LIQUIDITY SERVICES INC Leases Disclosure
6. Leases
The Company has operating leases for its corporate offices, warehouses, vehicles and equipment.
The operating leases have remaining terms of up to 5.3 years. Some of the leases have options to extend or terminate the leases. The exercise of such options is generally at the Company’s discretion. The lease agreements do not contain any significant residual value guarantees or restrictive covenants. The Company also subleases excess office and warehouse space, when applicable. The Company's finance leases and related balances are not significant.
The components of lease expense are:
|
September 30, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Finance lease – lease asset amortization |
$ |
69 |
|
|
$ |
70 |
|
Finance lease – interest on lease liabilities |
|
20 |
|
|
|
11 |
|
Operating lease cost |
|
5,928 |
|
|
|
5,457 |
|
Operating lease impairment expense (1) |
|
459 |
|
|
|
— |
|
Short-term lease cost |
|
460 |
|
|
|
318 |
|
Variable lease cost (2) |
|
1,319 |
|
|
|
1,458 |
|
Sublease income |
|
(84 |
) |
|
|
(19 |
) |
Total net lease cost |
$ |
8,171 |
|
|
$ |
7,295 |
|
(1) During the twelve months ended September 30, 2025, the Company exited from a RSCG warehouse in an effort to consolidate its warehouse operations and incurred $0.5 million of impairment expense.
(2) Variable lease costs primarily relate to the Company's election to combine non-lease components such as common area maintenance, insurance and taxes related to its real estate leases. To a lesser extent, the Company's equipment leases have variable costs associated with usage and subsequent changes to costs based upon an index.
Maturities of lease liabilities are:
|
September 30, |
|
|||||
|
Operating Leases |
|
|
Finance Leases |
|
||
2026 |
$ |
5,676 |
|
|
$ |
123 |
|
2027 |
|
3,369 |
|
|
|
73 |
|
2028 |
|
2,990 |
|
|
|
51 |
|
2029 |
|
2,163 |
|
|
|
47 |
|
2030 |
|
930 |
|
|
|
50 |
|
Thereafter |
|
79 |
|
|
|
30 |
|
Total lease payments (1) |
|
15,207 |
|
|
|
374 |
|
Less: imputed interest (2) |
$ |
(1,412 |
) |
|
$ |
(44 |
) |
$ |
13,795 |
|
|
$ |
330 |
|
|
(1) The weighted average remaining lease term is 3.4 years for operating leases and 4.2 years for finance leases as of September 30, 2025, and 3.3 years for operating leases and 2.4 years for finance leases as of September 30, 2024.
(2) The weighted average discount rate is 5.9% for operating leases and 5.8% for finance leases as of September 30, 2025, and 6.1% for operating leases and 5.6% for finance leases as of September 30, 2024.
Supplemental disclosures of cash flow information related to leases are:
|
Years Ended September 30, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Cash paid for amounts included in operating lease liabilities |
$ |
5,581 |
|
|
$ |
4,667 |
|
Cash paid for amounts included in finance lease liabilities |
$ |
102 |
|
|
$ |
100 |
|
Non-cash: lease liabilities arising from new operating lease assets obtained |
$ |
2,209 |
|
|
$ |
5,695 |
|
Non-cash: lease liabilities arising from new finance lease assets obtained |
$ |
240 |
|
|
$ |
57 |
|
Non-cash: adjustments to lease assets and liabilities(1) |
$ |
2,944 |
|
|
$ |
395 |
|
(1) These include adjustments due to lease modifications, renewals, and other related adjustments.
The increase in adjustments to lease assets and liabilities during the year ended September 30, 2025, is due to execution of renewal of an existing warehouse lease in Brampton, Ontario (Canada) associated with our RSCG reportable segment. The increase in lease liabilities arising from new operating lease assets obtained during the year ended September 30, 2025, was primarily driven by our new Retail Rush store in Columbus, Ohio, and auction staging lot in Montclair, California for our GovDeals reportable segment.
Lease liabilities increased during the year ended September 30, 2024, due to the commencement of a lease for new warehouse space in Brownsburg, Indiana during the period, as well as new leases relating to the Sierra acquisitions; see Note 3 - Acquisitions for further information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 20, 2025 | Showing above |
| 2024 | Dec 12, 2024 | |
| 2023 | Dec 7, 2023 | |
| 2022 | Dec 8, 2022 | |
| 2021 | Dec 9, 2021 | |
| 2020 | Dec 8, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.