Jeff Liaw: I don’t think the growth rate and Leah can comment here as well. Certainly, we are growing our capabilities. So the bringing on of new senior talent and the expansion of our offering in the whole car universe and frankly, our sophistication in the insurance world as well. Those all require new capabilities, and we are delighted to invest in them. So that reflects some of the G&A growth over time. That said, we continue to expect operating leverage over the medium-long term. But I think we always say, look, over multiple quarters to look over even most years for the right long-term trend. And I think the trend over time is that we invariably grow unit volume and revenue over the long haul, faster in many cases, meaningfully faster than we grow G&A.
Leah Stearns: And from just an inclusion of Purple Wave, we did have about a little over $7.5 million related to the incremental consolidation of that business in the quarter, which was obviously not in the prior year period.
Jeff Liaw: That’s true. That’s permanent.
Leah Stearns: So that is permanent. But other than that, I would say everything else we’re focused on is really to drive incremental operating leverage in the future.
Daniel Imbro : Got it. That’s helpful. Thanks guys.
Operator: Our next question is from Chris Bottiglieri with BNP Paribas Exane. Please proceed with your question.
Ian Davis: This is Ian Davis on for Chris. Thanks a lot for taking our questions this evening. First, it seems you won business with a few larger accounts in the past year. How do you think about the cadence of market share wins from here? Do you feel you have the operational capacity to onboard more accounts if insurers want to make the switch? Or would this likely happen after the recent wins are fully transferred over with the business?
Jeff Liaw: Got it. We don’t comment on individual accounts, but to your broader question about our capacity to handle additional volume. We invest years ahead of the curve as reflected, of course, in capital expenditures over the course of the past 7 or 8 years. We invest ahead of the curve in the various geographies in which we do business. And so we would be delighted to serve new volume and certainly have the capacity to do so. As you know, it’s not even just the storage capacity itself. It’s also the logistics capabilities trucking, both owned trucking assets as well as third-party assets, it’s people and it’s the scalable technology, auction platform and buyer base. And so to the answer more generically across all of those dimensions, it’s absolutely yes.
And the flywheel effect, frankly, applies to some of those dimensions, not just the auction dimension as well. For example, the stronger we become and the larger we become as a logistics company, the better access we have to both third-party and first-party transport capabilities, the better we are about deploying people to a storm and so on and so forth. So the answer is affirmatively yes.
Ian Davis: Got it. That’s helpful. And just one more, if I may. Ocean freight seem to be rising due to the conflict in the Middle East. Could you help us understand how rising ocean freight rates impact your business? We presume that international buyers in these markets would just bid less for the vehicles? Is that the right way to think about it? Are there any other impacts to consider?
Jeff Liaw: In a word, yes, though, I think it’s always worth commenting on what the relevant substitutes might be, right? So in so far as you’re talking about ocean freight, the demand for mobility in these various countries, the countries that sell vehicles too, which is effectively every country in the world, but the growth tends to come from what we would characterize as developing economies and their demand for mobility is real and sustained and the growth is real and sustained. So the question becomes what their natural alternatives might be? And in many cases, they will still ultimately turn to Copart cars as a result. And then the last comment I’d make on that front is that, while ocean freight rates can rise I think it’s still systemically naturally the case that ships mostly come to the U.S. or to the UK, for example, to our dominant origin markets.
They come here full and they leave empty. So it’s often the case that the backhaul legs are considerably cheaper. So the headline numbers may or may not be representative of our buyers’ lived experience.
Ian Davis: Got it. That’s really helpful. Thanks a lot.
Operator: Our next question is from Craig Kennison with Baird. Please proceed with your question.
Craig Kennison : Good afternoon. Thanks for taking my questions. Just on that shipping topic. Did you have any issues in the Red Sea due to the conflicts there?
Jeff Liaw: No, not appreciably so.
Craig Kennison: Thanks. And Leah, I wonder if you would expand on factors behind the resilience in your average selling price given the commentary relative to the Manheim Index.
Leah Stearns: Sure. Absolutely. So just as our overall mix shifts within the underlying unit makeup of our business and what’s selling through the Copart platform, that is one driver. So as you think about the increase in our unit volume coming from our Blue Car sellers, our dealer units, those are higher ASP units. But also as you think about used car pricing coming down and total frequency increasing, the incremental unit that is totaled by an insurance company is inherently a higher value unit, and that’s because when total loss frequency came down as a result of rising used car prices that resulted in the underlying borderline units falling out of the mix, and those are now coming back. So as insurance companies are facing elevated repair costs, they’re incrementally totaling the higher-value vehicles more frequently, and that’s driving additional resilience within our ASP.
Jeff Liaw: And then the — I would offer also that it is the auction liquidity you’ve heard us speak about on a few occasions today as well. That as we — as the platform grows, as we earn more Blue Cars, as the total volume of activity on the website grows, that draws more buyers, which has helped to sustain prices at levels well beyond what the Manheim Used Vehicle Index might reflect.
