Core Insights - Liquidity Services demonstrated strong momentum in Q1 of fiscal 2026, with significant growth in gross merchandise volume (GMV) and profitability, despite flat consolidated GAAP revenue due to a higher mix of consignment sales [3][6][17] Financial Performance - The company ended the quarter with $181.4 million in cash and no debt, alongside $26 million available under its credit facility [1][6] - Q1 GMV reached $398 million, with direct profit at $57 million, while GAAP revenue was flat at $121.2 million, reflecting a 1% decline year over year [2][6] - GAAP net income increased by 29%, resulting in a GAAP EPS of $0.23 and non-GAAP EPS of $0.39, with adjusted EBITDA reported at $18.1 million [6] Segment Performance - GovDeals experienced a 7% year-over-year GMV growth, attributed to the acquisition of over 500 new agency clients, with revenue increasing by 9% and direct profit rising by 13% [5][7] - The Retail segment posted a 3% GMV growth, but revenue declined by 6% year over year; however, direct profit increased by 16% to a record $21.5 million [8] - Capital Assets Group saw a 10% decline in GMV, but revenue increased by 17% and direct profit rose by 7%, supported by heavy equipment transactions [9] - Machinio and Software Solutions reported a 27% revenue growth, driven by subscription expansion and integration of auction software [10] Technology and Operational Efficiency - Management emphasized the role of technology in driving growth, including AI and automation initiatives aimed at improving buyer conversion and operational efficiency [11][12] - Automation efforts are focused on asset listing processes to enhance accuracy and reduce labor requirements [12] - Inbound lead handling has been automated to improve conversion rates among prospects, contributing to new client acquisition [13] Future Outlook - The company anticipates double-digit Adjusted EBITDA growth in Q2, with GMV guidance set between $375 million and $450 million and adjusted EBITDA expected to be between $14 million and $17 million [4][22] - A one-time cost of approximately $300,000 to $400,000 is flagged for streamlining retail operations [18] - Q2 guidance includes expectations for slightly lower margins in retail purchase flows and a seasonal increase in logistics costs [19]

Financial Data and Key Metrics Changes - In Q1 fiscal year 2026, GAAP revenue was flat, while consolidated gross merchandise volume (GMV) increased to $398 million and direct profit rose to $57 million [4][11] - GAAP net income increased by 29%, with non-GAAP Adjusted EBITDA growing by 38% year-over-year to $18.1 million, and adjusted EPS growing by 39% year-over-year to $0.39 per share [4][11] - The company ended the quarter with $181.4 million in cash and no financial debt, providing strategic flexibility for growth investments [5][14] Business Line Data and Key Metrics Changes - The GovDeals segment achieved 7% GMV growth, with direct profit increasing by 13% due to seller acquisition and market share expansion [5][15] - The RSCG segment saw 3% GMV growth, but revenue declined by 6%, while direct profit increased by 16% [15] - The CAG segment experienced a 10% decline in GMV, but revenue grew by 17% and direct profit increased by 7% [15] Market Data and Key Metrics Changes - The heavy equipment category within the CAG segment logged 27% year-over-year organic GMV growth and 88% growth in the number of transactions [6] - The company serves 6.2 million registered buyers, a 9% year-over-year increase, with 983,000 auction participants and 264,000 completed transactions in the quarter [9] Company Strategy and Development Direction - The company is focused on profitable technology-enabled growth, leveraging AI, data analytics, and automation to improve efficiency and customer experience [8][10] - The strategy includes expanding the auction software business and enhancing the marketplace for buyers and sellers [8][10] - The company aims to scale its auction software business to 1,000 customers with annual recurring revenue of $10,000 or more [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's resilience, supported by long-term trends in Circular Commerce and sustainability [9] - For Q2, the company anticipates double-digit Adjusted EBITDA growth year-over-year, driven by strong demand in GovDeals and retail segments [9][19] - Management highlighted the importance of operational efficiencies and a favorable product mix for future profitability [17][19] Other Important Information - The company conducted $1.5 million in share repurchases during Q1, with $15 million remaining on its authorization for additional repurchases [14] - Management's guidance for Q2 includes expected GMV ranging from $375 million to $450 million and GAAP net income between $6.5 million and $9.5 million [19][20] Q&A Session Summary Question: What are the bigger drivers of tech-enabled growth? - Management highlighted improvements in buyer conversion rates through automation and machine-driven systems, enhancing productivity and accuracy in asset listings [22][23] Question: How significant is the impact of new clients in CAG and GovDeals? - Management noted a structural improvement in buyer and seller acquisition, with expectations for significant asset sales with Fortune 1,000 clients [25][26] Question: Is the sales force being increased to drive new client acquisition? - Management indicated that most growth is driven by automation, but targeted resources have been added to support sales outreach [30][32] Question: What competitive advantages does the company have in heavy equipment sales? - Management cited lower commission rates, reduced transportation costs, and a strong buyer base as key differentiators [36] Question: What is the status of the Retail Rush product? - Management confirmed that Retail Rush is live and ramping up, with positive recovery rates compared to wholesale channels [38]

Investor Presentation First Quarter Fiscal Year 2026 © Liquidity Services, Inc. All Rights Reserved. 1 Forward-Looking Information This document contains 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, ...