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Segment Information
6 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Segment Information
14.
Segment Information

The Company provides operating results in four reportable segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Asset Group (CAG), and Machinio. Descriptions of our reportable segments are as follows:

The GovDeals reportable segment provides self-directed service solutions that enable federal, state, and local government entities including city, county and state agencies located in the United States and Canada, to sell surplus, salvage and real estate assets through the GovDeals and Bid4Assets marketplaces.
The RSCG reportable segment consists of marketplaces that enable corporations located in the United States and Canada to sell surplus and salvage consumer goods. RSCG also offers a suite of services that includes returns management, asset recovery, and e-commerce services. This segment uses the Liquidation.com, Secondipity and AllSurplus marketplaces.
The CAG reportable segment provides managed and self-directed service solutions to sellers and consists of marketplaces that enable commercial businesses to sell surplus and idle assets. CAG also offers a suite of services that includes surplus management, asset valuation, asset sales and marketing. Commercial seller assets are located across the Americas, Europe, Australia, Asia, and Africa. This segment uses the AllSurplus and GoIndustry DoveBid marketplaces.
The Machinio reportable segment operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing and agriculture sectors. Machinio also offers the Machinio System service that provides equipment sellers with a set of online marketing tools that includes website hosting, email marketing, and inventory management.

We also report results for Corporate & Other, including elimination adjustments.

Decisions concerning the allocation of the Company’s resources are made by the Company’s Chief Operating Decision Maker (CODM), which is the Company's Chief Executive Officer, with oversight by the Board of Directors. The Company reports reportable segment information based on the internal performance measures used by the CODM to assess the performance of each operating segment in a given period. In connection with this assessment, the CODM uses direct profit to evaluate the performance of each segment. Segment direct profit, previously referred to as segment gross profit, continues to be calculated as total revenue less cost of goods sold (excluding depreciation and amortization).

The following table sets forth certain financial information for the Company's reportable segments:

 

 

 

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

(in thousands)

2023

 

 

2022

 

 

2023

 

 

2022

 

GovDeals:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase revenue

 

$

 

 

$

 

 

$

 

 

$

 

 

Consignment and other fee revenues

 

 

15,079

 

 

 

14,559

 

 

 

28,686

 

 

 

28,543

 

 

Total revenue

 

 

15,079

 

 

 

14,559

 

 

 

28,686

 

 

 

28,543

 

 

Segment direct profit

 

$

14,291

 

 

$

13,853

 

 

$

27,183

 

 

$

27,148

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSCG:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase revenue

$

44,343

 

 

$

33,967

 

 

$

80,213

 

 

$

66,050

 

 

Consignment and other fee revenues

 

9,329

 

 

 

7,858

 

 

 

19,474

 

 

 

14,459

 

 

Total revenue

 

53,672

 

 

 

41,825

 

 

 

99,687

 

 

 

80,509

 

 

Segment direct profit

$

16,675

 

 

$

16,619

 

 

$

32,686

 

 

$

30,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAG:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase revenue

$

2,931

 

 

$

3,417

 

 

$

5,694

 

 

$

7,552

 

 

Consignment and other fee revenues

 

6,487

 

 

 

5,575

 

 

 

13,116

 

 

 

12,648

 

 

Total revenue

 

9,418

 

 

 

8,992

 

 

 

18,810

 

 

 

20,200

 

 

Segment direct profit

$

7,026

 

 

$

6,085

 

 

$

15,528

 

 

$

14,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machinio:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase revenue

$

 

 

$

 

 

$

 

 

$

 

 

Consignment and other fee revenues

 

3,286

 

 

 

2,899

 

 

 

6,553

 

 

 

5,731

 

 

Total revenue

 

3,286

 

 

 

2,899

 

 

 

6,553

 

 

 

5,731

 

 

Segment direct profit

$

3,095

 

 

$

2,750

 

 

$

6,199

 

 

$

5,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate & Other, including elimination adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase revenue

$

 

 

$

 

 

$

 

 

$

 

 

Consignment and other fee revenues

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

 

 

 

 

 

 

 

 

 

 

Segment direct profit

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase revenue

$

47,273

 

 

$

37,384

 

 

$

85,907

 

 

$

73,602

 

 

Consignment and other fee revenues

 

34,180

 

 

 

30,891

 

 

 

67,829

 

 

 

61,381

 

 

Total revenue

 

81,453

 

 

 

68,275

 

 

 

153,736

 

 

 

134,983

 

 

Total Segment direct profit

$

41,087

 

 

$

39,307

 

 

$

81,596

 

 

$

78,253

 

 

The following table reconciles segment direct profit used in the reportable segments to the Company's consolidated results:

 



Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

(in thousands)

2023

 

 

2022

 

 

2023

 

 

2022

 

Reconciliation:

 

 

 

 

 

 



 

 



 

Total segment direct profit

$

41,087

 

 

$

39,307

 

 

$

81,596

 

 

$

78,253

 

Other costs and expenses from operations (1)

$

35,852

 

 

 

34,801

 

 

 

71,495

 

 

 

69,297

 

Fair value adjustment of acquisition earn-outs

$

 

 

 

(8,500

)

 

 

 

 

 

(8,500

)

Interest and other income, net

$

(583

)

 

 

(23

)

 

 

(833

)

 

 

(187

)

Income before provision for income taxes

$

5,818

 

 

$

13,029

 

 

$

10,934

 

 

$

17,643

 

 

(1)
Other costs and expenses from operations is defined as Total costs and expenses from operations per the Condensed Consolidated Statements of Operations, less Cost of goods sold (which is included in the calculation of Segment direct profit).

 

The percent of our revenues that came from transactions conducted outside of the United States for the three months ended March 31, 2023 and 2022, was 9.4% and 15.4%, respectively. The percent of our revenues that came from transactions conducted outside of the United States for the six months ended March 31, 2023 and 2022, was 11.3% and 14.5%, respectively.