10q10k10q10k.net

What changed in LIQUIDITY SERVICES INC's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of LIQUIDITY SERVICES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+401 added−344 removedSource: 10-K (2025-11-20) vs 10-K (2024-12-12)

Top changes in LIQUIDITY SERVICES INC's 2025 10-K

401 paragraphs added · 344 removed · 278 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+36 added−24 removed69 unchanged
Biggest changeYou can identify forward-looking statements by terminology such as "may," "will," "should," "could," "would," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continues" or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Biggest changeAlthough we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements.
We connect millions of buyers and thousands of sellers through our leading e-commerce auction marketplaces, search engines, asset management software, and related services. Our comprehensive solutions enable the transparent, efficient, sustainable recovery of value from excess items owned by business and government sellers.
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.
Integrated and comprehensive solution Our marketplaces provide sellers and buyers with a comprehensive solution for the online sale and purchase of surplus assets. We offer marketplaces with full-service and self-directed solutions. Our self-directed solutions provide transaction settlement and marketing support while allowing sellers to undertake the work of photographing, cataloging, and building their auctions.
Integrated and comprehensive solution Our marketplaces provide sellers and buyers with a comprehensive solution for the online sale and purchase of surplus assets. We offer marketplaces with self-directed and full-service solutions. Our self-directed solutions provide transaction settlement and marketing support while allowing sellers to undertake the work of photographing, cataloging, and building their auctions.
Operations Supporting large organizations that have a recurring need to sell surplus assets requires systematic processes to enhance the financial value and convenience received by our sellers. We believe we have integrated the required operational processes into our solution to efficiently and to effectively support our buyers and sellers.
Operations Supporting large organizations that have a recurring need to sell surplus assets requires systematic processes to enhance the financial value and convenience received by our sellers. We believe we have integrated the required operational processes into our solution to efficiently and effectively support our buyers and sellers.
We provide logistics services designed to support the receipt, handling, transportation, and tracking of merchandise offered through our marketplaces, including the following: o Network of warehouses - we provide sellers with the flexibility of either having us manage the sales process at their location or delivering merchandise to one of our warehouses. o Inventory management - sellers benefit from our management and inventory tracking system designed so merchandise is received, processed, and delivered promptly. o Cataloguing merchandise - we catalogue all merchandise, which enables us to provide useful product information to buyers and sellers. 11 o Inspection and grading - in certain circumstances, we inspect the merchandise and provide condition descriptions to improve quality and the financial recovery to the seller. o Testing, data wiping, de-labeling, and refurbishment - we test products, wipe electronic data, refurbish and remove labels and product markings from merchandise prior to sale to add value to the asset and protect sellers' brand equity and distribution relationships. o Return to vendor or product disposition to non-sales channels - we manage the end-to-end processes for our sellers ensuring that returned merchandise is disposed of in compliance with a variety of disposition requirements.
We provide logistics services designed to support the receipt, handling, transportation, and tracking of merchandise offered through our marketplaces, including the following: o Network of warehouses - we provide sellers with the flexibility of either having us manage the sales process at their location or delivering merchandise to one of our warehouses. o Inventory management - sellers benefit from our management and inventory tracking system designed so merchandise is received, processed, and delivered promptly. o Cataloguing merchandise - we catalogue all merchandise, which enables us to provide useful product information to buyers and sellers. o Inspection and grading - in certain circumstances, we inspect the merchandise and provide condition descriptions to improve quality and the financial recovery to the seller. o Testing, data wiping, de-labeling, and refurbishment - we test products, wipe electronic data, refurbish and remove labels and product markings from merchandise prior to sale to add value to the asset and protect sellers' brand equity and distribution relationships. o Return to vendor or product disposition to non-sales channels - we manage the end-to-end processes for our sellers ensuring that returned merchandise is disposed of in compliance with a variety of disposition requirements.
Settlement and seller support services are designed for successful and reliable completion of transactions and include: o Buyer qualification - we qualify buyers to ensure their compliance with government or seller mandated terms of sale, as well as to confirm their ability to complete a transaction. o Collection and settlement - we collect payments on behalf of sellers prior to delivery of any merchandise and disburse the proceeds to the seller after the satisfaction of all conditions of a sale. o Transaction tracking - we enable sellers and buyers to track and monitor the status of their transactions throughout the sales process.
Settlement and seller support services are designed for successful and reliable completion of transactions and include: o Buyer qualification - we qualify buyers to ensure their compliance with government or seller mandated terms of sale, as well as to confirm their ability to complete a transaction. 11 o Collection and settlement - we collect payments on behalf of sellers prior to delivery of any merchandise and disburse the proceeds to the seller after the satisfaction of all conditions of a sale. o Transaction tracking - we enable sellers and buyers to track and monitor the status of their transactions throughout the sales process.
These activities include unloading, manifesting and reporting discrepancies for 15 all received assets and sales preparation of offered assets, including merchandising and organizing offered assets, writing product descriptions, capturing digital images and/or video and providing additional optional value-added services such as returns management (RM) services, return to vendor (RTV) services and product delabelling, data cleaning/wiping, testing, refurbishment and repackaging.
These activities include unloading, manifesting and reporting discrepancies for all received assets and sales preparation of offered assets, including merchandising and organizing offered assets, writing product descriptions, capturing digital images and/or video and providing additional optional value-added services such as returns management (RM) services, return to vendor (RTV) services and product delabelling, data cleaning/wiping, testing, refurbishment and repackaging.
Traditional methods are inefficient for buyers due to the lack of: • global access to an available continuous supply of desired goods and assets; • efficient and inexpensive sourcing processes; • a professionally managed central marketplace with transparent, high-quality services; • detailed information and product description for the offered goods; and • pricing transparency or ability to compare asset prices.
These traditional methods are inefficient for buyers due to the lack of: • global access to an available continuous supply of desired goods and assets; • efficient and inexpensive sourcing processes; • a professionally managed central marketplace with transparent, high-quality services; • detailed information and product description for the offered goods; and • pricing transparency or ability to compare asset prices.
Our buyer services include intelligent alerts, search tools, dynamic pricing, shipping and delivery where available, secure payment, live buyer support, and dispute resolution to enable effective methods to source assets for their businesses. Flexible and aligned transaction model We offer two primary transaction models to our sellers: the consignment transaction model and the purchase transaction model.
Our buyer services include intelligent alerts, search tools, dynamic pricing, shipping and delivery where available, secure payment, live buyer support, and dispute resolution to enable effective methods to source assets for their businesses. 7 Flexible and aligned transaction model We offer two primary transaction models to our sellers: the consignment transaction model and the purchase transaction model.
The cloud-based, flexible infrastructure has enabled our operations to continue, uninterrupted, in a variety of working models, including fully remote, on-site, and 14 hybrid. This flexibility affords us the ability to recruit and retain outstanding talent and to service our customers’ needs regardless of location.
The cloud-based, flexible infrastructure has enabled our operations to continue, uninterrupted, in a variety of working models, including fully remote, on-site, and hybrid. This flexibility affords us the ability to recruit and retain outstanding talent and to service our customers’ needs regardless of location.
Under the purchase transaction model, we purchase inventory from a seller that we resell 6 in our marketplaces. Sometimes our inventory purchase price is variable, as we may share the gross or net proceeds of such resales with the seller. Sellers that elect the purchase transaction model are considered vendors.
Under the purchase transaction model, we purchase inventory from a seller that we resell in our marketplaces. Sometimes our inventory purchase price is variable, as we may share the gross or net proceeds of such resales with the seller. Sellers that elect the purchase transaction model are considered vendors.
Our technology systems and committed teams enable us to automate and streamline many of the manual processes associated with finding, evaluating, bidding on, paying for, and shipping surplus assets, retail returns and overstocks, and foreclosed real-estate.
Our proprietary technology systems and committed teams enable us to automate and streamline many of the manual processes associated with finding, evaluating, bidding on, paying for, and shipping surplus assets, retail returns and overstocks, and foreclosed real-estate.
Registered preferences can be as broad as a product category or as specific as a part number or key word. We use this information to ensure informed recommendations whenever we identify a product that fits a buyer's preference.
Registered preferences can be as broad as a product category or as specific as a part number or key word. We use this information to ensure informed recommendations whenever we identify a product that fits a buyer's preferences.
Our plans are designed to enhance employee wellness by focusing on health, financial security, life, and learning. Our health benefits include multiple medical plans, dental and vision coverage, and paid parental leave. In the U.S., we pay a significant portion of the benefit premiums related to our health benefits.
Our plans are designed to enhance employee wellness by focusing on health, financial security, life, and learning. Our health benefits include multiple medical plans, dental and vision coverage, mental health support and paid parental leave. In the U.S., we pay a significant portion of the benefit premiums related to our health benefits.
To increase the realized sales value, we also research, collect, and use supplemental product information to enhance product descriptions and categorization. o Recommendations - we utilize AI and big data algorithms to match buyers to the right products, enhancing our seller's overall recovery. • Logistics.
To increase the realized sales value, we also research, collect, and use supplemental product information to enhance product descriptions and categorization. o Recommendations - we utilize AI and big data algorithms to match buyers to the right products, enhancing our sellers overall recovery. • Logistics.
We provide our sellers access to a network of liquid marketplaces with over 5.5 million buyers and a suite of services including consultative surplus asset management, valuation, sales solutions, logistics capabilities, and self-directed service tools to efficiently manage our sellers' reverse supply chain and maximize total supply chain value.
We provide our sellers access to a worldwide network of liquid marketplaces with over 6 million buyers, and a suite of services including consultative surplus asset management, valuation, sales solutions, logistics capabilities, and self-directed service tools to efficiently manage our sellers' reverse supply chain and maximize total supply chain value.
In addition, we provide buyers with the information they need to make informed decisions, including product data, seller performance, and online shipping quotes to help understand their landed cost. o Broad and flexible range of shipping/pick-up options - we can provide packaging and shipping services for many transactions, whether it is a small item or container loads for export, including buyer pick-up at our premises, supporting buyer-arranged transportation through our preferred shippers network, or providing customer pick-up appointments for both Liquidation.com and AllSurplus Deals transactions at specific warehouse locations. o Secure settlement and buyer support - besides qualifying sellers, providing several electronic payment options and serving as a trusted market intermediary, we verify transaction completion, and ensure the buyers funds are secure throughout the transaction process, all of which enhances buyer confidence. o Buyer support - we provide full reliable buyer support and dispute resolution through phone, email, and chat throughout the transaction process. 12 Sales and Marketing We use sales and marketing activities to acquire and manage our seller and buyer accounts.
In addition, we provide buyers with the information they need to make informed decisions, including product data, seller performance, and online shipping quotes to help understand their landed cost. o Broad and flexible range of shipping/pick-up options - we can provide packaging and shipping services for many transactions, whether it is a small item or container loads for export, including buyer pick-up at our premises, supporting buyer-arranged transportation through our preferred shippers network, or providing customer pick-up appointments for both Liquidation.com and AllSurplus Deals transactions at specific warehouse locations. o Secure settlement and buyer support - besides qualifying sellers, providing several electronic payment options and serving as a trusted market intermediary, we verify transaction completion, and ensure the buyers funds are secure throughout the transaction process, all of which enhances buyer confidence. o Buyer support - we provide full reliable buyer support and dispute resolution through phone, email, and chat throughout the transaction process.
The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Our vendor contracts with respect to sourcing or consigning merchandise for our RSCG segment generally reflect the concentration dynamics inherent to the retail industry. Government Regulation We are subject to federal and state consumer protection laws, including laws protecting the privacy of customer non-public information and regulations prohibiting unfair and deceptive trade practices.
The Company's vendor contracts with respect to sourcing or consigning merchandise for its RSCG segment generally reflect the concentration dynamics inherent to the retail industry. 16 Government Regulation We are subject to federal and state consumer protection laws, including laws protecting the privacy of customer non-public information and regulations prohibiting unfair and deceptive trade practices.
We rely on contractual restrictions and copyright and trade secret laws to protect our proprietary rights, know-how, information, and technology. We currently are the registered owners of several Internet domain names, including www.liquidation.com, www.govdeals.com, www.allsurplus.com, www.secondipity.com, www.machinio.com, www.machineryhost.com, and 16 www.bid4assets.com. We pursue the registration of our domain names in the U.S. and internationally.
We rely on contractual restrictions and copyright and trade secret laws to protect our proprietary rights, know-how, information, and technology. We currently are the registered owners of several Internet domain names, including www.liquidation.com, www.govdeals.com, www.allsurplus.com, www.secondipity.com, www.retailrush.com, www.machinio.com, www.machineryhost.com, www.auction.io, and www.bid4assets.com. We pursue the registration of our domain names in the U.S. and internationally.
As of September 30, 2024, our number of employees by region were as follows: We also utilize temporary workers to augment staffing during peak business cycles and to fill certain open positions on a temporary basis. Importance of our Employees We believe our employees are key to achieving our business goals and growth strategy.
As of September 30, 2025, our number of employees by region was as follows: We also utilize temporary workers to augment staffing during peak business cycles and to fill certain open positions on a temporary basis. Importance of our Employees We believe our employees are key to achieving our business goals and growth strategy.
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. $12.2 million and $5.8 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Consolidated Balance Sheets as of September 30, 2024 and 2023, respectively.
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. $10.1 million and $12.2 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Consolidated Balance Sheets as of September 30, 2025 and 2024, respectively.
Lastly, we are leveraging our Machinio segment to expand our capabilities with respect to technology-enabled advertising. This is a natural adjunct to the self-service and full-service solutions available in our marketplaces. Expense Leverage We intend to improve operating expense leverage by controlling costs coupled with technology innovation that increases productivity.
Lastly, we are leveraging our Machinio & Software Solutions segment to expand our capabilities with respect to technology-enabled advertising. This is a natural adjunct to the self-service and full-service solutions available in our marketplaces. Expense Leverage We intend to improve operating expense leverage by controlling costs and leveraging technology innovation to increase productivity.
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 our GovDeals, Bid4Assets and Sierra marketplaces; see Note 3 - Bid4Assets Acquisition and Note 4 - Sierra Acquisition , respectively. • RSCG .
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 .
We use our website as a channel of distribution for material Company information. We post important information, including news releases, analyst presentations, investor presentations, and financial information regarding the Company at www.liquidityservices.com and www.investors.liquidityservices.com. Cautionary Note Regarding Forward-Looking Statements This document contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. These statements are only predictions.
We use our website as a channel of distribution for material Company information. We post important information, including news releases, analyst presentations, investor presentations, and financial information regarding the Company at https://liquidityservices.com/ and http://investors.liquidityservices.com . Cautionary Note Regarding Forward-Looking Statements This document contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995.
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. During the past three fiscal years, we have conducted over 2.9 million online transactions generating $3.7 billion in gross merchandise volume or GMV.
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. During the past three fiscal years, we conducted over 3.1 million online transactions that generated $4.1 billion in gross merchandise volume or GMV.
By leveraging the variety of experiences, skills and perspectives inherent in a diverse workforce, we aim to improve our problem-solving abilities and bring innovative solutions to a wider range of clients and customers. Health and Well-Being We value the health and well-being of our employees and provide generous benefit options to our employees and their families.
By leveraging the variety of experiences, skills and perspectives among our employees, we aim to improve our problem-solving abilities and bring innovative solutions to a wider range of clients and customers. Health and Well-Being We value the health and well-being of our employees and provide generous benefit options for our employees and their families.
GMV is the total sales value of all transactions for which we earned compensation upon their completion through our marketplaces or other channels during a given period of time. During the year ended September 30, 2024, the number of registered buyers grew from 5.1 million to 5.5 million, or 7%.
GMV is the total sales value of all transactions for which we earned compensation upon their completion through our marketplaces or other channels during a given period of time. During the year ended September 30, 2025, our number of registered buyers grew from 5.5 million to 6.0 million, or 9.5%.
We generated GMV of $1.4 billion and revenue of $363.3 million through multiple sources, including transaction fees from sellers and buyers, proceeds from the sale of products we purchased from sellers, and value-added service charges during the year ended September 30, 2024. Over the prior 5 years, our GMV has grown at a compound annual growth rate of 16.4%.
We generated GMV of $1.6 billion and revenue of $477.7 million through multiple sources, including transaction fees from sellers and buyers, proceeds from the sale of products we purchased from sellers, and value-added service charges during the year ended September 30, 2025. Over the prior 5 years, our GMV has grown at a compound annual growth rate of 20.4%.
Faster transaction cycle times for our sellers and buyers We believe our marketplace solutions allow our sellers to complete the entire sales process more rapidly than through other liquidation methods by reducing the complexities in the reverse supply chain and utilizing our multi-channel strategies to optimize recovery and velocity.
Instead, sellers and buyers access our global e-commerce marketplaces for their entire surplus asset needs. 6 Faster transaction cycle times for our sellers and buyers We believe our marketplace solutions allow our sellers to complete the entire sales process more rapidly than through other liquidation methods by reducing the complexities in the reverse supply chain and utilizing our multi-channel strategies to optimize recovery and velocity.
Traditionally, these buyers have had limited access to a reliable flow of surplus goods and assets, relying instead on their own network of industry contacts and fixed-site auctioneers to locate, evaluate and purchase specific items of interest.
Traditionally, limited access to a reliable flow of surplus goods and assets has forced these buyers ton rely on their own network of industry contacts and fixed-site auctioneers to locate, evaluate and purchase specific items of interest.
Many jurisdictions also regulate "auctions" and "auctioneers" and may regulate online auction services. These consumer protection laws and regulations could cause substantial compliance costs and could interfere with the conduct of our business. Intellectual Property We regard our intellectual property, particularly domain names, copyrights, and buyer database trade secrets, as critical to our success.
These consumer protection laws and regulations could cause substantial compliance costs and could interfere with the conduct of our business. Intellectual Property We regard our intellectual property, particularly domain names, copyrights, and buyer database trade secrets, as critical to our success.
Key marketing support activities are embedded directly at the business unit level to support the successful execution of asset sales at each of our marketplaces. 9 Our Marketplaces Our network of marketplace brands serves buyers and sellers in numerous industries across hundreds of product categories. 10 Our e-commerce marketplaces, designed to address the particular requirements and needs of buyers and sellers, are efficient and convenient methods for the sale of surplus consumer goods and capital assets in over 750 product categories including, but not limited to: consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet, and transportation equipment and specialty equipment.
Our Marketplaces Our network of marketplace brands serves buyers and sellers in numerous industries across hundreds of product categories. 9 Our e-commerce marketplaces, designed to address the particular requirements and needs of buyers and sellers, are efficient and convenient methods for the sale of surplus consumer goods and capital assets in over 900 product categories including, but not limited to: consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet, and transportation equipment and specialty equipment.
Item 1. B usiness. Overview Liquidity Services, Inc. (Liquidity Services, the Company) is a leading global commerce company providing trusted online marketplace platforms that power 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.
Item 1. B usiness. Overview 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.
The CAG reportable segment enables commercial businesses to sell surplus assets on our AllSurplus marketplace. The core verticals in which CAG operates include industrial manufacturing, oil and gas, heavy equipment, biopharma, and electronics. CAG also offers a suite of services that includes surplus management, asset valuation, asset sales and marketing.
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.
Professional buyers seek surplus assets to sustain their operations and meet the demands of end-customers. They include online and offline retailers, convenience and discount stores, value-added resellers such as refurbishers and scrap recyclers, import and export firms, and small businesses.
Professional buyers consist of many different types, including online and offline retailers, convenience and discount stores, value-added resellers such as refurbishers and scrap recyclers, import and export firms, and small businesses. One thing they all have in common is that they seek surplus assets to sustain their operations and meet the demands of end-customers.
The growth and demand for e-commerce has resulted in and may continue to result in more stringent consumer protection laws and data privacy laws that impose additional compliance burdens on e-commerce companies. In particular, we continue to address changes in state, federal and international privacy laws and regulations, including the General Data Protection Regulations (GDPR) in the European Union.
The growth and demand for e-commerce has resulted in and may continue to result in more stringent consumer protection laws and data privacy laws that impose additional compliance burdens on e-commerce companies.
We believe buyers of surplus assets will increasingly use online marketplace platforms to identify and source goods available for immediate purchase. Our Solutions Our solutions include e-commerce marketplaces, self-directed auction listing tools, and value-added services.
It is our belief that the use of online marketplace platforms to identify and source goods available for immediate purchase will continue to increase amongst buyers. 5 Our Solutions Our global solutions include e-commerce marketplaces, self-directed auction listing tools, and value-added services.
The strengths of our business model include: Aggregation of supply and demand for surplus assets The strength of our business model rests on our ability to aggregate sellers and buyers through our marketplaces.
Competitive Factors We have created liquid marketplaces for virtually any type, quantity, or condition of surplus assets. The strengths of our business model include: Aggregation of supply and demand for surplus assets The strength of our business model rests on our ability to aggregate sellers and buyers through our marketplaces.
Sellers simply make goods available at their facilities or deliver them to our warehouses and we deliver the sale proceeds, less our portion of such proceeds and/or our commissions or fees, after the sale is completed. We have also expanded our capabilities to process individual items, pallets, less-than-truckload (LTL) and full-truckload (FTL) auctions.
Sellers simply make goods available at their facilities or deliver them to our warehouses and we deliver the sale proceeds, less our portion of such proceeds and/or our commissions or fees, after the sale is completed.
Our solution eliminates the need for sellers and buyers to rely on the highly fragmented and geographically dispersed group of traditional liquidators and auctioneers. Instead, sellers and buyers access our global e-commerce marketplaces for their entire surplus asset needs.
Our solution eliminates the need for sellers and buyers to rely on the highly fragmented and geographically dispersed group of traditional liquidators and auctioneers.
We are investing significant resources in: • Our marketplace user experiences; • Upgrading our sellers tools to be fully mobile-responsive; • Developing industry-specific asset upload templates making it easier to sell on our marketplaces; and • Leveraging generative AI and other automation technologies to create efficiencies across the enterprise.
We are investing significant resources in: • Our marketplace user experiences; • Upgrading our sellers tools to be fully mobile-responsive; • Developing AI-powered asset cataloging tools that offer significant efficiency gains to the seller, and • Leveraging generative AI and other automation technologies to create efficiencies across the enterprise.
We have expanded our self-directed service model to allow commercial sellers that do not require a full-service solution to leverage the power of our marketing and online marketplaces to drive buyer demand for their assets.
Through enhanced service models, we have broadened our self-directed offering to allow government and commercial sellers that need a more comprehensive solution to leverage the power of our marketing and online marketplaces to drive buyer demand for their assets.
Our websites contain extensive information about buying through our e-commerce marketplaces, including an online tutorial regarding the use of our marketplaces, answers to frequently asked buyer questions, and an indexed help section. Buyers can contact a buyer support service representative by live chat and e-mail or phone if they need additional support.
Our websites contain extensive information about buying through our e-commerce marketplaces, including an online tutorial regarding the use of our marketplaces, answers to frequently asked buyer questions, and an indexed help section.
Available Information Our proxy statement, annual, quarterly, and current reports, as well as amendments to those reports and other information, are provided free of charge on our website at www.investors.liquidityservices.com, as soon as reasonably practicable after we electronically file these 18 materials with or furnish them to, the Securities and Exchange Commission (the SEC).
These efforts extend to our employees as well, where our remote work structure for applicable employees has enabled lower expended energy and emissions from both transportation-related activities and operations across our real estate portfolio. 19 Available Information Our proxy statement, annual, quarterly, and current reports, as well as amendments to those reports and other information, are provided free of charge on our website at www.investors.liquidityservices.com, as soon as reasonably practicable after we electronically file these materials with or furnish them to, the Securities and Exchange Commission (the SEC).
In addition, our shipping coordinators monitor the performance and service level of our network of carriers to help ensure speed and quality of service. Warehouse network and field service operations Our warehouse network and field service operations groups perform selected pre-sale and post-sale value-added services across our network of warehouses and at seller locations globally.
Warehouse network and field service operations Our warehouse network and field service operations groups perform selected pre-sale and post-sale value-added services across our network of warehouses and at seller locations globally.
For these buyers, we provide a broad range of services to give them the information necessary to make an informed bid and ensure they quickly and efficiently receive the goods purchased. Solutions that promote sustainability for improved corporate/government stewardship Our e-commerce marketplace solutions power the circular economy and provide benefits to businesses, communities, and the environment.
For these buyers, we provide a broad range of services to give them the information necessary to make an informed bid and ensure they quickly and efficiently receive the goods purchased.
Employees are offered certain benefits at no charge to them or their families, e.g., Life and AD&D insurance, short- and long-term disability insurance, and Health Savings Account contributions. The financial security benefits program includes a 401(k) plan with discretionary employer match and access to health savings accounts and health and dependent care flexible spending accounts.
Employees are offered certain benefits at no charge to them or their families, e.g., Life and AD&D insurance, short- and long-term disability insurance, and Health Savings Account contributions.
We also seek the optimal methods to maximize our sellers' net recovery using channel strategies and dedicated programs to deliver transparent, sustained value. Through our relationships with our sellers, we provide our buyers with convenient access to a substantial and continuous flow of surplus assets.
We also seek the optimal methods to maximize our sellers' net recovery using channel strategies and dedicated programs to deliver transparent, sustained value.
This provides our retail sellers with flexible solutions that can scale to solve their unique liquidity challenges while leveraging our various retail channels to maximize their recovery value.
We have also expanded our capabilities to process individual items, pallets, less-than-truckload (LTL) and full-truckload (FTL) auctions. This provides our retail sellers with flexible solutions that can scale to solve their unique liquidity challenges while leveraging our various retail channels to maximize their recovery value.
We believe our marketplaces benefit over time from greater scale and adoption by our constituents creating a continuous flow of goods benefiting our buyers and sellers. As of September 30, 2024, we had 5.5 million registered buyers in our marketplaces. We had access to millions of additional end-users through a range of external consumer marketplaces.
This enables our solutions to become an important source of surplus assets for many of our professional buyers and end-users. We believe our marketplaces benefit over time from greater scale and adoption by our constituents creating a continuous flow of goods benefiting our buyers and sellers. As of September 30, 2025, we had 6.0 million registered buyers in our marketplaces.
Our sales activities are focused on acquiring new sellers and expanding existing sellers' use of our solutions. Our marketing activities are focused on acquiring and activating new buyers and increasing existing buyers' participation. Our marketing team also manages our marketplace brands and seller lead generation efforts that support the sales team.
Sales and Marketing We use sales and marketing activities to acquire and manage our seller and buyer accounts. Our sales activities are focused on acquiring new sellers and expanding existing sellers’ use of our solutions. Our marketing activities are focused on acquiring and activating new buyers and increasing existing buyers’ participation.
Our Value-Added Services for Buyers and Sellers In addition to our self-directed tools for our sellers, we have integrated value-added services to simplify the reverse supply chain processes for both our sellers and buyers.
We play a vital role in the circular economy, keeping valuable goods in use and out of landfills, supporting the efficient flow of resources. 10 Our Value-Added Services for Buyers and Sellers In addition to our self-directed tools for our sellers, we have integrated value-added services to simplify the reverse supply chain processes for both our sellers and buyers.
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements apply only as of the date of this Annual Report on Form 10-K and are expressly qualified in their entirety by the cautionary statements included in this document.
All forward-looking statements apply only as of the date of this Annual Report on Form 10-K and are expressly qualified in their entirety by the cautionary statements included in this document.
Factors contributing to these inefficiencies in the reverse supply chain include the lack of: • a centralized and global marketplace to sell bulk products as well as machinery and equipment in the reverse supply chain; • awareness of effective methods and mechanisms for the disposal of surplus assets; • experience in managing the reverse supply chain to seek optimal net returns and improve gross margins; and • real time market data on surplus assets.
Key contributors to inefficiencies in the reverse supply chain include: • Limited centralized, global marketplace for selling bulk products, machinery, and equipment in the reverse supply chain; • Limited awareness of effective disposal methods and mechanisms for surplus assets; • Inexperience in optimizing reverse supply chain management for improved net returns and gross margins; and • Insufficient access to real-time market data concerning surplus assets.
Reportable Segments The Company has four operating and reportable segments under which we conduct business: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Further information and operating results of our reportable segments can be found in Note 17 - Segment Information . • GovDeals .
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).
We achieve this through our safe and effective resale and redeployment of surplus assets; our reduction of waste; and by creating markets for items that might otherwise have been landfilled.
Solutions that promote sustainability for improved corporate/government stewardship Our e-commerce marketplace solutions power the circular economy and provide benefits to businesses, communities, and the environment. We achieve this through our safe and effective resale and redeployment of surplus assets; our reduction of waste; and by creating markets for items that might otherwise have been landfilled.
The net result is a consolidated, scalable platform that couples an enhanced and accessible user experience with state-of-the-art site search, navigation, and product recommendations. This engine is powered by a combination of artificial intelligence (AI) and machine learning (ML) algorithms which enable our buyers to locate the assets they desire in a more efficient manner.
This engine is powered by a combination of artificial intelligence (AI) and machine learning (ML) algorithms which enable our buyers to locate the assets they desire in a more efficient manner. This platform enables the seamless cross-bidding interaction of assets.
Each of our team members is part of our global initiative to make a difference in the communities where we live and work. We engage with our local communities across the globe supporting community outreach, disaster relief, zero-waste initiatives, youth mentoring, military families and veterans, and access to higher education. Flexible Workspace We are a remote-first work environment.
Each of our team members is part of our global initiative to make a difference in the communities where we live and work. We actively support our global communities through outreach programs, relief efforts, sustainability initiatives, education and mentorship programs. Flexible Workspace We are a remote-first work environment.
For any given asset, our buyers have access to a detailed product description, product manifest, digital images, relevant transaction history regarding the seller, and, where appropriate, 5 the shipping weights, product dimensions and estimated shipping costs to the buyer's location. This enables our solutions to become an important source for surplus assets for many of our professional buyers and end-users.
We continually look for new categories in which we can expand our presence. For any given asset, our buyers have access to a detailed product description, product manifest, digital images, relevant transaction history regarding the seller, and, where appropriate, the shipping weights, product dimensions and estimated shipping costs to the buyer's location.
Liquidity Services was incorporated in Delaware in November 1999 as Liquidation.com, Inc. and commenced operations in early 2000. On January 1, 2024, the Company acquired Sierra Auction Management, Inc. (Sierra), a full-service auction company specializing in the sale of vehicles, equipment and surplus assets for government agencies, commercial businesses, and charities.
See Note 3 - Acquisitions for more information regarding this transaction. On January 1, 2024, the Company acquired Sierra Auction Management, Inc. (Sierra), a full-service auction company specializing in the sale of vehicles, equipment and surplus assets for government agencies, commercial businesses, and charities. See Note 3 - Acquisitions for more information regarding this transaction.
Sales Our sales personnel develop seller relationships, contract to provide our services and manage the business accounts on an ongoing basis. Our sales team focuses on building long-term relationships with sellers that we believe will generate recurring transactions and position the Company as an integral partner helping them to achieve their goals.
Our sales team focuses on building long-term relationships with sellers that we believe will generate recurring transactions and position the Company as an integral partner helping them to achieve their goals. They also leverage our years of experience and market data of completed transactions to identify which of our various services would be beneficial to each new or existing seller.
CAG benefits from a global base of buyers and sellers enabling the sale and redeployment of assets wherever they’re most likely to generate the best value and highest use across the world. This segment primarily uses the AllSurplus and GovDeals marketplaces. • Machinio .
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 .
Aggregating this level of buyer demand and market data enables us to generate a continuous flow of goods from commercial and government sellers, which in turn attracts an increasing number of buyers. During the year ended September 30, 2024, we had more than 4.0 million auction participants in our online auctions.
We had access to millions of additional end-users through a range of external consumer marketplaces. Aggregating this level of buyer demand and market data enables us to generate a continuous flow of goods from commercial and government sellers, which in turn attracts an increasing number of buyers.
During fiscal 2024, we grew our registered buyer base by 7.2% or 371,000 registered buyers. As buyers continue to discover and use our e-commerce marketplaces as an effective method to source assets, we believe our solutions become an increasingly attractive sales channel for commercial and government agency sellers.
As buyers continue to discover and use our e-commerce marketplaces as an effective method to source assets, we believe our solutions become an increasingly attractive sales channel for commercial and government agency sellers. We believe this self-reinforcing cycle results in greater transaction volume and enhances the value of our marketplaces.
For example, according to Allied Market Research ( Reverse Logistics Market Size, Share, Competitive Landscape and Trend Analysis Report, by Return Type, by End User : Global Opportunity Analysis and Industry Forecast, 2023-2032 (April 2024) ), the global reverse logistics market is expected to reach $948 billion by 2032, growing at a compound annual growth rate of 4.3% from 2023 to 2032.
According to Allied Market Research, (Logistics Market Size, Share, Competitive Landscape and Trend Analysis Report, by Model: Global Opportunity Analysis and Industry Forecast, 2023 – 2033 (Feb 2025), the global logistics market, which includes reverse logistics, was valued at $10.2 trillion in 2023 and is projected to reach $20.1 trillion by 2033, growing at a compound annual growth rate (CAGR) of 7.3%.
Increased Volume We intend to grow the volume of transacted surplus on our marketplaces with flexible service offerings and pricing models to meet the needs of existing and new sellers.
Through technology and innovation, we are able to improve the buyer experience across our network of marketplaces, which attracts more buyers to these marketplaces, thus driving higher net recovery. 8 Increased Volume We intend to increase the volume of transacted surplus on our marketplaces with flexible service offerings and pricing models to meet the needs of existing and new sellers.
The Machinio reportable segment operates a global search engine platform for listing equipment for sale in the construction, machine tool, processing, transportation, printing, agriculture, and laboratory/medical sectors.
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.
We provide a range of insurance products and employee assistance programs. Internationally, we also offer 17 a variety of benefit plans customized to reflect local conditions.
The financial security benefits program includes a 401(k) plan with discretionary employer match and access to health savings accounts and health and dependent care flexible spending accounts. 18 We provide a range of insurance products and employee assistance programs. Internationally, we also offer a variety of benefit plans customized to reflect local conditions.
By coupling our click-stream data and bid activity with our campaign activity, the marketing organization leverages a feedback loop that increases campaign effectiveness and optimizes spending. 7 Our Strategy The focus of our growth strategy is to build the world’s leading marketplace for surplus assets to benefit buyers, sellers, and the planet.
Our data infrastructure and analytics continue to provide near real-time operational insights. By coupling our click-stream data and bid activity with our campaign activity, the marketing organization leverages a feedback loop that increases campaign effectiveness and optimizes spending.
During fiscal year 2022, AllSurplus Deals was launched as an expansion and adaptation of the core AllSurplus platform enabling a hyper-localized direct to consumer experience. AllSurplus Deals provides a convenient, local pick-up solution connecting our retail supply directly to consumers in our target markets.
Our hyper-localized direct-to-consumer sales experiences are offered through AllSurplus Deals, providing for a convenient location pick-up solution connecting our retail supply directly to consumers in our target markets, and Retail Rush, a new direct-to-consumer experience introduced during fiscal year 2025 combining the excitement of an online retail deep discount experience with a physical bin store.
Human Capital Management To achieve our goal to build the world’s leading marketplace for surplus assets to benefit buyers, sellers, and the planet, it is crucial that we attract, develop, and retain employees who deliver outstanding performance. We strive to make Liquidity Services a rewarding place to work by promoting diversity based on experiences, perspectives and skills.
Effective patent, copyright, trademark, service mark, trade secret, and domain name protection are expensive to maintain and may require litigation to enforce. 17 Human Capital Management To achieve our goal to build the world’s leading marketplace for surplus assets to benefit buyers, sellers, and the planet, it is crucial that we attract, nurture, and retain employees who deliver outstanding performance.
We provide our buyers with a convenient method for sourcing surplus consumer goods and electronics, commercial capital assets, industrial equipment, energy equipment, biopharma assets, and real estate. We continually look for new categories in which we can expand our presence.
Our solution combines leading e-commerce marketplaces with integrated sales, marketing, merchandising, fulfillment, payment collection, customer support, dispute mediation and logistics services. We provide our buyers with a convenient method for sourcing surplus consumer goods and electronics, commercial capital assets, industrial equipment, energy equipment, biopharma assets, and real estate.
We intend to grow our volume within the retail supply chain by leveraging the self-directed service model, expanding our AllSurplus Deals marketplace offering consumers deals for curbside pick-up, and continuing to grow our network of warehouses.
We also intend to grow our volume within the retail supply chain by leveraging the self-directed service model, expanding our new Retail Rush marketplace where buyers can shop both online and in-store for surplus goods and assets.
This approach allows us to more completely penetrate the total addressable market by better meeting the needs of small and mid-sized organizations, equipment dealers, and organizations with lower volumes. We also anticipate increasing volume by placing a greater focus on certain categories, including heavy equipment, construction, and real estate.
This approach allows us to more completely penetrate the total addressable market by better meeting the needs of small and mid-sized organizations, equipment dealers, and organizations with lower volumes. Service Expansion We intend to grow our services with recurring revenue characteristics that leverage our technology platform, domain expertise, data, and marketplace channels.
As a result, our sellers can reduce surplus or less valuable inventory quickly, generate additional working capital and reduce the cost of carrying unwanted assets. We provide a complete solution to enable professional buyers of any size throughout the world to purchase assets efficiently.
As a result, our sellers can reduce surplus or less valuable inventory quickly, generate additional working capital and reduce the cost of carrying unwanted assets. We engineer sales around the unique needs of each customer, offering tailored solutions that align with their specific asset types, volume, and recovery goals.
Shipping logistics Our shipping logistics group manages and coordinates inbound and outbound shipping of merchandise for sellers and buyers of our Retail services. We offer, as part of our value-added services, integrated shipping services using multiple vetted and pre-qualified carrier partners.
We offer, as part of our value-added services, integrated shipping services using multiple vetted and pre-qualified carrier partners. In addition, our shipping coordinators monitor the performance and service level of our network of carriers to help ensure speed and quality of service.
We have experienced no financially material service interruptions on our e-commerce marketplaces. In October 2023, we successfully migrated the GovDeals.com marketplace to our latest state-of-the-art modernized platform, giving our buyers the best buying experience. This new user experience leverages the knowledge we gained developing AllSurplus.com with the 20+ years of operating GovDeals.com.
We have experienced no financially material service interruptions on our e-commerce marketplaces. Our flagship marketplace platform combines the 20+ years of experience gained operating GovDeals.com with the modern user experience of AllSuplus.com. The net result is a consolidated, scalable platform that couples an enhanced and accessible user experience with state-of-the-art site search, navigation, and product recommendations.
Industry Overview While a well-established forward supply chain exists for the procurement of assets, many manufacturers, retailers, corporations and government agencies have recognized the growing need for strategic reverse supply chain solutions.
Industry Overview While a forward supply chain has long been in place for the acquisition of assets, an increasing number of manufacturers, retailers, corporations, and government agencies are recognizing the strategic importance of incorporating reverse supply chain solutions into their operations frameworks and overall success strategies.
Liquidity Services estimates that at least $100 billion of these returns are moved through secondary markets, with the remaining volume returning to retailer shelves or being sold through discount retailers. Assets handled by reverse supply chain solutions generally consist of retail consumer returns, overstock products and idle goods or capital assets from both commercial and government sectors.
Liquidity Services estimates that over $100 billion in returned merchandise is processed through secondary markets every year, with other returns being restocked, recycled, or sold at a discount. Reverse supply chain solutions manage consumer returns, surplus products, and unused assets from commercial and government sources.

… 61 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

83 edited+55 added−9 removed111 unchanged
Biggest changeWe must also attract, train, and retain a large and growing number of qualified employees in our RSCG warehouses while controlling related labor costs and maintaining our core values. Our ability to control labor and benefit costs is subject to numerous internal and external factors, regulatory changes, prevailing wage rates, and healthcare and other insurance costs.
Biggest changeFurther changes to immigration policies in the U.S. and other key jurisdictions that restrain the flow of technical and professional talent may inhibit our ability to adequately recruit and retain highly skilled employees. 24 We must also attract, train, and retain a large and growing number of qualified employees in our RSCG and GovDeals warehouses and storage lots, while controlling related labor costs and maintaining our core values.
In addition, we may not or may be unable to adequately staff our network of warehouses during these peak periods. If we cannot staff warehouses adequately, we may not be able to process assets quickly enough which, in turn, could mean dissatisfaction of sellers or increased third-party storage costs and reduced profitability.
In addition, we may be unable to adequately staff our network of warehouses during these peak periods. If we cannot staff warehouses adequately, we may not be able to process assets quickly enough which, in turn, could mean dissatisfaction of sellers or increased third-party storage costs and reduced profitability.
The information technology and digital marketing improvements that are core to our strategy place a significant strain on our management, operational, financial and other resources. 20 We continue to decommission non-scalable legacy IT platform technology with modular technology including key modules for unified management of sellers and buyers, property handling, transaction processing and finance functions across our entire Company.
The information technology and digital marketing improvements that are core to our strategy place a significant strain on our management, operational, financial and other resources. We continue to decommission non-scalable legacy IT platform technology with modular technology including key modules for unified management of sellers and buyers, property handling, transaction processing and finance functions across our entire Company.
If we must license our proprietary software under the foregoing, our competitors and other third parties could obtain access to our intellectual property, which could harm our business. Certain aspects of our marketing technology depend on third parties over whom we have no control. Obtaining organic search engine traffic from Google is a significant traffic driver for our marketplaces.
If we must license our proprietary software under the foregoing, our competitors and other third parties could obtain access to our intellectual property, which could harm our business. Certain aspects of our marketing technology depend on third parties over whom we have no direct control. Obtaining organic search engine traffic from Google is a significant traffic driver for our marketplaces.
The actions and controls we and our third-party service providers have implemented and are implementing, may not be sufficient to protect our systems, information, or other property. We currently expend, and we may be required to expend in the future, significant additional capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches.
The actions and controls we and our third-party service providers have implemented and are implementing, may not be sufficient to protect our systems, information, or other property. We currently expend, and we may be required to expend in the future, significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches.
Sometimes, our management must use judgment to select the accounting policy or 33 method to apply from two or more alternatives, any of which may be reasonable under the circumstances, yet may cause us to report materially different results than would have been reported under a different alternative.
Sometimes, our management must use judgment to select the accounting policy or method to apply from two or more alternatives, any of which may be reasonable under the circumstances, yet may cause us to report materially different results than would have been reported under a different alternative.
If such an investigation alleges that we engaged in improper or illegal activities, we could be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with government agencies.
If such an investigation alleges that we engaged in improper or illegal activities, we could be subject to civil and criminal penalties and administrative sanctions, 35 including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with government agencies.
Our operating results may fall below the expectations of market analysts and investors in some future periods. If this occurs, even temporarily, it could cause volatility in our stock price. 25 Our stock price has been volatile, and your investment in our common stock could decline in value.
Our operating results may fall below the expectations of market analysts and investors in some future periods. If this occurs, even temporarily, it could cause volatility in our stock price. Our stock price has been volatile, and your investment in our common stock could decline in value.
If adequate funds are not available or are 28 not available on acceptable terms, our ability to enhance our services, fund strategic initiatives, respond to competitive pressures, take advantage of business opportunities, or grow our business would be limited, and we might need to restrict our operations and initiatives.
If adequate funds are not available or are not available on acceptable terms, our ability to enhance our services, fund strategic initiatives, respond to competitive pressures, take advantage of business opportunities, or grow our business would be limited, and we might need to restrict our operations and initiatives.
Compliance with regulations regarding privacy, security, and protection of user and employee data, increased government or private enforcement, and changing public attitudes about data privacy, may increase the cost of growing our business and require us to expend significant capital and other 30 resources.
Compliance with regulations regarding privacy, security, and protection of user and employee data, increased government or private enforcement, and changing public attitudes about data privacy, may increase the cost of growing our business and require us to expend significant capital and other resources.
Recent economic conditions have caused fluctuations in the supply, mix, and market values of surplus assets available for sale, which has a direct impact on our revenues. In addition, price competition and the availability of surplus assets directly affect the supply of, demand for, and market value of such assets.
Recent economic conditions have caused fluctuations in the supply, mix, and market values of assets available for sale, which has a direct impact on our revenues. In addition, price competition and the availability of assets directly affect the supply of, demand for, and market value of such assets.
The integration process could cause the loss of key employees, buyers, sellers, or other vendors, increase our operating or other costs, decrease our profit margins, disrupt our other businesses, or divert management’s 26 attention and Company’s resources from our existing businesses.
The integration process could cause the loss of key employees, buyers, sellers, or other vendors, increase our operating or other costs, decrease our profit margins, disrupt our other businesses, or divert management’s attention and Company’s resources from our existing businesses.
Additionally, our marketing technology relies heavily on our ability to track our promotional campaign performance across marketing channels (i.e., email, search engines, social media, and third-party banner ads).
Our marketing technology relies heavily on our ability to track our promotional campaign performance across marketing channels (i.e., email, search engines, social media, and third-party banner ads).
We do not have key-person insurance on any of our officers or employees. Losing any member of our existing senior management team could damage key seller relationships, result in the loss of key information, expertise, or know-how, lead to unanticipated recruitment and training costs, and make it more difficult to operate our business and achieve our business goals.
We do not have key-person insurance for any of our officers or employees. Losing any member of our existing senior management team could damage key seller relationships, result in the loss of key information, expertise, or know-how, lead to unanticipated recruitment and training costs, and make it more difficult to operate our business and achieve our business goals.
In addition to the risks described elsewhere in this section, our international operations are subject to several risks, including: • local economic and political conditions, or civil unrest that may disrupt economic activity in affected countries; • government regulation of e-commerce and other services, competition, and restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs), nationalization, and restrictions on foreign ownership; • restrictions on sales or distribution of certain assets or services and uncertainty regarding liability for assets and services, including uncertainty because of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the enforcement of intellectual property rights; • business licensing or certification requirements, such as for imports, exports, and web services; • limitations on the repatriation and investment of funds and foreign currency exchange restrictions; • shorter payable and longer receivable cycles and the resultant negative impact on cash flow; • laws and regulations regarding consumer and data protection, privacy, network security, encryption, payments, and restrictions on pricing or discounts; • lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; 27 • lower levels of credit card usage and increased payment risk; • different employee/employer relationships and the existence of works councils; • compliance with the U.S.
In addition to the risks described elsewhere in this section, our international operations are subject to several risks, including: 30 • local economic and political conditions, or civil unrest that may disrupt economic activity in affected countries; • government regulation of e-commerce and other services, competition, and restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs), nationalization, and restrictions on foreign ownership; • restrictions on sales or distribution of certain assets or services and uncertainty regarding liability for assets and services, including uncertainty because of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the enforcement of intellectual property rights; • business licensing or certification requirements, such as for imports, exports, and web services; • limitations on the repatriation and investment of funds and foreign currency exchange restrictions; • shorter payable and longer receivable cycles and the resultant negative impact on cash flow; • laws and regulations regarding consumer and data protection including with respect to cross-border data transfers, privacy, network security, encryption, payments, and restrictions on pricing or discounts; • lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; • lower levels of credit card usage and increased payment and foreign exchange risk; • different employee/employer relationships and the existence of works councils; • compliance with the U.S.
If global economic conditions remain uncertain or deteriorate further, particularly to the extent such conflicts escalate to involve additional countries, we could see potential scenarios having a material adverse effect on our business such as a reduction in the ability of international buyers and sellers to conduct business due to travel restrictions impacting the ability of: sellers and their agents to travel to prepare assets for sale; buyers travelling to inspect assets; sellers and buyers completing international transactions requiring assets to cross export and import border control points; and the overall willingness of sellers and buyers to decommission capital assets and engage in cross-border transactions.
If global economic conditions remain uncertain or deteriorate further, particularly to the extent such conflicts escalate to involve additional countries, we could see potential scenarios having a material adverse effect on our business such as a reduction in the ability of international buyers and sellers to conduct business due to travel restrictions impacting the ability of: sellers and their agents to travel to prepare assets for sale; buyers traveling to inspect assets; sellers 32 and buyers completing international transactions requiring assets to cross export and import border control points; and the overall willingness of sellers and buyers to decommission capital assets and engage in cross-border transactions.
Any failure to timely and cost-effectively realize the anticipated benefits of the acquisition could have a material adverse effect on our revenues, expenses, and operating results Acquisitions could cause dilutive issuances of equity securities, the incurrence of debt, one-time write-offs of goodwill, and substantial amortization expenses of other intangible assets.
Any failure to timely and cost-effectively realize the anticipated benefits of an acquisition could have a material adverse effect on our revenues, expenses, and operating results Additionally, acquisitions could cause dilutive issuances of equity securities, the incurrence of debt, one-time write-offs of goodwill, and substantial amortization expenses of other intangible assets.
We have no control over any of the factors that affect the supply of, and demand for, surplus assets, and the circumstances that cause market values to fluctuate including, among other things, economic uncertainty, global geopolitical climate, disruptions to credit and financial markets, lower commodity prices, and our buyers’ restricted access to capital.
We have no control over any of the factors that affect the supply of, and demand for, such assets, and the circumstances that cause market values to fluctuate including, among other things, economic uncertainty, global geopolitical climate, disruptions to credit and financial markets, lower commodity prices, and our buyers’ restricted access to capital.
Factors that may, among others, affect our quarterly operating results include the following: • our ability to increase sales to existing buyers, attract and retain new buyers, and satisfy buyer demands; • our ability to retain and expand our base of sellers; • entry into, or the modification, termination, or expiration of, contracts; • the volume, size, timing, and completion rate of transactions in our marketplaces, including variability due to the timing of large, project-based activities; • changes in the supply and demand for and the volume, price, mix, and quality of our supply of surplus assets, including vehicles and real estate; • introduction of new or enhanced websites, services, or product offerings by us or our competitors, which may affect our margins; • implementation costs of new contracts, particularly those requiring custom integrations and value-added services; • changes in our pricing policies or the pricing policies of our competitors; • changes in the conditions and economic prospects of the e-commerce industry or the economy generally, which could alter current or prospective buyers' and sellers' priorities; • the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; • fiscal policies or inaction at the U.S. federal government level that may lead to federal government shutdowns or negative impacts on the U.S. economy; • event-driven disruptions such as war, terrorism, armed hostilities, disease, and natural disasters; • changes in energy and commodities prices, including the timing and speed of recovery in energy sector macro conditions; • seasonal patterns in selling and purchasing activity; and • costs related to acquisitions of technology or equipment.
Factors that may, among others, affect our quarterly operating results include the following: • our ability to increase sales to existing buyers, attract and retain new buyers, and satisfy buyer demands; • our ability to retain and expand our base of sellers; • entry into, or the modification, termination, or expiration of, contracts; • the volume, size, timing, and completion rate of transactions in our marketplaces, including variability due to the timing of large, project-based activities; • changes in the supply and demand for and the volume, price, mix, and quality of our supply of surplus assets, including vehicles and real estate; • introduction of new or enhanced websites, services, or product offerings by us or our competitors, which may affect our margins; • implementation costs of new contracts, particularly those requiring custom integrations and value-added services; • changes in our pricing policies or the pricing policies of our competitors; • changes in the conditions and economic prospects of the e-commerce industry or the economy generally, which could alter current or prospective buyers' and sellers' priorities; 28 • the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; • fiscal policies or inaction at the U.S. federal government level that may lead to federal government shutdowns or negative impacts on the U.S. economy; • customs or border control policies and new or changing tariffs or trade sanctions; • event-driven disruptions such as war, terrorism, armed hostilities, disease, and natural disasters; • changes in energy and commodities prices, including the timing and speed of recovery in energy sector macro conditions; • seasonal patterns in selling and purchasing activity; and • costs related to acquisitions of technology or equipment.
New statutory or regulatory developments may restrict our ability to collect and use demographic and personal information from our buyers and our sellers, which could be costly or harm our marketing efforts. Further, there may be conflicts among the privacy and data protections laws adopted by the countries in which we operate.
New statutory or regulatory developments may restrict our ability to collect and use demographic and personal information from our buyers and our sellers, which could be costly or harm our marketing efforts. Further, there may be conflicts among the privacy and data protection laws adopted by the countries in which we operate.
For example, a retail client may invest in its warehouse operational capacity to handle higher volumes of online returns which may cause such retailer to send us a reduced volume of returned merchandise or a product mix that is lower in value due to the removal of high value returns.
For example, a retail client may invest in its warehouse operational capacity to handle higher volumes of online returns which may cause such retailers to send us a reduced volume of returned merchandise or a product mix that is lower in value due to the removal of high value returns.
Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting certain payments to government officials and other third parties; • laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and • geopolitical events, including war and terrorism.
Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting certain payments to government officials and other third parties; • laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and • geopolitical events, including war, terrorism, and political instability.
Despite these protections, a third party could copy or otherwise obtain and use our intellectual property without authorization or independently develop similar intellectual property. 32 We currently are the registered owners of several Internet domain names, including www.liquidation.com, www.govdeals.com, www.allsurplus.com, www.secondipity.com, www.machinio.com, www.machineryhost.com, and www.bid4assets.com. We pursue the registration of our domain names in the U.S. and internationally.
Despite these protections, a third party could copy or otherwise obtain and use our intellectual property without authorization or independently develop similar intellectual property. We currently are the registered owners of several Internet domain names, including www.liquidation.com, www.govdeals.com, www.allsurplus.com, www.secondipity.com, www.retailrush.com, www.machinio.com, www.machineryhost.com, www.bid4assets.com, and www.sierraauction.com. We pursue the registration of our domain names in the U.S. and internationally.
We have recorded goodwill impairment charges in the past, and such charges materially affected our historical results of operations. For additional information, see Note 8 - Goodwill to the accompanying consolidated financial statements.
We have recorded goodwill impairment charges in the past, and such charges materially affected our historical results of operations. For additional information, see Note 7 - Goodwill to the accompanying consolidated financial statements.
If our initiatives are not implemented successfully and within budget, or if our systems do not perform in a satisfactory manner, it could disrupt or otherwise materially adversely affect our business and results of operations, as well as divert management resources.
If this initiative or our other initiatives are not implemented successfully and within budget, or if our systems do not perform in a satisfactory manner, it could disrupt or otherwise materially adversely affect our business and results of operations, as well as divert management resources.
Recently completed initiatives, as well as other changes in our business (including initiatives to invest in information systems, transition particular functions to third-party providers, and acquire new businesses such as Sierra Auction) have necessitated, and will continue to necessitate, modifications to our internal controls.
Recently completed initiatives, as well as other changes in our business (including initiatives to invest in information systems, transition particular functions to third-party providers, and acquire new businesses) have necessitated, and will continue to necessitate, modifications to our internal controls.
Our auction business may be subject to a variety of additional costly government regulations. Many states and other jurisdictions have regulations governing the conduct of traditional "auctions," the liability of traditional "auctioneers" in conducting auctions and handling property by "secondhand dealers" which may apply to online auction services.
Our auction business may be subject to a variety of additional costly government regulations. Many states and other jurisdictions have regulations governing the conduct of traditional "auctions", the liability of traditional "auctioneers" in conducting auctions, the sale of real property via traditional “auctions”, and handling property by "secondhand dealers" which may apply to online auction services.
In addition, if our sellers violate laws or regulations, or implement practices regarded as unethical, unsafe, or hazardous to the environment, it could damage our reputation, limit our growth, and negatively affect our business, prospects, financial condition, and results of operations. If we violate privacy regulations, our business could suffer harm.
In addition, if our sellers violate laws or regulations, or implement practices regarded as unethical, unsafe, or hazardous to the environment, it could damage our reputation, limit our growth, and negatively affect our business, prospects, financial condition, and results of operations.
Such laws could become even more restrictive and cover a wider array of assets in the event of escalations of a conflict between China and Taiwan. We may incur significant costs or be required to modify our business to comply with these requirements.
Such laws could become even more restrictive and cover a wider array of assets in the event of escalations of geopolitical conflict. We may incur significant costs or be required to modify our business to comply with these requirements.
Our international operations expose us to several risks. Our international activities are significant to our revenues and profits, and we may continue to expand internationally, including through acquisitions, organic growth and through joint ventures or strategic alliances with third parties. We are required to comply with the laws of the countries or markets in which we operate.
Our international activities are significant to our revenues and profits, and we may continue to expand internationally, including through acquisitions, organic growth and through joint ventures or strategic alliances with third parties. We are required to comply with the laws of the countries or markets in which we operate.
The amount of standby letters of credit are reserved against the Line of Credit and are not available for borrowing, resulting in $17.5 million of remaining borrowing capacity under the Line of Credit as of September 30, 2024. We are able to issue standby letters of credit for various purposes, including the facilitation of transactions with vendors or other counterparties.
The amount of standby letters of credit are reserved against the Line of Credit and are not available for borrowing, resulting in $26.0 million of remaining borrowing capacity under the Line of Credit as of September 30, 2025. We are able to issue standby letters of credit for various purposes, including the facilitation of transactions with vendors or other counterparties.
Other factors that could cause fluctuation in our stock price may include: • actual or anticipated variations in quarterly operating results; • changes in financial estimates by us or by a securities analyst who covers our stock; • publication of research reports about our Company or industry; • conditions or trends in our industry; • stock market price and volume fluctuations of other publicly traded companies and, in particular, those whose business involves the Internet and e-commerce; • announcements by us or our competitors of significant contracts (or the amendment or loss of such contracts), acquisitions, commercial relationships, strategic partnerships, or divestitures; • announcements by us or our competitors of technological innovations, new services or service enhancements; • announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; • the passage of legislation or other regulatory developments that adversely affect us, our sellers or buyers, or our industry; • additions or departures of key personnel; • sales of our common stock, including sales of our common stock by our directors and officers or specific stockholders; and • general global economic and/or political conditions and slow or negative growth of related markets.
Other factors that could cause fluctuation in our stock price may include: • actual or anticipated variations in quarterly operating results; • changes in financial estimates by us or by a securities analyst who covers our stock; • publication of research reports about our Company or industry; • conditions or trends in our industry; • stock market price and volume fluctuations of other publicly traded companies and, in particular, those whose business involves the Internet and e-commerce; • announcements by us or our competitors of significant contracts (or the amendment or loss of such contracts), acquisitions, commercial relationships, strategic partnerships, or divestitures; • announcements by us or our competitors of technological innovations, new services or service enhancements; • announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; • the passage of legislation or other regulatory developments that adversely affect us, our sellers or buyers, or our industry; • additions or departures of key personnel; • sales of our common stock, including sales of our common stock by our directors and officers or specific stockholders; and • general global economic and/or political conditions and slow or negative growth of related markets. 29 Volatility in the market price of shares may prevent investors from being able to sell their shares of common stock at prices they view as attractive.
We have multiple vendor contracts with Amazon.com, Inc., under which we acquire and then resell assets. $12.2 million and $5.8 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Consolidated Balance Sheets as of September 30, 2024 and 2023, respectively.
We have multiple vendor contracts with Amazon.com, Inc., under which we acquire and then resell assets. $10.1 million and $12.2 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Consolidated Balance Sheets as of September 30, 2025 and 2024, respectively.
Terms of the Credit Agreement provide for revolving loans (the Line of Credit) up to a maximum aggregate principal amount of $25.0 million with a $10.0 million sublimit for standby letters of credit, access to which expires on March 31, 2026.
Terms of the Credit Agreement provide for revolving loans (the Line of Credit) up to a maximum aggregate principal amount of $35.0 million with a $35.0 million sublimit for standby letters of credit, access to which expires on March 31, 2027.
Any damage to our reputation could impair our ability to retain existing or attract new customers, investors and employees. We carry a significant amount of goodwill on our balance sheet. As of September 30, 2024, we had goodwill of $97.8 million.
Any damage to our reputation could impair our ability to retain existing or attract new customers, investors and employees. We carry a significant amount of goodwill on our balance sheet. As of September 30, 2025, we had goodwill of $102.9 million.
To satisfy local laws and regulations, maximize returns, or effectively manage our operational cash flows, among other business factors, we may acquire inventory in partnership with one or more third parties.
We plan to continue to opportunistically make such acquisitions. To satisfy local laws and regulations, maximize returns, or effectively manage our operational cash flows, among other business factors, we may acquire inventory in partnership with one or more third parties.
We are subject to regulation at the federal, state, and international levels relating to privacy and the use of third-party data, including personal user information and employee data. These statutory and regulatory requirements are evolving, increasing in complexity and number, sometimes conflicting, and may change significantly.
If we violate privacy regulations, our business could suffer harm. 34 We are subject to regulation at the federal, state, and international levels relating to privacy and the use of third-party data, including personal user information and employee data. These statutory and regulatory requirements are evolving, increasing in complexity and number, sometimes conflicting, and may change significantly.
Service interruptions or system failures could negatively affect the demand for our services and our ability to grow our revenue. Any system interruptions that affect our websites or our transaction systems could impair the services we provide to our buyers and sellers.
Significant service interruptions or system failures, whether internal or within the broader cloud ecosystem, could negatively affect the demand for our services and our ability to grow our revenue. Any system interruptions that affect our websites or our transaction systems could impair the services we provide to our buyers and sellers.
Our systems rely on the availably and scalability of the public cloud providers in which they are hosted. these systems may be vulnerable to damage from a variety of other sources, including: damage to, or failure of, our computer software or hardware, or our connections to, and outsourced service arrangements with, third parties; failure of, or defects in, the third-party systems, software, or equipment on which we rely to access our hosted systems and other systems; errors in the processing of data; computer viruses, malware, or software defects; physical or electronic break-ins, sabotage, distributed denial of service, or DDoS, penetration attacks, intentional acts of vandalism, and similar events; and telecommunications failures, power outages, pandemics, political unrest, malicious human acts, and natural disasters.
These systems may be vulnerable to damage from a variety of other sources, including: damage to, or failure of, our computer software or hardware, or our connections to, and outsourced service arrangements with, third parties; failure of, or defects in, the third-party systems, software, or equipment on which we rely to access our hosted systems and other systems; errors in the processing of data; computer viruses, malware, or software defects; physical or electronic break-ins, sabotage, distributed denial of service, or DDoS, penetration attacks, intentional acts of vandalism, and similar events; and telecommunications failures, power outages, pandemics, political unrest, malicious human acts, and natural disasters. 25 Improving the reliability and redundancy of our systems may be expensive or reduce our margins and may not be successful in preventing system failures.
Legal and Regulatory Risks 29 We face legal uncertainties relating to our technology systems and to the e-commerce industry in particular and may become subject to costly government regulation. The laws and regulations related to the Internet and e-commerce are evolving.
Legal and Regulatory Risks • Laws and regulations related to the technology systems and to the e-commerce industry. We face legal uncertainties relating to our technology systems and to the e-commerce industry in particular and may become subject to costly government regulation. • Government regulations applicable to our auction business.
These laws generally prohibit companies and their intermediaries from making 31 improper payments or providing anything of value to improperly influence foreign government officials to obtain or retain business or obtain an unfair advantage. Global enforcement of these laws has increased substantially in recent years.
These laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence foreign government officials to obtain or retain business or obtain an unfair advantage.
If our strategy to compete against our many competitors is not effective, we may lose market share and our financial condition, results of operations, and long-term earnings growth may be negatively affected. Our operating results depend on our websites, network infrastructure, and transaction processing systems, and our software runs on public clouds.
If our strategy to compete against our many competitors is not effective, we may lose market share and our financial condition, results of operations, and long-term earnings growth may be negatively affected. Our operating results depend on the availability and performance of our marketplace technology, network infrastructure, and transaction processing systems, which leverage public cloud infrastructure.
Ongoing armed conflicts around the world, such as the invasion of Ukraine by Russia and recently, the conflict in and adjacent to Israel, could create or exacerbate risks facing our business. The Russia-Ukraine conflict specifically results in numerous countries, including the United States, imposing significant new sanctions and export controls against Russia, Russian banks, and certain Russian individuals.
Ongoing armed conflicts around the world, such as those in Ukraine and the Middle East, could create or exacerbate risks facing our business. The Russia-Ukraine conflict specifically resulted in numerous countries, including the United States, imposing significant new sanctions and export controls against Russia, Russian banks, and certain Russian individuals.
As of September 30, 2024, the Company had no outstanding borrowings under the Line of Credit and had $7.5 million of standby letters of credit outstanding.
As of September 30, 2025, the Company had no outstanding borrowings under the Line of Credit and had $9.0 million of standby letters of credit outstanding.
Our prior operating results have fluctuated due to changes in our business and the e-commerce industry. Similarly, our future operating results may vary significantly from quarter to quarter due to many factors, including factors beyond our control. You should not rely on period-to-period comparisons of our operating results as an indication of our future performance.
Similarly, our future operating results may vary significantly from quarter to quarter due to many factors, including factors beyond our control. You should not rely on period-to-period comparisons of our operating results as an indication of our future performance.
Decreases in the supply of, demand for, or market values of surplus assets and real estate, could harm our business. Our revenues could decrease if there was significant erosion in the supply of, demand for, or market values of surplus assets, which could adversely affect our financial condition and results of operations.
Our revenues could decrease if there was significant erosion in the supply of, demand for, or market values of the types of assets sold on our marketplaces, including used vehicles and real estate, which could adversely affect our financial condition and results of operations.
Such a conflict would also likely limit access to key Chinese ports and exporters due to both military actions and potential international sanctions, which would create significant disruption for a variety of industries that we serve that rely on supply chain in China.
Such a conflict would also likely limit access to key Chinese ports and exporters due to both military actions and potential international sanctions, which would create significant disruption for a variety of industries that we serve that rely on supply chain in China. Separately, any factors that reduce cross-border trade or make such trade more difficult could harm our business.
Any disruption to either the outsourced systems or the communication links between us and the outsourced supplier could negatively affect our ability to operate our websites or our transaction systems and could impair our ability to provide services to our buyers and sellers.
Any disruption to either the outsourced systems or the communication links between us and the outsourced supplier could negatively affect our ability to operate our websites or our transaction systems and could impair our ability to provide services to our buyers and sellers. We may incur additional costs to remedy the damages caused by these disruptions.
These factors and others may harm our business and our results of operations. In addition, currency exchange rates may negatively affect our results if we pay for inventory using a different currency than we receive when we sell the inventory. We may need additional financing in the future, which may not be available on favorable terms, if at all.
These factors and others may harm our business and our results of operations. In addition, currency exchange rates may negatively affect our results if we pay for inventory using a different currency than we receive when we sell the inventory.
The e-commerce industry is rapidly changing. If competitors introduce new assets and services using new technologies, such as generative artificial intelligence (AI), or if new industry standards and practices emerge, our existing online marketplaces and our proprietary technology and systems may become obsolete.
If competitors introduce capabilities and services using new technologies, such as AI, or if new industry standards and practices emerge, our existing online marketplaces and our proprietary technology and systems may become obsolete.
Increased security threats and more sophisticated cyber misconduct pose a risk to our e-commerce marketplaces, information technology systems, networks, and services. We rely upon IT systems and networks, some of which are managed by third parties, in connection with virtually all of our business activities. Additionally, we collect, store and process information relating to our business, sellers, buyers, and employees.
We rely upon IT systems and networks, some of which are managed by third parties, in connection with virtually all of our business activities. Additionally, we collect, store and process information relating to our business, sellers, buyers, and employees.
We compete with other retail and non-retail businesses for these employees and invest significant resources in training and motivating them. We may not be able to attract or retain highly qualified employees in the future, which could have a material adverse effect on our business, financial condition, and results of operations. We face intense competition.
We may not be able to attract or retain highly qualified employees in the future, which could have a material adverse effect on our business, financial condition, and results of operations. We face intense competition. Our businesses operate in intensely competitive markets.
This exclusive forum provision may limit the ability of our stockholders to challenge certain corporate actions in a judicial forum that such stockholders find favorable for disputes with the Company or our current or former directors or officers.
This exclusive forum provision may limit the ability of our stockholders to challenge certain corporate actions in a judicial forum that such stockholders find favorable for disputes with the Company or our current or former directors or officers. 36 Our ability to effectively safeguard and enforce our intellectual property rights may be limited, potentially impacting our reputation and adversely affecting our business growth.
As a result, we expect a disproportionate number of transactions on our marketplaces to occur at certain times during the year. If we cannot effectively manage increased demand, or the increased flow of goods we typically experience during these times, it could adversely affect our revenue and our future growth.
If we cannot effectively manage increased demand, or the increased flow of goods we typically experience during these times, it could adversely affect our revenue and our future growth.
If we fail to identify, finance, and integrate acquisitions, our future operating results may be materially adversely affected. Our ability to successfully integrate the acquired businesses and operations with our existing businesses plays a significant role in realizing the anticipated benefits of any acquisitions.
Our ability to successfully integrate the acquired businesses and operations with our existing businesses plays a significant role in realizing the anticipated benefits of any acquisitions.
Our business depends, to a large degree, on the provision of effective support services to our buyers and sellers, and on effective warehouse operations (including leased commercial warehouse space).
An interruption in the operations of our buyer and seller support service system or our warehouses could significantly harm our business and operating results. Our business depends, to a large degree, on the provision of effective support services to our buyers and sellers, and on effective warehouse operations (including leased commercial warehouse space).
We have experienced occasional difficulty in attracting personnel to support the growth of our business, and we may experience similar difficulties in the future.
Competition for employees in our industry is intense. We have experienced occasional difficulty in attracting personnel to support the growth of our business due to labor market volatility among other factors, and we may experience similar difficulties in the future.
Competitive pressures could affect our ability to attract and retain buyers and sellers, which could decrease our revenue and negatively affect our operating results. 21 Some of our current and potential competitors have longer operating histories, larger seller and buyer bases, greater brand recognition and greater financial, marketing, and other resources than we do.
Some of our current and potential competitors have longer operating histories, larger seller and buyer bases, greater brand recognition and greater financial, marketing, and other resources than we do.
Improving the reliability and redundancy of our systems may be expensive or reduce our margins and may not be successful in preventing system failures. Our ability to provide services depends substantially on systems provided by third parties, over whom we have little control. We have occasionally experienced interruptions to our services due to system failures.
Our ability to provide services depends substantially on systems provided by third parties, over whom we have little control. We have occasionally experienced interruptions to our services due to system failures.
In addition, if there is any perception that we cannot protect our users’ confidential information, we may lose the ability to retain existing, and attract new, sellers and buyers, and therefore our revenue could decline. 23 Threats designed to gain unauthorized access to systems, networks and data, both ours and third parties with whom we work, are increasing in frequency and sophistication.
In addition, if there is any perception that we cannot protect our users’ confidential information, we may lose the ability to retain existing, and attract new, sellers and buyers, and therefore our revenue could decline.
We rely on contractual restrictions and copyright and trade secret laws to protect our proprietary rights, know-how, information and technology.
We regard our intellectual property, particularly domain names, copyrights and buyer database trade secrets, as critical to our success. We rely on contractual restrictions and copyright and trade secret laws to protect our proprietary rights, know-how, information and technology.
Third parties may assert that we have infringed their intellectual property rights in technology or otherwise based on our internally developed systems or use of licensed third-party technology to operate our online auction platform and related websites. Third parties also could assert intellectual property infringement claims against the parties from whom we license technology.
Third parties may claim that our internally developed systems or licensed third-party technology for operating our online auction platform and related websites infringes their intellectual property rights. Similar claims could be made against the providers from whom we license technology.
We continue to expand our AllSurplus direct-to-consumer channel for returned and overstock inventory from retailers and manufacturers, which is referred to as AllSurplus Deals . Iterative information technology and digital marketing improvements require management time and resources to educate employees, redesign internal processes, and implement new ways of conducting business with our sellers and buyers.
Iterative information technology and digital marketing improvements require management time and resources to educate employees, redesign internal processes, and implement new ways of conducting business with our sellers and buyers.
If we cannot conclude that our internal controls over financial reporting are effective, market perception of our financial condition and the trading price of our stock may be adversely affected, and seller and buyer perception of our business may suffer.
If we cannot conclude that our internal controls over financial reporting are effective, market perception of our financial condition and the trading price of our stock may be adversely affected, and seller and buyer perception of our business may suffer. 37 Our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents, or by third parties with whom we work.
Occasionally, in our CAG segment, we make very significant inventory acquisitions, such as the purchase of semi-conductor and oil and gas equipment, and biopharma and metal-working machinery, for later resale on our energy and industrial marketplaces. We plan to continue to opportunistically make such acquisitions.
If assets are not attractive to our buyer base, we may have to take significant losses resulting from lower sale prices, which could reduce our revenue and margins. 27 Occasionally, in our CAG segment, we make very significant inventory acquisitions, such as the purchase of semi-conductor and oil and gas equipment, and biopharma and metal-working machinery, for later resale on our energy and industrial marketplaces.
We may incur additional costs to remedy the damages caused by these disruptions. 22 Our inability to use software licensed from third parties, open-source software, SAAS, and PAAS offerings under current license or contractual terms could interfere with our proprietary rights thereby disrupting our business.
Our inability to use software licensed from third parties, open-source software, SAAS, and PAAS offerings under current license or contractual terms could interfere with our proprietary rights thereby disrupting our business. • We use a combination of licensed and open-source software, software as a service (SAAS), and platform as a service (PAAS) offerings from multiple third parties and global public cloud providers.
Our businesses operate in intensely competitive markets. We have many competitors in different industries, including the online services market for auctioning or liquidating surplus assets and retail markets.
We have many competitors in different industries, including the online services market for auctioning or liquidating surplus assets and retail markets. Competitive pressures could affect our ability to attract and retain buyers and sellers, which could decrease our revenue and negatively affect our operating results.
Other events that we do not currently anticipate or that we currently deem immaterial also may affect our results of operations and financial condition. Business and Operating Risks 19 The success of our business depends on our ability to source a sufficient supply of assets from sellers to attract and retain active professional buyers, who in turn attract more sellers.
Risk Factors 22 Business and Operating Risks The success of our business depends on our ability to source a sufficient supply of assets from sellers to attract and retain active professional buyers, who in turn attract more sellers.
Royalty or licensing agreements, if required, may be unavailable on terms acceptable to us, or at all. Incurring of any of these costs could negatively impact our operating results. General Risk Factors Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results, and stock price.
General Risk Factors Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results, and stock price.
New developments in the fields of AI, machine learning, and robotics may create new vulnerabilities and cybersecurity risks, and remote work has also increased the possible attack surfaces. These threats pose a risk to the security of our systems and networks and the confidentiality, integrity, and availability of our data.
Threats designed to gain unauthorized access to systems, networks and data, both ours and third parties with whom we work, are increasing in frequency and sophistication. New developments in the fields of AI, machine learning, and robotics may create new vulnerabilities and cybersecurity risks, and remote work has also increased the possible attack surfaces.
Cybersecurity incidents may range from random attempts to coordinated and targeted attacks, including sophisticated computer crimes and advanced persistent threats. Phishing attacks have also emerged, including as vectors for ransomware attacks, which have increased in breadth, frequency, and sophistication for the Company.
Phishing attacks have also emerged, including as vectors for ransomware attacks, which have increased in breadth, frequency, and sophistication for the Company.
There are numerous federal, state, local and international laws, regulations, rules, industry codes of conduct, policies and standards regarding data privacy and security, including user privacy, freedom of expression, pricing, fraud, quality of assets and services, taxation, advertising, intellectual property rights, and information security.
The laws and regulations related to the Internet and e-commerce are evolving, including laws and regulations regarding user privacy, freedom of expression, pricing, fraud, quality of assets and services, taxation, advertising, intellectual property rights, and information security.
Obtaining financing to fund such acquisitions will increase our costs, which will decrease any profits we receive from the sale of the acquired assets. 24 As we grow our business, we may increase the assets we purchase directly from sellers, resulting in increased inventory levels and related risks, including increased risk of losses on the sale of the inventory acquired.
As we grow our business, we may increase the assets we purchase directly from sellers, resulting in increased inventory levels and related risks, including increased risk of losses on the sale of the inventory acquired. Any such increase would require the use of additional working capital and any funds so used would not be available for other purposes.
We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally. Failure to do so could damage our business, including our reputation with sellers, buyers, and employees, cause us to incur substantial additional costs, and make us subject to litigation and regulatory action.
We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally.
We may continue to do so. The success of any future growth strategy involving acquisitions will depend on our ability to identify, and the availability of, suitable acquisition targets. We may incur costs, perhaps significant costs, in connection with evaluating a potential acquisition but may be unable or unwilling to consummate the proposed transaction for various reasons.
We may incur costs, perhaps significant costs, in connection with evaluating and/or pursuing a potential acquisition but may be unable or unwilling to consummate the proposed transaction for various reasons. Our international operations expose us to several risks.
Additionally, businesses that we acquire outside the U.S. may present unique challenges or increase our exposure to risks associated with foreign operations, including foreign currency risks and risks associated with local regulatory regimes. We have expanded our business in part through acquisitions such as that of Sierra Auction Management, Inc. (Sierra Auction) in January 2024.
Additionally, businesses that we acquire outside the U.S. may present unique challenges or increase our exposure to risks associated with foreign operations, including foreign currency risks and risks associated with local regulatory regimes. The success of any future growth strategy involving acquisitions will depend on our ability to identify, and the availability of, suitable acquisition targets.
We cannot assure you that these initiatives will be beneficial to the extent, or within the timeframes, expected, or that the estimated efficiency, cost savings, and other improvements will be realized as anticipated or at all.
We cannot assure you that these initiatives will be beneficial to the extent, or within the timeframes, expected, or that the estimated efficiency, cost savings, and other improvements will be realized as anticipated or at all. 23 For example, we are simultaneously implementing enhancements for operating leverage in our retail operations and investing and expanding further our direct-to-consumer channel by opening a location in Columbus, Ohio under the name Retail Rush.
This type of litigation could result in substantial costs and divert our management's attention and resources. The seasonality of our business places increased strain on our operations. We experience seasonality in each portion of our business at various times during the year.
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources. The seasonality of our business places increased strain on our operations.
We may overpay for the acquired assets if we miscalculate buyer demand or if the acquired assets are not as desirable as we predicted. If assets are not attractive to our buyer base, we may have to take significant losses resulting from lower sale prices, which could reduce our revenue and margins.
We may overpay for the acquired assets if we miscalculate buyer demand or if the acquired assets are not as desirable as we predicted.
Our future success also depends on our ability to continue to attract, retain, and motivate highly skilled employees, particularly employees with technology, sales, marketing, operations, and administrative technical expertise. Competition for employees in our industry is intense.
Our future success also depends on our ability to continue to attract, retain, and motivate highly skilled employees, particularly employees with technology, sales, marketing, operations, and administrative technical expertise. As AI-enabled tools and technology evolve at an accelerated pace, attracting talent, across all disciplines, that are able to safely leverage these technologies becomes of increasing importance.

… 67 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+1 added−0 removed3 unchanged
Biggest changeWe will continue to invest in our security infrastructure to ensure it meets or exceeds industry standards for cybersecurity and employ dedicated resources to protect our systems. Management's Role . Our Internal security team in conjunction with the Chief Technology Officer (CTO) reviews current risks with a cross-functional leadership committee on a quarterly basis.
Biggest changeThe Audit Committee of the Board of Directors is responsible for reviewing the Company's financial reporting of cybersecurity risks and incidents in accordance with SEC rules. We will continue to invest in our security infrastructure to ensure it meets or exceeds industry standards for cybersecurity and employs dedicated resources to protect our systems. Management's Role .
Failure to do so could damage our business, including our reputation with sellers, buyers, and employees, cause us to incur substantial additional costs, and make us subject to litigation and regulatory action ."
Failure to do so could damage our business, including our reputation with sellers, buyers, and employees, cause us to incur substantial additional costs, and make us subject to litigation and regulatory action ." 39
Our process to assess, identify and manage material risks from cybersecurity threats include potential threats associated with third-party service providers, including cloud-based platforms. On an annual basis, we review the SOC2 (or equivalent) attestation of controls for material third-party service providers, coupled with monitoring industry notices and threat intelligence regarding potential vulnerabilities or threats targeting these third-party services.
Our proces s to assess, identify and manage material risks from cybersecurity threats include potential threats associated with third-party service providers, including cloud-based platforms. On an annual basis, we review the SOC2 (or equivalent) attestation of controls for material third-party service providers, coupled with monitoring industry notices and threat intelligence regarding potential vulnerabilities or threats targeting these third-party ser vices.
Risk Factors captioned: " We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally.
For additional information regarding cybersecurity risks, see the risk factor in Part I, Item 1A. Risk Factors captioned: " We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally.
In 2024, we achieved both SOC2 Type 1 and TX-Ramp certifications, reflecting our commitment to supporting our clients by aligning our controls and processes with the System and Organization Controls (SOC) compliance framework established by the American Institute of Certified Public Accountants (AICPA).
In 2025, we achieved SOC2 Type 2 certification, reflecting our commitment to supporting our clients by aligning our controls and processes with the System 38 and Organization Controls (SOC) compliance framework established by the American Institute of Certified Public Accountants (AICPA). This achievement builds on our previous SOC2 Type 1 certification and complements our ongoing TX Ramp compliance.
This same organization provides proactive notification and consultation on emerging threats and potential mitigation. In addition, we undertake integrated planning activities to support business continuity and operational resiliency. We assess our program's effectiveness through various exercises, including active Disaster Recovery production environment tests, tabletop exercises, continuous vulnerability tests, and annual penetration testing.
In addition, we undertake integrated planni ng activities to support business continuity and operational resiliency. We assess our program's effectiveness through various exercises, including active Disaster Recovery production environment tests, tabletop exercises, continuous vulnerability tests, and annual penetration testing.
We have developed comprehensive cybersecurity and data privacy programs across our employee groups and systems, building a culture of cybersecurity and data privacy awareness throughout the organization.
We have implemented comprehensive cybersecurity and data privacy programs, fostering a culture of awareness across all employee groups and systems.
Cybersecurity Governance Board and Committee Oversight . Our Board of Directors is responsible for oversight of the Company's cyber risk management program, including risk identification, mitigation strategy and efforts, and resources. The Audit Committee of the Board of Directors is responsible for reviewing the Company's financial reporting of cybersecurity risks and incidents in accordance with SEC rules.
Cybersecurity Governance Board and Committee Oversight . Our Board of Directors is responsible for oversight of the Company's cyber risk management program, including risk ide ntifica tion, mitigation strategy and efforts, and resources and receives quarterly updates on cybersecurity risks and mitigation efforts from management, including our Chief Technology Officer (CTO).
We are not currently aware of risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. For additional information regarding cybersecurity risks, see the risk factor in Part I, Item 1A.
Our internal security team in conjunction with the Chief Technology Officer (CTO) reviews current risks with a cross-functional leadership committee on a quarterly basis. We are not currently aware of risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
We developed our cybersecurity program by integrating proactive training, vulnerability management, and system design with active threat defense mechanisms. Our marketplace services are protected by multiple layers of security, employing a "defense in depth" 34 approach to asset protection that is backed by AI-powered threat detection and response systems and actively monitored 24/7 by a dedicated team of security professionals.
We developed our cybersecurity program by integrating proactive training, vulnerability management, and system design with active threat defense mechanisms. Our marketplace services are protected by multiple layers of security including firewalls, endpoint protection, WAF and Bot mitigation.
Added
Our "defense in depth" approach to asset protection is backed by AI-powered threat detection and response systems and actively monitored 24/7 by a dedicated team of security professionals. We maintain a formal incident response plan, which is regularly tested and updated to ensure prompt detection, reporting, and mitigation of cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeBrunswick, NJ, USA CAG 4,800 December 31, 2025 Lot Phoenix, Arizona USA GovDeals 10,760 January 31, 2029 Lot Tuscon, Arizona USA GovDeals 5,150 September 30, 2025 35 Administrative Plano, Texas USA Corporate & Other 2,280 November 30, 2025 In addition, we lease various administrative spaces in North America totaling 5,074 square feet, in Europe totaling 845 square feet, and in Asia totaling 3,976 square feet.
Biggest changeBrunswick, NJ, USA CAG 4,800 December 31, 2025 Auction Staging Lot Montclair, California USA GovDeals 113,256 November 30, 2026 Auction Staging Lot Phoenix, Arizona USA GovDeals 10,760 January 31, 2029 Auction Staging Lot Tuscon, Arizona USA GovDeals 5,150 September 30, 2030 Retail Rush Store Columbus, Ohio USA RSCG 30,000 January 31, 2031 Administrative Plano, Texas USA Corporate & Other 2,280 November 30, 2025 In addition, we lease other administrative space in North America totaling 1,657 square feet, in Europe totaling 845 square feet, and in Asia totaling 6,976 square feet.
The Company leases the following properties as of September 30, 2024: Purpose Location Segment Square Feet Lease Expiration Date Corporate Headquarters Bethesda, Maryland, USA Corporate & Other 4,027 January 31, 2029 Warehouse Brownsburg, Indiana, USA RSCG 204,206 May 31, 2029 Warehouse Garland, Texas, USA RSCG 127,144 January 31, 2026 Warehouse Pittston, Pennsylvania, USA RSCG 108,536 January 7, 2027 Warehouse North Las Vegas, Nevada, USA RSCG 102,400 June 30, 2026 Warehouse Hebron, Kentucky, USA RSCG 101,614 July 31, 2025 Warehouse Phoenix, Arizona, USA RSCG 84,690 January 31, 2027 Warehouse Brampton, Canada RSCG 53,621 August 31, 2025 Warehouse Atlanta, Georgia, USA GovDeals 47,636 May 31, 2025 Warehouse Kenilworth, NJ, USA CAG 10,507 December 31, 2026 Warehouse E.
The Company leases the following properties as of September 30, 2025: Purpose Location Segment Square Feet Lease Expiration Date Corporate Headquarters Bethesda, Maryland, USA Corporate & Other 4,027 January 31, 2029 Warehouse Brownsburg, Indiana, USA RSCG 204,206 May 31, 2029 Warehouse Garland, Texas, USA RSCG 127,144 January 31, 2026 Warehouse Pittston, Pennsylvania, USA RSCG 108,536 January 7, 2027 Warehouse North Las Vegas, Nevada, USA RSCG 102,400 June 30, 2026 Warehouse Phoenix, Arizona, USA RSCG 84,690 January 31, 2027 Warehouse Brampton, Canada RSCG 53,621 August 31, 2030 Warehouse Atlanta, Georgia, USA GovDeals 77,501 July 31, 2026 Warehouse Kenilworth, NJ, USA CAG 10,507 December 31, 2026 Warehouse E.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in litigation relating to claims arising in the ordinary course of the business. Information regarding the Company's legal proceedings can be found in Note 16 - Legal Proceedings , of the accompanying Notes to the Consolidated Financial Statements.
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in litigation relating to claims arising in the ordinary course of the business. Information regarding the Company's legal proceedings can be found in Note 15 - Legal Proceedings , of the accompanying Notes to the Consolidated Financial Statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed4 unchanged
Biggest changeAs of September 30, 2024, the Company had $7.6 million of remaining authorization to repurchase shares through December 31, 2025. On December 9, 2024, the Company's Board of Directors authorized the repurchase of up to an additional $10.0 million of the Company's outstanding shares of common stock through December 31, 2026. Item 6 . [Reserved] 39
Biggest changeAs of September 30, 2025, the Company had $1.5 million of remaining authorization to repurchase shares through December 31, 2026. Item 6 . [Reserved] 43
Stock Performance Graph 38 Issuer Repurchases of Equity Securities The following table presents information about our repurchases of common stock that were made during the three months ended September 30, 2024 (in millions, except share and per share amounts): Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as a Part of a Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2) July 1 to July 31, 2024 — $ — — $ 7.6 August 1 to August 31, 2024 17,564 22.58 — 7.6 September 1 to September 30, 2024 — — — 7.6 Total 17,564 — (1) Separate from the share repurchase program, our stock incentive plans allow for participants to exercise stock options by surrendering shares of common stock equivalent in value to the exercise price due.
Stock Performance Graph 42 Issuer Repurchases of Equity Securities The following table presents information about our repurchases of common stock that were made during the three months ended September 30, 2025 (in millions, except share and per share amounts): Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as a Part of a Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2) July 1 to July 31, 2025 — $ — — $ 17.6 August 1 to August 31, 2025 517,748 25.67 517,748 4.3 September 1 to September 30, 2025 105,939 26.52 105,939 1.5 Total 623,687 623,687 (1) Separate from the share repurchase program, our stock incentive plans allow for participants to exercise stock options by surrendering shares of common stock equivalent in value to the exercise price due.
Holders As of November 15, 2024, there were approximately 12,682 beneficial holders of our common stock and 25 holders of record of our common stock. 37 Dividends We have not paid any cash dividends on our common stock, and we have no present intention to do so.
Holders As of November 1, 2025, there were approximately 8,681 beneficial holders of our common stock and 26 holders of record of our common stock. 41 Dividends We have not paid any cash dividends on our common stock, and we have no present intention to do so.
During the three months ended September 30, 2024, participants surrendered 17,564 shares of common stock in the exercise of stock options. Any shares surrendered to the Company in this manner are not available for future grant. (2) On September 8, 2023, the Company's Board of Directors authorized a new stock repurchase plan of up to $15.2 million.
During the three months ended September 30, 2025, no shares of common stock were surrendered by participants in the exercise of stock options. Any shares surrendered to the Company in this manner are not available for future grant.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+31 added−33 removed59 unchanged
Biggest changeWe believe adjusting for these acquisition related expenses is useful to investors when evaluating the operating performance of our business on a consistent basis from year-to-year. • We believe adjusting for litigation settlement expenses that are not expected to reoccur is useful to investors when evaluating the operating performance of our business on a consistent basis from year-to-year. • We believe adjusting for business realignment expense is useful to investors when evaluating the operating performance of our business on a consistent basis from year-to-year, as these expenses are outside our ordinary course of business. • We believe isolating other non-cash charges, such as impairment costs or other costs incurred outside our ordinary course of business, provides additional information about our cost structure, and, over time, helps track our performance. • We believe Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA are important indicators of our operational strength and the performance of our business because they provide a link between profitability and operating cash flow. • We also believe that analysts and investors use Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA as supplemental measures to evaluate the overall operating performance of companies in our industry. 50 Our management uses Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA: • as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis as they remove the impact of items not directly resulting from our core operations; • for planning purposes, including the preparation of our internal annual operating budget; • to allocate resources to enhance the financial performance of our business; • to evaluate the effectiveness of our operational strategies; and • to evaluate our capacity to fund capital expenditures and expand our business.
Biggest changeWe believe adjusting for these acquisition related expenses is useful to investors when evaluating the operating performance of our business on a consistent basis from year-to-year. • We believe adjusting for litigation settlement expenses that are not expected to reoccur is useful to investors when evaluating the operating performance of our business on a consistent basis from year-to-year. • We believe adjusting for business realignment expense is useful to investors when evaluating the operating performance of our business on a consistent basis from year-to-year, as these expenses are outside our ordinary course of business. • We believe isolating non-cash charges, such as amortization and depreciation, and other items, such as impairment costs incurred outside our ordinary course of business, provides additional information about our cost structure, and, over time, helps track our performance. • We believe Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA are important indicators of our operational strength and the performance of our business because they provide a link between profitability and operating cash flow. • We also believe that analysts and investors use Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA as supplemental measures to evaluate the overall operating performance of companies in our industry.
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 software, and related services.
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.
Interest and other income, net . Interest and other income, net consists of interest income on interest-bearing checking accounts, money market funds, interest and unused commitment fees in connection with the Company's Credit Agreement, the components of net periodic pension cost (benefit) other than the service component and impacts of foreign currency fluctuations. Income taxes.
Interest and other income, net consists of interest income on interest-bearing checking accounts, money market funds, interest and unused commitment fees in connection with the Company's Credit Agreement, the components of net periodic pension cost (benefit) other than the service component and impacts of foreign currency fluctuations. Income taxes.
The amount of cash received and settled will be substantially higher than our take-rate on such transactions, and the timing of auction events, cash collection period, and payment of settlements relative to period end dates can potentially drive substantial cash movements to the extent the timing of such activities cross fiscal periods.
The amount of cash received and settled will be substantially higher than our take-rate on such transactions, and the timing of auction events, cash collection period, and payment of settlements relative to period end dates can potentially drive substantial cash movements to the extent the timing of such activities cross fiscal periods.
Industry Trends We believe there are several industry trends positively impacting the long-term growth of our business including: • the increase in volume of returned merchandise handled both online and in stores as online and omni-channel retail grow as a percentage of overall retail sales; • the increase in government regulations and the need for corporations to have sustainability solutions with verifiable recycling and remarketing of surplus assets; • the increase in outsourcing surplus disposition and end-of-life assets by corporations and government entities as they focus on reducing costs, improving transparency, compliance and working capital, and increasingly prefer service providers with proven track records, innovative scalable solutions and the ability to make a strategic impact in the reverse supply chain; 41 • an increase in buyer demand for surplus merchandise as consumers aspire to make more environmentally conscious decisions, while also seeking greater value through purchasing less expensive goods, both of which could impact our long-term growth; • the increase in demand from sellers and buyers to transact in an online solution ensuring assets are sold for fair market value; and • in the long-term we expect innovation in the retail supply chain will increase the pace of product obsolescence and, therefore, increase the supply of surplus assets.
Industry Trends We believe there are several industry trends positively impacting the long-term growth of our business including: • the increase in volume of returned merchandise handled both online and in stores as online and omni-channel retail grow as a percentage of overall retail sales; 45 • the increase in government regulations and the need for corporations to have sustainability solutions with verifiable recycling and remarketing of surplus assets; • the increase in outsourcing surplus disposition and end-of-life assets by corporations and government entities as they focus on reducing costs, improving transparency, compliance and working capital, and increasingly prefer service providers with proven track records, innovative scalable solutions and the ability to make a strategic impact in the reverse supply chain; • an increase in buyer demand for surplus merchandise as consumers aspire to make more environmentally conscious decisions, while also seeking greater value through purchasing less expensive goods, both of which could impact our long-term growth; • the increase in demand from sellers and buyers to transact in an online solution ensuring assets are sold for fair market value; and • in the long-term we expect innovation in the retail supply chain will increase the pace of product obsolescence and, therefore, increase the supply of surplus assets.
Critical Accounting Policies and Estimates 43 The Company's consolidated financial statements, included in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K with their accompanying notes, have been prepared in accordance with GAAP, which requires management of the Company to make assumptions, judgments and estimates that affect amounts reported in its consolidated financial statements.
Critical Accounting Policies and Estimates The Company's consolidated financial statements, included in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K with their accompanying notes, have been prepared in accordance with GAAP, which requires management of the Company to make assumptions, judgments and estimates that affect amounts reported in its consolidated financial statements.
Technology expenses are presented separately from Costs of goods sold (excluding depreciation and amortization) in the Condensed Consolidated Statements of Operations, as these expenses provide for the general availability of our marketplace platforms and other business operational systems and are not attributable to specific revenue generating transaction activity occurring on our marketplaces.
Technology expenses are presented separately from Costs of goods sold (excluding depreciation and amortization) in the Consolidated Statements of Operations, as these expenses provide for the general availability of our marketplace platforms and other business operational systems and are not attributable to specific revenue generating transaction activity occurring on our marketplaces.
Refer to Note 2 - Summary of Significant Accounting Policies , to the Company's consolidated financial statements in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K for discussion of the Company's Costs of goods sold and related accounting policies. Technology and operations.
Refer to Note 2 - Summary of Significant Accounting Policies , to the Company's consolidated financial statements in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K for discussion of the Company's Costs of goods sold and related accounting policies. 48 Technology and operations.
The settlements to the sellers for these sales will occur in the first quarter of fiscal 2025. 53 Our working capital accounts are subject to natural variations depending on the rate of change of our transaction volumes, the timing of cash receipts and payments, and variations in our transaction volumes related to settlements between our buyers and sellers.
The settlements to the sellers for these sales will occur in the first quarter of fiscal 2025. Our working capital accounts are subject to natural variations depending on the rate of change of our transaction volumes, the timing of cash receipts and payments, and variations in our transaction volumes related to settlements between our buyers and sellers.
General and administrative expenses increased by $3.9 million, or 13.8%, due to a $1.8 million increase in stock compensation primarily from variable stock awards tied to financial performance targets, $0.5 million in litigation settlement expense incurred during the year ended September 30, 2024 (see Note 16 - Legal Proceedings for further information), and other costs in support of our growth.
General and administrative expenses increased by $3.9 million, or 13.8%, due to a $1.8 million increase in stock compensation primarily from variable stock awards tied to financial performance targets, $0.5 million in litigation settlement expense incurred during the year ended September 30, 2024 (see Note 15 - Legal Proceedings for further information), and other costs in support of our growth.
Depreciation and amortization of capitalized software development costs, purchased software, acquired developed software intangible assets, and computer hardware are included within Depreciation and amortization in the accompanying Condensed Consolidated Statements of Operations.
Depreciation and amortization of capitalized software development costs, purchased software, acquired developed software intangible assets, and computer hardware are included within Depreciation and amortization in the accompanying Consolidated Statements of Operations.
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 direct-to-consumer sales on its AllSurplus Deals and Secondipity marketplaces and other third-party sales channels. 40 • CAG .
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 direct-to-consumer sales on its AllSurplus Deals and Secondipity marketplaces and other third-party sales channels. 44 • CAG .
Net cash used in investing activities was $16.1 million and $11.4 million for the years ended September 30, 2024 and 2023, respectively. The $4.7 million increase in cash used in investing activities was primarily driven by $13.2 million in cash paid, net of cash acquired, for the Sierra acquisition; see Note 4 - Sierra Acquisition for further information.
Net cash used in investing activities was $16.1 million and $11.4 million for the years ended September 30, 2024 and 2023, respectively. The $4.7 million increase in cash used in investing activities was primarily driven by $13.2 million in cash paid, net of cash acquired, for the Sierra acquisition; see Note 3 - Acquisitions for further information.
New Accounting Pronouncements Information regarding our adoption of new accounting and reporting standards is discussed in Note 2 - Summary of Significant Accounting Policies , to the consolidated financial statements included in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K. 54
New Accounting Pronouncements Information regarding our adoption of new accounting and reporting standards is discussed in Note 2 - Summary of Significant Accounting Policies , to the consolidated financial statements included in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K. 58
Global supply chains may experience heightened disruptions due to international tensions and other factors, which could limit the volume of assets made available for sale in any period. 46 Machinio . Revenue from our Machinio reportable segment increased 16.9%, or $2.3 million, due to price increases and continued growth in subscribers.
Global supply chains may experience heightened disruptions due to international tensions and other factors, which could limit the volume of assets made available for sale in any period. Machinio & Software Solutions . Revenue from our Machinio & Software Solutions reportable segment increased 16.9%, or $2.3 million, due to price increases and continued growth in subscribers.
For the years ended September 30, 2024 and 2023, the Company's total revenues directly associated with Russia, Ukraine, and Israel were not material to our consolidated financial results. We will continue monitoring these armed and geopolitical conflicts around the world and any potential future impacts on our business.
For the fiscal years ended September 30, 2025 and 2024, the Company's total revenues directly associated with Russia, Ukraine, and Israel were not material to our consolidated financial results. We will continue monitoring these armed and geopolitical conflicts around the world and any potential future impacts on our business.
Consolidated Results The following table sets forth, for the periods indicated, our operating results (dollars in thousands): Year Ended September 30, Change (in thousands) 2024 2023 $ % Purchase revenues $ 209,800 $ 172,089 $ 37,711 21.9 % Consignment and other fee revenues 153,518 142,373 11,145 7.8 % Total revenue 363,318 314,462 48,856 15.5 % Costs and expenses from operations: Cost of goods sold (excludes depreciation and amortization) 178,152 142,322 35,830 25.2 % Technology and operations 61,377 57,078 4,299 7.5 % Sales and marketing 54,832 49,443 5,389 10.9 % General and administrative 31,962 28,074 3,888 13.8 % Depreciation and amortization 12,120 11,255 865 7.7 % Other operating expenses, net 1,471 186 1,285 692.8 % Total costs and expenses 339,914 288,358 51,556 17.9 % Income from operations 23,404 26,105 (2,701 ) (10.3 )% Interest and other income, net (3,854 ) (2,912 ) (943 ) 32.4 % Income before provision for income taxes 27,260 29,016 (1,757 ) (6.1 )% Provision for income taxes 7,269 8,039 (770 ) (9.6 )% Net income $ 19,991 $ 20,978 $ (986 ) (4.7 )% NM = not meaningful Total revenues.
Segment direct profit as a percentage of total revenue remained relatively consistent between the period. 52 Consolidated Results The following table sets forth, for the periods indicated, our operating results (dollars in thousands): Year Ended September 30, 2024 2023 $ Change % Change Purchase revenues $ 209,800 $ 172,089 $ 37,711 21.9 % Consignment and other fee revenues 153,518 142,373 11,145 7.8 % Total revenues 363,318 314,462 48,856 15.5 % Costs and expenses from operations: Cost of goods sold (excludes depreciation and amortization) 178,152 142,322 35,830 25.2 % Technology and operations 61,377 57,078 4,299 7.5 % Sales and marketing 54,832 49,443 5,389 10.9 % General and administrative 31,962 28,074 3,888 13.8 % Depreciation and amortization 12,120 11,255 865 7.7 % Other operating expenses, net 1,471 186 1,285 692.8 % Total costs and expenses 339,914 288,358 51,556 17.9 % Income from operations 23,404 26,105 (2,701 ) (10.3 )% Interest and other income, net (3,854 ) (2,912 ) (943 ) 32.4 % Income before provision for income taxes 27,260 29,016 (1,757 ) (6.1 )% Provision for income taxes 7,269 8,039 (770 ) (9.6 )% Net income $ 19,991 $ 20,978 $ (986 ) (4.7 )% NM = not meaningful Total revenues .
The 2024 effective tax rate differed from the statutory federal rate of 21.0% primarily as a result of the impact of foreign, state, and local income taxes and permanent adjustments. Year Ended September 30, 2023 Compared to Year Ended September 30, 2022 Segment Results GovDeals .
The fiscal 2025 effective tax rate differed from the statutory federal rate of 21.0% primarily as a result of the impact of foreign, state, and local income taxes and permanent adjustments. Year Ended September 30, 2024 Compared to Year Ended September 30, 2023 Segment Results GovDeals .
GMV also provides a means to evaluate the effectiveness of investments that we have made and continue to make, including in the areas of buyer and seller support, value-added services, product development, sales and marketing, and operations. Our GMV for the year ended September 30, 2024, was $1.4 billion. Total registered buyers.
GMV also provides a means to evaluate the effectiveness of investments that we have made and continue to make, including in the areas of buyer and seller support, value-added services, product development, sales and marketing, and operations. Our GMV for the year ended September 30, 2025, was $1.6 billion. Total registered buyers .
We consider the following accounting estimates to be critical: business combinations (Note 4), and income taxes (Note 11). Refer to these individually referenced notes and Note 2 - Summary of Significant Accounting Policies to the Company's consolidated financial statements for further details on these accounting estimates. The following discussion is a supplement to the disclosures referenced. Intangible assets .
We consider the following accounting estimates to be critical: business combinations (Note 3), and income taxes (Note 10). Refer to these individually referenced notes and Note 2 - Summary of Significant Accounting Policies to the Company's consolidated financial statements for further details on these accounting estimates. The following discussion is a supplement to the disclosures referenced. Intangible assets .
As of September 30, 2024, the Company had $7.6 million of remaining authorization to repurchase shares through December 31, 2025. On December 9, 2024, the Company's Board of Directors authorized the repurchase of up to an additional $10.0 million of the Company's outstanding shares of common stock through December 31, 2026. Off-Balance Sheet Arrangements .
As of September 30, 2024, the Company had $7.6 million of remaining authorization to repurchase shares through December 31, 2025. On December 9, 2024, the Company's Board of Directors authorized the repurchase of up to an additional $10.0 million of the Company's outstanding shares of common stock through December 31, 2026.
We intend to indefinitely reinvest the earnings of our foreign subsidiaries outside the United States. As a result, we did not record a provision for deferred U.S. tax expense on the $9.8 million of undistributed foreign earnings as of September 30, 2024.
We intend to indefinitely reinvest the earnings of our foreign subsidiaries outside the United States. As a result, we did not record a provision for deferred U.S. tax expense on the $9.1 million of undistributed foreign earnings as of September 30, 2025.
Depreciation and amortization . Depreciation and amortization expense increased $0.9 million, or 7.7%, in connection with our acquisition of Sierra; see Note 4 - Sierra Acquisition. Interest and other income, net.
Depreciation and amortization . Depreciation and amortization expense increased $0.9 million, or 7.7%, in connection with our acquisition of Sierra; see Note 3 - Acquisitions . Interest and other income, net .
GMV is the total sales value of all transactions for which we earned compensation upon their completion through our marketplaces or other channels during a given period of time. During the year ended September 30, 2024, the number of registered buyers grew from 5.1 million to 5.5 million.
GMV is the total sales value of all transactions for which we earned compensation upon their completion through our marketplaces or other channels during a given period of time. During the year ended September 30, 2025, the number of registered buyers grew from 5.5 million to 6.0 million, or 9%.
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 our GovDeals, Bid4Assets and Sierra marketplaces; see Note 3 - Bid4Assets Acquisition and Note 4 - Sierra Acquisition , respectively. • RSCG .
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 .
Our vendor contracts with respect to sourcing or consigning merchandise for our RSCG segment generally reflect the concentration dynamics inherent to the retail industry.
The Company's vendor contracts with respect to sourcing or consigning merchandise for its RSCG segment generally reflect the concentration dynamics inherent to the retail industry.
As a result, we are not subject to significant collection risk, as goods are generally not shipped before payment is received. We expect to continue to invest in enhancements to our e-commerce technology platform, marketplace capabilities, and tools for data-driven product recommendations, omni-channel behavioral marketing, expanded analytics, and buyer/seller payment optimization.
These platforms generally provide immediate authorization and timely settlement. As a result, we are not subject to significant collection risk, as goods are generally not shipped before payment is received. We expect to continue to invest in enhancements to our e-commerce technology platform, marketplace capabilities, and tools for data-driven product recommendations, omni-channel behavioral marketing, expanded analytics, and buyer/seller payment optimization.
Purchase model transactions are a smaller proportion of our consolidated GMV, representing 14.9%, 14.2%, and 13.7% of our consolidated GMV for the years ended September 30, 2024, 2023, and 2022, respectively.
Purchase model transactions are a smaller proportion of our consolidated GMV, representing 18.7%, 14.9%, and 14.2% of our consolidated GMV for the years ended September 30, 2025, 2024, and 2023, respectively.
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. During the past three fiscal years, we have conducted over 2.9 million online transactions generating $3.7 billion in gross merchandise volume or GMV.
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. During the past three fiscal years, we conducted over 3.1 million online transactions that generated $4.1 billion in gross merchandise volume or GMV.
Most of our transactions are conducted under the consignment model, which represented 85.1%, 85.8%, and 86.3% of our consolidated GMV for the years ended September 30, 2024, 2023, and 2022, respectively; however, only the consignment fee, representing a small portion of the consignment GMV, is recognized as revenue, causing consignment revenues to account for 34.9%, 37.7%, and 38.4% of our total revenues for the years ended September 30, 2024, 2023, and 2022, respectively.
Most of our transactions are conducted under the consignment model, which represented 81.3%, 85.1%, and 85.8% of our consolidated GMV for the years ended September 30, 2025, 2024, and 2023, respectively; however, only the consignment fee, representing a small portion of the consignment GMV, is recognized as revenue, causing consignment revenues to account for 29.0%, 34.9%, and 37.7% of our total revenues for the years ended September 30, 2025, 2024, and 2023, respectively.
These expenses are generally more fixed in nature than our other operating expenses and do not vary as significantly in response to the volume of merchandise sold through our marketplaces. Depreciation and amortization. Depreciation and amortization consist of depreciation of property and equipment, amortization of internally developed software, and amortization of intangible assets. Fair value adjustment of acquisition earn-outs.
These expenses are generally more fixed in nature than our other operating expenses and do not vary as significantly in response to the volume of merchandise sold through our marketplaces. Depreciation and amortization . Depreciation and amortization consist of depreciation of property and equipment, amortization of internally developed software, and amortization of intangible assets. Other operating expenses, net .
We generated GMV of $1.4 billion and revenue of $363.3 million through multiple sources, including transaction fees from sellers and buyers, proceeds from the sale of products we purchased from sellers, and value-added service charges during the year ended September 30, 2024. Over the prior 5 years, our GMV has grown at a compound annual growth rate of 16.4%.
We generated GMV of $1.6 billion and revenue of $477.7 million through multiple sources, including transaction fees from sellers and buyers, proceeds from the sale of products we purchased from sellers, and value-added service charges during the year ended September 30, 2025. Over the prior 5 years, our GMV has grown at a compound annual growth rate of 20.4%.
As of September 30, 2024, we had $153.2 million in Cash and cash equivalents and $2.3 million in Short-term investments, which we believe is sufficient to meet the Company’s anticipated cash needs for at least one year from the date of these financial statements.
As of September 30, 2025, we had $174.6 million in Cash and cash equivalents and $11.2 million in Short-term investments, which we believe is sufficient to meet the Company’s anticipated cash needs for at least one year from the date of these financial statements.
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. $12.2 million and $5.8 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Consolidated Balance Sheets as of September 30, 2024 and 2023, respectively.
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. $10.1 million and $12.2 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Consolidated Inventory balances as of September 30, 2025 and 2024, respectively.
The supply of used vehicles available for sale on our marketplaces may be impacted by proposed tariffs in the U.S., as well as the slowing adoption of electric vehicles as a replacement to internal combustion vehicle fleets. Further, used car market price indices continue to experience heightened volatility.
The supply of used vehicles available for sale on our marketplaces may be impacted by ongoing tariffs implemented, or actively being considered, by the U.S., as well as the slowing adoption of electric vehicles as a replacement to internal combustion vehicle fleets. Further, used car market price indices continue to experience heightened volatility.
Because our marketplaces and support systems require frequent upgrades and enhancements to maintain viability, we have determined that the useful life for certain internally developed software is less than one year.
Because our marketplaces and support systems require frequent upgrades and enhancements to maintain viability, we have determined that the useful life for certain internally developed software is less than one year. As a result, we expense those costs as incurred.
Total consolidated revenue increased $34.4 million, or 12.3%. Refer to the discussion of Segment Results above for discussion of the increase in revenue. Cost of goods sold (excludes depreciation and amortization) .
Total consolidated revenue increased $113.4 million, or 31.2%. Refer to the discussion of Segment Results above for discussion of the increase in revenue. Cost of goods sold (excludes depreciation and amortization) .
Changes in Cash Flows: 2023 Compared to 2022 Net cash provided by operating activities was $47.0 million and $44.8 million for the years ended September 30, 2023, and 2022, respectively.
Changes in Cash Flows: 2024 Compared to 2023 Net cash provided by operating activities was $70.2 million and $47.0 million for the years ended September 30, 2024 and 2023, respectively.
Our actual results could vary materially from those indicated, implied, or suggested by these forward-looking statements as a result of many factors, including those discussed under "Risk Factors" and elsewhere in this Annual Report on Form 10-K. Overview About us. Liquidity Services is a leading global commerce company providing trusted online marketplace platforms that power the circular economy.
Our actual results could vary materially from those indicated, implied, or suggested by these forward-looking statements as a result of many factors, including those discussed under "Risk Factors" and elsewhere in this Annual Report on Form 10-K. Overview About us. Liquidity Services is the leading global provider of e-commerce marketplaces and software solutions powering the circular economy.
In addition to seller commissions, we also collect buyer premiums. Other — fee revenue. We also earn non-consignment fee revenue from Machinio's subscription services, auction listing service fees for foreclosed real estate at our GovDeals segment (payable regardless of whether or not an auction is completed), as well as other services including asset valuation, product handling, and storage fees.
We also earn non-consignment fee revenue from our Machinio and Software Solution subscription services, auction listing service fees for foreclosed real estate at our GovDeals segment (payable regardless of whether or not an auction is completed), as well as other services including asset valuation, product handling, and storage fees.
For further information see Note 16 - Legal Proceedings, discussing the litigation settlement that occurred during the fiscal year ended September 30, 2024. 3 Business realignment expenses, included as a component of Other operating expenses (income), net on the Consolidated Statements of Operations, includes the amounts accounted for as exit costs under ASC 420, Exit or Disposal Cost Obligations, and the related impacts of business realignment actions subject to other accounting guidance.
For further information see Note 15 - Legal Proceedings, for details about the litigation settlement that occurred during the fiscal year ended September 30, 2024. 3 Business realignment expenses, included as a component of Other operating expenses, net on the Consolidated Statements of Operations, includes the amounts accounted for as exit costs under ASC 420, Exit or Disposal Cost Obligations, and the related impacts of business realignment actions subject to other accounting guidance including operating lease impairment expense resulting from such actions as described in Note 6 - Leases. .
As a result of the increase in revenues, Segment direct profit increased 14.3%, or $1.6 million.
As a result of the increase in revenues, Segment direct profit increased 17.2%, or $2.3 million.
However, all of the GMV associated with the purchase model transaction is generally able to be recognized as revenue, causing purchase revenues to account for 57.7%, 54.7%, and 54.0% of our total revenues for the years ended September 30, 2024, 2023, and 2022, respectively.
However, all of the GMV associated with the purchase model transaction is generally able to be recognized as revenue, causing purchase revenues to account for 65.1%, 57.7%, and 54.7% of our total revenues for the years ended September 30, 2025, 2024, and 2023, respectively. 46 Other fee revenues accounted for 5.9%, 7.3%, and 7.5% of our total revenues for the years ended September 30, 2025, 2024, and 2023, respectively.
The fair valuation of intangible assets acquired in a business combination consists of customer and supplier relationships, technology, trade names, and other intangibles (comprised of patents and related assets). Intangible assets are amortized using the straight-line method over their estimated useful lives. The preliminary fair value of acquired intangible assets, excluding goodwill, arising from the Sierra acquisition was $5.4 million.
The fair valuation of intangible assets acquired in a business combination consists of customer and supplier relationships, technology, trade names, and other intangibles (comprised of patents and related assets). Intangible assets are amortized using the straight-line method over their estimated useful lives.
The amount of standby letters of credit are reserved against the Line of Credit and are not available for borrowing, resulting in $17.5 million of remaining borrowing capacity under the Line of Credit as of September 30, 2024.
The amount of standby letters of credit are reserved against the Credit Agreement and are not available for borrowing, resulting in $26.0 million of remaining borrowing capacity under the Credit Agreement as of September 30, 2025.
The CAG reportable segment enables commercial businesses to sell surplus assets on our AllSurplus marketplace. The core verticals in which CAG operates include industrial manufacturing, oil and gas, heavy equipment, biopharma, and electronics. CAG also offers a suite of services that includes surplus management, asset valuation, asset sales and marketing.
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.
Pursuant to our preliminary purchase price allocation, goodwill arising from the acquisition of Sierra was determined to be $7.9 million; see Note 4 - Sierra Acquisition , for further information. Components of Revenue and Expenses Revenue.
Pursuant to our preliminary purchase price allocation, goodwill arising from the acquisition of Auction Software was determined to be $5.1 million; see Note 3 - Acquisitions , for further information. Components of Revenue and Expenses Revenue.
Interest and other income, net increased $0.9 million, or 32.4%, due to higher balances held in cash equivalent and short-term investments and the effect of rising interest rates. 47 Provision for income taxes .
Interest and other income, net increased $0.9 million, or 32.4%, due to higher balances held in cash equivalent and short-term investments and the effect of rising interest rates. 53 Non-GAAP Financial Measures Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA.
Our future capital requirements will depend on many factors including our rate of revenue growth, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the development and deployment of new marketplaces, the introduction of new value-added services and the costs to expand our network of warehouses including our new lease for warehouse space in Brownsburg, Indiana which commenced during the year ended September 30, 2024.
Our future capital requirements will depend on many factors including our rate of revenue growth, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the development and deployment of new marketplaces, the introduction of new value-added services and the costs to expand our network of warehouses.
Our definition of Non-GAAP Adjusted EBITDA differs from Non-GAAP EBITDA because we further adjust Non-GAAP EBITDA for stock-based compensation expense, acquisition costs such as transaction expenses and changes in earn out estimates, business realignment expense, deferred revenue purchase accounting adjustments, and goodwill and long-lived asset impairment.
Our definition of Non-GAAP Adjusted EBITDA differs from Non-GAAP EBITDA because we further adjust Non-GAAP EBITDA for stock-based compensation expense, acquisition costs such as transaction expenses and changes in earn out estimates, business realignment expenses, litigation settlement expenses that are not expected to reoccur, and goodwill, long-lived and other non-current asset impairment.
Year ended September 30, 2024 2023 2022 Net income $ 19,991 $ 20,978 $ 40,324 Interest and other (income) expense, net (1) (4,048 ) (2,859 ) 126 Provision for income taxes 7,269 8,039 7,329 Depreciation and amortization 12,120 11,255 10,322 Non-GAAP EBITDA $ 35,332 $ 37,412 $ 58,101 Stock compensation expense 11,087 8,191 8,482 Acquisition-related costs and litigation settlement expense (2) 1,830 252 473 Business realignment expenses (3) 251 — 191 Fair value adjustments to acquisition earn-outs — — (24,500 ) Non-GAAP Adjusted EBITDA $ 48,500 $ 45,855 $ 42,747 1 Interest and other (income) expense, net excludes non-services pension and other postretirement expense (benefit). 2 Acquisition-related costs are included in Other operating expenses (income), net on the Consolidated Statements of Operations.
Year ended September 30, 2025 2024 2023 Net income $ 28,093 $ 19,991 $ 20,978 Interest and other income, net (1) (4,574 ) (4,048 ) (2,859 ) Provision for income taxes 11,348 7,269 8,039 Depreciation and amortization 10,409 12,120 11,255 Non-GAAP EBITDA $ 45,276 $ 35,332 $ 37,412 Stock compensation expense 14,490 11,087 8,191 Acquisition-related costs and litigation settlement expense (2) 285 1,830 252 Business realignment expenses (3) 765 251 — Non-GAAP Adjusted EBITDA $ 60,816 $ 48,500 $ 45,855 1 Interest and other income, net excludes non-services pension and other postretirement expense (benefit). 2 Acquisition-related costs are included in Other operating expenses, net on the Consolidated Statements of Operations.
As of September 30, 2024, the Company was in full compliance with the terms and conditions of the Credit Agreement. Working Capital Management Most of our sales are recorded subsequent to receipt of payment authorization, utilizing credit cards, wire transfers, and PayPal, an Internet-based payment system, as methods of payments.
As of September 30, 2025, the Company was in full compliance with the terms and conditions of the Credit Agreement. 56 Working Capital Management Most of our sales are recorded subsequent to receipt of payment authorization, utilizing credit cards, wire transfers, ACH, and other secure electronic payment platforms as methods of payment.
Additional debt would result in increased interest expense and could result in covenants that would restrict our operations. There is no assurance that such financing, if required, will be available in amounts or on terms acceptable to us, if at all. Credit Agreement The Company maintains a $25.0 million Credit Agreement with Wells Fargo Bank, National Associated (the Credit Agreement).
Additional debt would result in increased interest expense and could result in covenants that would restrict our operations. There is no assurance that such financing, if required, will be available in amounts or on terms acceptable to us, if at all.
The significant assumptions used in the income approach includes estimates about future expected cash flows from supplier contracts, the attrition rate, and the discount rate. • Trade Name - We valued the trade name acquired using a relief-from-royalty method.
The significant assumptions used in the relief-from-royalty method include estimates about future expected cash flows from the developed software, the royalty rate, the obsolescence factor and the discount rate. • Trade Name - We valued the trade name acquired using a relief-from-royalty method.
During the year ended September 30, 2024, the Company did not make any draws under the Line of Credit and issued $7.5 million of standby letters of credit. As of September 30, 2024, the Company had no outstanding borrowings under the Line of Credit and had $7.5 million of standby letters of credit outstanding.
During the fiscal year ended September 30, 2025, the Company did not make any draws under the Credit Agreement, had no outstanding borrowings under the Credit Agreement and had $9.0 million of standby letters of credit outstanding.
Fair value adjustment of acquisition earn-outs consists of the change in fair value of earn-out consideration following a business combination. Other operating expenses, net. Other operating expenses, net includes acquisition-related costs, impairment of long-lived and other assets, impacts of lease terminations, as well as business realignment expenses, including those associated with restructuring initiatives and the exit of certain business operations.
Other operating expenses, net includes acquisition-related costs, impairment of long-lived and other assets, impacts of lease terminations, as well as business realignment expenses, including those associated with restructuring initiatives and the exit of certain business operations. Interest and other income, net .
Total auction participants. For each auction we manage, the number of auction participants represents the total number of registered buyers who have bid one or more times in that auction. As a result, a registered buyer who bids, or participates, in more than one auction is counted as an auction participant in each auction in which he or she participates.
As a result, a registered buyer who bids, or participates, in more than one auction is counted as an auction participant in each auction in which he or she participates. Thus, total auction participants for a given period is the sum of the auction participants in each auction conducted during that period.
(Sierra), a full-service auction company specializing in the sale of vehicles, equipment and surplus assets for government agencies, commercial businesses, and charities in the southwestern U.S. See Note 4 - Sierra Acquisition for more information regarding this transaction. Bid4Assets, Inc. Acquisition .
On January 1, 2024, the Company acquired all the issued and outstanding equity securities associated with Sierra Auction Management, Inc. (Sierra), a full-service auction company specializing in the sale of vehicles, equipment and surplus assets for government agencies, commercial businesses, and charities in the southwestern U.S. See Note 3 - Acquisitions for more information regarding this transaction. Share Repurchases .
This balance consisted of the following identified intangible assets, each with their own significant assumptions used, as follows: • Customer and Supplier Relationships - We valued the customer and supplier relationships intangibles using the multi-period excess earnings method, an income approach valuation model.
The preliminary fair value of acquired intangible assets, excluding goodwill, arising from the Auction Software acquisition was $2.6 million. This balance consisted of the following identified intangible assets, each with their own significant assumptions used, as follows: • Contract Intangibles - We valued the contract intangibles using the multi-period excess earnings method, an income approach valuation model.
As a result, we expense those costs as incurred. 44 However, where we determine that the useful life of the internally developed software will be greater than one year, we capitalize development costs in accordance with ASC 350-40, Internal-use software.
However, where we determine that the useful life of the internally developed software will be greater than one year, we capitalize development costs in accordance with ASC 350-40, Internal-use software. As such, we are capitalizing certain development costs associated with our marketplaces and support systems, as well as other software development activities.
Operations expenses include both internal and external labor costs, as well as other third-party charges. These costs are expensed as incurred. Sales and marketing. Sales and marketing expenses include the cost of our sales and marketing personnel as well as the cost of lead generation, marketing and promotional activities, including buyer and seller acquisition, as well as general brand marketing.
Sales and marketing expenses include the cost of our sales and marketing personnel as well as the cost of lead generation, marketing and promotional activities, including buyer and seller acquisition, as well as general brand marketing.
During the years ended September 30, 2024, 2023 and 2022, the Company had an effective income tax rate of 26.7%, 27.7% and 15.4%, respectively, which included federal, state, and foreign income taxes. 45 Results of Operations The following table presents reportable segment GMV, revenue, segment direct profit (which is calculated as total revenue less cost of goods sold (exclusive of depreciation and amortization)), and segment direct profit as a percentage of total revenue for the periods indicated ($ in thousands): Year Ended September 30, (dollars in thousands 2024 2023 2022 GovDeals: GMV $ 836,288 $ 726,124 $ 720,323 Total revenue $ 76,557 $ 62,010 $ 59,352 Segment direct profit $ 71,727 $ 58,810 $ 56,408 Segment direct profit as a percentage of total revenue 93.7 % 94.8 % 95.0 % RSCG: GMV $ 320,683 $ 285,574 $ 236,236 Total revenue $ 233,003 $ 200,218 $ 166,100 Segment direct profit $ 66,873 $ 68,068 $ 63,704 Segment direct profit as a percentage of total revenue 28.7 % 34.0 % 38.4 % CAG: GMV $ 209,661 $ 191,333 $ 188,813 Total revenue $ 37,668 $ 38,476 $ 42,575 Segment direct profit $ 31,268 $ 32,215 $ 29,120 Segment direct profit as a percentage of total revenue 83.0 % 83.7 % 68.4 % Machinio: GMV — — — Total revenue $ 16,157 $ 13,821 $ 12,083 Segment direct profit $ 15,364 $ 13,110 $ 11,471 Segment direct profit as a percentage of total revenue 95.1 % 94.9 % 94.9 % Consolidated: GMV $ 1,366,632 $ 1,203,031 $ 1,145,372 Total revenue $ 363,318 $ 314,462 $ 280,050 NM = not meaningful Year Ended September 30, 2024 Compared to Year Ended September 30, 2023 Segment Results GovDeals .
Income taxes include current and deferred income tax expense for the U.S. federal, state, and foreign jurisdictions. 49 Results of Operations The following table presents reportable segment GMV, revenue, segment direct profit (which is calculated as total revenue less cost of goods sold (exclusive of depreciation and amortization)), and segment direct profit as a percentage of total revenue for the periods indicated ($ in thousands): Year Ended September 30, (dollars in thousands 2025 2024 2023 GovDeals: GMV $ 903,456 $ 836,288 $ 726,124 Total revenue $ 87,404 $ 76,557 $ 62,010 Segment direct profit $ 81,006 $ 71,727 $ 58,810 Segment direct profit as a percentage of total revenue 92.7 % 93.7 % 94.8 % RSCG: GMV $ 418,418 $ 320,683 $ 285,574 Total revenue $ 330,291 $ 233,003 $ 200,218 Segment direct profit $ 74,747 $ 66,873 $ 68,068 Segment direct profit as a percentage of total revenue 22.6 % 28.7 % 34.0 % CAG: GMV $ 249,017 $ 209,661 $ 191,333 Total revenue $ 39,296 $ 37,668 $ 38,476 Segment direct profit $ 34,828 $ 31,268 $ 32,215 Segment direct profit as a percentage of total revenue 88.6 % 83.0 % 83.7 % Machinio & Software Solutions: GMV — — — Total revenue $ 19,746 $ 16,157 $ 13,821 Segment direct profit $ 18,303 $ 15,364 $ 13,110 Segment direct profit as a percentage of total revenue 92.7 % 95.1 % 94.9 % Consolidated: GMV $ 1,570,891 $ 1,366,632 $ 1,203,031 Total revenue $ 476,669 $ 363,318 $ 314,462 NM = not meaningful Year Ended September 30, 2025 Compared to Year Ended September 30, 2024 Segment Results GovDeals .
Provision for income taxes decreased $0.7 million to an expense of $7.3 million from an expense of $8.0 million due to the decrease in state and deferred income taxes resulting from lower income in the current year compared to prior year. The Company's effective tax rate was 26.7% for the twelve months ended September 30, 2024.
Provision for income taxes increased $4.1 million to an expense of $11.3 million from an expense of $7.3 million due to the increase in state and deferred income taxes resulting from higher pre-tax income in fiscal 2025. The Company's effective tax rate was 28.8% for the fiscal year ended September 30, 2025.
Segment direct profit as a percentage of total revenue increased 15.3%, which may fluctuate due to inherent variations in the mix of assets sourced and sold by the CAG segment in any given period, due to a higher mix of consignment transactions conducted during the current year.
Segment direct profit as a percentage of total revenue increased from 83.0% to 88.6% due to fewer international spot purchase transactions in the current year. As a reminder, there are inherent variations in the mix of assets sourced and sold by the CAG segment in any given period.
As GovDeals real estate sales with settlement services increase through the integration with Bid4Assets, operating cash flow fluctuations from accounts payable and payables to sellers are expected to become more variable.
RSCG's purchase program volume changes may cause operating cash flows from Accounts receivable, Accounts payable and Inventory to fluctuate. As GovDeals real estate sales with settlement services increase, operating cash flow fluctuations from Accounts payable and Payables to sellers may become more variable.
No other changes, including regarding the borrowing terms or capacities, were made to the Credit Agreement as a result of the First Amendment or the Second Amendment. The Company may draw upon the Credit Agreement for general corporate purposes. Repayments of any borrowings under the Credit Agreement shall become available for redraw at any time by the Company.
The Company may draw upon the Credit Agreement for general corporate purposes. Repayments of any borrowings under the Credit Agreement shall become available for redraw at any time by the Company.
CAG benefits from a global base of buyers and sellers enabling the sale and redeployment of assets wherever they’re most likely to generate the best value and highest use across the world. This segment primarily uses the AllSurplus and GovDeals marketplaces. • Machinio .
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 Company repurchased 1,607,141 shares for $21.2 million during the year ended September 30, 2023. As of September 30, 2023, the Company had $17.0 million of remaining share repurchase authorization through December 31, 2025. The Company repurchased 564,887 shares for $9.4 million during the year ended September 30, 2024.
The Company repurchased 623,687 shares for $16.1 million during the year ended September 30, 2025. As of September 30, 2025, the Company had $1.5 million of remaining authorization to repurchase shares through December 31, 2026.
Thus, total auction participants for a given period is the sum of the auction participants in each auction conducted during that period. We use this metric to allow us to compare our online auction marketplaces to our competitors, including other online auction sites and traditional on-site auctioneers.
We use this metric to allow us to compare our online auction marketplaces to our competitors, including other online auction sites and traditional on-site auctioneers. In addition, we measure total auction participants on a periodic basis to evaluate the activity level of our base of registered buyers and to measure the performance of our marketing and promotional efforts.
Completed transactions represents the number of auctions in a given period from which we have recorded revenue. Similar to GMV, we believe that completed transactions is a key business metric because it provides an additional measurement of the volume of activity flowing through our marketplaces.
Similar to GMV, we believe that completed transactions is a key business metric because it provides an additional measurement of the volume of activity flowing through our marketplaces. During the years ended September 30, 2025, 2024, and 2023, we completed 1,066,000, 1,081,000 and 925,000 transactions, respectively.
The Machinio reportable segment operates a global search engine platform for listing equipment for sale in the construction, machine tool, processing, transportation, printing, agriculture and laboratory/medical sectors.
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 $9.8 million decrease in cash used by financing activities was primarily driven by $4.2 million of lower common stock repurchases in the current year, a $1.5 million decrease in taxes paid associated with net settlement of stock compensation awards, and the non-recurring earn-out payment of $3.5 million made during the year ended September 30, 2022, in connection with the Bid4Assets acquisition.
The $10.6 million increase in cash used in financing activities was primarily driven by a $6.8 million increase in share repurchases and a $3.5 million increase in taxes paid associated with the net settlement of stock compensation awards.
There have been no other significant changes to the working capital requirements for the Company. Net cash used in investing activities was $11.4 million and $21.1 million for the years ended September 30, 2023, and 2022, respectively.
Our US federal income tax payments increased in fiscal 2025 as our remaining federal net operating loss carryforwards were fully utilized. There have been no other significant changes to the working capital requirements for the Company. Net cash used in investing activities was $23.0 million and $16.1 million for the twelve months ended September 30, 2025 and 2024, respectively.
In addition, we measure total auction participants on a periodic basis to evaluate the activity level of our base of registered buyers and to measure the performance of our marketing and promotional efforts. During the years ended September 30, 2024, 2023, and 2022, 4.0 million, 3.3 million, and 3.1 million participants participated in auctions on our marketplaces, respectively. Completed transactions.
During the years ended September 30, 2025, 2024, and 2023, 4.1 million, 4.0 million, and 3.3 million participants participated in auctions on our marketplaces, respectively. 47 Completed transactions. Completed transactions represents the number of auctions in a given period from which we have recorded revenue.
We intend to fund those expenditures primarily from our existing cash balances and operating cash flows. Our capital expenditures for the year ended September 30, 2024, were $8.9 million. As of September 30, 2024, we had no significant outstanding commitments for capital expenditures.
The timing and volume of such capital expenditures in the future will be affected by the addition of new sellers or buyers or expansion of existing seller or buyer relationships. We intend to fund those expenditures primarily from our existing cash balances and operating cash flows. Our capital expenditures for the year ended September 30, 2025, were $7.8 million.
We use this metric to evaluate how well our marketing and promotional efforts are performing. Total registered buyers exclude duplicate registrations, buyers who are suspended from utilizing our marketplaces and buyers who have voluntarily removed themselves from our registration database.
Total registered buyers exclude duplicate registrations, buyers who are suspended from utilizing our marketplaces and buyers who have voluntarily removed themselves from our registration database. In addition, if we become aware of registered buyers that are no longer in business, we remove them from our database.
Share repurchases may be made through open market purchases, privately negotiated transactions, or otherwise, at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions.
The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions. The repurchase program may be discontinued or suspended at any time and will be funded using our available cash.
We grow our buyer base through a combination of marketing and promotional efforts. A person becomes a registered buyer by completing an online registration process on one of our marketplaces.
We grow our buyer base through a combination of internal and external marketing, as well as other promotional efforts. An individual or company becomes a registered buyer by completing our online registration process for our marketplaces. During registration, we collect personal and business information, including name, company name, address, email, phone number, taxation information, and intended use of our marketplaces.
During the year ended September 30, 2023, the Credit Agreement was amended to extend the maturity date by 12 months to March 31, 2025 (the First Amendment). During the six months ended March 31, 2024, the Credit Agreement was amended to extend the maturity date by an additional 12 months to March 31, 2026 (the Second Amendment).
On March 27, 2024, the Credit Agreement was amended to extend the maturity date by an additional 12 months to March 31, 2026 (the Second Amendment). No other changes, including regarding the borrowing terms or capacities, were made to the Credit Agreement as a result of the First Amendment or the Second Amendment.
Reportable Segments The Company has four operating and reportable segments under which we conduct business: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Further information and operating results of our reportable segments can be found in Note 17 - Segment Information . • GovDeals .
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).

… 79 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed5 unchanged
Biggest changeAs of September 30, 2024, we do not have any debt; however, should the Company draw on our Letter of Credit in the future, such draw would incur interest as determined by the Daily Simple Secured Overnight Financing Rate (SOFR) in effect plus a margin ranging from 1.25% to 1.75%. Exchange rate sensitivity.
Biggest changeAs of September 30, 2025, we do not have any debt; however, should the Company draw on our Letter of Credit in the future, such draw would incur interest as determined by the Daily Simple Secured Overnight Financing Rate (SOFR) in effect plus a margin ranging from 1.25% to 1.75%. Exchange rate sensitivity.
As of September 30, 2024, we hold cash and cash equivalents and short-term investments that are subject to varying interest rates based upon their maturities. A hypothetical 100 basis point decline in interest rates would impact our pre-tax earnings by less than $1.0 million on an annualized basis.
As of September 30, 2025, we hold cash and cash equivalents and short-term investments that are subject to varying interest rates based upon their maturities. A hypothetical 100 basis point decline in interest rates would impact our pre-tax earnings by less than $1.0 million on an annualized basis.

Other LQDT 10-K year-over-year comparisons