Copart Inc’s (NASDAQ:CPRT) shares fell nearly 6% in premarket trading on Thursday as the company missed quarterly profit estimates, in part driven by higher costs, even as revenue reached $1.07 billion, up 7.2% year over year.

The company’s global yard operations cost increased about $59 million, or about 17% in the three months ended July 31, 2024, from the prior year period.

This growth reflects the increase in unit volume as well as approximately $16 million of non-recurring expenses, primarily related to operating taxes.

In addition, given the active and early start to the storm season in 2024, Copart’s (CPRT) storm response teams incurred seasonally higher costs preparing and positioning resources for several storms which did not produce significant unit volumes, CFO Leah Stearns said on a post-earnings conference call.

Speaking about the insurance industry in the context of the storm season of 2024, CEO Jeff Liaw noted that, as anticipated by many, the storm season is off to an active start relative to other seasons recently.

Hurricane Beryl, the earliest Cat 5 Atlantic hurricane on record, has caused widespread damage across Texas, Louisiana, and neighbouring states.

“Other named storms of this season, including Hurricanes Debby and Ernesto, have required significant mobilization of resources on our part, which we are happy to undertake on behalf of our insurance clients,” Liaw added.

The company said that its partner in the equipment arena, Purple Wave, led by Aaron and Suzy McKee and their team based in Manhattan, Kansas, drove 17% year-over-year growth for the full year — for the full fiscal year, outpacing industry growth in the equipment auction markets they serve.