, that'd be helpful. Yeah. Like I said earlier, the focus is going to be on international. It's going to be on growing the existing core business. It's going to be on technology. For me to break it out, I can't break it out and tell you a third, a third, a third. That is the focus. The team at Copart have heard me say before, I can't remember four, five, or six things, three things, FBI, CIA. I can remember three things. When we talk about our growth, those are going to be the three pillars and the three legs, and that's going to be the focus. We are not some rigid organization. We're a flexible organization, and we will flex as we need to put more effort into one area versus the other. Okay. Got you. Just back to the M&A side of things, are you thinking about something that, and again, recognizing that it's probably still early, you're probably still not even at the point where you're really even looking at things, but do you envision doing something that may be transformative, something that's more tuck-in? How do you kind of envision that going forward? We're going to focus on things that fit our industry. We're not going to be going outside of our industry. Got you. Just last question before I pass it over. Now that you're coming in, do you think that there is more need for a strategy shift here? Do you think there is need for changes on the operational front? I was wondering if you could talk about that. Yeah, happy to talk about it. No, the operations team's amazing. We've got amazing systems people. All of our facilities, we've continued to invest in them over the last decade, let alone the last year. No, they're great. I feel very happy with where the company is sitting. It has been well-operated, but there's nothing I can say about that that I'm displeased with. I'm very happy with everything. If we're going to grow at a little faster rate, it does take some changes, like with respect to structural set up with people, the organization, how we move people around in the organization, hiring some people on the outside. In addition to that will be M&A. Okay. Very helpful. Thank you. All right. Thanks, John. I think that's it, isn't it? All right. Yes, sir. No further questions, is that right? That's correct. Mr. Adair- Okay. You go ahead with closing remarks. Yeah, I appreciate that. Thank you. I'm going to look forward to the earnings call when we come out. I think it was just important for us to do this call. It's the first time Copart has ever done a call between earnings releases in 30 years, 32 years as a public company. We just felt it was important for you to hear some of this and not wait till the actual quarter comes out. Given that, it was a pleasure to talk to you all again, hear voices I haven't heard in a while, and look forward to reporting on the quarter and the year in the coming months. Leah and I will have a lot to tell you then. Thanks for your time today, guys. We appreciate you, and we're signing off. Bye-bye. Thank you. This concludes today's conference. You may disconnect your lines at this time, and enjoy the rest of your day.