0001193125-26-211031
SEC filingSolid quarter with revenue growth accelerating to 3.7% and operating income surging 41.4%, driven by margin expansion and strong cash flow generation.
Revenue for the second quarter of fiscal 2026 was $120.7 million, up 3.7% from $116.4 million in the prior year period. The increase was primarily driven by growth in our CAG reportable segment, which benefited from increased heavy equipment and energy consignment transaction activity, as well as continued strength in GovDeals. Revenue grew at a higher rate than gross merchandise volume (GMV) due to the expansion of service offerings to higher-volume sellers and a lower transaction mix of real estate. General consumer behavior can be turbulent, and changes in consumer sentiment can cause fluctuation in the mix, volumes, and demand for the products we receive.
Net cash provided by operating activities was $29.0 million, compared to $9.5 million in the prior year period, reflecting strong cash generation from operations. Free cash flow, defined as operating cash flow less capital expenditures, was $24.6 million. Capital expenditures were $4.4 million, up from $3.7 million in the prior year period, as we continued to invest in our marketplace platforms and other software development activities. 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.
Management highlighted ongoing monitoring of geopolitical conflicts, tariffs, and consumer sentiment as potential headwinds. The company continues to invest in marketplace innovations, including AI and machine learning, and expects capital expenditure timing to be influenced by new seller/buyer relationships. With a strong balance sheet and no near-term debt maturities, Liquidity Services is well-positioned to pursue organic growth and strategic acquisitions, though the timing and volume of such activities remain uncertain. RSCG's purchase program volume changes may cause operating cash flows from accounts receivable, accounts payable and inventory to fluctuate.