Liquidity Services (NASDAQ:LQDT) opened fiscal 2026 with what management described as “strong momentum,” highlighting growth in gross merchandise volume (GMV), profitability, and continued expansion across its marketplace segments even as consolidated GAAP revenue was roughly flat due to a higher mix of consignment sales.
First-quarter results: GMV and profit growth despite flat revenue
Chairman and CEO Bill Angrick said consolidated GMV and direct profit rose to $398 million and $57 million, respectively, while GAAP revenue was flat because consignment sales represent a larger share of the business. CFO Jorge Celaya added that Q1 GMV increased 3% year over year, while revenue declined 1% to $121.2 million, reflecting a mix shift in the retail segment from purchase activity toward consignment flows.
- GAAP net income increased 29% year over year, according to Angrick.
- GAAP EPS was $0.23, up 28%, Celaya said.
- Non-GAAP adjusted EPS rose 39% to $0.39.
- Non-GAAP Adjusted EBITDA increased 38% to $18.1 million.
Celaya noted GAAP EPS grew more slowly than the company’s non-GAAP profitability measures due to performance-based stock compensation expense.
Liquidity Services ended the quarter with $181.4 million in cash, cash equivalents, and short-term investments and no debt. The company also had $26 million available under its credit facility. During the quarter, it repurchased $1.5 million of shares, with $15 million remaining on its authorization.
Segment performance: GovDeals growth, retail margin strength, and heavy equipment momentum
Angrick and Celaya pointed to broad-based execution across the company’s operating segments.
GovDeals delivered 7% GMV growth year over year, driven by seller acquisition and market share expansion. Angrick said the segment set an all-time record of more than 500 new agency clients, citing wins including the Pennsylvania Department of Transportation, the State of New York Housing and Urban Development Agency, the New York Port Authority Agency, and the City of Malibu, California. Celaya said GovDeals revenue increased 9% and direct profit rose 13%, attributing the gains to improved rates across certain sellers as well as operating efficiency initiatives implemented over the last two quarters.
Retail (RSCG) posted 3% GMV growth, while revenue declined 6% year over year, Celaya said. However, direct profit increased 16%, and he said segment direct profit reached $21.5 million, another quarterly record. Management attributed performance to growth in key consignment programs, higher volumes of “lower touch” purchase flows, and strong multichannel buyer participation. Angrick added that direct-to-consumer GMV increased 40% year over year, and said productivity improved meaningfully, with direct profit per labor hour up over 48% in Q1.
Capital Assets Group (CAG) saw GMV decline 10% year over year, but revenue increased 17% and direct profit rose 7%, Celaya said. Angrick noted the segment’s revenue growth was supported by increased industrial spot purchases and heavy equipment transactions, partially offset by lower GMV tied to the prior year’s unusually large energy projects. He highlighted continued heavy equipment strength, citing 27% year-over-year organic GMV growth and an 88% increase in the number of transactions. Angrick also said the company signed over 100 new seller clients in CAG during Q1 and expects a “steady ramp” over the balance of fiscal 2026.
Machinio and Software Solutions continued to expand, with management reporting 27% revenue growth. Angrick said the increase reflected subscription expansion and integration of the auction software business, adding that Machinio’s launch of advertising and systems offerings into the marine vertical was “going exceptionally well.” Celaya said the combined unit’s direct profit increased 23%, driven by Machinio subscription and pricing gains along with contributions from the acquired Software Solutions business.
Technology, AI, and operational efficiency initiatives
Management repeatedly emphasized technology-enabled growth. In response to analyst questions, Angrick described efforts to improve buyer conversion—from browsers to registered users to bidders—using “machine-driven systems” and “intelligent signaling” to show buyers relevant assets at the right time. He said those improvements can increase recovery rates for sellers and are being delivered in an automated way with lower labor requirements.
Angrick also pointed to automation in listing assets for sale, describing the historically labor-intensive work of capturing photos, descriptions, and appending original equipment manufacturer (OEM) data. He said the company is automating those processes to produce more accurate listings more quickly and with less labor content.
On the sales and marketing side, Angrick said inbound lead handling has been automated using scoring and drip campaigns informed by historical company data, including “$15 billion in sales” completed to date, to improve conversion among prospects. He linked those efforts to new client acquisition, including the record pace of new government agency clients.
Angrick added that Liquidity Services is using AI, data analytics, and automation to refine asset categories and product taxonomy to improve buyer navigation and conversion, and to enhance predictive lead scoring and customer engagement using “role-based signals.”
Retail Rush and heavy equipment: management commentary
During the Q&A session, Angrick provided additional detail on heavy equipment and the company’s newer consumer-focused initiative, Retail Rush.
On heavy equipment, Angrick described competitive advantages including lower net commission rates and lower out-of-pocket transportation and “make-ready” costs, flexibility for sellers to set terms and conditions of sale, the ability to use data-driven reserve prices to protect sellers’ downside, and access to the company’s buyer base, which he said helps drive stronger recovery rates.
On Retail Rush, Angrick said the company is live with a first prototype that is “ramping week over week, month over month,” with a pickup location in Columbus, Ohio. He said Liquidity Services is seeing an “uptick in recovery rate” for the same assets sold through Retail Rush versus wholesale channels, attributing performance to strong consumer demand for value. He also outlined a longer-term vision to potentially partner with Liquidation.com buyers by licensing the Retail Rush software platform to enable them to operate their own business-to-consumer auction pickup locations in additional U.S. markets and eventually in Canada.
Second-quarter outlook: EBITDA growth expected, one-time costs flagged
Looking ahead, Angrick said the company expects double-digit Adjusted EBITDA growth in Q2 versus the prior year, supported by a healthy business development pipeline, continued strength in GovDeals, expanding consignment activity in retail, and solid buyer demand. Celaya said the company began the quarter facing difficult weather conditions across the country, but still anticipates strong year-over-year growth in GMV and profit for GovDeals and retail.
Management also flagged a planned one-time cost of approximately $300,000 to $400,000 related to streamlining a retail operating location to enhance processing productivity for higher-touch flows. Celaya said Q2 guidance assumes retail purchase flows will be at slightly lower margin sequentially versus Q1 and includes a modest seasonal increase in logistics costs in the post-holiday season.
For fiscal Q2 2026, Liquidity Services guided to:
- GMV: $375 million to $450 million
- GAAP net income: $6.5 million to $9.5 million
- GAAP diluted EPS: $0.20 to $0.29
- Non-GAAP adjusted diluted EPS: $0.29 to $0.38
- Non-GAAP Adjusted EBITDA: $14 million to $17 million
Celaya said Q2 EPS guidance assumes an income tax rate in the mid- to high-20% range and approximately 32.5 million to 33 million fully weighted average shares outstanding. He added that capex is expected to remain consistent with recent levels of about $2 million per quarter, with free cash flow conversion in line with historical and seasonal patterns.
About Liquidity Services (NASDAQ:LQDT)
Liquidity Services, Inc is a technology-driven provider of online marketplaces for surplus and remarketed assets. Through its wholly owned platforms—such as Liquidation.com, GovDeals, Machinio and GoIndustry DoveBid—the company connects sellers of industrial equipment, commercial inventory, government surplus and transportation assets with a broad base of registered buyers. Its solutions blend auction formats, fixed-price listings and managed-service offerings to support efficient asset disposition across a wide range of industries.
The company’s core services include asset valuation, marketing, inspection and logistics coordination.
