Segment Information

6 Months Ended

Mar. 31, 2020

The Company provides results in four reportable operating segments: GovDeals, RSCG, CAG and Machinio. Descriptions of our reportable segments are as follows:

•The GovDeals reportable segment provides self-directed service solutions in which sellers list their own assets, and it consists of marketplaces that enable local and state government entities including city, county and state agencies, as well as quasi-governmental businesses located in the United States and Canada to sell surplus and salvage assets. GovDeals also offers a suite of services to sellers that includes asset sales and marketing. Through the end of fiscal 2019, GovDeals provided self-directed service solutions to commercial businesses as part of the Auction Deals marketplace.

•The RSCG reportable segment consists of marketplaces that enable corporations located in the United States and Canada to sell surplus and salvage consumer goods and retail capital assets. RSCG also offers a suite of services that includes returns management, asset recovery, and e-commerce services. This segment includes the Company's Liquidation.com, Liquidation.com DIRECT, and Secondipity marketplaces.

•The CAG reportable segment provides full-service solutions to sellers and it consists of marketplaces that enable commercial businesses to sell surplus, salvage, and scrap assets. CAG also offers a suite of services that includes surplus management, asset valuation, asset sales and marketing. Commercial sellers are located in the United States, Europe, Australia and Asia. This segment includes the Company's Network International and GoIndustry DoveBid marketplaces and, beginning in fiscal 2020, self-directed service solutions for commercial businesses within a unified marketplace previously referred to as Auction Deals. Prior to the conclusion of the Scrap Contract (see Note 2), CAG sold scrap assets from the DoD on its Government Liquidation marketplace.

•The Machinio reportable segment operates a global online platform for listing used equipment for sale in the construction, machine tool, transportation, printing and agriculture sectors.

We also report results of Corporate & Other, which for the three and six months ended March 31, 2019 includes a previously existing operating segment that did not meet the quantitative thresholds to be a reportable segment, IronDirect. The Company exited the IronDirect business in January 2019.

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. The Company reports 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 that assessment, the CODM uses segment gross profit to evaluate the performance of each segment. Gross profit is calculated as total revenue less cost of goods sold and seller distributions.

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)				2020			2019			2020			2019
GovDeals:
	Revenue	$	—		$	—		$	—		$	—
	Fee revenue	7,822			7,697			15,837			15,355
	Total revenue	7,822			7,697			15,837			15,355
	Gross profit	$	7,278		$	7,042		$	14,724		$	14,103

RSCG:
	Revenue	$	32,577		$	29,823		$	60,403		$	55,894
	Fee revenue	3,680			4,188			7,551			7,595
	Total revenue	36,257			34,011			67,954			63,489
	Gross profit	$	12,394		$	12,287		$	22,699		$	21,836

CAG:
	Revenue	$	2,626		$	7,498		$	5,149		$	16,727
	Fee revenue	4,413			6,186			9,832			12,438
	Total revenue	7,039			13,684			14,981			29,165
	Gross profit	$	4,922		$	8,614		$	10,736		$	17,496

Machinio:
	Revenue	$	—		$	—		$	—		$	—
	Fee revenue	1,706			1,374			3,556			2,366
	Total revenue	1,706			1,374			3,556			2,366
	Gross Profit	$	1,611		$	1,265		$	3,374		$	2,143

Corporate & Other:
	Revenue	$	—		$	34		$	—		$	469
	Fee revenue	—			—			—			9
	Total revenue	—			34			—			478
	Gross profit	$	—		$	10		$	—		$	113

Consolidated:
	Revenue	$	35,203		$	37,355		$	65,552		$	73,090
	Fee revenue	17,621			19,445			36,776			37,763
	Total revenue	52,824			56,800			102,328			110,853
	Gross profit	$	26,205		$	29,218		$	51,533		$	55,691

The following table presents a reconciliation of gross profit used in the reportable segments to the Company's consolidated results:


		Three Months Ended March 31,									Six Months Ended March 31,
(in thousands)				2020			2019			2020			2019
Reconciliation:
	Gross profit	$	26,205		$	29,218		$	51,533		$	55,691
	Operating expenses	30,669			32,353			60,794			63,696
	Other operating expenses	(12)			1,350			181			1,555
	Interest and other income, net	(257)			(451)			(509)			(770)
	Loss before provision for income taxes	$	(4,195)		$	(4,034)		$	(8,933)		$	(8,790)

The percent of our revenues that came from transactions conducted outside of the United States for the three months ended March 31, 2020 and 2019 was 10.9% and 14.6%, respectively and the percent of our revenues that came from transactions conducted outside of the United States for the six months ended March 31, 2020 and 2019 was 13.1% and 15.4%, respectively.