Copart (CPRT) Risk Factor Changes

Our executive officers, directors and their affiliates beneficially own, in the aggregate, more than 10% of our issued and outstanding common stock as of July 31, 2026.

Litigation based on allegations of infringement or other violations of intellectual property rights are common among companies who rely heavily on intellectual property rights.

Our intellectual property rights include patents relating to our auction technologies, as well as trademarks, trade secrets, copyrights, and other intellectual property rights.

We work to evaluate and implement new technologies and processes to manage risks relating to cyber-attacks and system and network disruptions, including but not limited to usage errors by our employees, power outages,…

Information technology system disruptions, cyber-attacks, ransomware attacks, or other security breaches or incidents could materially and adversely affect our reputation, operating results, or financial condition by,…

Information availability and security risks for online commerce companies have significantly increased in recent years because of, in addition to other factors, the proliferation of new technologies, the use of the in…

Disruptions to information technology systems used in our business, including failure to prevent outages, maintain security, and prevent unauthorized access to our information technology systems and confidential infor…

New tax legislative initiatives may be proposed from time to time, such as proposals for comprehensive tax reform in the United States, which may impact our effective tax rate and which could adversely affect our tax…

Our operations are subject to international, federal, provincial, state and local laws and regulations regarding the protection of the environment in the countries in which we have storage facilities.

Our internet-based auction-style model has allowed us to offer our products and services to international markets and has increased our international buyer base.

In addition, some of our recent acquisitions have required us to integrate non-U.S.

We are required to comply with applicable export control and economic sanctions laws and regulations, including the Export Administration Regulations administered by the U.S.

Factors such as mild weather conditions can have an adverse effect on our revenues and operating results, as well as our revenue and earnings growth rates, by reducing the available supply of salvage vehicles.

Acquisitions typically will increase our sales and profitability, although given the typical size of our acquisitions to date, most of our acquisitions have not individually had a material impact on our consolidated r…

We seek to increase our sales and profitability through the acquisition of complementary businesses, additional facilities and the development of new facilities.

Consumer concerns over the security of transactions conducted on the internet or the privacy of users may inhibit the growth of the internet and online commerce.

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We first expanded our operations outside the U.S.

Although no single customer accounted for more than 10% of our consolidated revenues for fiscal 2026, 2025, or 2024, a limited number of vehicle sellers historically have collectively accounted for a substantial porti…

transactions that could be beneficial to us or our other investors.

We continue to evaluate emerging technologies like artificial intelligence, machine learning, and generative artificial intelligence for incorporation into our business to augment our products and services.

We regularly evaluate and implement new technologies and processes to manage risks relating to cyber-attacks and system and network disruptions, including but not limited to usage errors by our employees, power outage…

We are subject to federal, state and international laws, directives, and regulations relating to the collection, use, retention, disclosure, security, and transfer of personal data.

• military conflicts, including the Russian invasion of Ukraine and recent events in the Middle East;

We first expanded our operations outside the U.S.

Because the models, algorithms, and datasets these technologies rely on may be flawed, incomplete, or biased, their outputs may be inaccurate, unreliable, or otherwise harmful, including in unintended or discriminator…

Artificial intelligence is also the subject of rapidly evolving and fragmented laws, regulations, and industry standards in the United States and internationally, addressing transparency, data usage, automated decisio…

We increasingly incorporate artificial intelligence, machine learning, and generative artificial intelligence technologies into our operations, products, and services, including in areas such as [vehicle image capture…

Our development and use of artificial intelligence and machine learning technologies present operational, legal, competitive, and reputational risks that could adversely affect our business, consolidated results of op…

artificial intelligence are evolving and may not afford us adequate protection, which could increase our reliance on trade secret protection and diminish the value of, or our ability to protect, our proprietary techno…

insurance with respect to acquired facilities with known environmental risks.

Our efforts to comply with the GDPR, the CCPA, the LGPD, and similar emerging and changing laws, regulations, policies, and contractual and other legal obligations relating to privacy data protection, and cybersecurit…

In the United States, California has enacted the California Consumer Privacy Act, as amended (“CCPA”) and numerous similar recently enacted laws create new data privacy rights for individuals.

We are subject to federal, state and international laws, directives, and regulations relating to the collection, use, retention, disclosure, security, transfer, and other processing of personal data.

will take actions in violation of our policies or applicable law, for which we may be ultimately held responsible.

The 2026 Credit Agreement contains restrictive covenants, including a maximum consolidated total net leverage ratio and other customary covenants that limit our and our subsidiaries’ operating and financial flexibilit…

take actions such as utilizing available capital, selling assets, or reducing or delaying capital expenditures, strategic transactions, and investments, any of which may impede the implementation of our business strat…

We have entered into, and may continue to enter into, arrangements pursuant to which we may incur significant indebtedness, including the 2026 Credit Agreement, which provides for an unsecured revolving credit in an a…

We may incur substantial indebtedness and any failure to meet our debt obligations may adversely affect our business, financial condition, and results of operations.

weather conditions can result in an oversupply of salvage vehicles that requires us to incur abnormal expenses to respond to market demands.

for years.

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Our executive officers, directors and their affiliates beneficially own, in the aggregate, more than 10% of our issued and outstanding common stock as of July 31, 2025.

• monetary policy and potential inflation impacts, including any adverse effects of inflation and/or interest rates on our cash reserves; and

We have developed a proprietary enterprise operating system to address our international expansion needs.

We regularly evaluate and implement new technologies and processes to manage risks relating to cyber-attacks and system and network disruptions, including but not limited to usage errors by our employees, power outage…

Although we face risks associated with international expansion in each of the non-U.S.

In some cases, the enforcement practices of governmental regulators in certain foreign areas and the procedural and substantive rights and remedies available to us may vary significantly from those in the U.S., which…

Mild weather conditions tend to result in a decrease in the available supply of salvage vehicles because traffic accidents decrease and fewer automobiles are damaged.

• obtain necessary regulatory approvals under applicable antitrust and competition laws; or

• maintain the historical revenue and earnings growth rates we have been able to obtain through facility openings and strategic acquisitions related to market share expansion in our core salvage vehicle remarketing bu…

We seek to increase our sales and profitability through the acquisition of complementary businesses, additional facilities and the development of new facilities.

• the need to comply with complex foreign and U.S.

We first expanded our operations outside the U.S.

Our expansion into markets outside the U.S., including expansions in the U.K., Canada, Europe, Brazil, and the Middle East expose us to risks arising from operating in international markets.

businesses acquired or operational capabilities established outside the U.S.

transactions that could be beneficial to us or our other investors.

preventative measures and believe that cyber-attacks and threats against us have occurred in the past and are likely to continue in the future.

• manage overhead expenses and maintain operating efficiencies;

• identify and complete strategic acquisitions in complementary market segments.

incur substantial expenses establishing new facilities and operations, acquiring buyers and sellers, and implementing shared services capabilities in international markets.