Copart Inc. (CPRT) stock rose in premarket trading Friday after the company reported better-than-expected fourth-quarter revenue and agreed to acquire ACV Auctions Inc. (ACVA).

Copart Strikes ACV Deal

Copart agreed to acquire ACV for $10.50 per share in cash.

ACV operates a primarily digital automotive marketplace that sells more than 800,000 vehicles annually while owning virtually no land.

Copart expects the deal to expand its automotive marketplace by connecting more vehicles and buyers across multiple sales channels.

Both companies' boards unanimously approved the transaction. Copart expects the deal to close by the end of 2026, subject to regulatory approval and other customary conditions.

The company expects the acquisition to boost earnings in the first full year after closing.

Earnings Snapshot

Copart reported earnings of 35 cents per share, missing the 38-cent consensus estimate.

Revenue of $1.15 billion beat the $1.14 billion consensus estimate. Revenue per unit rose 5.4%, while global average selling prices increased 3.5%.

However, global unit sales fell 2.9% year over year. U.S. units declined 5.7%, while international units increased 10%.

Global insurance units fell 4.2%. Domestic insurance volumes dropped 7.5%, while international volumes rose 11.2%. Excluding the loss of one customer, domestic insurance assignments would have increased 2.3%.

Meanwhile, global insurance average selling prices rose 3.1%. U.S. insurance prices gained 3.7%, while international prices increased 3.3%.

Gross profit fell 5.5% to $481 million, with gross margin at 41.8%. Copart attributed the decline to investments in services including long-haul delivery, Title Express and dedicated U.S. wholesale facilities.

U.S. Volumes Weigh On Growth

U.S. revenue rose 0.4% as higher revenue per unit offset weaker volumes. Dealer units increased 5.8%, while Blue Car volume climbed nearly 20%. Copart Direct volume fell 11.7%.

International revenue increased 11.7% to $222.1 million, helped by 15.5% growth in service revenue. International units rose 10%.

Copart ended July with about $5.7 billion of liquidity. That included $4.5 billion in cash, cash equivalents and held-to-maturity securities, plus $1.25 billion of revolving credit capacity.

CPRT Price Action: Copart shares were up 4.55% at $32.15 during premarket trading on Friday, according to market data.