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Copart, Inc. (CPRT) CEO Jayson Adair on Q4 2019 Results - Earnings Call Transcript

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About: Copart, Inc. (CPRT)
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Earning Call Audio

Copart, Inc. (NASDAQ:CPRT) Q4 2019 Earnings Conference Call September 5, 2019 11:00 AM ET

Company Participants

Jayson Adair - CEO

Jeffrey Liaw - CFO

Conference Call Participants

Robert Labick - CJS Securities

Craig Kennison - Robert W. Baird & Co.

Bret Jordan - Jefferies

Daniel Imbro - Stephens Inc.

Ryan Brinkman - JPMorgan

Chris Bottiglieri - Wolfe Research

Derek Glynn - Consumer Edge Research

Operator

Good day everyone and welcome to the Copart Incorporated Fourth Quarter Fiscal 2019 Earnings Call. Just a reminder, today's conference is being recorded. For opening remarks and introductions, I would like to turn the call over to Mr. Jay Adair, Chief Executive Officer of Copart Incorporated. Please go ahead, sir.

Jayson Adair

Thank you, Jonathan. Good morning everyone and welcome to the fourth quarter earnings call for Copart. Before I start, I will turn it over to Jeff Liaw for opening remarks and then I'll give you some commentary, turn it back to Jeff for an update and then we'll open it up for Q&A.

With that let me turn over to Jeff.

Jeffrey Liaw

Perfect. Thanks, Jay. I'll start with our Safe Harbor. During today's call, we'll discuss certain non-GAAP measures, including non-GAAP net income per diluted common share, which includes adjustments to reverse the effect of the impact of income taxes on the deemed repatriation of foreign earnings, net of deferred tax charges, certain discrete income tax items, disposals of non-operating assets, impairment of long-lived assets, acquisition related fees and integration charges, reserves for legacy sales tax liabilities, foreign currency related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises and the effect on common equivalent shares from ASU 2016-09. We've provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures on our website under the Investor Relations link and in our press release issued yesterday.

We believe the presentation of these non-GAAP measures together with our corresponding GAAP measures is relevant in assessing Copart's business trends and financial performance. We analyze our results on both the GAAP and non-GAAP basis described above. In addition, this call contains forward-looking statements within the meaning of federal securities laws, which are subject to substantial risks and uncertainties that could cause actual results to differ materially from those projected or implied by our statements and comments. We do not undertake to update any forward-looking statements that may be made from time-to-time on our behalf. For a more complete discussion of the risks that could affect our business, please review the management's discussion and analysis portions in our related periodic reports filed with the SEC.

Now, I'll turn our attention to the fourth quarter of fiscal '19 for Copart. We are pleased with our results in booking a record fourth quarter in revenue, gross profit and operating income. Our global worldwide revenue grew 20.8% year-over-year for the fourth quarter despite unfavorable currency effects of $3.9 million or thereabouts from foreign operations, primarily due to strength in the US dollar versus the pound. Our US revenue grew at 21%, international revenue grew at 20%. Global service revenue and purchased car revenue were similar for the quarter with global service revenue growing at 20.1% and purchased car revenue growing at 25.4%, slightly outpacing service revenue.

On unit sales, we grew worldwide 7.1% year-over-year with US unit growth of 7.3% and international unit growth [Technical Difficulty] United States our growth is driven both by our insurance customers as well as our non-insurance customers. On the matter of organic growth within the insurance world, we believe the long-term trends in favor of rising total loss frequency continues. Repairing vehicles is becoming relatively less attractive with repair costs rising from vehicle complexity and labor inflation, while at the same time totaling vehicles is becoming relatively more attractive with more buyers for these damaged cars and rising selling prices as a result [indiscernible] few minutes. We also continue to grow our non-insurance business as well.

Non-insurance volume represents north of 24% of our total US volume sold. In that non-insurance segments, we generally include franchise and independent auto dealers, finance and leasing companies, fleets, charities, equipment dealers and wholesalers. We attribute growth in non-insurance to our increased marketing, sales and operational focus and of course our auction liquidity and returns most of all. We grew global inventory for the quarter at 18.4%, with US inventory growing 19.8% and international inventory growing 9.8%. Inventory growth was driven by factors, similar to the ones that I described a moment ago for units trends. We grew gross profit from $188.4 million to $242.6 million or approximately 29% increase year-over-year. Our gross margin rate increased from 41.9% to 44.7%, an increase of 280 basis points. This is partially attributable to lapping elevated depreciation from a year ago and also partially attributable to rising average selling prices for our vehicles. International gross margins declined slightly from 28.9% to 25.5%, largely attributable to purchased car activity in Germany.

I'll turn now to average selling prices within the United States for Copart auctions, which rose 8.1% year-over-year for the fourth quarter. This has been a continuation of a trend now for years, a reflection in our business of more bidders -- more international bidders and therefore improved auction liquidity as well as increasing mix of newer less damaged cars. International bidding and buying activity are in turn the reflection of our proactive marketing efforts as well as the effectiveness of our all digital auction platform VB3. The outcome is have more bids per unit and therefore superior selling prices for our customers as well. And in fact our ASPs continue to outpace meaningfully the various used car indices, such as the Manheim Used Car Price Index. As you know, rising ASPs of course then cycles back to our unit growth drivers as well with repair cost rising, but the proceeds for total loss units increasing at the same time, the total loss path becomes relatively more compelling economically.

I'll turn now to our general and administrative expenditures, ex-stock comp and depreciation, G&A is down from $42.8 million a year ago to $39.8 million for the quarter. As we say almost every quarter, our G&A expenditures will fluctuate and they will generally grow over time, but we continue to believe we can achieve operating leverage, given the top line growth we've experienced. As with all trended data in our business gross margins, G&A unit sales inventory changes etc., we encourage you to review longer-dated trend lines rather than single quarter metrics for a more accurate view of the business.

Our GAAP operating income grew from $134.8 million to $192.8, or 43% year-over-year. This is despite currency effect of a negative $1.1 million in comparison to the fourth quarter of 2018. Well note again that in operating income this increase reflects in part the elevated depreciation levels from a year ago. Our net interest expense was nearly flat, up from $4 million to $4.3 million, primarily due to less interest income from lower cash balances at year-end, the product in parts of our share buybacks over the course of the year. Other expense of $1.5 million was largely attributable to non-recurring losses from our share of an equity method investment.

Then on taxes, our fourth quarter income tax rate of 17.9% is a reflection of a lower US federal tax rate. As we've discussed on prior calls of 21% or thereabouts, as well as onetime benefits from stock option exercises and discrete income tax items. The onetime benefit from those stock option exercises has been reflected in our non-GAAP reconciliation, which is included in our earnings release. GAAP net income then increased from $109.7 million a year ago in the fourth quarter to $153.5 million this year or an increase of approximately 40%. Our non-GAAP net income increased from [indiscernible] or growth of 39% is again adjusted for certain excess tax deductions for stock option exercises and related payroll taxes, as well as certain legacy sales tax liability reserves. Finally, on the balance sheet and cash flow, before I turn it back to Jay. We finished the quarter with $186.3 million in cash on our books and a little north of $200 million in net debt. We generated operating cash flow for the quarter of $193 million with capex of $114.5 million, more than 90% of which was attributable to capacity expansion and lease buyouts. We continue our efforts to invest in land, to purchase and develop lands to meet both current and prospective demand for our services.

With that, I'll turn it back to Jay.

Jayson Adair

Thank you, Jeff. Good morning again. In this quarter, not only is the fourth quarter for fiscal 2019, but it is the last quarter of the decade and a quarter that is a milestone being 25 years since we went public. Copart went public on March 17, 1994 and I literally remember it like yesterday going into New York City for the first time. We crisscrossed back and forth bidding with investors, pitching Copart and two weeks later we were in the World Trade Center building, must have been up about 104. I know it was the highest I've ever been in the building, and I know it was the highest I'd ever felt in my life is a pretty incredible time. And they were yelling Copart on the floor, people were screaming the name out and screening a lot of other things that you wouldn't do today, times have changed a lot, but it was one of the most memorable and emotional experiences I ever had in my life.

We were set. That's how I look at it. Copart now is public. We paid off our debt. We have currency to go buy companies and we IPO'ed that day at $0.50 a share. We closed that day up about 15% based on my memory, which was quite a pop in the stock. So it's quite a bit of demand for the Company. And we closed the year 25 years ago, yes, I had to look it up, because that's one thing I don't remember. We closed the year with revenues of $22.8 million as a Company and operating income for the year of $4.1 million. And we set off and we grew and we've bought companies and we've built a network and in 1996 we reserve this thing called copart.com and we weren't really sure what the Internet was, but we thought it was pretty cool.

And we, from that point on, really focused on all the things we can do at Copart and Copart.com. In 1998, we launched Internet bidding. It was the first of its kind. Willis and I were in San Francisco at an auction called Butterfield and Butterfield, and we saw people sitting at a desk on the phone, raising their hand and bidding against the live auction there. And we had seen that in our business with contract buyers, but in this case, these people were on the phone with the actual end buyer's and that's really where the idea came from and we thought why couldn't we allow people to submit bids over the Internet and then we will wrap those bids at auction. It hadn't been done in the whole car world, it hadn't been done in the salvage world. It was a brand new concept.

We rolled it out in August of 1998 and from March of 1994 to August of '98, the stock has tripled and we are pretty proud of our success in terms of what the Company has done in terms of growth and in terms of what we've seen in our stock price, but we really wanted to innovate. We wanted to change the way the cars were sold. In those days, it was 100% live auction. And so now we are introducing this Internet experience, but you really had to physically be at the auction to see the car and then submit the bid online. So in 1999, we started putting images online and that was another first for the industry and we've chose five. I'd like to tell you there was some kind of thought process behind it, but there is four corners on the car and an interior shot and that was it. So we put five images of every vehicle online and continued thinking about ways to improve the experience for our customers.

By 2003 and clearly, we were ahead of our time in terms of really pushing towards a digital platform and towards an online platform. But by 2003, we rolled out and tested our virtual bidding technology and it was June 23, 2003 in Bakersfield, California. We chose Bakersfield because it was a smallest store [ph] we had in the Company and we're going to test it, but test it in a small environment and see how it does or said it out, and what we saw in that sale is the strongest returns out of the whole year, it's a biweekly auction. So it's probably about 12 or 13 auctions so far that year and it was the highest return, we've ever seen as a Company in that location.

So we had to roll another sight, we chose Syracuse, New York because it's on the other side of the country, because it was also small site and it was a completely different experience and we saw the exact same results. Within six months Copart would roll the whole Company to virtual bidding technology to VB2. It was our second generation of virtual bidding technology, hence the name. And from there we would see returns just continue to increase and they would increase -- and they would increase all the way to 2008. And anybody who lived through 2008 in the business world knows what happened next. And so after the financial crisis, Copart had a decision. What do we want to do and we chose to double down. We double down on our expansions going international, expanding into the UK and eventually Germany and Spain and Brazil and the Middle East, Canada and another -- a number of other locations that we went into or that we opened up internationally.

And then we also doubled down on our marketing efforts and this was really the first time the Copart had taken an aggressive marketing stance. We started with NASCAR, with NHRA and with television SPEED Channel and ESPN2 and a number of other methods. That would evolve from that point on into a massive social media platform that we dominate today, whether it's Twitter, Facebook, YouTube. There are a number of channels where people have over 1 million followers and they talk about nothing, but Copart on their channel, buying cars, fixing cars and how they love to do business and to work with Copart, buying cars at Copart and bill [ph] cars we sell them. While this was happening, technology started to go into cars at a rapid rate. The interesting thing about 2019 is today, you can buy Kia that has everything from lane assist, adaptive cruise, adaptive headlights, every single thing you'd expect on the Mercedes-Benz, except the interesting part is back in 2009 none of those things existed on Mercedes-Benz.

So what we saw over the last 10 years is where the top car that you could buy in American had none of that technology and average car in America is standard with that type of technology. We saw that trend starting about five years ago and we kicked off a program called 2020. This allowed us to expand our network, expand our locations and start to get really prepared for the volume that we knew was going to be coming in. Many of you followed the Company for a long time know that we also doubled down by acquiring a bunch of the Company back doing stock repurchases, but to me what's more important is how we operated the business. We focused on the marketing efforts to build ultimate demand for the product we're selling, to have room for all the vehicles through our expansive network of locations.

And if you combine those two, you achieve record ASPs, achieve record volumes, achieve -- you achieve record successes. So I'm very excited about what has happened in the last 25 years. How could I not be. For a kid that went to New York City for the first time and looked up, I couldn't believe it. I just could not believe -- couldn't believe what I saw, it was that incredible. I have never been emotional, but it was a really, really incredible experience and to be sitting here today and looking at the Company, this has gone from just over $20 billion a year in revenue -- $20 million a year in revenue to a Company that has broke to $2 billion revenue number, it's damn impressive.

We have over 7,000 people that make up Copart. They were led by the best people in the world at what they do. The team that we have built over the last 25 years are amazing. That's why we've seen the kind of results we've seen. I've never seen Copart -- in all my years never seen Copart in a better position, in a better opportunity to seize the future. With Will Franklin at my side and Jeff Liaw, as our President and with the rest of the team in the 7,000 people that make up Copart, I'm enormously excited. I can't say that I'm enormously excited about what we're going to do in 2020, but I'm enormously excited about what we're going to do for the next 10 years. I was going to speak first, but Jeff was on a roll. So, I was going to turn it over to our new President. But now, I'll turn it over to questions.

So with that Jonathan, if you'd open it up for questions that would be great.

Question-and-Answer Session

Operator

[Operator Instructions] We'll take our first question from Bob Labick of CJS Securities.

Robert Labick

Good morning of Bob Labick from CJS. First congratulations to Jay to you and to Copart on 25 great years and then congratulations to Jeff and to Will on their new roles as well.

Jayson Adair

Thank you, Bob.

Jeffrey Liaw

Thank you, Bob.

Robert Labick

Excited for you guys. So one question I wanted to start with, you've said for several quarters and mentioned it -- I think you mentioned it today Jeff. I'm not 100% sure, what you've been saying it for several quarters that you've been winning share in the US, and I just was hoping you could discuss what's going on? What are you doing differently to gain the share? What are your key selling points with customers and how do you continue to show this strong growth in share gain?

Jeffrey Liaw

A good question, Bob. And I think we generally don't comment on individual accounts. But if you look at multiple quarters, multiple years really, I think it becomes self-evident that we have grown faster than the industry overall and the reasons we think are many folds. A handful that I'll describe here, but certainly auction returns, the economic proposition we offer is first and foremost, you heard us both talk about our technology platform, member recruitment equivalent marketing and so forth, which drives superlative auction results, which ultimately drives unit volumes and account wins in our favor. We, as you know from prior calls pride ourselves on security and service as well, both in the ordinary course of business. There are a number of details that I want to drag you through, but when we talk about operational performance with our customers what that means, I think is in many fold experience with Copart and then of course we also take pride in our superior service in catastrophic events as well. So depending on where you are in storm cycles, economic cycles, etc., certainly, different customers have different priorities, but we work day and night to deliver excellent results on all those dimensions.

Robert Labick

Got it, great. And then on the ASP side you've had obviously terrific results. I was hoping maybe you could break it down a little bit. Is it, both in terms of the insurance ASPs and non-insurance growing, or is it just a mix towards non-insurance? And if it's both are growing within insurance is it like-for-like growth, meaning if you have like a 10-year-old car with 150,000 miles, this year, are you getting a higher ASP than you did a year ago? Just any color on the ASP growth would be great?

Jeffrey Liaw

To answer your question technically is difficult because there is no -- it is not like for like right, meaning a 10-year-old car today is not the same as a 10-year-old car a year ago and that's one of the drivers thought change. But, yes what we're describing is not just mix shift from insurance to non-insurance. It is also like for like increases and the selling prices of insurance vehicles. So I think the answer to your question is yes, they are both increases in the 10-year-old car as well as an increasing mix of newer cars within the insurance world as well.

Robert Labick

Got it. Great, thank you. And then last one quickly, I think last quarter we talked about Germany and building out the distribution kind of network within the country before flipping insurance companies. Can you talk about your latest thoughts and hurdles to getting that market to Copart style?

Jeffrey Liaw

Certainly, I think we have continued to invest in Germany. We've experienced strong growth in both our traditional listing service business, as well as the Copart style -- Copart model auctions that we're running in Germany. We continue to invest in land member recruitment, seller sales efforts and so forth. So the progress continues there. We continue to believe the economic proposition is compelling [Technical Difficulty] Bob, where we got into retail, I think the story is still very much holds from there.

Robert Labick

Congratulations again on all of the things we've just discussed and thank you.

Jayson Adair

Thanks, Bob.

Jeffrey Liaw

Thanks, Bob.

Operator

Thank you. We'll take our next question from Craig Kennison of Baird.

Craig Kennison

Good morning. Thanks for taking my questions. And again congratulations on all those fronts. I wanted to ask about hurricane Dorian and in general, you're hurricane preparation this season. What have you done to prepare for Dorian and as that moves up the coast and maybe doesn't track towards Florida, but threatens other states? How has your response evolved?

Jeffrey Liaw

Thanks, Craig. Copart started on getting experience. I would say in super storms back in 2005. Sure, we dealt with storms prior to that, but 2005 is really the eye opener. Following that would be Sandy and Harvey. And today, we've got an amazing team that is just dedicated to cat. We got land dedicated to cat and we've got equipment dedicated to cat. So I can get into all the details when we just say that's we're prepared and we're ready across the Eastern seaboard. So whether the hurricane was going to impact Miami or whether it's going to impact New York, we've got the people, the equipment and the land in place and ready to go to serve our customers. So we're good.

Craig Kennison

Good, and thank you. And I'm assuming you have no exposure to the Bahamas?

Jeffrey Liaw

No, none.

Craig Kennison

Okay. And then, Jay, maybe in the spirit of long-term thinking, based on your comments, could you just talk about the sharing economy and what that means for Copart? You've got potentially a major shift in car ownership from individuals to fleets. How do you think that plays out for Copart and was that a big trend? Are you looking towards other big trends as you look at the next quarter century?

Jayson Adair

Well, if we go back maybe five-ish years on these earnings calls. I remember, making a comment that I didn't believe autonomous driving was going to be at the level that everybody was predicting back in those days. And in fact, we actually -- as I said on the opening call, we doubled down on our belief and started acquiring quite a bit of Copart stock because, I think it was just a general belief at that time that volumes would shrink over time not increase. The -- I could get into all of the sharing economy and I could sum it up with a bunch of examples and analogies. But there is nothing practical about buying a Mercedes-Benz or a BMW or any luxury car. It's a personal choice.

There's nothing practical about living in a large home and most of America today, while could live in a much smaller home, chooses a larger home because it's convenient and that's nice. Cars are the same way. I think your personal and while there will be some sharing involved, just like there is some Uber involved, I think for the most part when it's convenient, it's not always convenient in New York City to own a car, but what's convenient in most of America to own a car, I think you'll see that. So I'm of the belief putting that aside, that we're going to see increased volume just as an industry regardless of market share wins, the Copart has had, you're going to see increased volume, because the market just going to continue to grow because the trend that's most important is technology, being put into cars, that's not going to stop. People love technology and they love additional technology going in the cars and that will cause cars to be tougher to repair 10 years from now and those vehicles will be more likely to be written off as a total loss and repaired. So I think the trend of volumes going to continue to increase.

Jeffrey Liaw

Craig, I'm just going to jump in and add a little -- a little further, and as you might imagine, we spent a lot of energy tracking technologies changes in behavior, ride sharing and the like, because we do make long-term multiple decades investments in land and technology, etcetera, to support our business. So we very much need to understand it. And at the risk of being pedantic, I think I'd drag this back to the basic algebra of what drives unit volume for Copart and that is vehicle miles traveled, accident frequency and then total loss frequency and then I ask myself what is ride sharing need for each of them.

Ride sharing I think for miles traveled almost certainly will drive up the number of miles on the road today. I've seen consulting studies that indicate that every mile of self-driving is replaced by 2.8 miles of ride sharing miles instead that may be bullish, but the point is that almost certainly we have reduced the friction for driving. It's easier now to drive after a couple of drinks, easier for younger or older people to get in the car as well. Vehicle miles will rise. Accident frequency, I think all else equal, I think it's likely neutral. I don't think that Uber and [indiscernible] drivers are systematically superior drivers than the rest of us, you may be more bullish on that front than I am.

And then lastly, total loss frequency Ride sharing I think I've no effect here. Total loss frequency has been the one way tailwind for the past 50 years in the business. In 1980 total loss frequency was 4% or thereabouts, today it's more than 5% [ph]. So to me, that is -- those are the individual drivers, the vehicle miles traveled and loss frequency almost certainly will continue to move in our favor, accident frequency, you'll form your own point of view as to how much of the growth in the other two is offset by accident frequency. But in the aggregate, I don't think ride sharing changes the calculus for our business.

Craig Kennison

Great, well congratulations to everybody. Thank you.

Jayson Adair

Thanks, Craig.

Operator

Thank you. We'll take our next question from Bret Jordan of Jefferies.

Bret Jordan

Hey, good morning guys.

Jeffrey Liaw

Hey, Bret.

Jayson Adair

Good morning.

Bret Jordan

And congratulations. Jeff, the question on scrap rate; I do feel that maybe, is there an upper bound on the percentage of crash is that total -- what point the insurance companies no longer see the benefit of totaling, even if the repair cost is higher? I think we're at the high-teens now and is there a number you see that getting to in the next three to five years?

Jeffrey Liaw

Bret in short, no. I think you mixed a few things in there that I will try to piece apart. One, you made a comment about scrap rates, which are clearly lower and more than 20% down year-over-year. We used to have that in our script every quarter. We literally didn't even include this year. So I think it's increasingly irrelevant for our business. Our cars as you know, some are sold for parts, many are sold to be rebuilt and repaired, many go overseas for both purposes and therefore the actual metal content in the car is less and less relevant for our fundamental business.

Bret Jordan

Jeff, my second question; I should have said total rates as opposed to scrap, that option to the total car as opposed to repair?

Jeffrey Liaw

I think in a vacuum that question may be reasonable, which is to say, what if -- in other words, if I were to say to you hypothetically what if total crash cars -- total loss cars were to multiply by five-fold. Will you get to the point where it doesn't make any economic sense to total anymore. All else equal, I think the answer might have been, yes. But if I told you, total loss vehicles can grow by five-fold, while selling prices for those total cars keep rising and substantially so, then I think the problem is solved, right. If there were a finite demand, a fixed demand for that supply of vehicles I think the answer is yes. I think we have proven especially over the past three years that demand is very much not finite. With that global buyer base for rest of US and UK and Canadian cars etc., is robust and growing.

Bret Jordan

Okay, great. And then a follow-up on the land of purchase. You commented in the prepared remarks and then you also commented in Germany. Could you talk about what your acreage add in '19 was and maybe what you see acreage expectations for '20 or maybe I'm sort of on an average go-forward basis?

Jeffrey Liaw

We generally don't provide that Brett and for a multitude of reasons including that the gross number of acres is actually not all that informative, but -- because the land is not fungible. So what you have in Florida is not relevant to what you have in Texas and California and so forth. So we don't provide that level of details, I think it's almost misleading in it's precision. But I think the punch line is, we invested very meaningfully in land in fiscal 2019. We don't see that trend abating anytime soon.

Bret Jordan

Okay, great. Thank you.

Operator

Thank you. We'll take our next question from Daniel Imbro of Stephens.

Daniel Imbro

Good morning, guys. I add my congratulations to the list and thanks for taking my questions. What is there on the non-insurance business? I know you've talked about this in recent quarters, but your language seems to be getting more positive. And Jeff, I think you mentioned it was up to 24% of volume. Could you talk about or update us on your strategic approach to the business? I mean do you foresee that becoming a much larger portion of your volume going forward? And on the margin, where are you winning these units from? Where are they going today that you're taking the units? Thanks.

Jeffrey Liaw

Thanks for your question, Dan. In short, I think I get that question a fair bit when I'm on the road as to whether, it will grow as a mix of our overall business. And I think what I'd tell you fundamentally, that's not really how we think about running the business. We want to grow our insurance business and we want to grow our non-insurance dealer business, equipment dealers, wholesalers that the entire universe of customers we want to grow. So whether one [indiscernible] even a given year or 5-year period is quote outgrowing the other is less relevant to us and the fact that we want to continue to pursue and grow our business there. I think you heard me briefly allude to the economic proposition and the value proposition, we offer these sellers in the non-insurance universe. I think again, first and foremost is a massive liquid digital auction platform that will yield full and fair values to them, that hard stuff is the most important thing by far. Beyond that of course is the service and the sales force and the marketing efforts that we have underway to pursue and win those customers. I think we win that business from a multitude of different places. From the dealer world, some of those folks may well floor and sell the cars directly themselves and -- look to the large whole care option, others look to newer, modern digital apps C2C, B2C, B2B and otherwise, to which to dispose the vehicles. So there is no doubt, it's a competitive universe. I think our growth in the past few years is a reflection of our success in our, both our marketing efforts, but ultimately the auction platform itself and the price that yield.

Daniel Imbro

That's really helpful, thanks. And then touching on the you mentioned I think during your remarks, I think the inventory was up over 18% than the quarter, that's much higher than last quarter and kind of less view. I know that it can move quarter-to-quarter due to timing, but did we see anything accelerate during the quarter that led to such a strong inventory build or was that just a timing issue or a comparison issue that led to that big number?

Jeffrey Liaw

I think the inventory growth, as you know from having followed us for a while is the best, but also still imperfect indicator of unit volume for the next quarter or two or three, is certainly is an indication of strong growth in the business and that's how I would interpret it. I would again reiterate that in looking at any of these measures, we look at multiple quarters at a time, not an individual data point that's literally one day July 31, 2019 versus July 31 2018. But nonetheless, that growth rate is not accidental, it is a reflection of both growing market volumes, account wins and growth in our business.

Daniel Imbro

Perfect. And then last one for me. Just touching on international growth. I think you guys mentioned it was about 6% on the unit side, again, I know it can be noisy quarter, but it is a step down from, call it four quarters in a row of double-digit growth. Is there anything that changed there? Any market there -- any -- did any specific markets weaken or soften through the quarter? Thanks.

Jeffrey Liaw

There is no -- no particular sustained to change that -- is reflected in that number. So I'll be internally consistent and tell you in both directions that a single quarter indicator is not the best and most reliable indicator for the business.

Daniel Imbro

Perfect. Thanks so much best of luck guys.

Jeffrey Liaw

Thanks, Dan.

Operator

Thank you. We'll take our next question from Ryan Brinkman of JPMorgan.

Ryan Brinkman

Hi, thanks for taking my question. Just curious if you've thought about entering the portion of the dealer-to-dealer whole car market that is not physical, but entirely software related. So for example, similar to KAR Auction Services, TradeRev business or ACV Auctions. Well, I think whole car has not been a strong focus for you. I know you're technology platform is highly regarded in the industry and just wondering if maybe there is a way to leverage that an asset light way and then perhaps more generally, following on the earlier question you know if you could elaborate on which parts of the non-insurance market do you consider to be in your addressable market?

Jeffrey Liaw

Got it. First, on the all-digital question; I think for us we're always exploring ways to better serve our sellers and buyers and that's certainly one of the paths that we consider and evaluate on an ongoing basis. I think I would note, there are folks who are investing very heavily quite literally losing money and spending cash in on those pathways. While we continue to generate very positive returns on our auction platform. So the overall value proposition for Copart against the backdrop of -- in some cases venture-backed businesses and so forth, continues to grow very well, meaningfully faster than the used car market overall. So I think it's a reflection, at least in part that the Copart auction platform is succeeding in that world as it is, to your second question about the addressable universe. I don't know that we'd exclude anyone. I think there are folks who are more target rich than others, but these are leasing companies, fleets, dealers, independent franchise. So I think anyone with the vehicle to sell, we consider fair game for Copart.

Ryan Brinkman

Okay, great. That's very helpful, thanks. And then just my last question, I was curious if you thought that there might be any change to the competitive environment now that your primary competitor in the US, IAA is standalone business. There has been some speculation that they might wish to more closely emulate Copart strategy. I don't know with regard to investing in different areas, including internationally. Just curious if you have any thoughts on that?

Jeffrey Liaw

I think almost certainly a better question for them.

Ryan Brinkman

Got it. Okay, thank you very much.

Jeffrey Liaw

Thank you.

Operator

Thank you. We'll take our next question from Chris Bottiglieri of Wolfe Research.

Chris Bottiglieri

Thanks for taking the question. Jay, I don't think I've ever heard a more cash in earnings call. Is this mostly from hitting the milestones and some of the significant promotions that were up last night or is there something the business is [indiscernible] of inflictive, but as you very impassioned is frankly looking at the fundamentals, this is the best insurance unit volume that we've seen in quite some time in exit rate, in terms of inventory growth. I was just curious like what's behind this enthusiasm? Thank you.

Jayson Adair

We're doing very well right now. There is no question about that. But I felt I should at least tell some of the story of the last 25 years and I promise, not to -- to get the [indiscernible] as the woman on coffee talk does. But when I look back in my head and think about going to New York for the first time, seeing the process and how you take the company public and watching Willis gives his feel to the investment community 10 times a day for two weeks and then to hear that Copart being yelled and screamed and sworn across the floor. I thought it was just a story that had to be told. It's something we talk about sometimes internally, but I think the investment community may not really appreciate the humble beginnings of this Company and what this Company has achieved and the people that make up this Company and how incredible they are.

So it's just that -- yes, we're doing well right now, but it's just that, I try not to get emotional sometimes, but it happens and in that case it happened. I guess may be reflecting back in my mind, Willis having a conversation with Willy Weinstein [ph] and us getting ready to open up on the floor, the next thing you know they're screening Copart and there is a bottle of champagne and everybody's taking a sip at 10 o'clock in the morning or 9 o'clock in the morning, whenever the hell the Street opens up, but you know that just -- that was just such a great memory and so it's a once in a lifetime I think. And Copart over the years was viewed as -- Oh, Jezz, you guys have tripled the stock now. Oh, Jezz, you guys have six times the stock now. And I don't know what the stock is trading at today, but at $0.50 a share, if it's [indiscernible] bucks we've 160 times the stock and the future for me has never been brighter.

I've never seen the market share gains that we are seeing right now and in the history of the Company, I've never seen the kind of volume that's coming in from a market share win and I've never seen the kind of organic growth because of the technology and cars and I've never seen us operate at such a high level in terms of delivering on the service. So that's it in the nutshell.

Chris Bottiglieri

No, that's awesome, that's really helpful. And then I wanted to ask maybe bigger picture, long-term question. Do you think like some of this accident avoidance technology fears over blown for your industry, specifically at least near term anyway. Like I wonder if -- like the accident frequency is more prone to low-speed accidents so what's actually left that is in accident is more likely to be totaled, have you looked at that at all in terms of figuring out like that impact it has had?

Jayson Adair

Let me make this two parts. Let me turn it over to Jeff after I make this comment. This will give you a -- I think a more precise response or answer to it. Will Franklin [ph] coined the term risk homeostasis. And I think it makes a lot of sense and that is that if you've got auto breaking or you've got adaptive cruise or you've got lane assist and or the car literally drives itself down the road, keeping in the lane, you just got to keep your hands on the wheel, I think those are technologies that allow you to take more risk. Hence the term risk homeostasis. I think it causes people to be distracted more and in some ways, makes the car no more safe.

I would as a recipient of damaged cars, I would like to see people drive safely and that at the end of the day is most important, but when you have technology on cars that allow you to be less engaged, people don't multitask well. You're either good at driving the car on you're good at not driving the car and being a passenger. But to drive the car and not fully focus on the car in front of you, the car that's in the line next year because you've got technology to this issue. I don't think it's the best idea. For me personally, I shuttle that stuff off in my cars. I go and hit all the buttons. I don't have any of that stuff working when I drive. I don't want to trying to keep me in my lane, I don't want any of that. On the flip side, when the car does get in a wreck, all that technology has to replaced, that raise the cost of repair, increases total losses. So that's my take. I'll turn to Jeff.

Jeffrey Liaw

Chris, what I was going to add is that I think it can be true. I think, which you're alluding to is not simply the one metric measure of accident frequency, but also potentially reduce the severity as well. And I think the answer to that is yes. You could see less physical severity in an accident, so to speak. But I think by the way, if you went back and looked, so if you go back in 10-year increments and take a picture of a borderline salvaged car, total loss car, that car has changed a lot in the last 50 years. 50 years ago, the car with obliterated. It was hammered barely recognizable the vehicle. Today a car that is mildly hit from the rear or the front, can easily be totaled by virtue of the technology you just described. Accident detection and avoidance systems are effectively high value, no generic available sensors on the perimeter of a car. There is a lane departure sensors in the mirrors, the cameras and [indiscernible] in the front and rear bumpers, those are technologies that are expensive to repair, literally for the parts themselves as well as the skill required to install and calibrate them. So while the physical severity may decrease. I think the economic severity is unlikely to be. The cost of repair, we don't think it is going down anytime soon. And I think there is decades worth of evidence to suggest that's true.

Chris Bottiglieri

Got you. So, that's really helpful. And thanks for the type of thoughts.

Jeffrey Liaw

Thank you.

Operator

Thank you. [Operator Instructions] We'll take our next question from Derek Glynn of Consumer Edge Research.

Derek Glynn

Good morning and thanks for taking my questions. I just wanted to follow up on ASPs, up 8% in the US, still a strong number, but also decelerating from prior quarters. Are there any cause or factors in particular that is causing that rate of change to be a little bit lower than prior periods?

Jeffrey Liaw

No, not particularly. I think that ASP number is meaningfully is still growing meaningfully more than the used car market in general, meaningfully more than the ACV, or the pre-accident value, so to speak of the cars that are being consigned through us. So I don't think it's a reflection of any particular change.

Derek Glynn

Okay, I understood. And then, Jay, you talked a lot about the marketing efforts of the Company historically. Just curious how you see that marketing program and message unfolding or evolving in the future, particularly as you expand further into international markets?

Jayson Adair

Well, let me start with this. For 16 years, we've had data that nobody else in the industry has because every single bid goes through the Internet. We've got every single high bid, every single second high bid, what we call a push bid, every single bid on that vehicle. So we can see that what customers are looking for, it's analogous to Amazon. If you are looking at an iPhone or iPods or something of that nature on the site and you don't buy it, they know, you were looking, they know you're interested. They know that you may actually want cords [ph] some other features. So we have the same ability because they look at every single vehicle and bid online, it allows us to tailor the technology towards pushing vehicles to them. In the old days, we used to say buyer comes to the yard and looks at the car and has to find it. We put it online, buyers can go online and find it, but we've taken down the travel friction.

But we haven't taken down the friction of finding and now we find it for you. So if you're online, we're going to very quickly be able to tailor the types of vehicles that you're looking for and what you want. So that's one massive component. The other component I talked about already as a social media piece, we've really been able to create a buzz around the amazing product and the technology the Copart has. And so that when you think about -- you put both of those together, it allows you to create an enormous demand for the cars like Will -- like Jeff said, we're not thinking about scrap prices today, that vehicles are much different and the demand on the vehicles is much different than it was 10 years ago. So it's really change that -- from that standpoint. Then when we think internationally, these trends are happening in Germany, in the UK and other big markets that we're active in. And so we're leveraging knowledge across multiple markets, which is a wonderful thing, and different maybe then Walmart is in the US and Walmart has ASDA in the UK.

I don't know if someone who buys at ASDA in the UK is going to buy something in the U.S. With Copart there is a cross-pollination of buyer base, where buyers that are looking at product in the UK may go online and find that Harley, they were looking for in the U.S. and then -- and then bid on it. So there is a fair amount of that that exists across the -- I give that example, but there's a fair amount of that it exist across Polish buyers buying in the UK, become aware of Copart, start to bid in the U.S. that kind of thing. So it's -- that's why you see so much focus from Jeff on talking about international bidding and the rest, because it's a very different game than it was 10 years ago when scrap prices mattered.

Derek Glynn

Got all the commentary.

Jeffrey Liaw

All right, thank you.

Operator

Thank you. At this time there are no further questions in the queue. I would like to turn the floor back over to Mr. Jay Adair for closing remarks.

Jayson Adair

Okay. Thank you, Jonathan. I appreciate everybody for coming to the call. We look forward to reporting on Q1, and we'll talk to you then. Thanks so much. Bye, bye.

Operator

Ladies and gentlemen, thank you for your participation, this concludes today's conference. Have a great rest of your day.