Filing Information Form 10-Q Details This section details the company's quarterly report filing on Form 10-Q for the period ended June 30, 2025, identifying Liquidity Services, Inc. as an accelerated filer and providing key stock information and shares outstanding - Filing as a Quarterly Report on Form 10-Q for the period ended June 30, 20252 - Registrant: LIQUIDITY SERVICES, INC., incorporated in Delaware, with Commission file number 0-518132 - Company is an Accelerated Filer3 Common Stock Information | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | |---|---|---| | Common Stock, $0.001 par value | LQDT | Nasdaq | Shares Outstanding as of August 4, 2025: 31,236,939 shares PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, acquisitions, earnings per share, leases, goodwill, intangible assets, income taxes, debt, stockholders' equity, fair value measurements, pension plans, legal proceedings, and segment information Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Dollars in Thousands) | Metric | June 30, 2025 | September 30, 2024 | |---|---|---| | Assets | | | | Cash and cash equivalents | $155,605 | $153,226 | | Short-term investments | $11,353 | $2,310 | | Accounts receivable, net | $20,158 | $11,467 | | Inventory, net | $16,853 | $17,099 | | Total current assets | $220,007 | $199,235 | | Property and equipment, net | $18,187 | $17,961 | | Intangible assets, net | $14,096 | $13,912 | | Goodwill | $103,007 | $97,792 | | Total assets | $372,435 | $346,888 | | Liabilities | | | | Accounts payable | $58,797 | $58,693 | | Accrued expenses and other current liabilities | $25,363 | $28,261 | | Payables to sellers | $59,265 | $58,226 | | Total current liabilities | $153,895 | $155,153 | | Total liabilities | $163,785 | $164,328 | | Stockholders' Equity | | | | Total stockholders' equity | $208,650 | $182,560 | | Total liabilities and stockholders' equity | $372,435 | $346,888 | Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (Dollars in Thousands, Except Per Share Data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Purchase revenues | $76,517 | $53,396 | $237,159 | $142,726 | | Consignment and other fee revenues | $43,358 | $40,217 | $121,422 | $113,665 | | Total revenue | $119,875 | $93,613 | $358,581 | $256,391 | | Cost of goods sold | $65,110 | $44,212 | $206,220 | $119,960 | | Total costs and expenses | $109,657 | $85,718 | $334,473 | $240,253 | | Income from operations | $10,218 | $7,895 | $24,108 | $16,138 | | Income before provision for income taxes | $11,295 | $8,702 | $27,191 | $18,687 | | Provision for income taxes | $3,885 | $2,702 | $6,920 | $5,071 | | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | Basic income per common share | $0.24 | $0.20 | $0.66 | $0.45 | | Diluted income per common share | $0.23 | $0.19 | $0.63 | $0.43 | Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Comprehensive Income (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | Foreign currency translation | $1,669 | $(110) | $267 | $391 | | Other comprehensive income (loss), net of taxes | $1,669 | $(110) | $267 | $391 | | Comprehensive income | $9,079 | $5,890 | $20,538 | $14,007 | Condensed Consolidated Statement of Stockholders' Equity Condensed Consolidated Statement of Stockholders' Equity (Dollars In Thousands) | Metric | September 30, 2024 | June 30, 2025 | |---|---|---| | Total Stockholders' Equity | $182,560 | $208,650 | | Net Income (9 months) | $10,033 (Retained Earnings) | $30,304 (Retained Earnings) | | Additional Paid-in Capital | $275,771 | $281,370 | | Treasury Stock | $(93,854) | $(93,901) | | Accumulated Other Comprehensive Loss | $(9,427) | $(9,160) | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (Dollars In Thousands) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---| | Net cash provided by operating activities | $28,768 | $48,215 | | Net cash used in investing activities | $(20,881) | $(17,646) | | Net cash used in financing activities | $(5,068) | $(10,825) | | Effect of exchange rate differences on cash and cash equivalents | $(440) | $287 | | Net decrease in cash and cash equivalents | $2,379 | $20,031 | | Cash and cash equivalents at beginning of period | $153,226 | $110,281 | | Cash and cash equivalents at end of period | $155,605 | $130,312 | Notes to the Unaudited Condensed Consolidated Financial Statements Note 1. Organization - Liquidity Services, Inc. is a global commerce company providing online marketplace platforms that power the circular economy by connecting buyers and sellers of surplus assets24 - The company operates through three reportable segments: GovDeals, Retail Supply Chain Group (RSCG), and Capital Assets Group (CAG), with Machinio and Software Solutions combined for reporting27 - Operations are subject to various risks, including dependence on the Internet, economic trends, technological change, competition, and collectability of payments28 Note 2. Summary of Significant Accounting Policies - Unaudited interim financial statements are prepared in accordance with U.S. GAAP and SEC rules, including normal, recurring adjustments29 - Management's estimates and assumptions are affected by macroeconomic conditions such as international conflicts, tariffs, and market volatility32 Contract Assets and Liabilities (Dollars in Millions) | Metric | June 30, 2025 | September 30, 2024 | |---|---|---| | Contract assets | $1.5 | $1.5 | | Contract liabilities (Deferred revenue) | $5.2 | $4.8 | | Remaining performance obligation (Machinio & Software Solutions) | $5.2 | N/A | - New accounting standards (ASU 2023-07, 2023-09, 2024-03) will require enhanced disclosures for segment expenses, income tax reconciliation, and disaggregation of income statement expenses, with no material change expected for ASU 2023-07424344 Note 3. Acquisitions - On January 31, 2025, the Company acquired Auction Software for $7.4 million ($6.5 million cash, $0.9 million stock), allocating $2.6 million to intangible assets and $5.1 million to goodwill within the Software Solutions segment45 - On January 1, 2024, the Company acquired Sierra Auction Management, Inc. for approximately $13.7 million in cash, allocating $5.1 million to supplier relationships, $0.3 million to trade name assets, and $7.9 million to goodwill within the GovDeals segment4748 - Financial results from both acquisitions were immaterial to the condensed consolidated financial statements for the reported periods4649 Note 4. Earnings per Share - Basic EPS is calculated by dividing net income by weighted-average common shares outstanding, excluding unvested restricted stock awards50 - Diluted EPS includes potentially dilutive common shares (stock options, RSUs, RSAs) using the treasury stock method, considering performance/market conditions5152 Earnings Per Share (Dollars in Thousands, Except Per Share Data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | Basic weighted average shares outstanding | 31,157,183 | 30,388,675 | 30,935,882 | 30,497,820 | | Diluted weighted average shares outstanding | 32,497,238 | 31,464,461 | 32,404,183 | 31,617,578 | | Basic income per common share | $0.24 | $0.20 | $0.66 | $0.45 | | Diluted income per common share | $0.23 | $0.19 | $0.63 | $0.43 | Note 5. Leases - The Company holds operating leases for corporate offices, warehouses, vehicles, and equipment, with remaining terms up to 5.2 years5455 Total Net Lease Cost (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Operating lease cost | $1,563 | $1,418 | $4,494 | $4,046 | | Operating lease impairment expense | $459 | $— | $459 | $— | | Total net lease cost | $2,531 | $1,809 | $6,271 | $5,196 | - During the three months ended June 30, 2025, the Company incurred $0.5 million in impairment expense due to exiting an RSCG warehouse for consolidation55 Maturities of Lease Liabilities as of June 30, 2025 (Dollars in Thousands) | Years ending September 30, | Operating Leases | Finance Leases | |---|---|---| | Remainder of 2025 | $1,466 | $32 | | 2026 | $5,548 | $123 | | 2027 | $3,167 | $73 | | 2028 | $2,783 | $51 | | 2029 and thereafter | $2,662 | $127 | | Total lease liabilities | $14,159 | $357 | - Non-cash adjustments to lease assets and liabilities increased significantly in the nine months ended June 30, 2025, primarily due to the renewal of a warehouse lease in Brampton, Ontario, for the RSCG segment56 Note 6. Goodwill Goodwill Carrying Value by Segment (Dollars in Thousands) | Segment | September 30, 2024 | June 30, 2025 | |---|---|---| | GovDeals | $61,683 | $61,683 | | CAG | $21,551 | $21,696 | | Machinio & Software Solutions | $14,558 | $19,628 | | Total Goodwill | $97,792 | $103,007 | - Goodwill increased by approximately $5.1 million in the Software Solutions business during the nine months ended June 30, 2025, due to the Auction Software acquisition57 - No indicators of impairment were identified for goodwill during the three and nine months ended June 30, 202558 Note 7. Intangible Assets Intangible Assets, Net (Dollars in Thousands) | Intangible Asset Type | June 30, 2025 (Net Carrying Amount) | September 30, 2024 (Net Carrying Amount) | |---|---|---| | Customer and supplier relationships | $12,776 | $13,295 | | Technology | $825 | $61 | | Trade names | $347 | $397 | | Other intangibles | $148 | $159 | | Total intangible assets, net | $14,096 | $13,912 | - Gross carrying amount of total intangible assets increased by $2.6 million during the nine months ended June 30, 2025, due to the Auction Software acquisition59 Expected Future Amortization of Intangible Assets as of June 30, 2025 (Dollars in Thousands) | Years ending September 30, | Expected Future Amortization | |---|---| | Remainder of 2025 | $783 | | 2026 | $3,128 | | 2027 | $3,045 | | 2028 | $3,009 | | 2029 and thereafter | $4,131 | | Total | $14,096 | - No impairment charges were recorded on intangible assets or material long-lived assets during the reported periods61 Note 8. Income Taxes - The effective income tax rate for the nine months ended June 30, 2025, was 25.4%, down from 27.1% in the prior year, primarily due to increased tax benefits from stock compensation vesting, state and foreign taxes, and permanent tax adjustments62 - The 'One Big Beautiful Bill Act' signed on July 4, 2025, is being evaluated for its tax reform provisions, but is not expected to have a material impact on financial statements for the reported period63 - The Company did not record any unrecognized tax benefits during the nine months ended June 30, 2025, and has no open income tax examinations in the U.S. for years prior to 202164 Note 9. Debt - On May 7, 2025, the Company amended its Credit Agreement, extending the maturity date to March 31, 2027, increasing the maximum principal amount from $25.0 million to $35.0 million, and raising the sublimit for standby letters of credit from $10.0 million to $35.0 million69 - The applicable interest rate is a variable rate (Daily Simple SOFR + 1.25% to 1.75% margin), with monthly interest payments and quarterly unused commitment fees70 - As of June 30, 2025, the Company had no outstanding borrowings under the Line of Credit, $9.0 million in standby letters of credit, and $26.0 million of remaining borrowing capacity73 - The Company was in full compliance with all financial and non-financial restrictive covenants of the Credit Agreement as of June 30, 202572 Note 10. Stockholders' Equity - The Company maintains the Third Amended and Restated 2006 Omnibus Long-Term Incentive Plan (LTIP), with 1,289,677 shares of common stock remaining available for use as of June 30, 202577 Share-Based Compensation Expense (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Stock options | $563 | $550 | $1,595 | $1,574 | | RSUs & RSAs | $2,949 | $2,067 | $7,927 | $5,634 | | Total Equity-classified awards | $3,512 | $2,617 | $9,522 | $7,208 | - Stock options and RSUs/RSAs granted during the nine months ended June 30, 2025, include both service-based (vesting over four years) and performance-based conditions (vesting upon achievement of specified financial targets)79 - On December 9, 2024, the Board authorized an additional $10.0 million for share repurchases through December 31, 2026, bringing the total remaining authorization to $17.6 million as of June 30, 20258283 Note 11. Fair Value Measurement - The Company classifies fair value measurements into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)86 - Money market funds ($77.5 million at June 30, 2025) and guaranteed investment certificates ($11.4 million at June 30, 2025) are classified as Level 1 assets8788 - The carrying values of cash, short-term investments, accounts receivable, accounts payable, and payables to sellers approximate their fair values90 Note 12. Defined Benefit Pension Plan - Certain employees of Liquidity Services UK Limited (GoIndustry) are covered by the Henry Butcher Pension Fund and Life Assurance Scheme, a qualified defined benefit pension plan92 - The Company guarantees GoIndustry's obligations to the Scheme up to £10 million British pounds92 - Net periodic pension cost was $0.1 million for both the three months ended June 30, 2025 and 2024, and $0.1 million and $0.3 million for the nine months ended June 30, 2025 and 2024, respectively93 Note 13. Legal Proceedings and Other Contingencies - A former CMO filed a complaint alleging wrongful termination based on race and age and retaliation; the Company is asserting substantial defenses and cannot estimate potential liability95 - A former VP of Human Resources settled a wrongful termination lawsuit for $3.5 million in August 2024, with CNA funding $3.0 million and the Company recording a $0.5 million litigation settlement expense in Q3 202496 Note 14. Segment Information - The Company operates through three reportable segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and a combined Machinio & Software Solutions segment97 - Segment direct profit (total revenue less cost of goods sold) is used by the CEO to assess segment performance99 Segment Revenue and Direct Profit (Three Months Ended June 30, 2025 vs. 2024, Dollars in Thousands) | Segment | Total Revenue 2025 | Total Revenue 2024 | Change (%) | Segment Direct Profit 2025 | Segment Direct Profit 2024 | Change (%) | |---|---|---|---|---|---|---| | GovDeals | $23,966 | $22,109 | 8.4% | $22,160 | $20,716 | 7.0% | | RSCG | $81,544 | $58,764 | 38.8% | $19,371 | $17,365 | 11.6% | | CAG | $9,161 | $8,650 | 5.9% | $8,460 | $7,430 | 13.9% | | Machinio & Software Solutions | $5,221 | $4,106 | 27.1% | $4,790 | $3,906 | 22.6% | | Consolidated Total | $119,875 | $93,613 | 28.1% | $54,764 | $49,401 | 10.9% | Segment Revenue and Direct Profit (Nine Months Ended June 30, 2025 vs. 2024, Dollars in Thousands) | Segment | Total Revenue 2025 | Total Revenue 2024 | Change (%) | Segment Direct Profit 2025 | Segment Direct Profit 2024 | Change (%) | |---|---|---|---|---|---|---| | GovDeals | $63,725 | $56,384 | 13.0% | $58,688 | $52,982 | 10.8% | | RSCG | $251,917 | $159,299 | 58.1% | $54,434 | $48,478 | 12.3% | | CAG | $28,604 | $28,764 | -0.6% | $25,909 | $23,611 | 9.7% | | Machinio & Software Solutions | $14,386 | $11,994 | 19.9% | $13,380 | $11,409 | 17.3% | | Consolidated Total | $358,581 | $256,391 | 39.9% | $152,360 | $136,431 | 11.7% | - Revenue from transactions outside the U.S. was 8.6% (Q3 2025) and 9.0% (YTD 2025) of total revenues, down from 9.1% and 11.6% in the prior year periods, respectively102 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, including an overview of the business, macroeconomic conditions, industry trends, key business metrics, revenue recognition models, and a detailed analysis of consolidated and segment-level financial performance for the three and nine months ended June 30, 2025, compared to the prior year. It also discusses non-GAAP financial measures, liquidity, capital resources, and cash flow changes Overview - Liquidity Services is a global commerce company providing online marketplace platforms that power the circular economy by connecting millions of buyers and thousands of sellers of surplus assets107 - The business model focuses on creating a self-reinforcing cycle of value creation through online platforms, attracting more participants and enhancing network effects108 - The Company operates through GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio & Software Solutions segments109110 Macroeconomic Conditions - Tariffs and trade barriers may impact buyers, sellers, and asset availability, with ongoing developments remaining fluid and unpredictable111 - Supply chain challenges and volatile used vehicle market prices, along with turbulent consumer behavior, can affect financial performance112 - Inflation and heightened interest rates have increased prices for energy, shipping, and labor, and impacted borrowing costs, buyer qualification, and transaction timelines113 - Ongoing international armed and geopolitical conflicts (e.g., Russia-Ukraine, Israel) have heightened global supply chain disruptions and impacted international trade markets, though direct revenues from these regions were not material115 Industry Trends - Positive long-term growth drivers include increased volume of returned merchandise, growing demand for sustainability solutions, and outsourcing of surplus disposition by corporations and governments116 - Increased buyer demand for surplus merchandise due to environmental consciousness and value-seeking, and a preference for online solutions ensuring fair market value, are also contributing factors116 - Innovation in the retail supply chain is expected to accelerate product obsolescence, increasing the supply of surplus assets116 Our Marketplace Transactions - The Company's marketplaces benefit from greater scale and user adoption, creating a continuous flow of goods117 - As of June 30, 2025, the Company had 5.9 million registered buyers, an approximate 9% increase from 5.4 million a year prior117128 Revenues - Revenue is primarily earned through Purchase model (resale of purchased inventory) and Consignment model (commission fees on seller-owned goods) transactions, plus other fee revenues118119120 Revenue Mix by Transaction Model | Metric | Three Months Ended June 30, 2025 | Nine Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Consignment model GMV % | 82.5% | 80.9% | 86.5% | 86.0% | | Consignment revenues % of total | 30.0% | 28.1% | 35.9% | 36.5% | | Purchase model GMV % | 17.5% | 19.1% | 13.5% | 14.0% | | Purchase revenues % of total | 63.8% | 66.1% | 57.0% | 55.7% | | Other fee revenues % of total | 6.2% | 5.8% | 7.1% | 7.8% | - The Company was not dependent on any single buyer in a material manner for the reported periods123 Key Business Metrics Key Business Metrics (Dollars in Millions, except for counts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Gross Merchandise Volume (GMV) | $413.0 | $380.4 | $1,166.4 | $1,005.7 | | GMV Change (YoY) | +8.6% | N/A | +16.0% | N/A | | Total registered buyers (as of period end) | 5.9 million | 5.4 million | 5.9 million | 5.4 million | | Total auction participants | 1,098,000 | 1,016,000 | 3,040,000 | 3,003,000 | | Completed transactions | 286,000 | 263,000 | 797,000 | 802,000 | Components of Revenue and Expenses - Technology expenses primarily consist of costs for technical staff, third-party services, licenses, and infrastructure for marketplace platforms and operational systems, net of capitalized software development costs134 - Operations expenses cover warehouse operations, shipping logistics, inventory management, refurbishment, customer support, and field support136 - Sales and marketing expenses include personnel costs, lead generation, marketing campaigns (online/offline), and trade shows137 - General and administrative expenses are corporate and administrative functions, generally more fixed in nature138 - Other operating expenses, net, include acquisition-related costs, impairment, lease terminations, and business realignment expenses139 - Interest and other income, net, includes interest income, credit agreement fees, pension costs, and foreign currency fluctuations140 - Income taxes include current and deferred income tax expense for U.S. federal, state, and foreign jurisdictions, estimated using an annual effective tax rate141 Results of Operations Consolidated Operating Results (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | |---|---|---|---|---| | Total revenue | $119,875 | $93,613 | $26,262 | 28.1% | | Cost of goods sold | $65,110 | $44,212 | $20,898 | 47.3% | | Total costs and expenses | $109,657 | $85,718 | $23,939 | 27.9% | | Income from operations | $10,218 | $7,895 | $2,323 | 29.4% | | Net income | $7,410 | $6,000 | $1,410 | 23.5% | | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | Change ($) | Change (%) | |---|---|---|---|---| | Total revenue | $358,581 | $256,391 | $102,190 | 39.9% | | Cost of goods sold | $206,220 | $119,960 | $86,260 | 71.9% | | Total costs and expenses | $334,473 | $240,253 | $94,220 | 39.2% | | Income from operations | $24,108 | $16,138 | $7,970 | 49.4% | | Net income | $20,271 | $13,616 | $6,655 | 48.9% | - GovDeals revenue increased 8.4% (Q3) and 13.0% (YTD) due to new seller acquisition and service expansion, despite lower vehicle market prices144154 - RSCG revenue increased 38.8% (Q3) and 58.1% (YTD) driven by increased GMV from existing and new retail client programs and higher volumes from client purchase model programs146155 - CAG revenue increased 5.9% (Q3) but decreased 0.6% (YTD), with Q3 growth from heavy equipment consignment sales, while YTD was impacted by fewer large international spot purchase transactions147156 - Machinio & Software Solutions revenue increased 27.1% (Q3) and 19.9% (YTD) due to Machinio price increases, subscriber growth, and the Auction Software acquisition148157 - Cost of goods sold increased significantly (47.3% Q3, 71.9% YTD) primarily due to increased purchase transaction volumes in the RSCG segment149158 - General and administrative expenses decreased 4.4% (Q3) and 1.0% (YTD), mainly due to a $0.5 million litigation settlement expense in Q3 2024 not recurring, and ongoing cost management152161 - Depreciation and amortization decreased (16.9% Q3, 16.7% YTD) as historically acquired intangible assets reached the end of their useful lives152162 Non-GAAP Financial Measures - Non-GAAP EBITDA is Net income adjusted for Interest and other income (excluding non-service pension costs), Provision for income taxes, and Depreciation and amortization164 - Non-GAAP Adjusted EBITDA further adjusts Non-GAAP EBITDA for stock-based compensation, acquisition costs, business realignment expense, deferred revenue purchase accounting adjustments, and impairment charges164 - These non-GAAP measures are used by management for evaluating performance, planning, resource allocation, and assessing operational strategies, and are considered useful for investors to compare performance consistently165167170 Reconciliation of Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | EBITDA | $12,825 | $11,010 | $31,701 | $25,181 | | Stock compensation expense | $3,512 | $2,617 | $9,522 | $7,208 | | Acquisition-related costs and litigation settlement expense | $50 | $1,080 | $286 | $1,657 | | Business realignment expenses | $618 | $— | $777 | $— | | Non-GAAP Adjusted EBITDA | $17,005 | $14,707 | $42,286 | $34,046 | Liquidity and Capital Resources - Operational cash needs are funded by existing cash balances and cash generated from operations, with no historical or foreseeable dividend payments174 - As of June 30, 2025, the Company had $155.6 million in Cash and cash equivalents and $11.4 million in Short-term investments, deemed sufficient for anticipated cash needs for at least one year174 - The Company intends to indefinitely reinvest foreign subsidiary earnings ($9.1 million undistributed as of June 30, 2025) outside the U.S. to avoid adverse tax consequences upon repatriation176 - Capital expenditures for the nine months ended June 30, 2025, were $5.8 million, a decrease from $6.1 million in the prior year, primarily due to timing of platform enhancements177 - The Credit Agreement was amended on May 7, 2025, extending maturity to March 31, 2027, and increasing the maximum principal amount to $35.0 million and standby letter of credit sublimit to $35.0 million181 - As of June 30, 2025, the Company had $26.0 million of remaining borrowing capacity under the Credit Agreement, with no outstanding borrowings182 - Net cash provided by operating activities decreased by $19.4 million to $28.8 million for the nine months ended June 30, 2025, primarily due to changes in accounts receivable and payables to sellers189 - Net cash used in investing activities increased by $3.3 million to $20.9 million, driven by a $14.0 million increase in short-term investment purchases, partially offset by decreased business acquisition cash payments191 - Net cash used in financing activities decreased by $5.7 million to $5.1 million, mainly due to a $9.4 million decrease in share repurchases, partially offset by increased taxes paid for stock compensation192 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's exposure to market risks, specifically interest rate sensitivity and exchange rate sensitivity, and the potential impact of these risks on its financial performance - A hypothetical 100 basis point decline in interest rates would impact pre-tax earnings by less than $1.0 million annually194 - The Company has no debt as of June 30, 2025, but future draws on the Line of Credit would incur variable interest based on SOFR195 - Primary foreign exchange exposures include British Pounds, Canadian Dollars, Chinese Yuan, Euros, and Hong Kong Dollars197 - A hypothetical 10% decrease in foreign exchange rates would reduce total expected revenues by approximately 1%, with a smaller impact on pre-tax earnings197 Item 4. Controls and Procedures This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - As of June 30, 2025, management, including the CEO and CFO, concluded that disclosure controls and procedures were effective in providing reasonable assurance for timely and accurate reporting199 - No material changes occurred in internal control over financial reporting during the three months ended June 30, 2025200 PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 13 of the financial statements for information on legal proceedings, indicating that no new material litigation has arisen - Information regarding legal proceedings is detailed in Note 13 to the condensed consolidated financial statements202 Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024 - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended September 30, 2024203 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that there were no unregistered sales of equity securities and provides details on the Company's share repurchase program - No unregistered sales of equity securities occurred during the period204 - The Company made no repurchases under its share repurchase program during the three months ended June 30, 2025207 - As of June 30, 2025, the Company had $17.6 million of remaining authorization to repurchase shares through December 31, 2026210 Item 5. Other Information This section states that there is no other information to report under this item - No other information to report211 Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate documents, certifications, and XBRL data - Includes Fourth Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and various certifications (CEO, CFO) as exhibits212 - XBRL formatted financial statements (Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, Cash Flows, and Notes) are included as Exhibit 101212 SIGNATURES This section contains the required signatures from the registrant's authorized officers, including the Chairman of the Board and Chief Executive Officer, and the Chief Financial Officer - Report signed by William P. Angrick, III (Chairman of the Board of Directors and Chief Executive Officer) and Jorge A. Celaya (Chief Financial Officer) on August 7, 2025214
Liquidity Services(LQDT) - 2025 Q3 - Quarterly Report