LQDT - Earnings call transcript Q2 2021 | Liquidity Services, Inc.

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Operator

Welcome to Liquidity Services Incorporated Second Quarter Fiscal Year 2021 Financial Results Conference Call. My name is Vanessa, and I will be your operator for today’s call. Please note that this conference is being recorded. [Operator Instructions] On the call today are Bill Angrick, Liquidity Services Chairman and Chief Executive Officer; and Jorge Celaya, its Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks. responses of questions and today, forward-looking and managed Liquidity will discussion statements. as views May following to reflect your Services include The X, XXXX, may materially. results Actual differ

factors release and filings financial about Additional recent impact the SEC, in could Form annual in press included report with the on information today’s results that including is most the potentially XX-K.

and call, includes commentary release in well you, which Liquidity As financial press as the you front on the metrics listen quarter. please have to as Services today’s results, of

During this management is Services the and Liquidity financial measures will which non-GAAP call, filings discuss in posted SEC, release website. certain on the its press with

for use additional of also for CEO, results. of management regarding and comparable the supplemental believe be Liquidity operating with volume This will ‘ components certain will non-GAAP measures, I to data also not of they considered presentation measures. disclosures data as a superior Angrick. merchandise supplemental these gross find certain performance, turn over operating or measure measures is Liquidity including operating includes and this reconciliations time, investors. which Services GAAP a Bill You management to substitute should useful At these GAAP Services

Bill Angrick

QX our QX on key to welcome call. provide strategic And an morning. I’ll review our initiatives. earnings and Good performance update

will more Celaya details provide Jorge Next, on the quarter.

in our resulting and benefit from growth. to solutions, continues strong year-over-year third delivered business QX of customer all results strong adoption and in Our consecutive substantial of segments across momentum quarter our

remotely for at will market of quarter. summary, come. that to powerful benefit We centers both outstanding our results to the are deliver forces Liquidity for In safely and customers, efforts is in several the Services team’s business our our years fulfillment our intersection grateful for during

the for First, broader in online from and markets. both strong the new of continues online existing demand economy customers industrial market retail, and and drive platform our services government to adoption

otherwise and circular businesses, assets, reduction transportation the through this a power resale which our marketplace as creating large safe of turning Services seek environment. of businesses be strategies Second, and effective land markets value emissions increasingly economy, safe and that delivering maximizing surplus to initiatives. to effective items society entities achieved carbon assets our solutions government of small they continue and Liquidity are surplus their and benefits on by waste, the e-commerce the We redeployment for enterprises, and would costs, and sustainability filled, and for

that well capture demonstrate Our results our and customer positioned these address needs increased QX transaction has to volumes. against trends strategy us broader market RISE

as up among platforms as be anticipate forward of this have Metropolitan million pipeline. should note, to the our The continue a base adjusted auction year-over-year. marketplace. our million stakeholders to steward and higher better we quarter, our realized automated we on and sales Of closely year-over-year, for higher of grew is our the larger in We in volumes results. key XX% more invest transportation prior segment GMV values a others trailing we State breadth to including EBITDA a asset future seeks XX% City XX% world Ohio, continue tools period. we Tallahassee, the completed over was GMV through Transit growing even into mission translating buyer surplus. was our promotion our business. EBITDA And XX% June reach platform environment, better up record comparable $XX.X And the categories, Consolidated estate. exit digital Florida, build look our and prior work and participants year of of to to utilized As transactions signed Washington and agencies with GovDeals QX, our and our during the government a adjusted the real number a grew to we drove growing we $XX of Authority, rose across as and customers over on our XX-month quarter our year-over-year by robust continuing year’s transacted The

clients Capital from to that our of in grew over GMV Supply addition, marketplace comparable our in we in platform and of increased quarter, Group marketplace. successful for and heavy Group year’s XX% agency have prior our online our model Retail equipment. driven through heavy the industrial large solutions online government areas increase XX% use our COX reducing as and the online SMB urban the our and higher retail and sellers the in been vehicles appreciate use equipment growth our In internationally. of Assets our on capacity retail capitalize of Chain by serve sale utilized consignment the emissions segment secular to our expanded categories, our segment year-over-year, volumes on resulting growth transaction continued GMV

our Our Machinio lower buyers at dealers compared to global costs marketing segment to grew channels. solutions to year-over-year, continue embrace digital and marketing by traditional revenue XX% equipment as acquire when owners

demand. across higher we which the driving markets, digital and platform sector chain strategy supply our $XXX-plus gain are activity newest we and comprise a estate, growth retail, opportunity results and marketplace, reverse needs year nearly integrated yielded together goods public to key categories, asset investments construction, in continue and expertise, well from industrial and to as platform aligned have continues Our strong GMV continued technology AllSurplus.com a Services. consumer see of four-fold Liquidity transportation, for as services, to we the such grew registrations and our biopharma. new to-date buyer are landscape domain in Overall, billion real transformation customer ago and traction strong innovative the Through e-commerce buyer with market changing

leader are our focused eclipsing for GMV In the value and we quarter. closing, turn strong optimistic our RISE it sales our about of Jorge backdrop, continuing $X for to now and and a our role in of mission we we pipeline their to are our to our annualized excited prospects. dedication global create activity by our this thank continue have customers I billion on Against for growth strategic goal execute Services will We our our more on we Liquidity remain across to team details to members shareholders. over market as plan.

Jorge Celaya

Bill. a with comparable you, of We morning. second increase million, increase Revenue for per of quarter for from $XXX.X XXXX period. second XX% year’s million, XX% completed $XXX.X diluted the in income GMV prior a year $XX.X share in was was quarter Good while fiscal earnings Thank of resulting million, net million $X.XX. quarter last the second same to year, compared $X.X this quarter the the

EBITDA $XX.X million improvement. improvement. million, last a same Our was $X.X the results shown to compared adjusted quarter significant year have Non-GAAP

growth quarters growth Our position the four platform took to of profitable these us market to to trends ourselves past leadership take secular advantage results reposition to our as we in on services. enabled leaner enhance e-commerce speak that accelerated leveraging business a focused actions and the model has

for ways work and to our and complementary look customers service advantage continue investors. expand the results We market to to platform for share capabilities to our generate our to of

e-commerce benefit our The all fiscal year XXXX from across compared year-over-year our government diversified sustainable entities, continue effective to to quarter large volumes which reflect enterprise and we second to have small solutions. our safe, businesses and across as results base consolidated segments customer financial increased

includes service year. from XX% proportion margins to has and XX% this higher solutions self-service last that improved profit consignment revenue resulted of quarter Our our gross in

leadership also experienced products a by by and significant in have improved macroeconomic base mix and and access unprecedented achieved, asset partly our recovery position asset buyer sold our rates certain of the We platform from trends favorable our in marketplaces. influenced margins categories the provides,

gross Our margin to reflect in business has topline us of profit overall higher platform volumes been our and in our scale of the leverage leverage bottomline enable our operating to A results goal expenses. our our multiyear our for profitable our and segments, results. key more and investments technology increase transformation across

quarter. We performance have are ability solid in past to sustained pleased our this

in quarter Specifically, was GovDeals Machinio comparing gross XX% year, as the Changes our greater revenue. of as second revenue, margin percent GMV to revenue, up on GMV in for on on quarter the was mix, was GMV our and segment same RSCG up on X% revenue. up result XX% and was higher segment, and compared growth $X.XX up on service CAG of profit produce lower results growth XX% proportion or GMV can a recording retail yet our up XX%. a XX% consignment segment a activity revenue such revenue last

authorization. during We have that cash, of in a the end this used quarter. Please the at details the remained $X.X repurchase share On authorization share to first FY up quarter, repurchases received free XX-Q entire a our having May balance authorization debt repurchase last $XX.X with million million share sheet repurchase We the million and XXXX of the $XX the quarter quarter. announced on on Xth. March stock completed the in million $XX this earlier from and completed from week, $XX we of Xrd, million for $X refer quarter million

Looking value create services. to platform of relationships by on a ahead, long-term we customer to performance expanding we indicators focusing solid our and well-positioned positive continue other we leveraging pipeline, believe e-commerce are see and

for XXXX range to our maximizing in quarter fiscal of economic is is XXXX market recovery transaction million fiscal third year, million, range backlog the COVID-XX quarter the the $XX platform. did is the in reflecting that per follows, our transaction XXXX. during income same from XXXX. last shares This quarter $X.XX the significant base weighted of volumes year non-GAAP to have million seller net assumes non-GAAP as most per caused per and at to creating third GAAP reflect corresponding access $XXX guidance Our our year’s recovered the a and increased expect strong was adjusted from from which share approximately share that third range for Thank the of quarter diluted EBITDA seeking period pandemic average $X.XX to per earnings to from results onset new million much created share. per is existing from estimate is guidance $X.X per million third fiscal year $X substantial restrictions delays, fourth of with fiscal demand to and we outstanding We their using year diluted buyer adoption $XXX fiscal Management’s year GMV $X.XX of the range in guidance million. XXXX starting we the services million, economy the accelerated earnings to diluted range online customers both expected share. that share of year our of ranging $X.X of GAAP above quarter for to the you. rates Last of results $X.XX XX.X accumulations share of growing adjusted estimated

We will now take your questions.

Operator

first we you. Gary our [Operator And Please Prestopino. question have Instructions] And sir. ahead, from go thank

Gary Prestopino

through went I have XX%. Jorge Bill. notes Are or quarter, morning, and rates that level my to recovery has increased that close trending questions that of that at Good here. as higher couple something assets sequentially? you on Hey. mentioned from still A last Bill, you increased

Bill Angrick

strong our marketplaces. are of we see continue interesting for We equipment recovery inventory and and demand on durable what realizing as rates really to buyers the have type is

been So I product would down. say, or up sharply trend, it’s nothing a consistent moving

Gary Prestopino

new can a maybe Okay. lot you How coming as, kind some here, of for with versus were sellers growth done it And you’ve of off and -- good GMV of results how us growth. really LiquidityOne of maybe can the much is you that since then is or initiative, platform? that any the but give adding the organic everything think do you the plan parse on was the idea to and you was way out from much

Bill Angrick

of Well, are in around is the and solution context is Gary, clients for and one-stop finding, organic put nascent categories all real we’re heavy U.S., of a What the that government XX,XXX and yet our their that is categories market that are clients, that, billion-plus of government target a scratch in we plus market have market, entities of. real think to that, at expanding. always very existing heavy the penetrating estate billion successful some which which agency several margin, we vehicles, we I’d think flows business penetrating asset that’s we’re through target relationships. the have the addressable very bulk desirous another say, the of really of of such for with equipment really in the dollar market us we as now real estate market. value And high to some equipment addressable some many we’re the We surface estate fleet $X and

platform agency more have these clients organic range we of that’s are our equipment that really powering their entities the our Fortune growth. asset government enjoy full So high really using and and trust levels with XXXX supply lots that plus of do XX,XXX chains more in and to categories of

Gary Prestopino

Okay.

like GMV in percentage was back a go-forward quarter. terms on -- of we more this about revenue looks of a it out good XX% the that Just the as couple year? model here, a half Is to basis

Bill Angrick

Jorge?

Jorge Celaya

Yes.

in Give have or have, it’s to especially because fluctuate Assets that some purchase generally but the take, deals we Okay. quarter-to-quarter, Capital when we business, hard when speaking… may predict from

Gary Prestopino

Right.

Jorge Celaya

I you the gave ranges still the …it’s past. in

Gary Prestopino

me, up the of And tech going to $XX quarter, almost operations through And caused like be something for there is were the on is lastly looks it sequentially, year? that anything sustained going level then that half that $X.X the and a million that there million of is expenses that? back was

Jorge Celaya

our like quarter, sales The marketing had example, or expense. just additional last we for some campaigns

bit variable. the portion a marketing Our sales is marketing and of

have we activity this to finished. which, into quarter just last marketing we we investment that made course, of So coming leads quarter, some did campaign better

will that time. time from So to vary

reasonable look we We government heavy the are like, we’re probably area of bit the And and retail expand where for or area think real I at mentioned, as our forward, estate as or example, go make as additional segment. some forward. may to in in level in in the in go in the some a services, more marketing technology investments a Bill or we we machinery now. we sales

Bill Angrick

Couple additional…

Gary Prestopino

Thank you.

Bill Angrick

and operations. technology on thoughts …

the we’ve trended and very we we’ve of and we’ve very capacity, had and that through interest The to services, fulfillment strong that first level tech ops. thing area. and demand in is tremendous has for as run but a highly And center continued growth, at flows valued have Gary, networks OpEx that high a seen just higher organic

Gary Prestopino

Okay.

Bill Angrick

in invest to we’re making continue driven mobile and friendly. services it we solutions, and modernizing Secondly, very technology solutions those

own clients we’re such facilities sell APIs to their teams enterprise as scan requires on and investment to with their things that connect the sell for cell availability us. application, facilities scan increasing for So, tool load to their and of our and that now our from marketplace our from some

We clients We BXC of BXB and also sell that can having continue to like the stack. capabilities idea allowing channels. both modernize and through to multichannel

for -- in of doing helping investing marketing acquisition our the to organization multiple channels, lot We’re attribution. data conversion buyers helping bio marketing -- sales a drive investment analytics our us that’s and What’s support of the measurement marketing and the of our teams.

there. So there’s some investment

up are growth. these of our distribution improvement meet coupled So types investments, network continuous warehouse to with robust center scaling normal very organic

Gary Prestopino

Okay. Thank you.

Jorge Celaya

aware And Gary, I and tied maybe we’re they as kind make time that dramatic, at may these you these I yes, time, fluctuation, Bill from not be some say investments, -- very short- to we’re returns, going to So, be to continue we way to -- continue we to the to see right? that’s but it’s think, there but and of be investments make medium-term of as mentioned, wouldn’t it. look

Gary Prestopino

Thank you. Okay.

Operator

you. thank And

from We have Colin question Sebastian. next our

Dalton Kern

on Kern quarter, A me here. guys. Colin. couple from is you. Congrats This Thank Dalton Great. for the Hi. on

acceleration that return of rates of a Group out retail Supply few quarters baseline of looks how we big GMV shopping nice like over expect specifically. versus on maybe trend in any boost one-time the the and roll much that the of volume you past normalization some sequential e-commerce post-holiday kind Can And a of as growth more from here. how higher some return break in It for sense to Retail get benefit next you partners? volumes? your holiday was that First, kind from Chain

Bill Angrick

is their certainly, of this online e-commerce quite many volume growth, then monster of continued peak of and trend we coming season of some And returns are secular regard and Well, digital out coming inexorably as would Dalton, that’s the linked did retailers well. to chains growth consequence in the with seasonal we to sales holiday That’s a for a I’ll just retail. typically, holiday terms and broadly have can supply Jorge the But this talk that’s talk guidance. years. of a

we growth of I have quarters business, the consecutive retail organic XX XX in consecutive. think

of the this seems shifts permanent continued seems of a buying to behavioral behavior. stuck more seen We’ve to have trend more to that seen respond we’ve So it. be people to -- and we’ve online

thought to So to it pause as They’re online there a reopens, in would they’re and economy a whereas phenomena. some in seems be people buy might money world. out -- and online be the brick-and-mortar have shopping continuing spending the

seen like returns maybe of years the people bit like two steady three going we’ve like online. large our service. convenience. that’s of ago. years a and So to compared to value or volumes that’s unusual through marketplace, the start volumes of like as fueling the coming have and that They They this the habit through quarter They little to proposition continue

So, as as about talked for phenomenon, that healthy We trends. just the growth, strong because lot services. well of a our macro receptivity

are We create of product used, type waste have We and zero interested clients in every very from that salvage sustainability initiatives. scrap. new, markets for

So ways Chain assist we’re continue the waste Supply that’s helping also to something and to customers Retail reduce in our us to grow. that’s finding

Operator

is your still Anything further? line Colin, in queue.

Dalton Kern

Thanks. Yeah. one Great. Maybe more here. Sure.

mix guys sequentially, the up was is So But obviously, still do into I down guess earlier around that the kind rates. slightly noticed of tied take consignment question you year-over-year. this that expect that or the you’re a with be is low-to-mid able in now? kind range comfortable this to of XXs to for consistent further kind near-term expand of run really rate

Bill Angrick

and will next up, reflects trend consignment need over clients an the our transfer We it just of XXs the options. self you customer share into they low-to-mid what realization don’t get where selecting if But I Assets menu mix clients use. consignment trend is we of transactions a more of have quarter of we’ve just have dictate Again, tech the consignment purchase to empowering versus because tools. think tools purchase options. And it model. Occasionally would rather handle self-directed the that to the will helps, reflecting end physical flow is with years up, different few where tools were I just to tell given more provide some people and a going, upside goals that our arrangement. there’s they model to we’ll Capital that using in the to assets business, increasing the arrangement

move think of that in in it range will but to So year over up maybe time. that’s the stay continue slightly I the has been, something we’ll next sort

Dalton Kern

was then more And a sales and sales helps. the That and back a trends quarter, you feel don’t well, Thanks. year. for the the strength know getting against in campaign earlier bit the that a right looking of circling broadly at Great. But and kind strong bit one just now? here of organic matter of as on that Is the in spending it a I off enough that capturing pull of the it question you’re the back maybe momentum growth mentioned earlier are kind half sounds business marketing the on kind marketing kind need looking and bit in what’s the of we the maybe more, there or change kind more you’re at of the of to of you not It is rationale expect rolling little more like a development. year? spending back there any as expecting guidance, in through

up comps? that So those better organic lap a bit the as to growth kind of to starts moderates ramp a we should little expect

Bill Angrick

the be development sharing the marketing generation. leadership, business time lead targeted with with increased an of that ideal studies coupled the marketing there users, in and message and to invest thought now at part with facing in agree margin business will investment to market our to case and our activities, that seller end is but certain sectors very certain we communications we and Well, be intend is you

marketplace touch but a lot only our their We assets companies, load and activate of businesses activate platform same a trends have can as can They all customers. on through accounts online and Fortune that not the way. experiencing tools. They small assets are sell in the larger can our middle the a market self-directed scalable lower XXX that

beneficiary our any about of investment. to a values, and require actually the leak is that But And is sure in they and to context into bit know of want trends we that so GMV the business markets inflation higher market. a trending get will sales out of make average a we that think that

we there’s when base. Because a We’re higher our marketplace of buyer pricing for beneficiary more drive that. in demand the

in We’re buyer participation. very maintaining active healthy

leverage And tends what us of to our Dalton, expense give overall so that on. we’re model, independent spending on money

Dalton Kern

Great. Thanks, the I Bill. color. appreciate

Operator

further I see questions no in queue.

Bill Angrick

I think that concludes our call.

following attention be we’ll you questions, up adjourns any this and have call. for you our Thank offline. If your

Operator

call. ladies now disconnect. thank and participating thank for may And our you gentlemen, you concludes you We and this

Liquidity Services (LQDT) 9 May 212021 Q2 Earnings call transcript