Q2 2025 Copart Inc Earnings Call
THE PEACE KEEPER
Please stand by.
Good day everyone and welcome to the Copart Incorporated second quarter fiscal 2025 earnings call. Just a reminder, today's conference is being recorded. Before turning the call over to management, I will share Copart's Safe Harbor statement.
The company's comments today include forward-looking statements within the meaning of federal securities laws, including management's current views with respect to trends, opportunities, and uncertainties in the company's markets.
for more detail on the risks associated with the company's business.
We refer you to the section titled Risk Factors and the company's annual report on Form 10-K for the year ended July 31st, 2024, and each of the company's subsequent quarterly reports on Form 10-Q.
Any forward-looking statements are made as of today, and the company has no obligation to update or revise any forward-looking statements.
Speaker Change: I'll now turn the call over to the company's CEO, Jeff Liaw.
Jeff Liaw: Thank you, Owen, and welcome everybody to our second quarter 2025 earnings call. On our recent calls, we've discussed and addressed a range of long-term themes, including fundamental growth drivers for our insurance business, including macro forces such as total loss frequency, which we'll touch upon today.
Jeff Liaw: as well as the proactive levers that we control to drive our growth in that portion of our business.
Jeff Liaw: Those levers include, for example, our artificial intelligence-enabled image recognition tools, which can empower insurance companies to total cars more accurately and more effectively, as well as our vertical extension into new service offerings such as TitleExpress.
Jeff Liaw: We've also talked about our response to major catastrophic events including hurricanes Helene and Milton from last year And we of course have discussed as well our expansion the expansion of our business with sellers beyond the insurance industry to include financial institutions rental car fleets corporate fleets among others
Jeff Liaw: We would encourage you to revisit those prior calls for deep dives on those subjects I would summarize today simply by saying that those big picture trends continue
First, we continue to grow our insurance volume.
Jeff Liaw: our auctioned equity and the returns we're generating for our sellers.
Jeff Liaw: Our insurance carriers with each passing day are entrusting us with more of the workflow that they once handled in-house both day to day and in storm events as well. As one very visible example, now that we are processing well over a million titles per year,
Jeff Liaw: via our Tidal Express platform. No carrier who has started with Copart has taken it back in-house.
Jeff Liaw: We also continue to grow our volume with our non-insurance sellers, benefiting of course from the flywheel effects of our auctions.
Jeff Liaw: And finally, we continue to invest proudly and aggressively in our business in the form of technology, real estate, and people to fuel our future growth.
Speaker Change: I wanted to provide a few brief comments on our insurance business specifically before turning it over to Liaw to review the financial results and to take a few of your questions.
Jeff Liaw: First, on our insurance business, our global volume grew 8% for the quarter in comparison to the same quarter last year. A little over half of this was attributable to the catastrophic events of the second half of last year.
as has been true since the dawn of our industry.
Jeff Liaw: We continue to experience increases in total loss frequency, of course, with the singular exception of the blip from 2021 to 2022 when ACVs, or pre-accident values, increase more than they ever had previously in Coparts history.
Jeff Liaw: For the fourth quarter in the United States, total loss frequency hit 23.8%, an all-time high, though a portion of that is attributable to those storm events in the second half of last year, which tend to have very high total loss frequency rates.
Jeff Liaw: Nonetheless, the full-year trend of 22.2% represents an all-time annual high, and the total loss frequency drivers certainly continue unabated.
Jeff Liaw: Repairing cars becomes less attractive as time passes as labor costs increase, repair parts costs increase, and rental car rates do as well, while totaling vehicles becomes more attractive given the liquidity of our auctions, demand for our vehicles by international buyers, and the salvage returns we're able to generate for our sellers.
Jeff Liaw: A couple of inquiries we've received in recent days that I thought might be worth addressing today.
Jeff Liaw: First is the question about whether insurance coverage in general has changed.
Jeff Liaw: And I would note that over the past two years, the insurance industry has generally achieved rate relief through state regulatory bodies, and consumers have certainly felt those changes in the form of higher rates for their auto policies.
Jeff Liaw: This has caused a modest increase in the uninsured population relative to pre-COVID levels, certainly.
Jeff Liaw: Over many years, we've observed this to be a cyclical trend, meaning the uninsured motorist rates tend to go up and down over the years, and given where we sit right now, it likely is a modest, it represents a modest offset to the growth in our insurance business.
Jeff Liaw: The second topic I wanted to address briefly is the question of what potential terrorists mean for our business, and I'll take a US-centric view first to addressing this question.
Jeff Liaw: It's frankly similar to an inquiry that we get from time to time about whether high used car prices or low used car prices are better for our business.
Jeff Liaw: The reality is that we're somewhat ambivalent, and in this case, the bottom line of a potential tariff-oriented approach.
Jeff Liaw: would be that it's largely neutral to our business, though with a complex tapestry of offsetting forces, some of which we'll briefly touch on today.
Jeff Liaw: As you know, in general, the effects of tariffs are largely inflationary for each of the factors that in turn affect our business with the corresponding downstream effects on our unit volume, our selling prices, and our operating profits. Here are a few such examples.
Jeff Liaw: Inbound tariffs in isolation would increase the cost of repair parts for vehicles, which all else equal would increase total loss frequency and drive increased volume to co-park.
to use the American promise.
Jeff Liaw: which, in isolation, would increase the cost of total losses to insurance carriers, reducing total loss frequency, and suppressing volume to co-part.
Jeff Liaw: But those inbound tariffs would also increase the selling prices for the vehicles that we sell at auction for the very same reason Yet again driving total loss frequency up and improving our unit economics as well
Jeff Liaw: If the story stopped there, I'd characterize the effect of tariffs as being modestly positive to COPAR.
Jeff Liaw: The great unknown, however, is what inbound tariffs for shipments to the United States, whether those tariffs could precipitate retaliatory tariffs from the same countries against whom we are imposing them.
Jeff Liaw: On its face, those tariffs might appear to suppress selling prices for our vehicles at auction. However, for the automotive industries, the tariffs are not a problem.
Jeff Liaw: Those nations are typically in Eastern Europe, the Middle East, and Africa.
Jeff Liaw: As has been true now for many years, economic outcomes for our sellers and for Copark at our auctions
Jeff Liaw: not as parts to be harvested, nor as metal to be scrapped.
Jeff Liaw: The countries who are hungriest for these types of cars generally do not have substantial domestic auto manufacturing capabilities and as such are not likely to be subject to significant automotive tariffs against which to retaliate in the first place.
Speaker Change: That's a bit of a long-winded answer, but in sum, I think we believe that tariffs would have a likely neutral to modestly positive effect on our business, and we've faced enough such inquiries that I thought it was worth exploring in greater detail.
Speaker Change: We concluded our quarter and are pleased with the results, and I'll hand it to Leah to describe those more fully.
Thank you, Jeff.
Leah: I'll begin with our second quarter sales trends. During the quarter, our global unit sales increased 8%, and inventory decreased nearly 3% from a year-ago period.
Leah: Focusing on our U.S. business, growth in units sold was about 8 percent, which reflects fee unit growth of nearly 8 percent and purchase unit growth of 29 percent.
Leah: Our U.S. insurance unit volume increased about 9% year-over-year, or approximately 2% when you exclude CAT units.
Leah: Non-insurance unit volume increases continue to outpace our insurance volume growth, excluding CAT.
Leah: Bluecar, which services our bank, rent, and fleet customers, continued its strong trend with year-over-year growth of over 27 percent.
Leah: Dealer sales volume consisting of co-part dealer services and our national power sports auction business was flat year over year, with MPA increasing over 14% and CDS declining about 5%.
Leah: Low value units, including charities and municipalities, declined just over 4% as we continue to focus on higher margin per unit business lines.
Leah: On a final note, our partner in the equipment space, PurpleWave, has driven 8% GTV growth year over year for the trailing 12 months ended January 31st.
Leah: While we are observing the industry-wide trend of sellers taking a cautious, wait-and-see approach due to uncertainties in the broader macro environment, PurpleWave's overall GTV continues to significantly outpace the industry from a growth perspective.
Leah: Overall, inventory levels in the U.S. decreased about 4% and by about 5% when excluding low value in CAT units.
turning to our international business.
Leah: Growth in units sold was over 8% in the quarter, and about 7% when you exclude CAT units.
Leah: International fee units increased 11% and purchase units decreased 6% for the quarter.
Leah: Our international business ended the quarter with inventory levels 2% ahead of the prior year period.
Leah: Global ASPs increased by approximately 2% for the quarter relative to the year ago.
Leah: Our U.S. insurance ASPs increased by nearly 2% over the same period and increased just over 1% when you exclude the impact of CAT units.
Leah: Our international ASPs decreased by less than 1% and international insurance ASPs increased 3%.
Leah: U.S. service revenue grew by nearly 15% for the quarter and 8% when excluding CAT units.
Leah: Global purchase vehicle sales for the second quarter increased approximately 9%, while global purchase vehicle gross profit increased 110% in the second quarter.
Leah: while purchased vehicle gross profit increased over $9 million, or about 205% in the quarter.
Leah: Global facility-related costs, which include facility operations, depreciation and amortization, and stock-based compensation, increased $81 million, or about 20 percent.
Leah: In the U.S., facility-related costs increased $75 million, or nearly 22%. During the quarter, we recognized $27 million of incremental costs associated with the Hurricanes Helene and Milton.
Leah: This reflects the recognition of expenses associated with CAT units sold during the period.
Leah: There remains over $5 million in costs which are incurred and are currently capitalized on our balance sheet, which will be recognized if the remaining CAT units are sold. Excluding the costs associated with the hurricane, facility-related costs per unit increased about 12% from the prior year period.
Leah: This increase in per-unit costs reflects our ongoing investments and expanded operational capacity to support our continued growth.
Leah: International facility related costs were up almost 6 million which is an increase of nearly 9% or less than 1% on a growth on a per unit basis.
Leah: During the quarter, global gross profit was approximately $526 million, an increase of over $61 million, or about 13%, and our gross margin percentage was 45% in the quarter.
Leah: In the U.S., our gross profit was approximately $463 million, an increase of about 11%, and gross margin was about 48% for the quarter.
Leah: Our international gross profit was approximately $62 million, an increase of about 32%, and gross margin was about 33% in the quarter.
Leah: Second quarter GAAP operating income increased about 12% to over $426 million.
Leah: which reflects the growth in gross profit and our general and administrative expenditures of $99 million, which are up about $15 million over the prior year.
Leah: And finally, second quarter Gap Net Income increased 19% to over $387 million, or $0.40 per diluted common share.
Leah: During the quarter, we benefited from an increase of nearly $7 million of interest income as we have actively invested our cash into Treasury securities.
And for the quarter, our tax rate was approximately 17%.
Leah: Turning to our capital structure, as of the end of January, we had over $5 billion of liquidity, which is comprised of nearly $3.8 billion in cash and our capacity under our revolving credit facility of over $1.2 billion.
Leah: With that, Jeff and I would be happy to take some questions.
Leah: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys.
Speaker Change: And our first question comes from the line of Bob Labick with CJS Securities. Please proceed.
Good afternoon. Thanks for taking our questions.
Bob Labick: So I want to start, on the salvage side, you guys have advanced the industry for decades by serving your customers' needs. What are the biggest points of friction in the total loss process for the insurance customers you serve now, and how are you working to solve those?
Speaker Change: Sure, it's a great question, Bob. I'd say the critical points of friction...
Speaker Change: some of which we can help with directly, others of which are, at least for now, not yet in our hands. We'd start from the moment of the accident forward. So from the moment of the accident forward, in particular in the United States.
Speaker Change: The direction of that initial tow often happens without the insurance company's knowledge at all. So costs are incurred
Speaker Change: The cars are often towed to an impound facility, for example, where storage charges...
to see you, Eric.
Speaker Change: The faster we can help them make that decision, and that requires upstream integration into their business processes, into an aspect of claims that we had historically not been as plugged into.
Speaker Change: But the earlier we can assist them with that decision, the more we can arrest those advanced charges in the first place. So that remains a key point of friction in the industry more broadly. We have a number of initiatives with a number of carriers underway already to help them make that decision more quickly.
Speaker Change: At the other end of the spectrum, I think it was probably a couple of calls ago.
Speaker Change: We talked a great length about the title express platform or a title procurement function that we now Perform on behalf of insurance companies that is likewise a large administrative burden for anyone especially when their liens outstanding on a total loss claim vehicle
Speaker Change: That requires interacting with lenders, and if you've studied the space, you're aware that the fragmentation of the U.S.
Speaker Change: lender base is vast, going from the big money center banks at the front end, the obvious Bank of America, Citibank, J.P. Morgan, and so forth.
Speaker Change: all the way to the very smallest regional credit unions, most of which you haven't heard of. It requires sophistication on the part of an institution like us to absorb that burden, especially as we're beginning to see an uptick in underwater loans in the first place. So that's an area where we have now, you heard me mention during the call,
Speaker Change: taken on that burden for well over a million cars a year and counting and growing and I'd say the carriers who have signed up for that service have, by and large, been delighted with it. So those are a couple of points of friction. There's certainly others, Bob, but we're excited to help them with those two critical touch points in the claims process.
Bob Labick: Okay, great. Appreciate that color. And then one on the non-salvage, the whole car side. Just give us a sense of where you are in your Salesforce build-out to grow, you know, and your market share in the light damaged non-salvage cars. And how big of an opportunity is that segment for Copart?
Bob Labick: That's a fair question, Bob. I think the question you pose and the answer, frankly, is a dynamic one. And as we – and the interplay of total loss frequency and the vehicles that we sell for sellers beyond insurance companies,
Bob Labick: works in concert. But as total loss frequency rises and the cars we sell increasingly are almost not recognizable as totals, in some cases you could not tell by the naked eye that the car had even been in an accident. The universe of buyers for those vehicles begins to very heavily resemble the buyers of cars at traditional auto auctions, wholesale auto auctions.
Bob Labick: just organically extends into that space more and more. Broadly speaking, as you I'm sure are well aware, the wholesale
Auction Intermediate Market is
Bob Labick: in the, you know, north of 15 million cars a year. Some of those cars, of course, sell for $30,000, $40,000 plus. Those aren't yet our sweet spot. But as for the cars that are in the insurance zone, so to speak, we are talking many, many, many cars. We should be in the early innings of our experience there. And we have invested in the sales force, as you know, Bob. Our aspiration is to invest far more over the years to come, both as our capabilities grow.
Bob Labick: The auction liquidity continues to move in that direction, and we've become a still more credible provider of those services to sellers in that universe.
Super, thanks so much. I'll get back in queue.
Speaker Change: The next question comes from the line of Chris Bottiglieri with Dante Paribas. Please proceed.
Thank you.
Yeah, thanks for taking the question.
Speaker Change: We've had two today. I guess the first one was on currency. I think it's been a number of years since I've asked this, but can you just remind us kind of how a strong USD, like how it plays throughout your business? Does it impact the fees buyers pay? Does it impact ASTs? Like historically, you've seen periods of strong dollar. I think it's been a number of years.
What would the impact be from your perspective?
Yeah, I think we are
Speaker Change: In broad strokes, Chris, I'd say we're more short the dollar than we are long.
Speaker Change: assets in the U.S. more expensive for those outside U.S. borders to purchase so it can, taken to the extremes, a super strong U.S. dollar could suppress selling prices for vehicles at co-part auctions.
Speaker Change: That said, I'd say over the years, currency fluctuations tend not to be universal or unanimous. Invariably, there are some countries...
Speaker Change: with Stronger Currencies Relative to the Dollar at any moment in time. And as a result, then, our reach, our footprint, so to speak, in terms of the countries to which our auctions reach, tend to be diversified enough that even if some countries, quote, suffer in the form of weaker currencies relative to the dollar, others step into the fold.
Speaker Change: and certainly domestic buyers would be advantaged in that instance as well. So it's an organic enough demand curve, so to speak.
Speaker Change: that we haven't seen meaningful blips in many years. So whatever headlines we read about the Mexican peso, the Canadian dollar, and elsewhere, we wouldn't, per se, see it in the day-to-day selling prices at cohort auctions because our risk is sufficiently diversified.
Speaker Change: Gotcha, okay, that makes sense. I kind of wanted to delve into the title a little bit more. Sounds like you've progressed well excess that million now. You sell roughly four million units in North America today.
Speaker Change: What kind of knock-on effects are you seeing? Are you seeing them kind of engage with you in other services or are they thinking like besides just making life easier for them, what other ways is this helping your business?
Yeah, uh, to the...
second half or latter portion of your question.
I think the knock-on effects that are
Speaker Change: The most valuable to both us and to our insurance company clients is that we generally reduce cycle times for those vehicles because we are performing this function at scale across the board.
Speaker Change: with the many thousands of lenders and the established traffic patterns, so to speak, as to when to call and how many titles you can negotiate with a given lender when you finally get through on hold, or those we negotiate to participate actively in our portal and so forth, right? So there is a natural benefit.
Speaker Change: of the scale that we have built on that side of the business, which ultimately manifests itself in moving the cars more quickly, which, generally speaking, generates higher returns and, of course, makes better use of our storage capacity as well.
Speaker Change: I think it is a critical point of trust with our insurance carriers, as you noted. If an insurance company entrusts co-parts to navigate
policyholder interactions.
Speaker Change: at the moment of a pretty intense claim, right by its nature a total loss claim is a more serious
Speaker Change: claim and say with glass breakage you know windshield crack or what have you that insurance companies have entrusted us with that pivotal moment I think it's a sign that yes they will over the years to come likely entrust us with still more the total loss decision tools that I mentioned.
Speaker Change: I think you posed a question as to how progression naturally works, and yes, it tends to start with a pilot for a given state or a given subset of states, and then migrates its way to the entire company or all of their total loss claims.
Speaker Change: Barring any folks that are in a trial period now, I'd say virtually every Title Express client has virtually every title been procured by us. It doesn't make sense to try to segment them in some way to keep X states and transfer Y states to us. It tends to be all or nothing.
Thanks a lot of stuff. Thank you.
Speaker Change: The next question comes from the line of Craig Tennyson with Baird. Please proceed.
Craig Tennyson: Hey, good afternoon. Thanks for taking my questions. I wanted to focus on purple wave if I could
Craig Tennyson: And maybe you could just help us understand your geographic expansion plans and whether it's important that you expand in geographically adjacent markets so you can leverage network effects that you built up locally and a few follow-ups.
Craig Tennyson: Hi Craig, thanks for the question. There are two components to our expansion of the PurpleWave sales force. One is densification of sales professionals in the existing territories that PurpleWave was operating in prior to our investment.
Craig Tennyson: So, it's really been a two-pronged approach that we've taken and it's served us well. We're seeing that we're able to basically densify our sales force in some of Purple Wave's legacy markets and that's helping us win more share in those markets as well.
virtual auction business for the heavy equipment space.
Craig Tennyson: So they have by and large not relied on physical storage, so even if we expand into new geographic adjacencies, the investment is largely people and systems oriented as opposed to large storage facilities or large physical infrastructure, but that is certainly part of the playbook for VOID.
Bob Labick: And maybe you can help me, Jeff, understand the network effect in your buyer base. How often does equipment leave the local market and find its way around the world?
For Purple Wave, oh, it definitely does.
Bob Labick: The equipment is often expensive enough to, or high value enough, so to speak, to justify transporting it to other places, and the attendees that are out of the town or out of the state are certainly substantial.
Bob Labick: And I think this is probably, you probably already know this, Greg, but even in Coparts core business, because we serve insurance companies.
even before the Purple Wave investment, the Purple Wave partnership.
Bob Labick: We were already a very significant purveyor of heavy equipment in the construction space, agricultural, etc., almost incidentally so, because insurance carriers often have policies that cover these types of assets as well.
Bob Labick: So we are experiencing, we are leveraging the benefits in both directions and will do so in the future as well. In terms of the crossover buyers that would be interested, who are participants in COPART, would be interested in PurpleWave and vice versa.
Speaker Change: Thanks, and just one more. I think Leah, you mentioned that you do target veteran or seasoned professionals in that industry. I know you've said in the past you've doubled the headcount or territory manager headcount.
Speaker Change: I'm sure it takes time to ramp, but is 8% GTV growth consistent with, I guess, increasing your sales force by that much?
I would say doubling of the sales force has only...
Speaker Change: excuse me, recently occurred, so I think of really the first
Speaker Change: two to three months of being, coming in, getting trained, getting the full playbook for the Purple Wave platform.
Speaker Change: and then they begin to build up their book of business and their future.
Speaker Change: visibility into their pipeline. And so yes I think we're pleased with where that new cohort is performing and would expect to see further growth from them come in over the next several quarters.
Great, thank you.
Speaker Change: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad.
Speaker Change: And the next question comes from the line of Brett Jordan with Jeffries. Please proceed.
Hey, good evening guys. Hey, bro.
Speaker Change: On the CDS compare year-over-year, I guess was there an abnormal spike in the prior year or is it just tougher to get that volume since it's such sort of a one-off acquisition at the dealer level?
Speaker Change: I'd say the CDS volume we've seen be more volatile this year. I think the overall wholesale market is expected to be flat year on year. And so we've seen months where we've been well ahead of prior year and we've seen months where we've just been behind. So I think it's been all in.
Speaker Change: a bit weaker than we had expected, but net-net, the team continues to focus on adding additional accounts and that we're able to build out that base within our dealer business to have a strong platform to grow from.
Speaker Change: Okay, and then a follow-up. Germany, you mentioned its transition mostly to consignment. Could you talk about the German growth specifically within international, and as it goes to consignment, does that allow it to accelerate faster just because it's more efficient to get the unit?
I think it's fair to say that the
CDS businesses by its nature, not as...
Speaker Change: and we certainly have to engage with them on a regular basis to continue that flow of vehicles. But I wouldn't describe it as a kind of business that if you just turned away for a day, you'd go away either. I wouldn't characterize it that way.
to answer your second question about Germany.
Speaker Change: in our penetration of growth in Germany. That remains those themes we've tackled, I think, on prior discussions with you and others.
Speaker Change: about the historical practices in Germany. Some regulatory matters, I think it's frankly more habit, culture, and historical practices than it is even the regulatory burdens, but because that the total loss market has emerged very differently in Germany, we have to overcome that institutional inertia, we have to overcome
Speaker Change: the habits of both the claims team as well as the marketing team, the legal teams, the tax teams.
Speaker Change: there's just inertia to overcome. So the consignments question is, it's a helpful fact for us. It better aligns our interests with the insurance companies. I think we've talked about that in the past too.
Speaker Change: We always prefer to sell on a consignment basis because it means the insurance carrier and we are rooting for the same outcome as opposed to the very naturally adversarial relationship when we buy cars from them.
Speaker Change: and we are in turn now rooting for the highest possible price that we sell the vehicle for and they're rooting for the lowest possible price because they want to make sure that they have the foregone value that belonged to them.
the enabler in isolation.
God bless you.
Speaker Change: But the equipment, for the same reason, we have had some cross-border movement from Europe, Canada, what have you, so I wouldn't say the answer is no, but not yet to the same degree that the co-part auctions experienced. Thank you.
Speaker Change: The next question comes from Oren Kashpatla with J.P. Morgan. Please proceed.
Hi, good evening and thanks for taking my questions.
Speaker Change: I just wanted to start off with a question on the trends in service and purchased vehicles gross profit margin. You had called out a favorable environment in the UK as a driver of the transitory uplift in purchase margins, but it looks like Q2 was another strong quarter for purchase vehicle gross margins.
Speaker Change: vehicle gross margin is attributable one primarily to the the transition of a top customer in Germany to a consignment model, but also just the
Speaker Change: contract structure for certain sellers in the UK that were previously using more of a purchase contract there also they've also moved to a consignment model and then in addition to that there is some benefit from a margin perspective purely on vehicles that we purchase and sell through the auction from consumers.
So it's a combination of factors, it's not just one.
Speaker Change: I think in the broadest, through the broadest lens, I would view vehicles that co-part
Speaker Change: sells on a purchase basis. There's the consumer business, which you know about. That's our Cash for Cars platform. Because we aren't yet a meaningful household name, the Cash for Cars business is a more straightforward way of selling cars on behalf of consumers. We take all the risks, we buy the cars from them.
Speaker Change: virtually every other corner of Copart in which we are buying and selling cars I would view that as a transitional step over time for consignment model. It is proving to the seller that we generate
Speaker Change: We'll be happy to share those results with them to show them that we're in fact making money on the cars. Let's together migrate to a consignment model so that we can sit on the same side of the
Understood. That's super helpful.
Speaker Change: Just as a follow-up, could you talk about the drivers of sequential downtick in G&A spend despite seasonally higher revenue?
Speaker Change: Would it be reasonable to view the Q2 run rate as a normalized run rate going forward or are there any material investments in the pipeline as we go to 2025? Thank you.
Speaker Change: Yeah, the DNA question is a good one, and I think we'll say the same thing in quarters that are heavier, quarters that are light. I think we should all look at multiple quarters of historical results to...
from which to assess any meaningful trends.
Speaker Change: We manage our costs very thoughtfully. We want to invest in the business to grow it.
Speaker Change: I wouldn't read into any given quarter, and that goes for CapEx and G&A and so forth. We're not managing for the smoothness of our earnings. We manage to grow the enterprise profitably for the benefit of our customers and our shareholders long-term. So the quarterly blips, you know, there's some seasonality in the business invariably.
Yard Expenses
or what have you.
and we
undertaking no efforts to smoothen what
Speaker Change: They are what they are. Look to multiple quarters to draw an conclusion.
Thank you for your questions.
Thanks and good luck.
Speaker Change: Thank you. Ladies and gentlemen, we've reached the end of the question and answer session. I'd like to turn the call back to Jeffrey Liaw for closing remarks.
Jeff Liaw: Great, thanks everybody for joining us and we'll talk to you next quarter.
Jeff Liaw: This concludes today's conference. You may disconnect your lines at this time. Enjoy the rest of your day.