In announcing its fiscal second-quarter and six-month results, Copart Inc. highlighted a decrease in revenue and vehicle sales, with bright spots being a spike in service revenue and inventory.

Copart experienced a revenue slide of $10.2 million or 3.6 percent during their second fiscal quarter, a move the company’s management team discussed in more detail during a conference call to discuss quarterly and six-month results ending January 31.

For the company’s fiscal second quarter, revenue, gross margin and net income were $276.3 million, $114.9 million and $52.2 million, respectively.

Though the company experienced a slide in revenue, these numbers represent a 3 percent bump in gross margin and a 15.1-percent increase in net income from the same quarter of last year.

That said, vehicle sales followed revenue trends and were also down a bit during the quarter and six-month period.

For the company’s Q2 fiscal quarter, Copart’s vehicles sales revenue same in at $37.8 million, down from $50.7 million for the same period of 2014. For the six months ending Jan. 31, the company made $81.5 million in vehicle sales revenue, down from $104.2 million during the first six months of the company’s 2014 fiscal year.

Jay Adair, chief executive officer, discussed the reality of flat revenues during the call, and said the company did have one less business day in this quarter as compared to a year ago, which played a role.

“The rest of it I would say is timing due to a very strong Q1 this year as was witnessed, and so some of those it just depends on when vehicles come in, when they are going to sell. And we saw some heavy sales in Q1, little slower in this quarter, and I suspect we will see a good sell-off in Q3,” said Adair.

Sales price was also down a bit in Q2 — a contributing factor to drops in overall revenue.

“We believe this is primarily due to scrap, scrap pricing has come off substantially, not only year-over-year but Q1 to Q2. And cycle times have remained relatively flat at this time,” said Adair.

Will Franklin, Copart chief financial officer, also pointed out scrap metal pricing had an effect on the company’s “lower-end cars” sector of the business.

“In North America the scrap metal pricing had a significant impact on our lower-end cars, and our overall base, if there was a marginal decline. On a consolidated basis, because we had a growth in revenue per car and other areas of our operations internationally, they are relatively flat. In terms of importance, scrap metal pricing is a significant factor,” said Franklin. “So, I mean, we look at two primary drivers when we correlate our pricing and that’s used-car pricing and commodity pricing. And in terms of significance, I would weigh used-car pricing is slightly more significant.”

Service revenues was a bright light for the company’s results call, though. Copart made $238.5 million in service revenues in its fiscal Q2, up slightly from $235.7 million made during the same time last year. For the six months ending Jan. 31, the company made $485.2 million in service revenue, up from $462.1 million made during the first six months of 2014.

During the Q&A portion of the call, Wall Street Analysts asked about factors behind service revenues bump of a bit over 1 percent, with inventory up about 9 percent.

“We had a real big Q2. So, we are able to not only build inventory, but we had some large sales … So, some of it is just timing, I mean, it’s the type of vehicles you get the mix, meaning some of our accounts move vehicles twice as fast as others on the insurance side,” said Adair. “On the non-insurance side, we have got a mix of vehicles that are far more profitable, because they are dealer cars, as opposed to mix of vehicles that are more charity focused. So, it depends on mix. It depends on timing,” Adair explained.

Franklin also mentioned that vehicle sales will most likely spike in Q3, as the company has times to work through inventory growth.

“So, our inventory grew at the end of the quarter. I mean, we had a significant increase in assignments towards the end of the quarter, which didn’t allow us to cycle that through the sales process that will flow through in our third quarter,” Franklin said.