流動資金服務第三季收入增8.1% 淨利潤升41% 每股盈利0.32美元

10-Q
 
 
 
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

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
 

 
 
 
 
 

 
 ☒

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

  
For the quarterly period ended June 30, 2026
OR
 

 
 
 
 
 

 
 ☐

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

  
For the transition period from to
Commission file number 0-51813
 

 
LIQUIDITY SERVICES, INC.
(Exact Name of Registrant as Specified in Its Charter)
 

 
 
 
 
 

 
 Delaware

 52-2209244

 

 
 (State or Other Jurisdiction of

 (I.R.S. Employer

 

 
 Incorporation or Organization)

 Identification No.)

 

 
  

  

 

 
 6931 Arlington Road, Suite 460, Bethesda, MD

 20814

 

 
 (Address of Principal Executive Offices)

 (Zip Code)

 

  
(202) 467-6868
(Registrant’s Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
Securities registered to Section 12(b) of the Act:
 

 
 
 
 
 
 

 
 Title of Each Class

 Trading Symbol(s)

 Name of Each Exchange on Which Registered

 

 
 Common Stock, $0.001 par value

 LQDT

 Nasdaq

 

  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 

 
 
 
 
 
 
 
 

 
 Large accelerated filer  ☒

  

  

 Accelerated filer ☐

  

 

 
  

  

  

  

  

 

 
 Non-accelerated filer ☐

  

  

 Smaller reporting company ☐

  

 

 
  

  

  

  

  

 

 
  

  

  

 Emerging growth company ☐

  

 

  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

 
 

 The number of shares outstanding of the issuer’s common stock, par value $0.001 per share, as of August 3, 2026, was 31,331,618.

 

 
  

  

 
 
 
 
 
 

 
 INDEX

 

 
  

  

  

 

 
  

  

 Page 

 

 
 PART I. FINANCIAL INFORMATION

  

 

 
  

  

  

 

 
 Item 1.

 Financial Statements (Unaudited)

 3

 

 
  

  

  

 

 
  

 Condensed Consolidated Balance Sheets

 3

 

 
  

  

  

 

 
  

 Condensed Consolidated Statements of Operations

 4

 

 
  

  

  

 

 
  

 Condensed Consolidated Statements of Comprehensive Income

 5

 

 
  

  

  

 

 
  

 Condensed Consolidated Statement of Stockholders' Equity

 6

 

 
  

  

  

 

 
  

 Condensed Consolidated Statements of Cash Flows

 7

 

 
  

  

  

 

 
  

 Notes to the Unaudited Condensed Consolidated Financial Statements

 8

 

 
  

  

  

 

 
 Item 2.

 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 19

 

 
  

  

  

 

 
 Item 3.

 Quantitative and Qualitative Disclosures About Market Risk

 31

 

 
  

  

  

 

 
 Item 4.

 Controls and Procedures

 31

 

 
  

  

  

 

 
 PART II. OTHER INFORMATION

  

 

 
  

  

  

 

 
 Item 1.

 Legal Proceedings

 32

 

 
  

  

  

 

 
 Item 1A.

 Risk Factors

 32

 

 
  

  

  

 

 
 Item 2.

 Unregistered Sales of Equity Securities and Use of Proceeds

 32

 

 
  

  

  

 

 
 Item 5.

 Other Information

 33

 

 
  

  

  

 

 
 Item 6.

 Exhibits

 34

 

 
  

  

  

 

 
 SIGNATURES

  

 35

 

  

  
2

 
  

 PART I—FINANCIAL INFORMATION
 
Item 1. Financial Statements (Unaudited)
 
Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in Thousands, Except Par Value)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30, 2026

  

  

 September 30, 2025

  

 

 
  

  

 (Unaudited)

  

 

 
 Assets

  

  

  

  

  

  

 

 
 Current assets:

  

  

  

  

  

  

 

 
 Cash and cash equivalents

  

 $

 219,751

  

  

 $

 174,607

  

 

 
 Short-term investments

  

  

 11,348

  

  

  

 11,212

  

 

 
 Accounts receivable, net of allowance for doubtful accounts of $657 and $777

  

  

 12,470

  

  

  

 11,176

  

 

 
 Inventory, net

  

  

 15,539

  

  

  

 14,180

  

 

 
 Prepaid taxes and tax refund receivable

  

  

 1,212

  

  

  

 1,757

  

 

 
 Prepaid expenses and other current assets

  

  

 11,180

  

  

  

 11,857

  

 

 
 Total current assets

  

  

 271,500

  

  

  

 224,789

  

 

 
 Property and equipment, net

  

  

 18,773

  

  

  

 18,259

  

 

 
 Operating lease assets

  

  

 11,624

  

  

  

 11,499

  

 

 
 Intangible assets, net

  

  

 11,022

  

  

  

 13,340

  

 

 
 Goodwill

  

  

 102,794

  

  

  

 102,875

  

 

 
 Deferred tax assets

  

  

 536

  

  

  

 567

  

 

 
 Other assets

  

  

 3,843

  

  

  

 3,772

  

 

 
 Total assets

  

 $

 420,092

  

  

 $

 375,101

  

 

 
 Liabilities and stockholders’ equity

  

  

  

  

  

  

 

 
 Current liabilities:

  

  

  

  

  

  

 

 
 Accounts payable

  

 $

 60,636

  

  

 $

 61,454

  

 

 
 Accrued expenses and other current liabilities

  

  

 29,597

  

  

  

 30,575

  

 

 
 Current portion of operating lease liabilities

  

  

 4,502

  

  

  

 5,071

  

 

 
 Deferred revenue

  

  

 4,849

  

  

  

 5,093

  

 

 
 Payables to sellers

  

  

 72,244

  

  

  

 59,432

  

 

 
 Total current liabilities

  

  

 171,828

  

  

  

 161,625

  

 

 
 Operating lease liabilities

  

  

 9,093

  

  

  

 8,723

  

 

 
 Other long-term liabilities

  

  

 3,319

  

  

  

 1,511

  

 

 
 Total liabilities

  

  

 184,240

  

  

  

 171,859

  

 

 
 Commitments and contingencies (Note 13)

  

  

  

  

  

  

 

 
 Stockholders’ equity:

  

  

  

  

  

  

 

 
 Common stock, $0.001 par value; 120,000,000 shares authorized; 38,025,125 shares issued and outstanding at June 30, 2026; 37,317,175 shares issued and outstanding at September 30, 2025

  

  

 38

  

  

  

 37

  

 

 
 Additional paid-in capital

  

  

 295,026

  

  

  

 285,721

  

 

 
 Treasury stock, at cost; 6,701,268 shares at June 30, 2026, and 6,640,580 shares at September 30, 2025

  

  

 (111,635

 )

  

  

 (110,002

 )

 

 
 Accumulated other comprehensive loss

  

  

 (11,140

 )

  

  

 (10,640

 )

 

 
 Retained earnings

  

  

 63,563

  

  

  

 38,126

  

 

 
 Total stockholders’ equity

  

  

 235,852

  

  

  

 203,242

  

 

 
 Total liabilities and stockholders’ equity

  

 $

 420,092

  

  

 $

 375,101

  

 

  
See accompanying notes to the unaudited condensed consolidated financial statements.

  
3

 
  

 Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Dollars in Thousands, Except Per Share Data)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

  

 Nine Months Ended June 30,

  

 

 
  

  

 2026

  

  

  

 2025

  

  

  

 2026

  

  

  

 2025

  

 

 
 Purchase revenues

  

 $

 81,838

  

  

  

 $

 76,517

  

  

  

 $

 237,042

  

  

  

 $

 237,159

  

 

 
 Consignment and other fee revenues

  

  

 47,740

  

  

  

  

 43,358

  

  

  

 $

 134,488

  

  

  

  

 121,422

  

 

 
 Total revenue

  

  

 129,578

  

  

  

  

 119,875

  

  

  

  

 371,530

  

  

  

  

 358,581

  

 

 
 Costs and expenses from operations:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Cost of goods sold (excludes depreciation and amortization)

  

  

 65,742

  

  

  

  

 65,110

  

  

  

  

 194,790

  

  

  

  

 206,220

  

 

 
 Technology and operations

  

  

 19,252

  

  

  

  

 17,275

  

  

  

  

 55,869

  

  

  

  

 51,565

  

 

 
 Sales and marketing

  

  

 17,618

  

  

  

  

 15,694

  

  

  

  

 50,750

  

  

  

  

 44,278

  

 

 
 General and administrative

  

  

 10,141

  

  

  

  

 8,221

  

  

  

  

 28,978

  

  

  

  

 23,596

  

 

 
 Depreciation and amortization

  

  

 2,683

  

  

  

  

 2,657

  

  

  

  

 7,906

  

  

  

  

 7,741

  

 

 
 Other operating expenses

  

  

 4

  

  

  

  

 700

  

  

  

  

 108

  

  

  

  

 1,073

  

 

 
 Total costs and expenses

  

  

 115,440

  

  

  

  

 109,657

  

  

  

  

 338,401

  

  

  

  

 334,473

  

 

 
 Income from operations

  

  

 14,138

  

  

  

  

 10,218

  

  

  

  

 33,129

  

  

  

  

 24,108

  

 

 
 Interest and other income, net

  

  

 (1,360

 )

  

  

  

 (1,077

 )

  

  

  

 (3,558

 )

  

  

  

 (3,083

 )

 

 
 Income before provision for income taxes

  

  

 15,498

  

  

  

  

 11,295

  

  

  

  

 36,687

  

  

  

  

 27,191

  

 

 
 Provision for income taxes

  

  

 5,072

  

  

  

  

 3,885

  

  

  

  

 11,250

  

  

  

  

 6,920

  

 

 
 Net income

  

 $

 10,426

  

  

  

 $

 7,410

  

  

  

 $

 25,437

  

  

  

 $

 20,271

  

 

 
 Basic income per common share

  

 $

 0.33

  

  

  

 $

 0.24

  

  

  

 $

 0.82

  

  

  

 $

 0.66

  

 

 
 Diluted income per common share

  

 $

 0.32

  

  

  

 $

 0.23

  

  

  

 $

 0.78

  

  

  

 $

 0.63

  

 

 
 Basic weighted average shares outstanding

  

  

 31,240,396

  

  

  

  

 31,157,183

  

  

  

  

 30,976,586

  

  

  

  

 30,935,882

  

 

 
 Diluted weighted average shares outstanding

  

  

 32,851,019

  

  

  

  

 32,497,238

  

  

  

  

 32,476,795

  

  

  

  

 32,404,183

  

 

  
See accompanying notes to the unaudited condensed consolidated financial statements.

  
4

 
  

 Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Dollars in Thousands)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Nine Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 Net income

  

 $

 10,426

  

  

 $

 7,410

  

  

 $

 25,437

  

  

 $

 20,271

  

 

 
 Other comprehensive (loss) income:

  

 

  

  

  

  

  

  

  

  

  

  

 

 
 Foreign currency translation and other

  

 $

 (592

 )

  

  

 1,669

  

  

 $

 (329

 )

  

  

 267

  

 

 
 Other comprehensive (loss) income, net of taxes

  

  

 (592

 )

  

  

 1,669

  

  

  

 (329

 )

  

  

 267

  

 

 
 Comprehensive income

  

 $

 9,834

  

  

 $

 9,079

  

  

 $

 25,108

  

  

 $

 20,538

  

 

  
See accompanying notes to the unaudited condensed consolidated financial statements.

  
5

 
  

 Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders’ Equity
(Dollars In Thousands)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

  

  

  

 Additional

  

  

  

  

  

 Accumulated
Other

  

  

  

  

  

 

 
  

 Common Stock

  

 Paid-in

  

 Treasury Stock

  

 Comprehensive

  

 Retained

  

  

  

 

 
  

 Shares

  

 Amount

  

 Capital

  

 Shares

  

 Amount

  

 Loss

  

 Earnings

  

 Total

  

 

 
 Balance at September 30, 2025

  

 37,317,175

  

 $

 37

  

 $

 285,721

  

  

 (6,640,580

 )

 $

 (110,002

 )

 $

 (10,640

 )

 $

 38,126

  

 $

 203,242

  

 

 
 Net Income

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 7,489

  

  

 7,489

  

 

 
 Exercise of common stock options, grants of restricted stock awards, and vesting of restricted stock units

  

 224,396

  

  

 1

  

  

 737

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 738

  

 

 
 Taxes paid associated with net settlement of stock compensation awards

  

 (40,301

 )

  

 —

  

  

 (1,168

 )

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 (1,168

 )

 

 
 Common stock repurchase

  

 —

  

  

 —

  

  

 —

  

  

 (55,246

 )

  

 (1,473

 )

  

 —

  

  

 —

  

  

 (1,473

 )

 

 
 Shares swapped to exercise stock options

  

 —

  

  

 —

  

  

 67

  

  

 (2,388

 )

  

 (67

 )

  

 —

  

  

 —

  

  

 —

  

 

 
 Stock compensation expense

  

 —

  

  

 —

  

  

 6,174

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 6,174

  

 

 
 Foreign currency translation and other

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 263

  

  

 —

  

  

 263

  

 

 
 Balance at December 31, 2025

  

 37,501,270

  

 $

 38

  

 $

 291,531

  

  

 (6,698,214

 )

 $

 (111,542

 )

 $

 (10,377

 )

 $

 45,615

  

 $

 215,265

  

 

 
 Net income

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 7,522

  

  

 7,522

  

 

 
 Exercise of common stock options, grants of restricted stock awards, and vesting of restricted stock units

  

 573,106

  

  

 —

  

  

 151

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 151

  

 

 
 Taxes paid associated with net settlement of stock compensation awards

  

 (149,559

 )

  

 —

  

  

 (4,588

 )

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 (4,588

 )

 

 
 Common stock repurchase

  

 —

  

  

 —

  

  

 —

  

  

 (1,430

 )

  

 (40

 )

  

 —

  

  

 —

  

  

 (40

 )

 

 
 Shares swapped to exercise stock options

  

 —

  

  

 —

  

  

 36

  

  

 (1,131

 )

  

 (36

 )

  

 —

  

  

 —

  

  

 —

  

 

 
 Stock compensation expense

  

 —

  

  

 —

  

  

 4,350

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 4,350

  

 

 
 Forfeitures of restricted stock awards

  

 (51,093

 )

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

 

 
 Foreign currency translation

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 (592

 )

  

 —

  

  

 (592

 )

 

 
 Balance at March 31, 2026

  

 37,873,724

  

 $

 38

  

 $

 291,480

  

  

 (6,700,775

 )

 $

 (111,618

 )

 $

 (10,969

 )

 $

 53,137

  

 $

 222,068

  

 

 
 Net income

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 10,426

  

  

 10,426

  

 

 
 Exercise of common stock options, grants of restricted stock awards, and vesting of restricted stock units

  

 214,743

  

  

 —

  

  

 486

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 486

  

 

 
 Taxes paid associated with net settlement of stock compensation awards

  

 (63,342

 )

  

 —

  

  

 (2,229

 )

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 (2,229

 )

 

 
 Shares swapped to exercise stock options

  

 —

  

  

 —

  

  

 17

  

  

 (493

 )

  

 (17

 )

  

 —

  

  

 —

  

  

 —

  

 

 
 Stock compensation expense

  

 —

  

  

 —

  

  

 5,272

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 5,272

  

 

 
 Foreign currency translation

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 (171

 )

  

 —

  

  

 (171

 )

 

 
 Balance at June 30, 2026

  

 38,025,125

  

 $

 38

  

 $

 295,026

  

  

 (6,701,268

 )

 $

 (111,635

 )

 $

 (11,140

 )

 $

 63,563

  

 $

 235,852

  

 

  
See accompanying notes to the unaudited condensed consolidated financial statements.

  
6

 
  

 Liquidity Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars In Thousands)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Nine Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Operating activities

  

  

  

  

  

  

 

 
 Net income

  

 $

 25,437

  

  

 $

 20,271

  

 

 
 Adjustments to reconcile net income to net cash provided by operating activities:

  

  

  

  

  

  

 

 
 Depreciation and amortization

  

  

 7,906

  

  

  

 7,741

  

 

 
 Stock compensation expense

  

  

 15,796

  

  

  

 9,522

  

 

 
 Inventory adjustment to net realizable value

  

  

 123

  

  

  

 32

  

 

 
 Provision for doubtful accounts

  

  

 267

  

  

  

 199

  

 

 
 Deferred tax expense

  

  

 1,887

  

  

  

 1,872

  

 

 
 Impairment of long-lived and other non-current assets

  

  

 —

  

  

  

 459

  

 

 
 Gain on disposal of property and equipment

  

  

 (2

 )

  

  

 (19

 )

 

 
 Changes in operating assets and liabilities:

  

  

  

  

  

  

 

 
 Accounts receivable

  

  

 (1,330

 )

  

  

 (8,599

 )

 

 
 Inventory

  

  

 (2,883

 )

  

  

 2,124

  

 

 
 Prepaid taxes and tax refund receivable

  

  

 545

  

  

  

 (1,881

 )

 

 
 Prepaid expenses and other assets

  

  

 469

  

  

  

 885

  

 

 
 Operating lease assets and liabilities

  

  

 (371

 )

  

  

 (283

 )

 

 
 Accounts payable

  

  

 610

  

  

  

 (1,787

 )

 

 
 Accrued expenses and other current liabilities

  

  

 (930

 )

  

  

 (2,733

 )

 

 
 Deferred revenue

  

  

 (244

 )

  

  

 (62

 )

 

 
 Payables to sellers

  

  

 12,912

  

  

  

 1,027

  

 

 
 Other liabilities

  

  

 (1

 )

  

  

 —

  

 

 
 Net cash provided by operating activities

  

  

 60,191

  

  

  

 28,768

  

 

 
 Investing activities

  

  

  

  

  

  

 

 
 Cash paid for business acquisitions, net of cash acquired

  

  

 —

  

  

  

 (6,500

 )

 

 
 Purchases of property and equipment, including capitalized software

  

  

 (6,178

 )

  

  

 (5,784

 )

 

 
 Purchase of short-term investments

  

  

 (8,791

 )

  

  

 (16,217

 )

 

 
 Maturities of short-term investments

  

  

 8,309

  

  

  

 7,417

  

 

 
 Other investing activities, net

  

  

 111

  

  

  

 203

  

 

 
 Net cash used in investing activities

  

  

 (6,549

 )

  

  

 (20,881

 )

 

 
 Financing activities

  

  

  

  

  

  

 

 
 Common stock repurchases

  

  

 (1,513

 )

  

  

 (79

 )

 

 
 Taxes paid associated with net settlement of stock compensation awards

  

  

 (7,985

 )

  

  

 (5,106

 )

 

 
 Payments of the principal portion of finance lease liabilities

  

  

 (82

 )

  

  

 (75

 )

 

 
 Proceeds from exercise of stock options, net of tax

  

  

 1,106

  

  

  

 192

  

 

 
 Net cash used in financing activities

  

  

 (8,474

 )

  

  

 (5,068

 )

 

 
 Effect of exchange rate differences on cash and cash equivalents

  

  

 (24

 )

  

  

 (440

 )

 

 
 Net increase (decrease) in cash and cash equivalents

  

  

 45,144

  

  

  

 2,379

  

 

 
 Cash and cash equivalents at beginning of period

  

  

 174,607

  

  

  

 153,226

  

 

 
 Cash and cash equivalents at end of period

  

 $

 219,751

  

  

 $

 155,605

  

 

 
 Supplemental disclosure of cash flow information

  

  

  

  

  

  

 

 
 Cash paid for income taxes, net

  

 $

 8,890

  

  

 $

 6,960

  

 

 
 Non-cash: Common stock surrendered in the exercise of stock options

  

  

 121

  

  

  

 47

  

 

 
 Non-cash: Acquisition consideration paid in common stock

  

  

 —

  

  

  

 945

  

 

  
See accompanying notes to the unaudited condensed consolidated financial statements.

  
7

 
 

 Liquidity Services, Inc. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
1.Organization

Liquidity Services, Inc. (Liquidity Services, the Company) is the leading global provider of e-commerce marketplaces and software solutions powering the circular economy. We create a better future for organizations, individuals, and the planet by using technology to capture and unleash the intrinsic value of surplus. We connect millions of buyers and thousands of sellers through our leading e-commerce auction marketplaces, search engines, asset management and auction software, and related services. Our comprehensive solutions enable the transparent, efficient, sustainable recovery of value from excess items owned by business and government sellers.
Our business delivers value to shareholders by unleashing the intrinsic value of surplus through our online marketplace platforms. These platforms ignite and enable a self-reinforcing cycle of value creation where buyers and sellers attract one another in greater numbers. The result of this cycle is a continuous flow of goods that becomes increasingly valuable as more participants join the platforms, thereby creating positive network effects that benefit sellers, buyers, and shareholders.
Incorporated in Delaware as Liquidation.com in November 1999, Liquidity Services has over 25 years of industry experience.
Reportable Segments
The Company has five operating segments and three reportable segments under which we conduct business: GovDeals, Retail Supply Chain Group (RSCG), and Capital Assets Group (CAG). Our separate Machinio and Software Solutions operating segments, which do not individually meet the quantitative thresholds to be reportable segments, are combined and presented together as Machinio & Software Solutions for segment reporting purposes. Further information and operating results of our reportable segments can be found in Note 14 - Segment Information.
•GovDeals. The GovDeals reportable segment provides solutions that enable government entities including city, county, state and federal agencies located in the United States and Canada and related commercial businesses to sell surplus property and real estate assets through its GovDeals, Bid4Assets and Sierra marketplaces; see Note 3 - Acquisitions. 

•RSCG. The RSCG reportable segment consists of marketplaces that enable corporations located in the United States and Canada to sell excess, returned, and overstocked consumer goods. RSCG also offers a suite of services that includes returns management, asset recovery, and e-commerce solutions. This segment uses multiple selling channels across our network of marketplaces and others to optimize the best combination of velocity, volume, and value. This segment primarily conducts its business-to-business sales on its Liquidation.com marketplace and through Direct Sales, and managed direct-to-consumer sales across a network of online sale channels, including Retail Rush, AllSurplus Deals, Secondipity and other online marketplaces. 

•CAG. The CAG reportable segment enables commercial businesses to sell surplus assets on our AllSurplus and GovDeals marketplace, specializing in asset categories such as heavy equipment, industrial manufacturing, oil and gas, biopharma, fast-moving consumer goods and electronics. CAG also offers a suite of services that includes surplus management, asset valuation, asset sales and marketing. CAG clients benefit from its global base of buyers and sellers, enabling the sale and redeployment of assets wherever they generate the best value and highest use across the world. 

•Machinio & Software Solutions. The Machinio operating segment operates the Machinio marketplace, a global search engine platform for listing equipment for sale in the construction, machine tool, processing, transportation, printing, agriculture, and laboratory/medical sectors, and the Machinio System platform that provides equipment sellers with a suite of software tools including website hosting, email marketing, and inventory management, to support and enable equipment sellers’ online business. The Software Solutions operating segment separately serves as the Company's private-label auction and software-as-a-service (SaaS) arm, offering scalable auction platform services to entrepreneurs and businesses. 

The Company's operations are subject to certain risks and uncertainties, many of which are associated with technology-oriented companies, including, but not limited to, the Company's dependence on use of the Internet; the effect of general business and economic trends including inflationary pressures and impacts from interest rate changes; tariffs and other trade barriers; ongoing international armed and geopolitical conflicts; susceptibility to rapid technological change; actual and potential competition by entities with greater financial and other resources; collectability of payment from our buyers; and the potential for the commercial sellers from which the Company derives a significant portion of its inventory to change the way they conduct their disposition of surplus assets or to otherwise terminate or not renew their contracts with the Company.

2.Summary of Significant Accounting Policies 

Unaudited Interim Financial Information 
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In management's opinion, all adjustments, consisting of normal, recurring adjustments considered necessary for a fair presentation, have been included, and intercompany transactions and accounts have been eliminated in consolidation. The information disclosed in the notes to the condensed consolidated financial statements for these periods is unaudited. 

  
8

 
 Liquidity Services, Inc. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements - (Continued)
 

 Operating results for the three and nine months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending September 30, 2026, or for any future period.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts in the condensed consolidated financial statements and accompanying notes. For the three and nine months ended June 30, 2026, these estimates required the Company to make assumptions about disruptions to macroeconomic conditions such as the impact of ongoing international armed and geopolitical conflicts, tariffs, global trade, market volatility and uncertainty and, in turn, the Company's results of operations. The Company will continue to update its assumptions as conditions change. Actual results could differ significantly from those estimates.

Contract Assets and Liabilities
Contract assets reflect an estimate of expenses that will be reimbursed upon settlement with a seller. The contract asset balance was $2.2 million as of June 30, 2026, and $1.3 million as of September 30, 2025, and is included in the line-item Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. 
Contract liabilities reflect obligations to provide services for which the Company has already received consideration and generally arise from up-front payments received in connection with our Machinio and Software Solutions subscription services. The contract liability balance was $4.8 million as of June 30, 2026, and $5.1 million as of September 30, 2025, and is included in the line-item Deferred revenue on the Condensed Consolidated Balance Sheets. Of the September 30, 2025, contract liability balance, $5.0 million was earned as other fee revenue during the nine months ended June 30, 2026.
For the Company's Machinio & Software Solutions segment, the performance obligation has been identified as the stand ready obligation to provide access to subscription services offered by our Machinio and Software Solutions businesses, which are satisfied over time and recognized as other fee revenues in the line-item Consignment and other fee revenues on the Condensed Consolidated Statements of Operations. As of June 30, 2026, the Company had a remaining performance obligation of $4.8 million; the Company expects to recognize the substantial majority of that amount as other fee revenues over the next 12 months.

Contract Costs
Contract costs relate to sales commissions paid on subscription contracts that are capitalized within our Machinio and Software Solutions businesses. Contract costs are amortized on a straight-line basis over the expected life of the customer contract. The contract cost balance was $2.4 million as of June 30, 2026, and $2.3 million as of September 30, 2025, and is included in the line-item Prepaid expenses and other current assets, and Other assets on the Condensed Consolidated Balance Sheets. Amortization expense was $0.4 million and $0.4 million during the three months ended June 30, 2026 and 2025, respectively, and $1.2 million and $1.2 million during the nine months ended June 30, 2026, and 2025, respectively. 

Risk Associated with Certain Concentrations
For the majority of buyers that receive goods before payment to the Company is made, credit evaluations are performed; however, for the remaining buyers, goods are not shipped before payment is made, and as a result the Company is not subject to significant collection risk from those buyers. However, for a limited number of financially qualified buyers, which can include re-sellers, we may from time-to-time extend credit for certain large purchases with negotiated payment periods. Credit terms commonly require payment to be made within 30 days, but where commercial terms or market conditions warrant these payment terms may be extended for up to six months. As a result, our consolidated accounts receivable balances are typically a small component of our overall financial position but may, at times, be concentrated among a limited, small number of such buyers. Collection risk from and credit exposure to these financially qualified buyers is regularly reviewed by management and adjusted as needed.
For consignment sales transactions, funds are typically collected from buyers and are held by the Company on the sellers' behalf. The funds are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company releases the funds to the seller, less the Company's commission and other fees due, through Accounts payable after the buyer has accepted the goods or within 30 days, depending on the state where the buyer and seller conduct business.
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash in banks within non-interest bearing, interest-bearing, and earnings allowance checking accounts, as well as cash equivalent money market funds, all of which exceed the applicable U.S. federal (FDIC and/or SIPC), local jurisdiction (foreign banking institutions) insurance limits, and Accounts receivable. 
The Company deposits its cash in interest bearing checking accounts, acquires cash equivalent money market funds, and holds short-term investments designated as held-to-maturity investment securities, each with financial institutions that the Company considers to be of high credit quality. Management continually monitors the financial institutions with whom we conduct business and responds appropriately, when necessary, to manage potential risk exposure to our cash balances above the insurance limits.

  
9

 
 Liquidity Services, Inc. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements - (Continued)
 

 The Company has multiple vendor contracts with Amazon.com, Inc. under which it acquires and sells commercial merchandise. While purchase model transactions account for less than 20% of our total GMV, the cost of inventory for purchase model transactions is the most significant component of our consolidated Costs of goods sold. $11.1 million and $10.1 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Condensed Consolidated Balance Sheets as of June 30, 2026, and September 30, 2025, respectively. The Company's vendor contracts with respect to sourcing or consigning merchandise fo