Skip to content
    LQDT
    Earnings call· Jun 2026(Q3 FY26)

    LIQUIDITY SERVICES Q3 FY26 earnings call LQDT

    Aug 6, 2026 Source

    Executive summary

    Liquidity Services Q3 FY26 — Record GMV and Profitability Driven by ARISE Strategy

    Liquidity Services delivered record Q3 FY26 performance, driven by its ARISE strategy focused on maximizing recovery, increasing transaction volume, expanding services, and leveraging technology. The company achieved record GMV and profitability, with strong contributions from its Retail and GovDeals segments, and is well-positioned for continued growth towards its $2 billion annual GMV target. Management highlighted the resilience of its platform and strategic financial position.

    Highlights

    5

    • GAAP diluted EPS increased 39% year-over-year to $0.32.

    • GMV grew 10% year-over-year to a record $453 million.

    • Adjusted EBITDA increased 30% year-over-year to $22 million, marking the 10th consecutive quarter of YoY EBITDA growth.

    • Retail segment GMV reached a record $121.6 million, increasing 19% year-over-year.

    • GovDeals segment GMV reached a record $274 million, up 9% year-over-year, with the 7th consecutive quarter of seller growth.

    Concerns

    2

    • Capital Assets Group (CAG) GMV declined 1% year-over-year to $57.5 million, impacted by project timing and lower volumes in EMEA, APAC, and selected North American industrial markets.

    • Auction participants were down 5% despite a 9% increase in registered buyers and 17% increase in transactions, reflecting a shift to higher-value assignments.

    Guidance & targets

    9
    CategoryTargetConfidence
    GMV
    $450 million to $455 million
    high materiality
    High
    Non-GAAP adjusted EBITDA
    $22 million to $25 million
    high materiality
    High
    GAAP net income
    $10 million to $13 million
    medium materiality
    High
    GAAP diluted earnings per share
    $0.30 to $0.39
    high materiality
    High
    Non-GAAP adjusted diluted earnings per share
    $0.41 to $0.50
    high materiality
    High
    Effective tax rate
    low to mid-30s
    low materiality
    Medium
    Capital expenditures
    $2.5 million to $3 million
    medium materiality
    High
    Annual fiscal year adjusted EBITDA
    highest in 13 years
    high materiality
    High
    Annual growth across all key metrics
    continued annual growth
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Retail
    Achieved record GMV, revenue, and direct profit, reflecting an expanded buyer base for low touch purchase flows and an increased mix of consignment flows, while maintaining operating leverage.
    GMV: $121.6 millionmanaged direct-to-consumer consignment business nearly doubled from prior year
    		up 8%19%—up 30%
    GovDeals
    Achieved record GMV, revenue, and direct profit, driven by continued expansion of buyer and seller base and increased adoption of added services.
    GMV: $274 millionnew quarterly record for unique sellers7th consecutive quarter of seller growthbuyer registrations increased 23%new bidders increased 42%conversion rates improved 35%
    		up 7%9%—up 9%
    Capital Assets Group (CAG)
    GMV decreased primarily due to project timing and lower volumes in EMEA, APAC, and selected North American industrial markets. Direct profit increased due to a favorable mix of high take rate projects and stronger pricing.
    GMV: $57.5 milliontake rate increased 270 basis points from a year ago175 new accounts signed
    		up 18%-1%—up 13%

    Operational metrics

    20
    GAAP diluted earnings per share
    $0.32up 39% YoY
    Q3 FY26

    Reported GAAP diluted EPS.

    Consolidated GMV
    $453 millionup 10% YoY
    Q3 FY26

    Set a new quarterly record.

    GAAP Revenue
    $129.6 millionup 8% YoY
    Q3 FY26

    Consolidated GAAP revenue.

    Direct Profit
    $3.8 millionup 17% YoY
    Q3 FY26

    Consolidated direct profit.

    Adjusted EBITDA
    $22 millionup 30% YoY
    Q3 FY26

    10th consecutive quarter of year-over-year EBITDA growth.

    Rule of 40 score
    51%up from 42% a year ago
    Q3 FY26

    Improved Rule of 40 score.

    Cash and short-term investments
    $231.1 million
    Q3 FY26

    Cash, cash equivalents, and short-term investments balance.

    Non-GAAP adjusted earnings per share
    $0.45up 32%
    Q3 FY26

    Reported non-GAAP adjusted EPS.

    Share repurchase authorization remaining
    $50 million
    Q3 FY26

    Amount remaining from authorization to perform additional share repurchases.

    Available borrowing capacity
    $24 million
    Q3 FY26

    Available capacity under credit facility.

    Machinio total system ARR
    26%YoY
    Q3 FY26

    Annual Recurring Revenue for Machinio business.

    Machinio Marine Vertical growth
    95%YoY
    Q3 FY26

    Growth in the Machinio Marine Vertical.

    Consignment GMV as percent of total GMV
    mid 80s
    Q4 FY26

    Expected consignment GMV for the fiscal fourth quarter.

    Consolidated Revenue as percent of GMV
    mid-20s
    Q4 FY26

    Expected consolidated revenue as a percent of GMV for the fiscal fourth quarter.

    Total segment direct profit as percent of consolidated revenue
    mid-50%
    Q4 FY26

    Expected total segment direct profit as a percent of consolidated revenue for the fiscal fourth quarter, resulting in improved direct profit margins year-over-year.

    GovDeals notable transaction
    $7.7 million
    Q3 FY26

    One of several notable transactions during the quarter.

    GovDeals notable transaction
    $2.5 million
    Q3 FY26

    One of several notable transactions during the quarter.

    GovDeals notable transaction
    $2.6 million
    Q3 FY26

    One of several notable transactions during the quarter.

    Circular economy market size
    $100 billion
    current

    The company reinforces its leadership position in this market.

    Annual GMV target
    $2 billion
    future

    The company is confidently marching towards this target.

    Risks & headwinds

    2
    Timing of large projects in Capital Assets Group (CAG)Q3 FY26

    Impacted Q3 results, contributing to 1% YoY GMV decline for CAG.

    Mitigation: These delays reflect timing issues rather than project losses and have strengthened the outlook for upcoming quarters.

    Lower transaction volumes in certain geographies/markets for CAGQ3 FY26

    Contributed to 1% YoY GMV decline for CAG, specifically in EMEA, APAC, and selected North American industrial markets.

    Mitigation: CAG delivered 13% YoY direct profit growth due to stronger pricing and mix, and a 270 bps increase in take rate, offsetting the volume impact.

    What to watch in Q4 FY26

    5

    CAG segment GMV recovery

    Q4 FY26
    Current$57.5 million, down 1% YoY in Q3 FY26
    TargetGrowth, overcoming Q3 project timing impacts

    Why it matters

    CAG's performance was impacted by project timing; its recovery is key to consolidated growth and future outlook.

    While quarterly results were impacted by the timing of📎 several large projects, CAG delivered another quarter of year-over-year direct profit growth... Importantly, these large project delays during Q3 reflect timing issues rather than project losses and have strengthened our outlook for upcoming quarters.

    Q&A highlights

    3

    Why were auction participants down 5% when registered buyers and transactions were up, and what is the strategy to address this?

    Management explained that the decline in auction participants is due to a strategic shift towards higher-value assignments and asset categories, which results in fewer lots sold but higher GMV per lot. They focus on ensuring competitive liquidity for each lot and noted that despite limiting marketing spend, recovery rates are improving.

    “if we have fewer lots at a higher value that number of auction participants can tip down but GMB can still grow and we can have a very efficient business the mix you know will vary quarter to quarter”

    asked by George Sutton · answered by William Angrick

    2 min read6 chapters

    Detailed Narrative

    01

    ARISE Strategy Success

    The company's ARISE strategy, focusing on maximizing recovery, increasing transaction volume, expanding value-added services, and leveraging technology, is driving stronger financial performance and reinforcing its leadership in the $100 billion circular economy. This strategy has led to an improved Rule of 40 score of 51% and consistent EBITDA growth, marking the 10th consecutive quarter of year-over-year EBITDA growth.

    02

    Retail Segment Growth

    The retail segment achieved record GMV of $121.6 million, a 19% year-over-year increase, driven by expanding consignment relationships and improved recovery rates. The managed direct-to-consumer consignment business nearly doubled from the prior year, and international clients showed strong growth, demonstrating the effectiveness of flexible service offerings in helping large retailers recover more value from surplus inventory.

    03

    GovDeals Marketplace Expansion

    GovDeals set new records for GMV ($274 million, up 9% year-over-year), unique sellers (7th consecutive quarter of growth), and bidder/seller engagement. Buyer registrations increased 23%, new bidders 42%, and conversion rates improved 35%, attributed to AI-enabled marketing, personalization, buyer education, and improved marketplace experiences. Notable transactions included a $7.7 million heavy equipment sale and a $2.5 million generator auction.

    04

    Capital Assets Group Resilience

    Despite project timing impact📎s and lower volumes in EMEA, APAC, and selected North American industrial markets, CAG delivered 13% year-over-year direct profit growth. This was driven by stronger pricing and mix, and a 270 basis points increase in take rate. New account activity remained healthy with 175 new accounts signed, reinforcing leadership across industrial, energy, biopharma, and manufacturing sectors.

    05

    Technology and Platform Modernization

    Investments in AI-enabled marketing, personalization, buyer education, and improved marketplace experiences are enhancing user experiences across multiple marketplaces and preparing new capabilities for future growth. The Machinio business also showed strong momentum with total system ARR increasing 26% year-over-year and the Marine Vertical growing 95% year-over-year, leveraging cross-pollination of buyers.

    06

    Strategic Financial Position

    The company maintains a strong, debt-free balance sheet with $231.1 million in cash and short-term investments and approximately $50 million remaining from its share repurchase authorization. This financial strength, combined with expanding buyer and seller networks and growing services, provides multiple avenues for value creation and continued profitable growth towards its $2 billion annual GMV target.

    AI-generated summary of the company’s earnings call. Not investment advice.