Liquidity Services, Inc. (LQDT) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlighted strong financial performance with significant year-over-year growth in key metrics like non-GAAP adjusted EBITDA and EPS. The company also has no financial debt, providing strategic flexibility. The Q&A session revealed positive sentiment towards tech-enabled growth and expansion plans, particularly in heavy equipment and GovDeals. The share repurchase plan and strategic growth initiatives further support a positive outlook. Despite some declines in specific segments, overall growth and strategic initiatives are likely to drive a positive stock price movement in the short term.
Key Financial Performance
Consolidated Gross Merchandise Volume (GMV) $398 million, up 3% year-over-year. The increase was driven by growth in GovDeals and RSCG segments, despite a decline in CAG segment GMV.
Revenue $121.2 million, down 1% year-over-year. The decline was due to a mix shift towards lower purchase transaction activity in the Retail segment, mostly offset by consignment flows.
GAAP Net Income Up 29% year-over-year. The increase reflects improved profitability across segments and operational efficiencies.
Non-GAAP Adjusted EBITDA $18.1 million, up 38% year-over-year. Growth was driven by lower-touch consignment transactions and expanding multichannel buyer outreach, particularly in the Retail segment.
Adjusted Earnings Per Share (EPS) $0.39, up 39% year-over-year. The increase was supported by higher profitability metrics and operational efficiencies.
Cash and Cash Equivalents $181.4 million, with no financial debt. This provides strategic flexibility for growth and technology investments.
GovDeals GMV Up 7% year-over-year. Growth was fueled by seller acquisition, market share expansion, and new agency clients.
Direct Profit $57 million, up 13% year-over-year. The increase was due to enhanced services, stronger pricing on asset sales, and higher average commission rates.
RSCG Segment GMV Up 3% year-over-year. Growth was driven by strong buyer participation and improved product mix, despite a decline in purchase model programs.
RSCG Segment Direct Profit Up 16% year-over-year. The increase was attributed to higher volumes of lower-touch purchase flows and strong multichannel buyer participation.
CAG Segment Revenue Up 17% year-over-year. Growth was supported by increased activity in industrial spot purchases and heavy equipment transactions, despite lower GMV.
Heavy Equipment Category GMV Up 27% year-over-year. Growth was driven by strong buyer participation and an 88% increase in the number of transactions.
Machinio and Software Solutions Revenue Up 27% year-over-year. Growth was driven by subscription expansion and the integration of the Auction Software business.
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Operating Highlights
Retail Rush: Launched as a new consumer auction channel, leveraging software solutions to expand reach into the retail secondary market and attract new buyers and sellers.
GovDeals: Achieved 7% GMV growth, added over 500 new agency clients including Pennsylvania Department of Transportation and New York Port Authority, and expanded market share.
Heavy Equipment Category: Logged 27% year-over-year organic GMV growth and 88% growth in transactions, supported by strong buyer participation.
Machinio: Expanded into the marine industry vertical and grew the number of service providers on its marketplace.
Operational Efficiencies: Improved productivity with a 48% year-over-year increase in direct profit per labor hour in Q1, leveraging AI, data analytics, and automation.
Consignment Transactions: Increased focus on lower-touch consignment transactions, contributing to higher margins and operational efficiency.
Technology Investments: Continued disciplined investment in AI, data analytics, multichannel marketing, and operational excellence to enhance customer experience and decision-making.
Auction Software Business: Focused on scaling to 1,000 customers with ARR of $10,000 or more, targeting resellers, retail liquidators, and traditional auction houses.
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Risk or Challenges
Weather Conditions: Difficult weather conditions across the country at the beginning of the second quarter could impact activity levels and growth.
Retail Operating Location Streamlining: Onetime costs and operating expenses of approximately $300,000 to $400,000 related to streamlining a retail operating location may affect short-term profitability.
Logistics Costs: A modest seasonal increase in logistics costs post-holiday season could impact margins in the retail segment.
Product Mix in Retail Segment: Sequentially lower margins expected in the retail segment due to product mix within purchase flows.
Energy Category GMV Decline: Lower GMV year-over-year in the energy category due to the prior year's unusually large projects not recurring.
Tax Rate Comparisons: Comparatively low effective tax rate in the second quarter of fiscal 2025 may affect year-over-year EPS comparisons.
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Guidance & Outlook
Second Quarter Fiscal Year 2026 GMV: Expected to range from $375 million to $415 million.
Second Quarter Fiscal Year 2026 GAAP Net Income: Expected in the range of $6.5 million to $9.5 million.
Second Quarter Fiscal Year 2026 GAAP Diluted EPS: Expected to range from $0.20 to $0.29 per share.
Second Quarter Fiscal Year 2026 Non-GAAP Adjusted Diluted EPS: Estimated in the range of $0.29 to $0.38 per share.
Second Quarter Fiscal Year 2026 Non-GAAP Adjusted EBITDA: Estimated to range from $14 million to $17 million.
Second Quarter Fiscal Year 2026 Income Tax Rate: Assumed to be in the mid- to high 20s.
Second Quarter Fiscal Year 2026 Fully Weighted Average Shares Outstanding: Approximately 32.5 million to 33 million.
Second Quarter Fiscal Year 2026 CapEx: Expected to remain consistent with recent levels of approximately $2 million per quarter.
Second Quarter Fiscal Year 2026 Free Cash Flow Conversion: Should be in line with historical and seasonal patterns.
Second Quarter Fiscal Year 2026 Business Mix Ratios: Consignment GMV expected to be in the low 80s as a percent of total GMV. Consolidated revenue as a percent of GMV expected to be slightly below 30%. Segment direct profit as a percent of consolidated revenue expected to be in the mid- to high 40% range.
Second Quarter Fiscal Year 2026 Operational Efficiencies: Onetime costs of approximately $300,000 to $400,000 related to streamlining a retail operating location to enhance processing productivity for higher touch flows.
Second Quarter Fiscal Year 2026 Seasonal Logistics Costs: Modest seasonal increase in logistics costs expected as the company enters the post-holiday season.
Second Quarter Fiscal Year 2026 Adjusted EBITDA Growth: Anticipated to show double-digit growth compared to the same quarter last year.
Second Half Fiscal Year 2026 Seller Flows and Buyer Demand: Expected to remain strong, positioning the company well for the fiscal second half of 2026.
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Shareholder Return Plan
Share Repurchase: During the fiscal first quarter, we conducted $1.5 million of share repurchases. At the end of the quarter, we had $15 million remaining on our authorization to perform additional share repurchases.
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Key Q&A
Q:What are the bigger drivers of tech-enabled growth mentioned in the prepared comments?
A:The company has improved the conversion rate of buyers, automated asset scanning and description processes, and enhanced sales and marketing through automation and historical data utilization. These efforts have led to higher recovery rates, more satisfied sellers, and increased efficiency.
Q:What is the significance of the growing number of CAG and GovDeal clients, and what are the plans for growth in these verticals?
A:The company sees a strong runway in both public sector and commercial markets, with structural improvements in buyer and seller acquisition. They anticipate 10-digit asset sales and programs with Fortune 1000 clients by 2026, emphasizing trust, loyalty, and industrial-scale execution.
Q:Have you been increasing your sales force to drive growth in new client acquisition, or is it mainly driven by tech investments?
A:The majority of growth is driven by improved automation and scoring of companies, but targeted resources have been added to support sales outreach, particularly in categories like heavy equipment and GovDeals marketplace.
Q:What is the competitive advantage in heavy equipment sales, and are you targeting niches not covered by larger players?
A:The competitive advantages include lower net commission rates, reduced transportation and make-ready costs, flexible seller terms, data-driven reserve prices, and a strong buyer base. These factors have driven differentiation and adoption. Heavy equipment sales include yellow iron.
Q:What is the status of the Retail Rush product?
A:The Retail Rush product is live in its first prototype in Columbus, Ohio, showing week-over-week and month-over-month growth. It offers higher recovery rates compared to wholesale channels and combines value with a treasure hunt experience. The company plans to expand this model to other locations and potentially partner with B2B buyers.
Q:Review of Unclear Management Responses
A:No questions were identified where management avoided giving a direct answer or lacked clarity in their responses.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI analytics
AI lead
ARR Liquidity
Auction Software
Authority agency
BB marketplace
CEO momentum
California Clients
City Malibu
Clients breadth
Department Transportation
GMV energy
GMV increase
GMV seller
GovDeals GMV
GovDeals activity
Jorge detail
Ladies gentleman
Malibu California
New York
Pennsylvania Department
Port Authority
President measure
Services Financial
Services ability
Services leverage
buyer participation
demand
efficiency
engagement
liquidity
multichannel
surplus asset
technology
LQDT Transcript
Liquidity Services, Inc. (LQDT) Q1 2026 Earnings Call Transcript
Positive2-5
The earnings call highlighted strong financial performance with significant year-over-year growth in key metrics like non-GAAP adjusted EBITDA and EPS. The company also has no financial debt, providing strategic flexibility. The Q&A session revealed positive sentiment towards tech-enabled growth and expansion plans, particularly in heavy equipment and GovDeals. The share repurchase plan and strategic growth initiatives further support a positive outlook. Despite some declines in specific segments, overall growth and strategic initiatives are likely to drive a positive stock price movement in the short term.
Liquidity Services, Inc. (LQDT) Q4 2025 Earnings Call Transcript
Positive11-20
The company's financial performance and strategic outlook are strong, with significant year-over-year growth in key metrics like GMV, revenue, and net income. The Q&A session revealed positive sentiment from analysts, with management providing clear and detailed responses. Share repurchases and a robust cash position further support a positive outlook. Despite some competitive pressures and seasonal variability, the overall sentiment is positive due to growth across segments, efficient operations, and strategic initiatives like the new payment solution and consignment focus.
Liquidity Services, Inc. (LQDT) Q3 2025 Earnings Call Transcript
Positive8-8
The earnings call summary and Q&A session highlight strong financial performance, including a 28% revenue increase and record cash reserves. Key growth areas include the GovDeals and Retail segments, with innovative solutions like the Columbus e-commerce program. The company maintains a debt-free position, supporting further growth. Despite some international uncertainties, the overall sentiment is positive, driven by strategic initiatives and strong guidance, suggesting a likely stock price increase of 2% to 8%.
Liquidity Services, Inc. (NASDAQ:LQDT) Q2 2025 Earnings Call Transcript
Unknown5-9
The earnings call presents a mixed outlook: while there is strong revenue growth and a solid cash position, economic uncertainties and supply chain issues pose risks. Guidance suggests modest growth, but no share repurchase program was announced. The Q&A highlighted some concerns about profitability and unclear opportunities with federal agencies, which could temper investor enthusiasm. Overall, the combination of positive financial performance and strategic initiatives is balanced by external risks and uncertainties, leading to a neutral sentiment.
LQDT Slides
LQDT Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
