LQDT - Earnings call transcript Q3 2021 | Liquidity Services, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Liquidity Services, Inc.

Third Quarter Fiscal Year 2021 Financial Results Conference Call. My name is James and I will be your operator for today’s call. Please note that this conference call 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. for their available remarks. be will questions prepared after They include questions responses Services August The will and your X, statements. reflect and today, following discussion of to Liquidity as management’s XXXX forward-looking views differ materially. Actual results may

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

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

of Liquidity non-GAAP also non-GAAP website, of its call, and including use measures these measures, will which its GAAP this is filings superior This turn Services measures. CEO, release these on which data not over measure results. as presentation performance, volume and or posted a you During they reconciliations certain Liquidity certain management be investors. of time, will this At will Services and certain press GAAP Services comparable each operating the to management should considered believe operating management Bill components is with financial substitute also supplemental gross Liquidity find for discuss with additional supplemental merchandise for data measures. of to SEC, Angrick. includes a the regarding I’ll operating useful In disclosures

Bill Angrick

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

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

during are quarter. safely outstanding We deliver results for team’s our the our customers grateful for to efforts

the redeployment reduction for Surplus our benefits items markets resale and power be safe e-commerce this billion landfilled. marketplace otherwise circular $XXX would creating and businesses, environment. triple of of economy and through achieved line, pioneering by effective continue our bottom a to which and that We assets, waste; the Our solutions communities and plus

advance a to of their small meaningful financial growing quarter, large the and world businesses benefits During realize entities government number across enabled enterprises, sustainability the programs. we and

platform, expert Our fueled continued and software each growth our scalable strong reflect results across of services. segments, QX marketplace by our

volume Assets Capital and sale assets our segment Pacific. energy equipment, heavy driven the adoption transacted sellers XX responsible generating cash of data events of year’s online quarter, in for model GovDeals prior Services Group in biopharma flow comparable our more more assets GMV North continue ecommerce. the customer Asia consignment for adjusted of equipment XX% we growth array very of marketplaces in broader retail million real our grew over of higher our in solutions a our for GMV technology-enabled for to year’s and over used estate. attractive year’s sellers. marketplace comparable value vehicles, SMB turn, including buyers, a to QX. over is solution platform, operating driven expanded methods prior and grew the two-sided increasing sales expand million the This chain Group of heavy segment capitalize are segment Retail As use attracting flywheel our GMV government effect marketplace supply traditional business comparable and XX% assets, and by and last as their attracting recovery collecting of secular the and marketplace in platform and increased in adoption America more and to we large the breadth of the quarter, sales of Supply months drive on the on $XX.X over feature EBITDA our quarter, over agencies is our of by $XX.X reverse through the sellers XXX% by Liquidity digital strong prior digital Chain

solutions. quarter over with XX% management demonstrate and our digital and segment strong the grew as prior owners comparable marketing Machinio engagement to inventory year’s equipment dealers Our by revenue continued

cash, an growth achieving of on registrations acceptable estate, biopharma. for marketplace, as attractive XX, newest a a rule continued large, framework to our realization and Similar and construction, initiatives Our further our look cash in for uses penetrate guide AllSurplus.com, categories such in we as ago, grew including transportation, profit, have existing paired sellers acquisitions. to on strong buyer repurchases also and nearly growth price profit. asset the of gross real EBITDA of $X growth decisions thrive focused We year for GMV continue consumer established as XXX% in untapped intelligent a markets; from share and gross the new margin fueling organic platform of opportunities with an percentage non-GAAP profitable investment exited tuck-in to adjusted key to growth and with debt, goods $XXX we the million to quarter

we members Jorge current this for For use customers term. as and our XX% as on optimize continuing the to continue shareholders. momentum, the to for is the strategically non-GAAP profit across balance on world’s very is excited profit, over details for to now BXB QX, is a largest revenues, business technology opportunities through investment our the more services XX%. XX Services percentage I gross to and as our will EBITDA margin anticipate for team a framework months net over mission gross long which And closing, it proxy thank and create our marketplace year. ecommerce we quarter. government turn we In Based our trailing we’re to adjusted prior to of our And dedication Liquidity for surplus. up value our the for their

Jorge Celaya

all third quarter of with Thank results. you, Bill all the third quarter an million, We same $XXX.X We activity fiscal to of increase completed above continued good ended from $XXX.X compared the year. the for XXXX quarter strength contributing the and better-than-expected $XX.X morning. metrics, in to increase across quarter million, businesses million year our on with XX% year; XX% GMV a the while was of last our the same million million, revenue, last Revenue of quarter million diluted ending third control quarter fall-through, June a line $X.X year, fiscal bottom combined solid in in EBITDA Non-GAAP resulting quarter XX margin Compared earnings over or per was up was up, XX.X% $X.XX. of resulting $X.X are the guidance for this third yielded cost the gross improvement net and is income to volumes expenses which, share operating for results. our of year-over-year XXXX. $XX.X last adjusted with our

quarter-over-quarter. has in our We further and poised accomplishments look of our the rise services feel since that BXB the optimize transformation at seasonally from compared high with of quarter quarter, We were year; last the favorably we pandemic typically our began quarters one are are million, proud low is we while growth to our now technology executing auction to XX% to accelerated this buyers us up activity. benefit and on initiatives. as almost $X Registered well transactions participation ecommerce to which ahead positioned third completed XX% up

the transformation third XXXX consolidated multiyear financial The technology demonstrated investments results impact fiscal business our our year-over-year comparative are in having on and year quarter businesses.

We are enterprises, driving service ecommerce by entities. to platform market opportunity the government the operating businesses diverse by solutions allowing increasing on leverage our presented large and offerings, and capitalize demand small from us for sustainable

interest increased this margins XX% revenue, model, to show XX% gross solutions the growing continues its to see as our to profit consignment quarter which self-directed continue year. in last from improved includes impact, which percent We in a and of

as sold asset trends such macroeconomic partly influenced Our and by in recovery rates margins favorable achieved, also of benefited asset mix products from categories, transportation. certain the

the line from increase line top benefits and negative bottom in profit Our The year economic initial the significant our volumes, the to included reflect results margin impacts line expenses. related restrictions. overall top period prior leverage gross operating in comparable COVID-XX

our year, third quarter comparing XXX% segment Specifically on up quarter and these XXX% results the last GMV GovDeals for on revenue. was same

to Our our up segment was up retail XX% was up Consignment on XX% revenue. proportionally and faster and GMV up segment than revenue purchase activity on on revenue, our RSCG seller clients. XX%. GMV XX% was and grew GMV up Machinio CAG offering XX%

sheet and We quarter have $XXX.X up million cash, debt-free quarter. in the from with $XX.X a million last ended balance

repurchases. million have perform remaining share to We in $XX additional authorization

performance to We by marketplace are services create of customer forward. strong enabled optimal expanding deliver by further platform And value customers, a other solutions. we our emphasizing relationships pipeline, for continue indicators and we our see positioned well liquidity to believe positive that going technology-based

guidance accelerated processing accelerated for same transaction of strong increases a and year the quarter Last that more last of macro is the demand last and quarter. period have accumulated backlog restrictions services of year, earlier anticipated online customers. for typically fiscal would Our XXXX during seller COVID-XX our market than in adoption pandemic stage year’s include ecommerce seasonally the offset towards fourth year greater what results The is been fiscal transacting. range new the low both the creating the did economy general fourth of existing quarter fourth above volumes our reflecting that from year online and trend

anticipate results of While being slightly upcoming we quarter. during growth in fiscal year seasonal fiscal expect QX, the of quarter trends the our we to fourth fourth year-over-year ‘XX continue resumption sequentially with below

addition, macroeconomic our fiscal certain growth. part asset of is categories continue since rates to as year favorably ‘XX follows. guidance expected that year Management’s ‘XX as QX our are fiscal year guidance, of as for positive in drive QX the ‘XX factors In QX of increased even recovery expanding have fiscal volumes

diluted XX.X to estimate to outstanding in million $X.XX fiscal expected is We $X.XX will have is expect assumes questions. range earnings approximately the million, from adjusted share. per to we take non-GAAP of with EBITDA This weighted GAAP to the And average during that now Thank million from share. $X.X to million GMV We ranging $XXX share to from the $X.X range fourth you. $XX million range million. shares GAAP of corresponding $X.XX diluted $XXX estimated Non-GAAP range quarter income XXXX. $XX adjusted diluted guidance per of million. in net per per year to share, earnings we a $X.XX

Operator

question [Operator Prestopino comes Gary Instructions] you. Research. Our Thank of first from Barrington

Gary Prestopino

Good of Bill, couple things here. morning, everyone. a

done returns, look market? driving in in of should returns, maybe proxy to terms to as position a at the to higher for what time gross have increase company returns increase your it in profit In over you drive the we

Bill Angrick

Absolutely.

which our net of cost which for derived arrangements GMV. product of it’s gross That’s any sellers. COGS, from I with revenue services dollars, think the because of profit only in our substance approximate about is revenues net or sharing, XX% us commission directly

reflected value, and gross we more proceeds for drive certainly commission in sell Liquidity profit. and for higher revenues Services that’s our we as higher sellers assets So for

value seeing effectively benefit one-stop a from more of is asset our more and all AllSurplus.com, our for And government clients assets, and construction platform, commented we corporate equipment, categories. platform value because higher we how within also higher is penetrating that We which manage as cars are we’re through completed and putting margin, an think trucks, transaction. improvement marketplace. just assets the And fundamentally more ethos every are there I dollars those continuous vehicles, higher including ongoing

buyers, prior registered be browsing history. harvest the recovery. existing in We buyers, a new bit and of and of right buying assets. a with better those information We correlations matching patterns interested at make based would auction are on we drives buyer about legacy becoming better which And of buyers. that more participation, matching prospective quite what higher bidding means And

reasons, all your those So with we for agree statement.

Gary Prestopino

think because you have QX that here. of have do of a for normalized the Okay. is and there out looked I year, you GMV, went And million you was of guidance in QX in the can then, last mean, way growth you did rate it step-down think $XXX catch-up what seasonally, ‘XX, given? versus I back was can more I a so we GMV GMV in I factor usually, any get and

So be? I growth an more to of normalized am idea a would trying what just get

Jorge Celaya

Jorge. is this Gary,

the you I our So the at look the numbers have see drop – you third at last to seen look in what GMV year’s can have XXXX been it numbers. in look two a quarters. you think typical our from for would to, is run-rate best sequentially But where way, prior at would also, it dropped higher then quarter, yes, the to XXX to that

get when that you see COVID drop, speak. you So to sense of the a drop, so what was

to close so most perspective, of was indicated, fourth of fourth last in million quarter have that, in backlog up XXXX, the a where of we we quarter $XXX caught the had or in GMV from year. As

do. about having $XXX despite So quarter high still of if year, in to sequentially that more in last excuse of fundamental I And business guidance number. are – think got GMV is me general we well that last and year’s depictive last trying momentum the wrong our macroeconomic – is fourth million we our above the year that indicate about trends what I number

Bill Angrick

for the Gary, market to profitable top a government commercial, add just – and existing retail to believe line allows EBITDA where on focused XX% described framework say a growth have we margin. attractive we supply we market us We very on growth. are drive XX% sustaining chain,

of similar And notion So very point we that like the profit of the to pointed those lines to rule a businesses. for attractive any out proxy gross are as year-over-year versus it of growth because we revenue, has number on sustainable period. that XX XX-month consignment up differences for net for accounting and been neutralizes purchase XX% to prior GMV the GAAP trailing over model

So, of sort growth. the that of normalization gives you a of sense

Gary Prestopino

am I lot a And as some, is not for the kind showing thing – guidance to of questions there Right. growth the use just am see of the what a QX getting growth catch-up stock and think is GMV the of the think that that there? is is wanted why understanding tremendous that I here was and you to I of down they of number, quarter-to-quarter the can QX, only in to I can but you get in amount if baseline an trying GMV

Jorge Celaya

are where And seasonal that that goes on back, necessarily the find of everyone trend you drops go on right. want months back because one what we to sequentially trailing slightly. That as does the case that. that, that’s it any are typically a many the fourth occasions indicating We only will quarter Bill we where is what not not go we you have is that couple the of things. has the going as beyond quarter as indicated, time think these And the reasons quarter-to-quarter remind to Gary, years of this commented bearing you be normalizes XX at been kind fourth

Gary Prestopino

Right.

Jorge Celaya

your I the guidance pick think was had year cash, exactly now But metric, tells to profitability was quarter your any that to you the see metric, today. we of quarter unusually and are pick you trends low, year, your pick a story your compare just are fourth right, high. you same when last growth, months, it are of your over margin, the the pick catch-up, unusually we giving of when right, the we And which compare this year, quarter last finished XX metric pick it where pick but last quarter the to same lot last

Gary Prestopino

Okay, thank you.

Operator

it we more Instructions] And questions. no [Operator would appear have

Bill Angrick

you, Thank you Thank James. everybody.

Operator

and you, concludes gentlemen. ladies Thank you participating. This today’s Thank conference. for

disconnect. now may You

Liquidity Services (LQDT) 8 Aug 212021 Q3 Earnings call transcript