Liquidity Services, Inc.

What they do

The company operates e-commerce marketplaces that connect buyers and sellers of surplus, returned, and overstocked goods. It has three reportable segments: GovDeals (government surplus and real estate), Retail Supply Chain Group (consumer goods returns and overstock), and Capital Assets Group (industrial equipment and assets). It also operates Machinio, a global equipment search engine, and a Software Solutions segment providing private-label auction SaaS.

Revenue drivers

• Retail Supply Chain Group (RSCG) — Sells excess, returned, and overstocked consumer goods through channels like Liquidation.com, AllSurplus Deals, and Secondipity; in Q3 FY2026, GMV grew 19% and revenue grew 8%, with direct profit up 30%.
• GovDeals — Provides auction solutions for government entities (city, county, state, federal) in the U.S. and Canada; in Q3 FY2026, GMV and revenue each grew 9% and 7%, respectively, setting new quarterly records.
• Capital Assets Group (CAG) — Enables commercial sales of heavy equipment, industrial, oil & gas, and other assets on AllSurplus and GovDeals; in Q3 FY2026, revenue grew 18% with improved take-rates on multinational projects.
• Machinio & Software Solutions — Machinio is a global search engine for equipment listings, while Software Solutions offers private-label auction SaaS (Auction.io); combined revenue grew 4% in Q3 FY2026.

Recent performance

In Q3 FY2026 (quarter ended June 30, 2026), the company reported record GMV of $453.0 million, up 10% year-over-year, and revenue of $129.6 million, up 8%. GAAP net income was $10.4 million ($0.32 diluted EPS), up 41%, while non-GAAP Adjusted EBITDA rose 30% to $22.0 million. For fiscal 2025 (ended September 30, 2025), revenue was $476.7 million with net income of $28.1 million. Cash balances were $231.1 million with zero financial debt.

Strategy

Management highlights the 'RISE' strategy aimed at driving value across the circular economy with a target of $2 billion in annual GMV. Investment focus includes machine learning, artificial intelligence, and software to improve recovery rates and operational efficiency. The company is expanding asset-light, consignment-based solutions and multi-channel buyer bases across retail, industrial, and public sector verticals. Recent acquisitions include Auction Software (January 2025) to form the Software Solutions segment and Sierra Auction Management (January 2024) to expand GovDeals.

Risks

• Tariffs and trade barriers — Government actions affecting cross-border trade could impact both buyers and sellers on the company's marketplaces.
• Economic cyclicality in CAG — CAG segment faces variability in project timing and regional activity, as seen in a 1% GMV decline in Q3 FY2026.
• Integration of acquisitions — Recent acquisitions (Auction Software, Sierra) may not integrate as planned, affecting performance and growth.
• Dependence on buyer and seller network effects — The business model relies on continuous growth in registered buyers and sellers; a slowdown could reduce transaction volume and profitability.

Outlook

Management expects continued growth in all economic climates, citing strong buyer participation and seller adoption. The company is progressing toward its $2 billion annual GMV target, with record quarterly GMV in Q3 FY2026. Investments in innovation, service, and scale are expected to support profitable expansion.