Liquidity Services celebrated a quarter of substantial financial growth and strategic advancement in the third quarter of fiscal year 2026, driven by its effective RISE strategy. The company posted a Gross Merchandise Volume (GMV) of $453 million, marking a 10% year-over-year increase and establishing a new quarterly benchmark. Total revenue climbed to $129.6 million, an 8% rise from the previous year. Net income, calculated according to Generally Accepted Accounting Principles (GAAP), surged by 41% to $10.4 million, translating into a 39% increase in diluted earnings per share to $0.32. Adjusted diluted earnings per share (non-GAAP) also saw impressive growth, up 32% to $0.45, while adjusted EBITDA increased by 30% to $22.0 million, reflecting enhanced transaction margins and operational efficiencies. The company's Rule of 40 score improved to 51% from 42% a year prior, and its cash and short-term investments stood strong at $231.1 million, with no financial debt.
Growth was particularly robust in the Retail Supply Chain Group (RSCG) and GovDeals segments, benefiting from expanded consignment partnerships and increased buyer engagement. RSCG achieved a record GMV of $121.6 million, a 19% increase, and its direct profit grew by 30% to $25.2 million. The GovDeals segment also hit a record GMV of $274.0 million, up 9%, with its direct profit reaching $24.2 million. This segment reported a record number of unique sellers for the seventh consecutive quarter, showcasing strong public sector client reliance. The company is actively utilizing machine learning and artificial intelligence to refine its marketplace operations, leading to improved buyer conversion rates and retention. For instance, GovDeals saw new bidder registrations rise by 42% and conversion rates improve by 35%, even with reduced marketing expenses. The Capital Assets Group (CAG) experienced a minor 1% GMV decrease, attributed to project scheduling, yet its direct profit rose by 13% due to better pricing strategies and a favorable project mix, alongside a 270 basis point increase in its take rate. Looking ahead, Liquidity Services projects continued profitability for Q4 2026, with GMV estimated between $415 million and $455 million, adjusted EBITDA between $22 million and $25 million, and GAAP diluted EPS from $0.30 to $0.39, while anticipating a higher effective tax rate.
This quarter's performance by Liquidity Services not only underscores its operational excellence and strategic foresight but also highlights the significant opportunities within the circular economy. By continuously innovating and prioritizing customer value, the company is building a sustainable model for growth and efficiency. Their dedication to maximizing recovery for sellers, expanding service offerings, and embracing technological advancements positions them as a leader, driving positive economic and environmental impacts.
