LIQUIDITY SERVICES INC

Previous wording

International armed and geopolitical conflicts. The global financial markets have experienced volatility subsequent to the invasion of Ukraine by Russia in February 2022, a conflict which remains ongoing, as well as the ongoing conflict in and adjacent to Israel. The Russia-Ukraine conflict specifically resulted in numerous countries, including the United States, imposing significant new sanctions and export controls against Russia, Russian banks, and certain Russian individuals. These sanctions and export controls and international responses to the ongoing conflict in and adjacent to Israel, have further heightened global supply chain disruptions and impacted the international trade markets. For the three months ended March 31, 2025 and 2024, the Company's total revenues directly associated with Russia, Ukraine, and Israel were not material to our condensed consolidated financial results. We will continue monitoring these armed and geopolitical conflicts around the world and any potential future impacts on our business.

Current wording

International armed and geopolitical conflicts. The global financial markets have experienced volatility subsequent to the invasion of Ukraine by Russia in February 2022, a conflict which remains ongoing, as well as the ongoing conflict in and adjacent to Israel. The Russia-Ukraine conflict specifically resulted in numerous countries, including the United States, imposing significant new sanctions and export controls against Russia, Russian banks, and certain Russian individuals. These sanctions and export controls and international responses to the ongoing conflict in and adjacent to Israel, have further heightened global supply chain disruptions and impacted the international trade markets. For the three and nine months ended June 30, 2025 and 2024, the Company's total revenues directly associated with Russia, Ukraine, and Israel were not material to our condensed consolidated financial results. We will continue monitoring these armed and geopolitical conflicts around the world and any potential future impacts on our business.

Previous wording

We believe our marketplaces benefit over time from greater scale and adoption by our users creating a continuous flow of goods benefiting our buyers and sellers. As of March 31, 2025, we had 5.8 million registered buyers in our marketplaces. We had access to millions of additional end-users through a range of external consumer marketplaces. Aggregating this level of buyer demand and market data enables us to generate a continuous flow of goods from corporate and government sellers, which in turn attracts more buyers. During the twelve months ended March 31, 2025, the approximate number of registered buyers increased from 5.3 million to 5.8 million, or approximately 9%. As buyers continue to discover and use our e-commerce marketplaces as an effective method to source assets, we believe our solutions become a more attractive sales channel for corporate and government agency sellers. We believe this self-reinforcing cycle results in greater transaction volume and enhances the value of our marketplaces.

Current wording

We believe our marketplaces benefit over time from greater scale and adoption by our users creating a continuous flow of goods benefiting our buyers and sellers. As of June 30, 2025, we had 5.9 million registered buyers in our marketplaces. We had access to millions of additional end-users through a range of external consumer marketplaces. Aggregating this level of buyer demand and market data enables us to generate a continuous flow of goods from corporate and government sellers, which in turn attracts more buyers. During the twelve months ended June 30, 2025, the approximate number of registered buyers increased from 5.4 million to 5.9 million, or approximately 9%. As buyers continue to discover and use our e-commerce marketplaces as an effective method to source assets, we believe our solutions become a more attractive sales channel for corporate and government agency sellers. We believe this self-reinforcing cycle results in greater transaction volume and enhances the value of our marketplaces.

Previous wording

Transaction Model Mix. Most of our transactions are conducted under the consignment model, which represented 80.1% and 79.9% of our consolidated GMV for the three and six months ended March 31, 2025, respectively, and 82.9% and 85.7% of our consolidated GMV for the three and six months ended March 31, 2024. However, only the consignment fee, representing a small portion of the consignment GMV, is recognized as revenue, causing consignment revenues to account for 27.3% and 27.1% of our total revenues for the three and six months ended March 31, 2025, respectively, and 34.7% and 36.9% of our total revenues for the three and six months ended March 31, 2024, respectively.

Current wording

Transaction Model Mix. Most of our transactions are conducted under the consignment model, which represented 82.5% and 80.9% of our consolidated GMV for the three and nine months ended June 30, 2025, respectively, and 86.5% and 86.0% of our consolidated GMV for the three and nine months ended June 30, 2024. However, only the consignment fee, representing a small portion of the consignment GMV, is recognized as revenue, causing consignment revenues to account for 30.0% and 28.1% of our total revenues for the three and nine months ended June 30, 2025, respectively, and 35.9% and 36.5% of our total revenues for the three and nine months ended June 30, 2024, respectively.

Previous wording

Purchase model transactions are a smaller proportion of our consolidated GMV, representing 19.9% and 20.1% of our consolidated GMV for the three and six months ended March 31, 2025, respectively, and 17.1% and 14.3% of our consolidated GMV for the three and six months ended March 31, 2024, respectively. However, all of the GMV associated with the purchase model transaction is generally able to be recognized as revenue, causing purchase revenues to account for 66.9% and 67.3% of our total revenues for the three and six months ended March 31, 2025, respectively, and 58.1% and 54.9% of our total revenues for the three and six months ended March 31, 2024.

Current wording

Purchase model transactions are a smaller proportion of our consolidated GMV, representing 17.5% and 19.1% of our consolidated GMV for the three and nine months ended June 30, 2025, respectively, and 13.5% and 14.0% of our consolidated GMV for the three and nine months ended June 30, 2024, respectively. However, all of the GMV associated with the purchase model transaction is generally able to be recognized as revenue, causing purchase revenues to account for 63.8% and 66.1% of our total revenues for the three and nine months ended June 30, 2025, respectively, and 57.0% and 55.7% of our total revenues for the three and nine months ended June 30, 2024.

Previous wording

In assessing buyer concentration risk, we consider a number of quantitative factors, which can include the buyer's proportionate share of our consolidated GMV, revenues and direct profit, including any impacts based upon the transaction model mix they purchase. We also consider qualitative factors, such as the level of differentiation in the products sold and whether there are alterative buyers accessible in the market, among other relevant factors. For the three and six months ended March 31, 2025 and 2024, we were not dependent on any single buyer in a manner material to our business.

Current wording

In assessing buyer concentration risk, we consider a number of quantitative factors, which can include the buyer's proportionate share of our consolidated GMV, revenues and direct profit, including any impacts based upon the transaction model mix they purchase. We also consider qualitative factors, such as the level of differentiation in the products sold and whether there are alterative buyers accessible in the market, among other relevant factors. For the three and nine months ended June 30, 2025 and 2024, we were not dependent on any single buyer in a manner material to our business.

Previous wording

We have multiple vendor contracts with Amazon.com, Inc. under which we acquire and sell commercial merchandise. While purchase model transactions account for less than 25% of our total GMV, the cost of inventory for purchase model transactions is the most significant component of our consolidated Costs of goods sold. $15.6 million and $12.2 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Condensed Consolidated Inventory balances as of March 31, 2025 and September 30, 2024, respectively. Our vendor contracts with respect to sourcing or consigning merchandise for our RSCG segment generally reflect the concentration dynamics inherent to the retail industry.

Current wording

We have multiple vendor contracts with Amazon.com, Inc. under which we acquire and sell commercial merchandise. While purchase model transactions account for less than 25% of our total GMV, the cost of inventory for purchase model transactions is the most significant component of our consolidated Costs of goods sold. $12.4 million and $12.2 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Condensed Consolidated Inventory balances as of June 30, 2025 and September 30, 2024, respectively. Our vendor contracts with respect to sourcing or consigning merchandise for our RSCG segment generally reflect the concentration dynamics inherent to the retail industry.

Previous wording

Other fee revenues accounted for 5.8% and 5.6% of our total revenues for three and six months ended March 31, 2025, respectively, and 7.2% and 8.3% of our total revenues for three and six months ended March 31, 2024, respectively.

Current wording

Other fee revenues accounted for 6.2% and 5.8% of our total revenues for three and nine months ended June 30, 2025, respectively, and 7.1% and 7.8% of our total revenues for three and nine months ended June 30, 2024, respectively.

Previous wording

Gross merchandise volume (GMV). GMV is the total sales value of all merchandise sold by us or our sellers through our marketplaces or by us through other channels during a given period of time. We review GMV because it provides a measure of the volume of goods being sold in our marketplaces and thus the activity of those marketplaces. GMV also provides a means to evaluate the effectiveness of investments that we have made and continue to make, including in the areas of buyer and seller support, value-added services, product development, sales and marketing, and operations. Our GMV for the three and six months ended March 31, 2025, was $367.4 million and $753.4 million, respectively, increasing from the three and six months ended March 31, 2024 by $48.0 million, or 15.0%, and $128.2 million, or 20.5%, respectively.

Current wording

Gross merchandise volume (GMV). GMV is the total sales value of all merchandise sold by us or our sellers through our marketplaces or by us through other channels during a given period of time. We review GMV because it provides a measure of the volume of goods being sold in our marketplaces and thus the activity of those marketplaces. GMV also provides a means to evaluate the effectiveness of investments that we have made and continue to make, including in the areas of buyer and seller support, value-added services, product development, sales and marketing, and operations. Our GMV for the three and nine months ended June 30, 2025, was $413.0 million and $1.2 billion, respectively, increasing from the three and nine months ended June 30, 2024 by $32.6 million, or 8.6%, and $160.8 million, or 16.0%, respectively.

Previous wording

Total registered buyers, as of a given date, represent the aggregate number of persons or entities who have registered on one of our marketplaces. We use this metric to evaluate how well our marketing and promotional efforts are performing. Total registered buyers exclude duplicate registrations, buyers who are suspended from utilizing our marketplaces and buyers who have voluntarily removed themselves from our registration database. In addition, if we become aware of registered buyers that are no longer in business, we remove them from our database. As of March 31, 2025 and 2024, we had 5.8 million and 5.3 million registered buyers, respectively.

Current wording

Total registered buyers, as of a given date, represent the aggregate number of persons or entities who have registered on one of our marketplaces. We use this metric to evaluate how well our marketing and promotional efforts are performing. Total registered buyers exclude duplicate registrations, buyers who are suspended from utilizing our marketplaces and buyers who have voluntarily removed themselves from our registration database. In addition, if we become aware of registered buyers that are no longer in business, we remove them from our database. As of June 30, 2025 and 2024, we had 5.9 million and 5.4 million registered buyers, respectively.

Previous wording

Total auction participants. For each auction we manage, the number of auction participants represents the total number of registered buyers who have bid one or more times in that auction. As a result, a registered buyer who bids, or participates, in more than one auction is counted as an auction participant in each auction in which he or she participates. Thus, total auction participants for a given period is the sum of the auction participants in each auction conducted during that period. We use this metric to allow us to compare our online auction marketplaces to our competitors, including other online auction sites and traditional on-site auctioneers. In addition, we measure total auction participants on a periodic basis to evaluate the activity level of our base of registered buyers and to measure the performance of our marketing and promotional efforts. During the three months ended March 31, 2025 and 2024, 982,000 and 1,139,000 participants participated in auctions on our marketplaces, respectively. During the six months ended March 31, 2025 and 2024, approximately 1,942,000 and 1,987,000 participants participated in auctions on our marketplaces, respectively.

Current wording

Total auction participants. For each auction we manage, the number of auction participants represents the total number of registered buyers who have bid one or more times in that auction. As a result, a registered buyer who bids, or participates, in more than one auction is counted as an auction participant in each auction in which he or she participates. Thus, total auction participants for a given period is the sum of the auction participants in each auction conducted during that period. We use this metric to allow us to compare our online auction marketplaces to our competitors, including other online auction sites and traditional on-site auctioneers. In addition, we measure total auction participants on a periodic basis to evaluate the activity level of our base of registered buyers and to measure the performance of our marketing and promotional efforts. During the three months ended June 30, 2025 and 2024, 1,098,000 and 1,016,000 participants participated in auctions on our marketplaces, respectively. During the nine months ended June 30, 2025 and 2024, approximately 3,040,000 and 3,003,000 participants participated in auctions on our marketplaces, respectively.

Previous wording

Completed transactions. Completed transactions represents the number of auctions in a given period from which we have recorded revenue. Similar to GMV, we believe that completed transactions is a key business metric because it provides an additional measurement of the volume of activity flowing through our marketplaces. During the three months ended March 31, 2025 and 2024, we completed 258,000 and 300,000 transactions, respectively. During the six months ended March 31, 2025 and 2025, we completed 511,000 and 539,000 transactions, respectively.

Current wording

Completed transactions. Completed transactions represents the number of auctions in a given period from which we have recorded revenue. Similar to GMV, we believe that completed transactions is a key business metric because it provides an additional measurement of the volume of activity flowing through our marketplaces. During the three months ended June 30, 2025 and 2024, we completed 286,000 and 263,000 transactions, respectively. During the nine months ended June 30, 2025 and 2025, we completed 797,000 and 802,000 transactions, respectively.

Previous wording

GovDeals. Total revenues from our GovDeals reportable segment increased 4.7%, or $0.8 million, due to a $17.1 million, or 9.2%, increase in GMV driven by new seller acquisition, service expansion and strong results in our real estate category, partially offset by weather-related delays. Revenue grew at a lower than GMV due to growth from our lower take-rate real estate category. Segment direct profit increased by $0.5 million, or 2.9% while Segment direct profit as a percentage of total revenue decreased from 93.7% to 92.1%, as our expanded service offerings for higher-volume sellers have a higher revenue take-rate but require additional costs of goods sold relative to our core self-service model.

Current wording

GovDeals. Total revenues from our GovDeals reportable segment increased 8.4%, or $1.9 million, due to a $2.6 million, or 1.1%, increase in GMV driven by new seller acquisition and service expansion, partially offset by lower market prices for vehicles sold. Revenue grew at a higher rate than GMV due to reduced activity from certain lower take-rate real estate sellers. Segment direct profit increased by $1.4 million, or 7.0% while Segment direct profit as a percentage of total revenue decreased from 93.7% to

Previous wording

CAG. Revenue from our CAG reportable segment decreased by $2.7 million, or 21.9%, despite an increase in GMV of $7.7 million, or 14.3%, primarily driven by consignment sales in our heavy equipment category, due to completion of large international spot purchase transactions in the three months ended March 31, 2024. As a result of the decrease in revenues, Segment direct profit decreased by $0.6 million, or 6.3%. Segment direct profit as a percentage of total revenue increased from 75.2% to 90.2% due to the prior year international spot purchase transactions. As a reminder, there are inherent variations in the mix of assets sourced and sold by the CAG segment in any given period. Global supply chains may experience heightened disruptions due to international tensions and other factors, which could limit the volume of assets made available for sale in any period.

Current wording

CAG. Revenue from our CAG reportable segment increased by $0.5 million, or 5.9%, due to a $6.3 million, or 12.2%, increase in GMV primarily driven by consignment sales in our heavy equipment category, partially offset by certain industrial categories and regions experiencing tempered activity due to economic and tariff-related supply chain uncertainty. As a result of the increase in revenues, Segment direct profit increased by $1.0 million, or 13.9%. Segment direct profit as a percentage of total revenue increased from 85.9% to 92.4%, which may fluctuate due to inherent variations in the mix of assets sourced and sold by the CAG segment in any given period, due to a higher mix of consignment transactions conducted during the current year. Global supply chains may experience heightened disruptions due to international tensions and other factors, which could limit the volume of assets made available for sale in any period.

Previous wording

Machinio & Software Solutions. Revenue in our Machinio & Software Solutions businesses increased 21.8%, or $0.9 million, due to Machinio price increases and continued growth in its subscribers, and from the acquisition of Auction Software. As a result of these increase in revenues, segment direct profit increased 18.8%, or $0.7 million. Segment direct profit as a percentage of total revenue remained relatively consistent between the periods.

Current wording

Machinio & Software Solutions. Revenue in our Machinio & Software Solutions businesses increased 27.1%, or $1.1 million, due to Machinio price increases and continued growth in its subscribers, and from the acquisition of Auction Software to form our Software Solutions business. As a result of this increase in revenues, segment direct profit increased 22.6%, or $0.9 million. Segment direct profit as a percentage of total revenue decreased from 95.1% to 91.7% as a result of the Auction Software acquisition.

Previous wording

Total revenues. Total consolidated revenue increased $24.9 million, or 27.3%. Refer to the discussion of Segment Results above for discussion of the increase in revenue.

Current wording

Total revenues. Total consolidated revenue increased $26.3 million, or 28.1%. Refer to the discussion of Segment Results above for discussion of the increase in revenue.

Previous wording

Cost of goods sold (excludes depreciation and amortization). Cost of goods sold increased $24.7 million, primarily due to increased purchase transaction volumes at our RSCG reportable segment during the three months ended March 31, 2025.

Current wording

Cost of goods sold (excludes depreciation and amortization). Cost of goods sold increased $20.9 million, primarily due to increased purchase transaction volumes at our RSCG reportable segment during the three months ended June 30, 2025.

Previous wording

Technology and operations expenses. Technology and operations expenses increased $1.4 million, or 8.7%, primarily in support of the increased transactions volumes across our segments, including operating costs associated with expanded service offerings in our GovDeals segment, temporary storage costs in our RSCG segment from the initial stages of its purchase programs expansion that are expected to normalize during the three months ended June 30, 2025, and a $0.1 million increase in stock compensation expense.

Current wording

Technology and operations expenses. Technology and operations expenses increased $1.9 million, or 12.4%, primarily in support of the increased transactions volumes across our segments, including operating costs associated with expanded service offerings in our GovDeals segment, a $0.2 million increase in stock compensation expense, and the acquisition of Auction Software; see Note 3 -Acquisitions.

Previous wording

Sales and marketing expenses. Sales and marketing expenses decreased $0.4 million, or 2.7%, due to a reprioritization of marketing initiatives in the current year.

Current wording

Sales and marketing expenses. Sales and marketing expenses increased $1.9 million, or 14.1%, due to increased sales expenses incurred to support the greater purchase transaction volumes at our RSCG reportable segment and other key initiatives, partially offset by a reprioritization of marketing initiatives in the current year.

Previous wording

Depreciation and amortization. Depreciation and amortization expense decreased $0.6 million, or 19.6%, due to historically acquired intangible assets reaching the end of their useful lives.

Current wording

Depreciation and amortization. Depreciation and amortization expense decreased $0.5 million, or 16.9%, due to historically acquired intangible assets reaching the end of their useful lives.

Previous wording

Provision for income taxes. Provision for income taxes decreased $0.8 million due to an increase in tax benefits from stock compensation vesting activity, and the impact of foreign, state, and local taxes and permanent tax adjustments.

Current wording

Provision for income taxes. Provision for income taxes increased $1.2 million due to an increase in income, and the impact of foreign, state, and local taxes and permanent tax adjustments.

Previous wording

GovDeals. Total revenues from our GovDeals reportable segment increased 16.0%, or $5.5 million, due to a $38.9 million, or 10.3%, increase in GMV driven by new seller acquisition, service expansion and strong results across our personal property and real estate categories, partially offset by weather-related delays. Revenue grew at a higher rate than GMV due to the expansion of service offerings to new, higher-volume sellers, including through the acquisition of Sierra. Segment direct profit increased by $4.3 million, or 13.2%, and Segment direct profit as a percentage of total revenue decreased from 94.1% to 91.9%, as our expanded service offerings for higher-volume sellers have a higher revenue take-rate but require additional costs of goods sold relative to our core self-service model.

Current wording

GovDeals. Total revenues from our GovDeals reportable segment increased 13.0%, or $7.3 million, due to a $41.5 million, or 6.6%, increase in GMV driven by new seller acquisition, service expansion and strong results across our personal property categories, partially offset by lower market prices for vehicles sold. Revenue grew at a higher rate than GMV due to the expansion of service offerings to new, higher-volume sellers, including through the acquisition of Sierra, and reduced activity from certain lower take-rate real estate sellers. Segment direct profit increased by $5.7 million, or 10.8%, and Segment direct profit as a percentage of total revenue decreased from 94.0% to 92.1%, as our expanded service offerings for higher-volume sellers have a higher revenue take-rate but require additional costs of goods sold relative to our core self-service model.

Previous wording

CAG. Revenue from our CAG reportable segment decreased by $0.7 million, or 3.3%, despite an increase in GMV of $22.9 million, or 22.4% increase, primarily driven by consignment sales in our heavy equipment, due to completion of large international spot purchase transactions during the six months ended March 31, 2024. Segment direct profit increased by $1.3 million, or 7.8%, as the increased consignment mix has a greater impact on Segment direct profit than total revenues. Segment direct profit as a percentage of total revenue increased from 80.4% to 89.7% due to the prior year international spot purchase transactions. As a reminder, there are inherent variations in the mix of assets sourced and sold by the CAG segment in any given period. Global supply chains may experience heightened disruptions due to international tensions and other factors, which could limit the volume of assets made available for sale in any period.

Current wording

CAG. Revenue from our CAG reportable segment decreased by $0.2 million, or 0.6%, despite an increase in GMV of $29.3 million, or 19.0% increase, primarily driven by consignment sales in our heavy equipment category, offset by fewer large international spot purchase transactions, and certain industrial categories and regions experiencing tempered activity due to economic and tariff-related supply chain uncertainty, during the nine months ended June 30, 2025. Segment direct profit increased by $2.3 million, or 9.7%, as the increased consignment mix, driven by the heavy equipment category, has a greater impact on Segment direct profit than total revenues. Segment direct profit as a percentage of total revenue increased from 82.1% to 90.6% due to fewer international spot purchase transactions in the current year. As a reminder, there are inherent variations in the mix of assets sourced and sold by the CAG segment in any given period. Global supply chains may experience heightened disruptions due to international tensions and other factors, which could limit the volume of assets made available for sale in any period.

Previous wording

Machinio & Software Solutions. Revenue in our Machinio & Software Solutions businesses increased 16.2%, or $1.3 million, due to Machinio price increases and continued growth in its subscribers, and from the acquisition of Auction Software. As a result of these increase in revenues, segment direct profit increased 14.5%, or $1.1 million. Segment direct profit as a percentage of total revenue remained relatively consistent between the periods.

Current wording

Machinio & Software Solutions. Revenue in our Machinio & Software Solutions businesses increased 19.9%, or $2.4 million, due to Machinio price increases and continued growth in its subscribers, and from the acquisition of Auction Software to form our Software Solutions business. As a result of this increase in revenues, segment direct profit increased 17.3%, or $2.0 million. Segment direct profit as a percentage of total revenue decreased from 95.1% to 93.0% as a result of the Auction Software acquisition.

Previous wording

Total revenues. Total consolidated revenue increased $75.9 million, or 46.6%. Refer to the discussion of Segment Results above for discussion of the increase in revenue.

Current wording

Total revenues. Total consolidated revenue increased $102.2 million, or 39.9%. Refer to the discussion of Segment Results above for discussion of the increase in revenue.

Previous wording

Cost of goods sold (excludes depreciation and amortization). Cost of goods sold increased $65.4 million, primarily due to increased purchase transaction volumes at our RSCG reportable segment during the six months ended March 31, 2025.

Current wording

Cost of goods sold (excludes depreciation and amortization). Cost of goods sold increased $86.3 million, primarily due to increased purchase transaction volumes at our RSCG reportable segment during the nine months ended June 30, 2025.

Previous wording

Technology and operations expenses. Technology and operations expenses increased $4.5 million, or 15.2%, primarily in support of the increased transactions volumes across our segments, including operating costs associated with expanded service offerings in our GovDeals segment, temporary storage costs in our RSCG segment from the initial stages of its purchase programs expansion that are expected to normalize during the three months ended June 30, 2025, and a $0.3 million increase in stock compensation expense.

Current wording

Technology and operations expenses. Technology and operations expenses increased $6.4 million, or 14.2%, primarily in support of the increased transactions volumes across our segments, including operating costs associated with expanded service offerings in our GovDeals segment, a $0.5 million increase in stock compensation expense, and the acquisition of Auction Software; see Note 3 -Acquisitions.

Previous wording

General and administrative expenses. General and administrative expenses increased $0.1 million, or 0.9%, driven by a $0.5 million increase in stock compensation primarily from variable stock awards tied to financial performance targets, offset slightly by ongoing cost management and streamlining efforts.

Current wording

General and administrative expenses. General and administrative expenses decreased $0.3 million, or 1.0%, primarily due to $0.5 million in litigation settlement expense incurred during the three months ended June 30, 2024, and ongoing cost management and streamlining efforts, partially offset by a $0.8 million increase in stock compensation primarily from variable stock awards tied to financial performance targets.

Previous wording

Depreciation and amortization. Depreciation and amortization expense decreased $1.0 million, or 16.6%, due to historically acquired intangible assets reaching the end of their useful lives.

Current wording

Depreciation and amortization. Depreciation and amortization expense decreased $1.5 million, or 16.7%, primarily due to historically acquired intangible assets reaching the end of their useful lives.

Previous wording

Provision for income taxes. Provision for income taxes increased $0.7 million due to an increase in income, offset by an increase in stock compensation vesting activity, and the impact of foreign, state, and local taxes and permanent tax adjustments.

Current wording

Provision for income taxes. Provision for income taxes increased $1.8 million due to an increase in income, offset by an increase in stock compensation vesting activity, and the impact of foreign, state, and local taxes and permanent tax adjustments.

Previous wording

2 Acquisition-related costs, and business realignment expenses are included in Other operating expenses, net on the Condensed Consolidated Statement of Operations.

Current wording

2 Acquisition-related costs, and business realignment expenses are included in Other operating expenses, net on the Condensed Consolidated Statement of Operations. Litigation settlement expense reflects significant legal settlements not expected to reoccur and are included in General and administrative expenses on the Condensed Consolidated Statement of Operations. For further information see Note 13 - Legal Proceedings and Other Contingencies, for details about the litigation settlement that occurred during the three months ended June 30, 2024.

Previous wording

3 Business realignment expense includes the amounts accounted for as exit costs under ASC 420, Exit or Disposal Cost Obligations, and the related impacts of business realignment actions subject to other accounting guidance.

Current wording

3 Business realignment expense includes the amounts accounted for as exit costs under ASC 420, Exit or Disposal Cost Obligations, and the related impacts of business realignment actions subject to other accounting guidance including operating lease impairment expense resulting from such actions as described in Note 5 - Leases.

Previous wording

Our operational cash needs primarily relate to working capital, including staffing costs, technology expenses, leases of real estate, and equipment used in our operations, and capital used for inventory purchases, which we have funded through existing cash balances and cash generated from operations. The Company has not paid a dividend historically, nor do we have any intention to do so in the foreseeable future. From time to time, we may use our capital resources for other activities, such as contract start-up costs, joint ventures, share repurchases and acquisitions. As of March 31, 2025, we had $138.5 million in Cash and cash equivalents and $10.5 million in Short-term investments, which we believe is sufficient to meet the Company’s anticipated cash needs for at least one year from the date of these financial statements.

Current wording

Our operational cash needs primarily relate to working capital, including staffing costs, technology expenses, leases of real estate, and equipment used in our operations, and capital used for inventory purchases, which we have funded through existing cash balances and cash generated from operations. The Company has not paid a dividend historically, nor do we have any intention to do so in the foreseeable future. From time to time, we may use our capital resources for other activities, such as contract start-up costs, joint ventures, share repurchases and acquisitions. As of June 30, 2025, we had $155.6 million in Cash and cash equivalents and $11.4 million in Short-term investments, which we believe is sufficient to meet the Company’s anticipated cash needs for at least one year from the date of these financial statements.

Previous wording

We intend to indefinitely reinvest the earnings of our foreign subsidiaries outside the United States. As a result, we did not record a provision for deferred U.S. tax expense on the $9.5 million of undistributed foreign earnings as of March 31, 2025. A total of $30.3 million of cash and cash equivalents and short-term investments was held out of the U.S. as of March 31, 2025. These amounts are not currently considered in our evaluation of near-term liquidity needs in the U.S. due to the potential for adverse tax consequences upon repatriation.

Current wording

We intend to indefinitely reinvest the earnings of our foreign subsidiaries outside the United States. As a result, we did not record a provision for deferred U.S. tax expense on the $9.1 million of undistributed foreign earnings as of June 30, 2025. A total of $25.3 million of cash and cash equivalents and short-term investments was held out of the U.S. as of June 30, 2025. These amounts are not currently considered in our evaluation of near-term liquidity needs in the U.S. due to the potential for adverse tax consequences upon repatriation.

Previous wording

Our capital expenditures consist primarily of capitalized software, warehouse equipment, computers and purchased software, office equipment, furniture and fixtures, and leasehold improvements. The timing and volume of such capital expenditures in the future will be affected by the addition of new sellers or buyers or expansion of existing seller or buyer relationships. We intend to fund those expenditures primarily from our existing cash balances and operating cash flows. Our capital expenditures for the six months ended March 31, 2025 and 2024, were $3.7 million and $4.1 million, respectively. This decrease was primarily driven by the timing of enhancements to our platforms and marketplaces. As of March 31, 2025, we had no significant outstanding commitments for capital expenditures.

Current wording

Our capital expenditures consist primarily of capitalized software, warehouse equipment, computers and purchased software, office equipment, furniture and fixtures, and leasehold improvements. The timing and volume of such capital expenditures in the future will be affected by the addition of new sellers or buyers or expansion of existing seller or buyer relationships. We intend to fund those expenditures primarily from our existing cash balances and operating cash flows. Our capital expenditures for the nine months ended June 30, 2025 and 2024, were $5.8 million and $6.1 million, respectively. This decrease was primarily driven by the timing of enhancements to our platforms and marketplaces. As of June 30, 2025, we had no significant outstanding commitments for capital expenditures.

Previous wording

The Company may draw upon the Credit Agreement for general corporate purposes. Repayments of any borrowings under the Credit Agreement shall become available for redraw at any time by the Company. The interest rate on borrowings under the Credit Agreement is a variable rate per annum equal to the Daily Simple Secured Overnight Financing Rate (SOFR) in effect plus a margin ranging from 1.25% to 1.75%. Interest is payable monthly. During the six months ended March 31, 2025, the Company did not make any draws under the Line of Credit, had no outstanding borrowings under the Line of Credit and had $7.5 million of standby letters of credit outstanding. The amount of standby letters of credit are reserved against the Line of Credit and are not available for borrowing, resulting in $17.5 million of remaining borrowing capacity under the Line of Credit as of March 31, 2025.

Current wording

The Company may draw upon the Credit Agreement for general corporate purposes. Repayments of any borrowings under the Credit Agreement shall become available for redraw at any time by the Company. The interest rate on borrowings under the Credit Agreement is a variable rate per annum equal to the Daily Simple Secured Overnight Financing Rate (SOFR) in effect plus a margin ranging from 1.25% to 1.75%. Interest is payable monthly. During the nine months ended June 30, 2025, the Company did not make any draws under the Line of Credit, had no outstanding borrowings under the Line of Credit and had $9.0 million of standby letters of credit outstanding. The amount of standby letters of credit are reserved against the Line of Credit and are not available for borrowing, resulting in $26.0 million of remaining borrowing capacity under the Line of Credit as of June 30, 2025.

Previous wording

The Company made no repurchases during the three and six months ended March 31, 2025. As of March 31, 2025, the Company had $17.6 million of remaining authorization to repurchase shares through December 31, 2026.

Current wording

The Company made no repurchases during the three and nine months ended June 30, 2025. As of June 30, 2025, the Company had $17.6 million of remaining authorization to repurchase shares through December 31, 2026.

Previous wording

Changes in Cash Flows: Six Months Ended March 31, 2025, Compared to the Six Months Ended March 31, 2024

Current wording

Changes in Cash Flows: Nine Months Ended June 30, 2025, Compared to the Nine Months Ended June 30, 2024

Previous wording

Net cash provided by operating activitieswas $9.5 million and $26.0 million for the six months ended March 31, 2025 and 2024, respectively. The $16.5 million decrease in cash provided by operating activities between periods was primarily attributable to an $11.9 million decrease in cash flows associated with Accounts Payable due to the timing of seller settlements at our GovDeals and CAG businesses including impacts from weather-related delays, a $7.2 million decrease in cash flows associated with Accounts receivable primarily due to qualified buyers with credit terms transacting in our expanded purchase program volumes in our RSCG segment, and a $4.7 million increase in cash tax payments. These were partially offset by a $4.4 million increase in our Net income as adjusted for non-cash items.

Current wording

Net cash provided by operating activitieswas $28.8 million and $48.2 million for the nine months ended June 30, 2025 and 2024, respectively. The $19.4 million decrease in cash provided by operating activities between periods was primarily attributable to a $7.0 million decrease in cash flows associated with Accounts receivable primarily due to qualified buyers with credit terms transacting in our expanded purchase program volumes in our RSCG segment, and a $14.3 million decrease in cash inflows associated with our Payables to sellers as the prior year benefited from the receipt of buyer payments for certain, larger consignment asset sales near the end of the quarter. The settlements to the sellers for these sales will occur in the fiscal fourth quarter. These were partially offset by a $4.8 million increase in our Net income as adjusted for non-cash items.

Previous wording

Net cash used in investing activitieswas $18.6 million and $17.6 million for the six months ended March 31, 2025 and 2024, respectively. The $1.0 million increase in cash used in investing activities was primarily driven an $11.0 million increase in the purchase of short-term investments, offset by an increase of $2.7 million in maturities of short-term investments and a $7.0 million decrease in cash paid for business acquisitions; see Note 3 -Acquisitions.

Current wording

Net cash used in investing activitieswas $20.9 million and $17.6 million for the nine months ended June 30, 2025 and 2024, respectively. The $3.3 million increase in cash used in investing activities was primarily driven a $14.0 million increase in the purchase of short-term investments, offset by an increase of $3.5 million in maturities of short-term investments and a $6.8 million decrease in cash paid for business acquisitions; see Note 3 -Acquisitions.

Previous wording

Net cash used in financing activitieswas $4.8 million and $10.3 million for the six months ended March 31, 2025 and 2024, respectively. The $5.5 million decrease in cash used in financing activities was primarily driven by a $9.0 million decrease in share repurchases partially offset by a $3.5 million increase in taxes paid associated with the net settlement of stock compensation awards.

Current wording

Net cash used in financing activitieswas $5.1 million and $10.8 million for the nine months ended June 30, 2025 and 2024, respectively. The $5.7 million decrease in cash used in financing activities was primarily driven by a $9.4 million decrease in share repurchases partially offset by a $3.7 million increase in taxes paid associated with the net settlement of stock compensation awards.