NOTE 12 — Stockholders’ Equity

General

The Company has authorized the issuance of 1.6 billion shares of common stock, with a par value of $0.0001, of which 926,298,293 shares were issued and outstanding at July 31, 2026. As of July 31, 2026 and 2025, the Company had reserved 43,587,656 and 45,431,198 shares of common stock, respectively, for the issuance of options, restricted stock (“RSA”), restricted stock units (“RSU”), or performance stock units (“PSU”) granted under the Company’s equity incentive plans and 2,790,241 and 3,300,386 shares of common stock, respectively, for the issuance of shares under the Copart, Inc. Employee Stock Purchase Plan (“ESPP”). The Company has authorized the issuance of five million shares of preferred stock, with a par value of $0.0001, none of which were issued or outstanding at July 31, 2026 or 2025, which have the rights and preferences as the Company’s Board of Directors shall determine, from time to time.

Stock Repurchases

On September 22, 2011, the Company's Board of Directors approved a 320 million share increase in our stock repurchase program, bringing the total current authorization to 784 million shares. The repurchases may be effected through solicited or unsolicited transactions in privately negotiated transactions or in the open market, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. No time limit has been placed on the duration of the stock repurchase program. Subject to applicable securities laws, such repurchases will be made at such times and in such amounts as

we deem appropriate and may be discontinued at any time. For fiscal year 2026, the Company repurchased 43,433,164 shares of its common stock at a weighted average price of $37.63 per share totaling $1.6 billion. The Company did not repurchase any common stock under the program for fiscal years 2025 and 2024. As of July 31, 2026, the total number of shares repurchased under the program was 502 million, and subject to applicable limitations under Delaware law, 282 million shares were available for repurchase under the program.

In fiscal 2026, certain employees held stock option awards that could be exercised through a cashless exercise. For the years ended July 31, 2026, 2025 and 2024, no employee exercised stock options through a cashless exercise. If exercised a portion of the options exercised will be net settled in satisfaction of the exercise price and employees’ statutory withholding requirements. Any shares withheld for taxes are treated as a repurchase of shares for accounting purposes but do not count against our stock repurchase program.

Employee Stock Purchase Plan

The ESPP provides for the purchase of up to an aggregate of 40 million shares of common stock of the Company by employees pursuant to the terms of the ESPP. The Company’s ESPP was adopted by the Board of Directors and approved by the Company’s stockholders in 1994. The ESPP was amended and restated in 2003 and again approved by the stockholders. In 2014, a new ESPP was approved by the Board of Directors and approved by the Company’s stockholders. Under the ESPP, employees of the Company who elect to participate have the right to purchase common stock at a 15% discount from the lower of the market value of the common stock at the beginning or the end of each six month offering period. The ESPP permits an enrolled employee to have contributions withheld from their salary an amount up to 10% of their compensation (which amount may be increased from time to time by the Company but may not exceed 15% of compensation). No employee may purchase more than $25,000 worth of common stock (calculated at the time the purchase right is granted) in any calendar year. The Compensation Committee of the Board of Directors administers the ESPP. The number of shares of common stock issued pursuant to the ESPP during the years ended July 31, 2026, 2025 and 2024 was 510,145; 337,707; and 315,042; respectively. As of July 31, 2026, there were 37,530,055 shares of common stock issued pursuant to the ESPP and 2,790,241 shares remain available for purchase under the ESPP.

Stock Options

In December 2007, the Company adopted the Copart, Inc. 2007 Equity Incentive Plan (“Plan”), presently covering an aggregate of 144 million shares of the Company’s common stock. The Plan provides for the grant of incentive stock options, restricted stock, restricted stock units and other equity-based awards to employees and non-qualified stock options, restricted stock, restricted stock units and other equity-based awards to employees, officers, directors and consultants at prices not less than 100% of the fair market value for incentive and non-qualified stock options, as determined by the Board of Directors at the grant date. Incentive and non-qualified stock options may have terms of up to ten years and vest over periods determined by the Board of Directors. Options generally vest ratably over a five year period. The Plan replaced the Company’s 2001 Stock Option Plan. As of July 31, 2026, 21,225,659 shares were available for grant under the Plan and the number of options that were in-the-money was 12,090,402 at July 31, 2026.

Additionally, Purple Wave maintains an equity-based compensation plan for certain executives. Compensation cost attributable to Purple Wave equity-based compensation plan was $1.8 million and $2.3 million included in stock-based compensation for the fiscal years ended July 31, 2026 and 2025, respectively.

There were no material compensation costs capitalized as part of the cost of an asset as of July 31, 2026 and 2025. The Company recognizes compensation expense for stock option awards on a straight-line basis over the requisite service period of the award.

The fair value of each stock option without a market-based condition was estimated on the measurement date using the Black-Scholes Merton (“BSM”) option-pricing model. For options that included a market-based condition either the Monte Carlo simulation model or a lattice model was used. The BSM option-pricing model utilized the following assumptions:

Expected life— Expected life represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based awards.

Risk-free interest rate—The Company bases the risk-free interest rate used in the BSM option-pricing model on the implied yield currently available on U.S. Treasury zero-coupon issues with the same or substantially equivalent expected life.

Estimated volatility—The Company uses the trading history of its common stock in determining an estimated volatility factor when using the BSM option-pricing model to determine the fair value of options granted.

Expected dividend—The Company does not expect to declare dividends. Therefore, the Company uses a zero value for the expected dividend value factor when using the BSM option-pricing model to determine the fair value of options granted.

Net cash proceeds from the exercise of stock options were $16.7 million, $42.8 million and $24.3 million for the years ended July 31, 2026, 2025 and 2024, respectively.

The Company grants option awards to certain executives that contain service and market conditions. The options will become exercisable over five years, subject to continued service by the executive, with 20% vesting on the first anniversary of

the grant date and the balance vesting monthly over the subsequent four years. Separate and apart from the time-based vesting schedule, the options are also subject to a market condition requiring the trading price of Copart, Inc. common stock on the NASDAQ Global Select Market to be greater than or equal to 125% of the exercise price of the options, determined both (i) at the time of any exercise, and (ii) based on the closing price on each of the twenty consecutive trading days preceding the date of any exercise. The exercise price of the options is equivalent to the closing price of the Company’s common stock on the grant date. The fair value of the awards is determined at the grant date using either the Lattice or Monte Carlo model, risk-free interest rates ranging from 0.71% to 4.37%, estimated volatility ranging from 25.2% to 29.8%, and no expected dividends. The total estimated compensation expense to be recognized by the Company over the five-year service period for these options was $7.7 million as of July 31, 2026 and will be recognized using the accelerated attribution method over each vesting tranche of the award. The Company recognized $1.4 million, $3.8 million and $7.4 million in compensation expense related to these awards for the years ended July 31, 2026, 2025 and 2024, respectively.

Effective July 31, 2026, the Board of Directors approved a modification of certain stock option awards previously granted to Jeffrey Liaw in connection with his resignation as Chief Executive Officer. The modification removed the market condition applicable to the awards, but did not accelerate vesting or amend the remaining service period. The effects of the modification are reflected in the tables above and below, and the incremental compensation cost as a result of the modification was immaterial.

The aggregate intrinsic value in the tables above represents the total pre-tax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the year ended July 31, 2026 and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their options on July 31, 2026. The aggregate intrinsic value of options exercised was $41.8 million, $188.3 million and $105.5 million in the years ended July 31, 2026, 2025 and 2024, respectively, and represents the difference between the exercise price of the option and the estimated fair value of the Company’s common stock on the dates exercised. As of July 31, 2026, the total compensation cost related to non-vested stock options granted to employees under the Company’s stock equity incentive plans but not yet recognized was $14.8 million. This cost will be amortized on a straight-line basis over a weighted average remaining term of 2.21 years. The fair value of options vested for the years ended July 31, 2026, 2025 and 2024 was $14.5 million, $23.9 million and $21.5 million, respectively.

The Company’s restricted stock awards (“RSA”), RSUs, and PSUs have generally been issued with vesting periods ranging from two years to five years. RSAs and RSUs vest solely on service conditions while PSUs will vest over five years, when and if certain financial performance targets are met. Accordingly, the Company recognizes compensation expense for RSA and RSU awards on a straight-line basis over the requisite service period of the award. Compensation expense for PSU awards is recognized on an accelerated attribution method when the achievement of certain financial performance targets appear probable and is recognized over the remaining requisite service period.