Q2 2022 Copart Inc Earnings Call
Greetings, please standby good day, everyone and welcome to the co part incorporated second quarter fiscal 2022 earnings call.
Just a reminder, today's conference is being recorded.
For opening remarks, I would like to turn the call over to Mr. John North Chief Financial Officer of corporate incorporated. Please go ahead Sir.
During today's call, we'll discuss certain non-GAAP measures, which include adjustments to reverse a payroll tax benefits related to accounting for stock option exercises and certain discrete tax items. We 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 our 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, including the COVID-19 pandemic.
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 31, 2021, and each of our subsequent quarterly reports on Form 10-Q .
Any forward looking statements are made as of today and we have no obligation to update or revise any forward looking statements.
And so with that out of the way I'd like to turn the call over to our President Jeff <unk>.
Thanks, John Good morning, everyone. We're pleased to report a strong second quarter for fiscal 2022.
I know that over the course of our discussion today, we will naturally migrate to a discussion of near term trends such as driving patterns, new vehicle production total loss frequency cost inflation market share trends and the like but I'll start by observing that the long term fundamentals of our business are as strong as they've ever been auction liquidity and returns member recruitment and.
Our collaborative engagement with our clients day to day and in catastrophic situations and certainly our aggressive reinvestment in capacity technology and people that make all of the above a reality a quick thank you to the co par team worldwide for their efforts in making these true.
Our results in the second quarter financially were largely a continuation of what we experienced in the first quarter as we observe commerce and mobility continuing to trend back to the quote new normal which will elaborate on in greater detail accident, an assignment volumes beginning in continuing to recover and asps remaining elevated as well.
As I've done previously I'll elaborate on a handful of key themes for the quarter and John will provide additional detail and perspective as well.
Starting with our unit trends for the for the quarter, our unit sales globally increased 19% year over year with the U S increase of 21% and international increase of 9%.
Our insurance business in the U S in particular.
True over the second quarter of 2021 by 21, 5% and was also up on a two year comparison versus fiscal 2020 due to the recovery I described a moment ago as well as share gains.
Notably our unit volume has been reduced by increasing used car prices, which I will describe in greater detail momentarily.
As we noted a moment ago driving activity continues to rebound as measured across a number of different dimensions, including simply vehicle miles driven as measured by the U S Department of transportation and the U K Department of transport statistics, and gasoline consumption and a host of other statistics as well.
We note however that the character of driving has evolved as well with downtown office occupancy remaining quite low driving ease less focused at rush hour and more distributed over the course of the day.
There are a number of other phenomenon that have emerged with COVID-19, with nuanced outcomes like that one.
The next theme I tackle these total loss frequency, which for the first time in our memory. We have noted has declined sequentially from the third quarter calendar quarter of 2021 for the fourth quarter from 19, 3% to 19%.
That's of course, a very fine measure in that case, but in any case. It's the first time, we've seen a decline as opposed to.
As opposed to the long standing increases we've observed over the course of our 40 year history.
This is a reflection of the very strong used car price environment and vehicle availability used car availability, reducing assignment volume relative to what it otherwise would be.
As most of you already well know insurance companies typically compare the cost to repair a vehicle.
The difference between the pre accident value and what they can recover at an auction through co part for the damage vehicle, while our auction returns are at or near all time highs and have kept pace with used car appreciation on a percentage basis higher.
Pre accident values, certainly do reduce our volume relative to what they otherwise would have been.
As those who are following us in the industry in general we would well know there are a host of countervailing forces also working in our favor which have been incorporated into our clients' total loss decision process to varying degrees accident severity and repair costs are up we are facing and our clients are facing larger repair supplement.
<unk> repair cycle times are up parts are delayed and rentals are both longer and at higher rates than they ever have been.
We certainly look to the 40 year trend in our 40 year history of total loss frequency as the right long term perspective total loss frequency as a reminder, was 4% and 1980 and effectively 20% today, a five fold increase over the company's history.
We take that to mean that we are likely experiencing a temporary dislocation as a function of used car prices. The secular trends. We have discussed previously remain true vehicle complexity rises vehicle composition becomes less repairable substrates like of composites in aluminum, making cars more expensive to repair.
And our auction liquidity and international member base makes them ever more efficient to total instead.
We believe that as used vehicle values potentially peak and trend back to historical norms in the future. We may see some moderation in our Asps will certainly benefit from volume increases as well.
Moving to our non insurance business, we've continued to expand our market share there excluding cars as we customarily do from sources, such as wholesalers and charities our U S. Non insurance business grew on a unit basis by four 5% driven in part by growth in our co part direct business as well as consignments from rental fleets.
Financial institutions across our various non insurance channels. We believe our growth is a reflection of market share capture as a function in terms of our auction liquidity and returns combined with our own proactive selling efforts.
The cars, we earn the right to sell on behalf of insurance companies through our online auction platform no doubt enables to enable us to achieve superior returns for progressively more non insurance cars as well and in turn these dealer rental bank and consumer cars further contribute to our auction liquidity spinning the flywheel.
To benefit our insurance sellers as well.
Turning then to our average selling prices, we continue to experience ASP strength as previously noted worldwide, our selling prices grew 20% year over year for the quarter. The Manheim used car vehicle index is currently at record levels in January of $236 three and <unk>.
Increase of 45% year over year since the beginning of the pandemic, our selling prices frankly increased earlier, but have kept pace in the aggregate with the with the Manheim used car index.
When we look forward.
Practically we note that a variety of industry sources indicate that chip shortages will persist for 2022 and potentially well into 2023, we've seen a variety of forecasts. We are from a business perspective, certainly prepared for.
The influx of volume that may come with softening in used car prices.
With that I will hand, the call to John North.
Thanks, Jeff I'll make a few comments on our operational results.
And then we will take a few questions.
For the second quarter global revenue increased $250 million or <unk>, 46%, including a $3 million loss due to currency.
Global service revenue increased $178 5 million or 33, 5%, primarily due to higher average selling prices and increased volume.
U S service revenue grew 35, 5% and international experienced an increase of 20%.
Purchased vehicle sales increased 71, 9% or 85, two sorry purchase vehicle sales increased $31 9 million or 85, 2% due to higher Asps and increased volumes U S purchased vehicle revenue was up 84% over the prior year and international grew 87% as a result purchase vehicle gross profit.
Find has vehicle sales less cost of vehicle sales increased by $5 million overall.
Global gross profit in the second quarter increased by $95 8 million or 31% and our gross margin percentage decreased by approximately 350 basis points to 46, 5% U S margins declined from 52, 2% to 49, 4% and international margins decreased from 37, 6% to 31, 6%.
The margin decline was primarily attributable to two factors.
Approximately 150 basis points of decline is due to the mix shift from a greater proportion of purchased vehicles, which have a lower gross margin, but a similar profit per vehicle.
The balance of our margin contraction is attributable to cost inflation offset partially by higher revenue per unit.
There was a very modest impact to margin rate due to hurricane Ida as we continued to incur expenses due to the sale of vehicles confined to us from that event. Although we have now sold to approximately 85% of our assignment volume from the storm.
Remain excited by the opportunity to increase margin over time, as we add additional scale and find further operational efficiencies through technology and innovation.
I will now move to a discussion of G&A expenditures, excluding stock compensation and depreciation.
G&A spend in the quarter increased $7 million from $35 8 million a year ago to $42 $7 million. This year and increased slightly on a sequential basis from $41 1 million last quarter.
However, as a percentage of revenue.
88 basis points to four 9% compared to five 8% last year.
While G&A can be volatile from period to period, we anticipate G&A to continue to decline as a percentage of revenue as we grow our business and create additional leverage as a result, our GAAP operating income increased by 34, 5% from $258 2 million to $347 3 million.
Second quarter income tax expense was $54 6 million had a 16% effective tax rate, reflecting a $4 million tax benefit on the exercise of employee stock options and a $17 $5 million benefit associated with a discrete tax item both of which have been adjusted for purposes of the non-GAAP earnings included in our earnings release.
On a non-GAAP basis, our effective tax rate would have been 22, 2%.
Second quarter GAAP net income increased 49% from $193 million last year to $287 million this year.
Adjusted to remove the tax benefits I described a moment ago non-GAAP net income increased 39% from $191 million last year to 266 million in the second quarter of this year.
Our global inventory at the end of January increased eight 4% from last year.
This is comprised of a year over year increase of seven seven in the U S and $13 two internationally.
The increase in inventory is largely a function of accident frequency and miles driven are returning to normal as Jeff mentioned previously along with growth in our non insurance business.
Now to briefly update our liquidity and cash flow highlights.
As of January 31, 2022, we had $2 4 billion of liquidity comprised of $1 3 billion of cash and cash equivalents and an undrawn revolving credit facility.
<unk> of over $1 billion.
Under our credit facility in December of last year, increasing the size to $1 5 billion, while lowering certainties.
Operating cash flow for the quarter increased by $53 $5 million year over year to $446 5 million driven by stronger earnings.
We invested $91 5 million in capital expenditures in the quarter and approximately two thirds of this amount was attributable to capacity expansion.
We are continuing to prioritize investments in physical infrastructure and our technology platform.
We believe this continued investment creates a durable value and enabling us to serve our current and future customers more effectively.
And with that we'll conclude our prepared remarks and take a few questions.
And at this time, we will be conducting a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad.
Companies in tone will indicate your line is in the question queue you.
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 the line of.
Rob the bank with Cts CGS Securities.
Please proceed with your question.
Good morning, Thanks for taking my questions.
Hum.
Wanted to start with cost inflation as you guys talked about it a bit in the prepared remarks.
Obviously, it's not unique to co part the inflationary environment. We're in so maybe just help us understand.
The primary drivers of the cost inflation for you as it towing labor other where is it coming from and really what remedies you are looking at and the opportunity to bring back kind of cost per unit.
To prior levels, where how long do you think that might take.
Got it thanks Bob.
May be astute preamble, there that are like all enterprises frankly across all industries.
We experienced inflation, we consume a mix of third party goods and services and certainly employ a large number of team members worldwide and so we've always been subject to inflationary pressures I'd say historically on a more selective basis, whether it's health care or commodity cycles and the like today there is more widespread inflation.
<unk> our cost base overall.
You are already aware of the major costs in our business, but they do include the towing.
Personnel, certainly our technology platform as well, we have some structural protection and that as you know we own the vast majority of our land and so that cost is we already are.
Oh, and the land outright and therefore don't face inflationary pressures when it comes to rental expense to the extent that we otherwise might.
Historically speaking over any intermediate term Bob.
Always demonstrated the ability to recover or more than recover inflation in the marketplace and I don't think the expectation in this case being any different long term.
Most importantly, we also strive for productivity enhancements and improvements over time to help absorb those same inflationary pressures both before this wave.
Courtesy of COVID-19.
Otherwise.
Okay got it great and then.
Obviously, you had a lot of success in growing not just the salvage insurance cars, but beyond that to non salvage.
All our cars and whatnot.
Can you talk about I know not specific numbers per se, but the relative profitability of the gross profit per unit.
Of the salvage vehicles versus the dealer or rental or repos.
I think it's tough to provide a sweeping answer that covers all such non insurance categories.
No.
Little bit of a contrived casual basket for US there are certainly groups of those sellers as you noted a moment ago for whom the average selling price is higher than our typical insurance car and therefore the contribution.
May be higher as well and there are other categories included in that non insurance portion that are lower average selling price than our typical insurance cars. So tough tough tough to answer so on a blended basis, probably on average higher.
But distributed.
Okay, Great and then last one for me and I don't know if you guys are ready to answer this.
Yet or not if it's too early but I'll give it a shot obviously, you've recently launched cohort select.
And it's.
An attractive kind of less damaged non insurance car clean title less damaged car.
And so was just curious if you could give your initial.
Thoughts on on the launch if there's any surprises from the launch and how you think about cohorts of luck going forward.
Bob Youre always observance.
On co part select it is.
Many things we do at our auction we are.
Innovating and experimenting and attempting new.
Ways to position, our auctions and the products that our sellers consigned through US we think this kind of offering holds real promise.
So we're not yet ready to share a substantive results, but it's the.
In keeping with themes we've addressed in the past right. We you and I have been talking about these kinds of pursuing this market and these kinds of cars for years now and this is one more arrow in our quiver to tackle that marketplace.
Okay Super Good luck. Thanks, Thanks, Paul.
Our next question comes from the line of Daniel <unk> with Stephens Inc. Please proceed with your question.
Hey, good morning, guys. Thanks for taking my questions.
Yeah.
I wanted to ask one on the pricing backdrop, maybe first Jeff you made the comment.
The salvage market move faster, but in aggregate it kind of kept up with manheim.
Or are you still are confident now that we have the benefit of hindsight.
That some of the more thank you were drivers less damage total loss vehicles more improved auction liquidity, whereas big of ARPA drivers as we thought at the time or has hindsight proving that maybe that was more used car price driven than you. Initially thought you kind of understand that comment.
You're saying since March of 'twenty, or you were saying I feel like during 2020 some of the comments on the earnings calls.
Discussed that you guys saw a lot of the.
<unk>, maybe company specific drivers auction liquidity things like that.
We're a larger contributor than used car pricing, but you've cooperating with one of the inputs just trying to understand as we move further from it and gotten more data point, if youre understanding the theme or if it's changed at all.
I don't think its changed I think it's been in precise the whole time.
When we look over the very long term history I think it was secular drivers are unequivocally true that they are newer cars that are total less damaged cars that were totaled I think the auction liquidity.
When we say that those are objective measures right. Those are the number of bids that are being submitted per unit. The number of participants in a given auction et cetera et cetera. So those arent that's much more science than art in that regard.
As to precisely the trend for pricing for our cars independent demick and frankly, even the first year is dependent on it was very different from the second in terms of the supply chain and used car availability and such I think both were both were factors for sure both our proactive efforts in both the character of the cars.
We're selling as well as the used car marketplace.
That's helpful.
I wanted to ask one on the business mix you always been growing revenue much faster into purchase vehicles part of that is just the way you reflect revenue has a unit have unit also been shifting towards the purchase side.
<unk> way too to the revenue we are seeing and if so why would that be is that a change in the U S insurance market or is there something else going on there.
Not a change in the U S insurance market. There are some portions of our business, including for example cohort direct.
Channel through which we purchased cars directly from consumers.
That yes, consumers will consign cars to grow apart from time to time, but often they prefer to deal on a principal basis for a price certain from us instead, so as we grow that business that is quoted principal volume that drives growth and purchased car sales and purchase car costs, but thats. An example of what would cause it but it is not by and large.
Insurance carriers shifting back to principal they understand the merits of the consignment model and Wednesday, and we share in the upside of the highest possible returns on cars generally speaking nobody moves back to principal they moved from principal to consignment overtime.
Perfect and then maybe last one for me.
Thinking about ancillary services peers last week talked more about maybe offering transportation I'm. Just curious if you guys have looked at that I think you guys connect your buyers with transportation partners, but don't actually provide that service have you looked at that would it be ROIC accretive for you guys and maybe anywhere else you see an opportunity to add ancillary services.
As for either buyers or sellers to your platform today.
That's a perceptive question in general, which is to say that the as the.
<unk>.
Leading marketplace online Mark global online marketplace for cars in the talk that we sell there may well be untapped potential when it comes to additional services that we offer the member base I think to be fair. There is a robust ecosystem of those service providers that has emerged around co part.
As you might imagine is selling very many millions of cars a year to buyers worldwide. There is certainly our transportation service providers. There are secondary storage providers and the like that have emerged approximate to cope our yards and certainly who know many of our buyers firsthand as well. So the answer is we are always evaluating those opportunities experimenting with them.
Trialing them from time to time, they stick and we expand them. So it is it is always on our radar.
Got it that's it for me guys. Thanks, so much and best of luck. Thanks, Jamie.
Our next question comes from the line of Ryan Brinkman with Jpmorgan. Please proceed with your question Hi, Thanks for taking my question. I think you are may be reticent to discuss individual contract wins or customer relationships et cetera, but wanted to check in on the potential market share shifts.
The salvage auction industry, what do you think your market share may now be how much share you might have gained and whether there are any practical or potential regulatory limits to your share in the U S or how much more room your share could Ron and then unrelated note it would be great to get your thoughts on what has been the driver.
Youre a higher share.
There you may be competing on price or winning contracts based upon superior service level or greater ancillary services or just the net yields that sellers can realize as a result of your bigger buyer base et cetera.
Got it.
And as you might imagine Ryan I, probably can't answer the first half of your question at all.
And we don't we don't discuss individual accounts.
But certainly happy to comment on the second half of your question, which is what is it that has driven our market share capture as a general theme.
Which I would say has been true for the past 40 years, not just past few.
And as for why we would win an individual account I think the answer is.
Often unsatisfying, we a variety of things, it's not one singular theme, which I think our brains.
Prefer but certainly to articulate a few.
Auction returns are critical and that is literally how much money, we put in the pockets of our sellers we auction cars.
Which is a function of our BB three online auction technology, which we believe is the best in the industry. It's a function of our ability to recruit new members and to engage them.
The function of how quickly we can pick up the cars and reduce the advanced charges experienced by our insurance company sellers. It is a function of our streamlining the purchase experience and making it ever easier for third parties to buy cars at cohort.
It's also a function of the auction liquidity, we talked about a few times on this call.
The growth of our insurance business has helped to affect the further growth of our insurance business did one on insurance and vice versa.
A second theme I'd touch on is our approach to customer service and we think.
Long term horizon take a long term approach to problem solving on behalf of our customers.
We believe that we earn the right to sell cars for our customers with every assignment that we get and that mindset, starting with our founder Willis Johnson J, there and to me and to the new hire who starts in your dwelling tomorrow morning.
That sounds like a throwaway cultural comment, but I think it absolutely rings true to us day to day here and you would see it perhaps most pronounced in a catastrophic event. When it is all hands on deck and literally all of US are physically many of even the executive leadership on the ground, making sure that our teams are serving our.
Capably.
As one other example, we have acquired our physical land nonstop.
Since we can for the past 40 years to ensure that we have the long term ability to serve our customers that were never prisoners two.
Third parties, who who may prefer to do something else with the facility or or otherwise. So it is the combination of those two it is auction returns and the customer service mindset and having the long term horizon, which we think has yielded those benefits over the long haul.
Okay. Thanks, that's very helpful. And then just lastly for me you know, let's discuss some already the degree to which your surgeon revenue per unit. During the pandemic may have been attributable to various different factors, including increased pricing for used vehicles metals et cetera versus your proactive backwards, including relative to mix etcetera, but I think fee increases have not really been a drag.
Right I understand that as you've had more or less the same fee structure over this time that has just been applied to much more expensive vehicles. So if that is the case do you think that there might be potential scope to increase the fee structure, particularly if we see some cooling off in used vehicle prices, it's not the mid month Manheim finally pick.
Down today or or some of the metal prices, which seem that sort of peaked in kind of October type timeframe. After surgery and every single month in order to help offset some of these inflationary cost increases that you talked about.
We don't comment on our fee structures, Unfortunately, but I would.
Direct you back to the overall comment that over the intermediate horizon, we've shown the ability to recover and more than recover.
Inflation.
Via both productivity and other other measures we might take in the marketplace overall, so the and the second point I'd add is that.
If and when we see a moderation in used car prices will almost certainly see a rebound where an increase in volume relative to where it otherwise would be as well.
Very helpful. Thank you.
Our next question comes from the line of Chris.
Bye.
Particularly <unk> with BNP Paribas. Please proceed with your question.
It was a good attempt hey, guys.
Hey, Chris.
Okay. So first question is.
Gentle topic, but can you give me a sense of your exposure to like Russia, Ukraine, the neighboring Soviet Bloc.
We think there are probably 5% to 10% of sales, but maybe just give us some sense of that and have you seen activity tied it up yet there or is it like generally pretty healthy still.
Yeah.
Uh huh.
Healthy less than that and healthy.
Yes, okay good to hear.
And then the other question is to the extent you can comment on it.
Can I reframe. The question on used car pricing I would think a lot of your fees are fixed to the buy side.
I would guess, they're probably fix of the sell side of the on average and then youre priced ads have a beta of less than one.
So I know mix varies but I guess my question is is there like a rule of thumb you can give us for the ESP growth like what's the contribution to <unk> growth like is there any kind of like.
Any way you could frame that would help ease the discussion on used car pricing sensitivity. There was some kind of rule of thumb sensitivity factor with the client.
We haven't shared those rules of thumb.
Chris in the past, we certainly do have a publicly published.
Fee schedule for our members. So some of that math you can literally do by hand based on our.
Based on what's publicly available, but we don't we don't elaborate on fees.
Yes sure.
Our next question comes from the line of Bret Jordan with Jefferies. Please proceed with your question.
Hey, just to keep flogging that dead horse.
Given that your fee structure does vary by transaction value.
Have you done the math to sort of explain from a correlation standpoint, what the.
With the relationship demand I mean, as you talked about some moderation in asps in the prepared remarks, but do you have a feeling for what maybe what the what the actual.
Statistical correlation of Manheim is the ASB.
Over the I think it would be tough to I think over the long haul.
Asps.
Paced the manheim.
Stop the clock March 2020.
Our growth in Asp's are generally outpaced the manheim used vehicle index, which is not a surprise given total loss frequency because lesser damaged cars and newer cars are total so our mix naturally evolves overtime manheim mix naturally does not evolve over time.
So I would say that is that has been true for many years pre pandemic.
During the pandemic.
Four.
As you heard US described today our growth in the quarter on Asps.
North well north of 20%, while Mannheim I think for the quarter was up 40%, 45% or thereabouts.
I think that reflects a lag in their index I suppose the best way to describe it because from say pre pandemic levels today.
And we have experienced the percentage increases in our selling prices that are plus or minus comparable.
<unk>.
Therefore, I'd argue that our prices increased earlier and today, we are plus or minus at parity relative to pre pandemic levels over the long haul I continue to believe we will.
ASP growth will outpace theirs by virtue of the mix shift in total loss frequency before accounting for non insurance business.
Okay and the other mixed driver I guess in your favor is not insurance could you give us a little bit of an update as far as the dealer cars and maybe what the dealer relationship count is or however, whatever metric you wanted to using to measure the success and the dealer strategy.
So I think our non insurance business I think.
Breath as a mix of dealer cars rental car companies financial institutions are co part direct business in which we buy cars directly from consumers.
All the above are experiencing some of the same disruptions that.
We just talked about for the purposes of Manheim, and our insurance cars as well, meaning there is there are used car availability challenges. There is ample demand for cars automotive dealers literally putting up billboards to buy cars not to sell them. So we're experiencing unusual dislocation in that regard, but have nonetheless grown or not.
Insurance business year over year for the quarter by four 5%.
Eventually I think there's good traction there, which is a function again of returns on liquidity.
Alright.
Thanks, Brett.
Our next question comes from the line of John Healy with Northcoast Research. Please proceed with your question.
Thank you and thanks for taking my question I wanted to ask about that tick down until the loss rates when.
When you look at that.
See that where do you see the total loss rate changing within your own business is that at lower dollar value cards areas in the middle or at the high end and how do you think that change in total loss rate actually impacted your your asps. This year with it helpful or was it hurting you guys, depending on where it though.
Tough question, because I think in some cases, we're mixing X and Y variables a little bit.
Total loss frequency in general the marginal car would be the higher end vehicle within insurance that is fixed instead of being repaired if youre driving a 2008.
Eight car with any kind of meaningful impact that's certainly an automatic total without without much consideration. The newer cars are going to be somewhat more marginal ones now the reason that and this is what I mean by X and Y variables. The reason why total loss frequency has tapered somewhat is because used car prices are as high as they are meeting the cars are difficult to replace.
<unk> is a problem outright.
When you can't replace it at higher prices, which makes the total loss decision all else equal more expensive than it otherwise would be but those very same how used car prices that increase the selling prices for cars at cobalt auctions as well that's what I meant by the extra what variables is that the underlying.
Lying caused strong.
Unusually strong used car price environment has helped our asps.
Overall, it perhaps has quoted hurt our asps by cutting off a slice of the cars that otherwise would have been told.
Okay understood and then I might have missed it but did you guys quantify what.
<unk> for the U S and the international business and.
In the quarter in terms of just how those are those are shipped.
Shared growth numbers John .
Global unit sales were up 19% U S was up 28 international was up nine 3%.
Great. Thank you guys.
Thanks, Sean.
And as a final reminder, if anyone has any questions you May press star one on your telephone keypad doing so ensure your spot question and do you think you.
Our next question comes from the line of Gary <unk>.
Aaron can research. Please proceed with your question, Hey, John Hey, Jeff.
Could you just I didn't quite get the growth in U S purchase and international purchase sales for the quarter could you just give me that please.
Yeah.
Yes.
U S purchase was up 57%.
And international was up 20.
Units.
What about sales did you give that number.
Gary Let me, let me get it for you offline. We can go over the specific number okay. That's fine and then Jeff just just kind of.
Yes.
Oracle question here as used car prices come down, which they are going to.
Eventually is there a pretty pretty much a.
Quick correlation with total loss ratios going up because these prices are going down.
In short, yes, there are other variables at play as well.
Yes.
Oh.
A lot of confounding forces here that make it hard to give you a clean answer, but yes, certainly if nothing else in the world changed except the used car prices came down we would see volume increase very meaningfully.
Same answer by the way I would have given you.
In December of 2019, or this is a non pandemic observation when we've been asked in the past do we want high used car prices are low used car prices.
Responses generally been high.
Used car prices yielded better unit economics for co part minimum will make more money on the cars, we sell but also a fewer units because of the total loss equation lower used car prices means we will face less attractive per unit economics, but we would sell many more units. So we've always been ambivalent about used car prices.
It means for our business and I suppose to characterize it more favorably I think we have a hedged position when it comes to the used car prices.
As for today's circumstances, I think we are facing a more.
Stream set of variables and we ever seen at least in my professional career when it comes to used car availability and prices if those prices do come down I think we have.
Absolutely we've seen an increase all else equal in consignments to us from insurance carriers.
Okay, and then lastly, I don't know if you made this public but.
Could you give us an idea of what percentage of your cars.
Our process on our non insurance basis.
This quarter versus say a year ago.
That's reasonably stable.
It's approximately 25% in the U S.
Thank you thank.
Thank you.
Our next question comes from the line of Stephanie Moore with <unk> Securities. Please proceed with your question.
Hi, Thank you.
I wanted to touch on.
I'll return to this inflation discussion we had earlier.
I'm curious you've kind of talked about rabbit.
Remedies in terms of trying to.
Overcome the inflation that I think pretty much every company business is dealing with in this environment I know that in the past there's been flexibility to adjust these captured on the buy side, but what is your appetite and.
And our ability to have conversations with your insurance customers.
On the sell side to have them help offset some of the truly probably historical inflationary environment, especially with regards to some aspects like telling in that.
Others have been directly benefiting.
Got it thanks, Stephanie pricing.
Pricing as I'm sure you can tell from this call in a couple of occasions is a delicate subject for us that we tend not to discuss on an earnings call as a public forums like this are suffice it to say that our agreements with our sellers tend to run multiple years at a time, because we make long term commitments to them in the form of our land and technology.
People and so forth and they do in turn with US. So we take those commitments certainly very seriously and the contracts are what they are is our responsibility to manage.
Our costs and as I noted a moment ago over any intermediate period of time, we have been able to recover and more than recover the inflation in the marketplace and through productivity enhancements.
So unfortunately, we can't we can't say much more about the pricing I think the seller and buyer side.
That's fair and then just as a follow up can you maybe Scott.
You're telling process.
The use of maybe company owned trucks, the use of third party broker.
Just kind of what has been the normal practice and maybe expanding on that what might be an opportunity.
Got it.
Inbound retrieval of the cars to go forward.
Yes, exactly so we use.
<unk> of third parties as well as our own trucks.
Majority of being the former not the letter.
We have the ladder in terms of our own captive fleet, which has grown meaningfully over the past few years and will likely do so in the future as well too to have additional capacity in the event of catastrophic events. For example, but we largely rely on third party stockholders, who we dispatched directly so we don't use intermediaries by and large in.
Our local markets circuit 200 of them across the U S. We know the local companies and local to local towers and build long standing relationships with them. So that they come effectively retreat parse for us on a near daily basis. Once they are onboard.
Great and then just did you give John the USAF P number I know you gave the worldwide one.
Wondering on that.
U S were up 23.
Great. Okay. Thanks, so much.
Stephanie.
And we have reached the end of the question and answer session I will now turn the call back over to Jeff for closing remarks.
Thank you for joining us today, we look forward to talking again after the third quarter take care.
Sure.
And ladies and gentlemen, thank you for your participation. This does conclude today's conference.
Great rest of your day.
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Yes.
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