LQDT - Earnings call transcript Q1 2022 | Liquidity Services, Inc.

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Operator

Welcome to the Liquidity Services Incorporated First Quarter and Fiscal Year 2022 Financial Results Conference Call. My name is Venessa, and I will be your operator for today’s call. Please note that this conference call is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

are and Liquidity Vice Jorge Chief Officer. today Chief Chairman President call Financial Officer; Executive Celaya, the Bill Services’ Angrick, and and On its Executive for their They questions be available prepared will remarks. after views statements. responses and XXXX, questions Services February discussion following as include to today, forward-looking The of will reflect your Liquidity management’s and X, Actual results materially. may differ

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

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

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

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

William Angrick

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

surpassed annualized an reaching stated customer GMV previously in of surging have $X during with Jorge all-time people, Next, been more provide outstanding set QX goal billion And on in record as Long-term Celaya will service quarterly we in we QX. volume our quarter. GMV. our details products and the investments rewarded

and quickly economy. marketplace largest merchandise every ensuring that lowest recovery software manner and deliver this a circular of stays out our of By We financial sophisticated the Services for on most second system. As billion-plus footprint of returned and for a deploy data-driven used surplus the mission consumer and services equipment finds life in carbon set the technology, highest landfill piece efficient the customers. the Liquidity $XXX powers to goods, world’s with

value mission million, with GMV sellers our all-time year-over-year sixth record in our approximately XX% by we are to as grew and QX Our growth. an XX%-plus GMV of consecutive resonating proposition $XXX and annual quarter

sector Our real of vertical goods, energy, every the construction, including growth estate. transportation, broad-based was retail manufacturing, economy, across and our industrial consumer newest

buyers be lower financial more delivering chain Our driving proven and a costs sold this example on sustained helicopters bids our returns our unique platform marketplace marketplace attracting past thousands sold the the record over higher-value Florida. goods track on listed of proceeds XX,XXX to supply City is And items superior and generated for our customers for month, of over two we Bell these assets. Jacksonville, one client basis. $X on for to million of of These and

value is and resonating buyers. with mission Our also proposition

the of $X.X QX, our sale more sellers superior of platform provides registered buyers and to retail, for government our assets. number on the million, than execution grew During their industrial agency which

During marketplace. our QX, liquidity our XX% auction transactions year-over-year, of platform XX% and on up growing reflecting the and completed the in respectively participants number were

employees to execute and mission talent business and our proposition with and top to retain current resonating acquire value Finally, our our are prospective and benefits our efforts plan.

headcount talent investments directly at year-over-year, business operations. aim and development, XX% by shareholder grew we our QX to delivering capturing principally leg of take incremental our in As of These marketing market are in technology, areas the approximately we long-term tied and share growth, next and value.

navigating we’ve at And business transformation made our is growth and It online planet. more marketplace trends, organizations plays in enterprises associated a that including macro vital returns; Indeed, drive both increasing our and marketplace resilient sector, in and global goal Services periods supply next-generation Liquidity role in product technologies; of footprints drives benefit strategies buyers, could waste of obsolescence long-term several the contraction. of expansion well solving and smart investments result economic the both the trends. commerce, in of and which sellers, economy. the important is and is also digital chain in the as product redeployment COX growth businesses the adopt platform and and small remarketing needs performs underscore reducing expansion of shared the through share asset our market a in every Our secular to to large

the billion-plus well to unleash value of to deliver positioned intrinsic marketplace to and economy the our Our continue shareholders our through to value $XXX surplus e-commerce are circular platforms. solutions through power marketplace ability

enable and benefit where valuable sellers, our ever-increasing as cycle and more buyers continuous Our participants buyers that attract network in one and result creation, increasingly is value shareholders. goods, sellers self-reinforcing a a our of ignite platforms positive The numbers. of that flow creating effects platform, thereby another becomes join

in circular markets, annualized In closing, we a over dedication the our surplus. continue of profitable Liquidity our members penetrate to of organic for people, their accelerate and build have quarter. growing better scaling capture new billion our and equipment, a established second it half initiatives, enable outlined on target uses year consumer we business, our fiscal XXXX growth across us to objective repurchases towards real will including these goods more for to progress, aggressively opportunity our we as look future Jorge our $X.X categories And mission, the existing of technology acquisitions. realize further to economy share and investing us drive and tuck-in Services market industrial cash, now to With thank this target estate, intelligent for to new I’ll a key achieve to GMV. growth investments the annualized heavy product These in X.X in asset and billion Given of in are in our near-term vehicles, such and turn GMV. and team for and power and accordingly, details the target. opportunities we to

Jorge Celaya

Good morning.

additional segments. Northeast from Our and continued AllSurplus also new in our investments These strong results initiative and momentum our RSCG our the groups in CAG results Deals capacity first quarter operating marketing in expansion GovDeals reflect and resources the technology reflect sales, growth segments our in and our for the another quarter segment.

We We year quarter $XXX.X with up year. our exceeds quarter accelerated $XX.X for fiscal across and annualized last the billion to are the that targeting efforts in of $X to second we XX% to growth as record half fiscal early investments generate we growth year anticipate profitable in $XXX.X previously. in GMV, XX% first support and set segments same quarter last of our Revenue million million first the fiscal a XXXX. million, XXXX quarterly from completed XXXX all-time quarter the goal forth this year. the compared GMV an was GMV increase same was

revenue change estate been has of given We in anticipate and would we sales purchase being a GMV sales, be component category. sales so, take lower consignment This of expected faster real grow to lower as of consignment self-service As high-value average this the have mix than part growth rates, indicated ratio with our reduce of GMV, strategy. previously. to as GMV Revenue more GMV. percent the GMV to long-term a in

touch be segment. $XX.X for However, cash and corresponding EBITDA expected our in expense, with net adjusted received, Non-GAAP to strong $X.XX. for of self-service model a of $X.X was similarly lower million, resulting X on spending quarter share $X in income BidXAssets for the after $X.X repurchases in low million including business same of the high first million debt-free the over per ratio low maps sheet as and We earnings businesses, hold this an of our year. revenue despite balance GMV, margins as November was gross completing leveraged in real quarter. this GovDeals diluted GovDeals to and during line operating improvements estate quarter the $XX.X are million share cash million, acquisition last Net

calendar shares, currently during pay million the quarter the As incremental potential We earn-out of with authorization in XX, to payments a payments quarter, of some December over second first in XXXX-year fiscal the $XX potential BidXAssets up year. year have we repurchase and upon XXXX’s XXXX. to anticipate to base fiscal $XX.X performance in XXXX, final earn-out million

on results up segment our was RSCG segment revenue; year, quarter GMV our first segment the on on to retail quarter was X% and up CAG our revenue. on this last was same up and comparing up or XX% revenue; revenue; up was Machinio GovDeals up and for and XX% on on Specifically, XX% XX% GMV GMV XX% on XX% segment

our investments seasonal retail pipeline diversify advance XXXX year fiscal additional quarter. typical remains and to growth. trends in our the expect and fundamentals We on strong QX of execute and transforming of continues third remain solid, CAG’s decline GovDeals strong into in

for change in traction, QX and business’ in for these anticipate XXXX, lower gain quarter. seasonality profits short-term of While year fiscal with combined we sales growth initiatives days the the project this GovDeals coming CAG mix

We expect the by and clients XXXX government leverage we BidXAssets further and as to with GovDeals combination the matter segment base. be subject progresses, GovDeals also expansive boosted GMV fiscal year BidXAssets focus

Our XXXX to to the year the from range respectively. same of last range XX% year second XX% period GMV guidance quarter high of low of end fiscal for guidance our above is

and is revenue results As from of ratio integrate purchase as and shift. expected business, our from percentage grow model of sales under versus the we sales real in a confinement due percentage estate slower to growth GMV business GMV the lower strategic growing this faster GMV growth mix than model the revenue a

fiscal or for XXXX generate second same expect for beyond. costs year, to second the the we the profit Our growth respond guidance in quarter last of marketing at and year period is below fiscal half the XXXX technology the mainly to increased and reflecting and sales, year of

yet will tax negative a fiscal to net rate for from now profitability for fourth XX% XXXX. XXXX, fiscal of paid This effective trends, share. no valuation stronger As fiscal approximately quarter guidance reversal increase XXXX earnings fiscal higher to to reminder, year-over-year our the taxes XX% corresponding in our XXXX the is quarter to have tax our Our year income year follows. year for to XXXX rate due a of impact of per Management’s and is year second effective comparable be during tax a level significant expected has resulting as allowance of income cash

diluted approximately second year we outstanding shares average million. XX.X non-GAAP guidance the $X.X million $X.XX that is assumes share fiscal of earnings for in share. adjusted The per Non-GAAP to earnings to $X.XX from the weighted from a have $X.X share. per expected GAAP million, $X.XX estimate range to to range expect range We $XXX to GAAP adjusted million from $X.X income GMV share We per with EBITDA ranging from $XXX is diluted million $X.XX corresponding million to non-GAAP $X.X earnings diluted million. to estimated range of share GAAP to per fully per net and XXXX. quarter

We will questions. now take your

Operator

you. Thank

now will have [Operator Prestopino question-and-answer We We first Please Barrington begin question ahead. our Gary go from with Instructions] our session. Research.

Your is open. line

Gary Prestopino

Good here. morning, questions all. Couple of

are could going First what of was? growth metric of – not? us Bill, Are give that make idea you just you some in to all, or you the public GMV going organic to

William Angrick

The difficult more over BidXAssets, integration that to we in independent businesses GMV line will Gary. but with quarters of six XX%-plus make provide of were of consecutive the time, growth, that

Gary Prestopino

Okay.

William Angrick

well. So the core business is performing

Gary Prestopino

two BidXAssets, only months had you And right? of

William Angrick

Correct.

Gary Prestopino

the to It’s they quarter. scale the Okay. measured GMV [indiscernible] net where expect revenue to full GMV it BidXAssets, in to revenue net the you And XX% revenue got Jorge, quarter those percentages closed do a Good. QX? growth then this GMV, to XX.X%, in in to to numbers down All total were and terms from revenue With right. on – I GMV, of about

Jorge Celaya

pretty it revenue course over in be of the now the to was the And last the which year, is of ratio to where line going high used more in XXs. quarter, much Yes. what I to in be said that low GMV with that XXs

Gary Prestopino

Okay.

Jorge Celaya

the And to direction in it’s as go going that year progresses.

Gary Prestopino

And then some just the mentioned that? the things one was on RSCG quarter. you you that that that good. the elaborate constraints release that’s stellar were segments there of right, the – in Could All in in

William Angrick

Was Jorge, outlook business in your – that in section?

Gary Prestopino

RSCG, you sorry. said that no, No, I’m

flows, product an get of to magnified and seller there? I’m You but trying by it had was capacity constraints. X% was going – seller diversified growth, selective on what idea

William Angrick

reflected product to Well, – getting I to And the with product product. markets think of you’ve that and the seen in challenge ship, the well retail publicized. availability backlog certainly, the ports. store, It’s the industry struggle

weeks to would something that starting some of the in and that’s resolving think free and has last that issue. I itself indications ports to So up, four normalize the this that that is I indicated two think are

Gary Prestopino

Okay.

year, look an of you growth outlook, leads first terms acceleration versus half of my that you’re question to the back So of see this into half as me could about and And saying of rationales year? would that in in business? going the of overall going in growth next forward, the the you’re us going just the give market-by-market go terms maybe if that some the talking the dynamics for of on us you with understand you’re in what’s what the help

William Angrick

Sure. across enhancing we’ve and needs, loaded business Well, meet all, the front I functionality our essentially of activity on to facing headcount significant and marketing, development, is seller trigger which seller development, entire first think, business, improvement which more marketplace. would product

to So, begin now that investment of quarters. investment, return their the relationship. that return reveal carrying that opportunity presented and the we’re June the we we move as that estate the without the real through the into sales is are half certainly In immediately clients that XX,XXX marketplace, on GovDeals fold a with cost September have year showing will agency that government itself first being in the to up

probably We expert the sales that helping government and for matter capture the managing real opportunity. have subject longest BidXAssets standing drive estate with of entities online that’s

certainly the the real GMV we move And category outlined in we bought billion estate realize Gary, we expect believe year. we contractual significant this we opportunity. based relationships, BidXAssets, when that that on a that we improvement business So is $X will through as

take material few year to game owning make But in first it’s a I goal the towards a that going think of to get in Now it. years we’ll BidXAssets.

to half step the move as free construction we is to power reveal generation equipment, year. business. chain start moving through the assets. moving local up be into rotate core opportunity And stair government will that the of itself up we The with think municipal an to GovDeals second think vehicle I capture the business free and going of to that assets budgets, value the to equipment, for GovDeals higher equipment So infrastructure is value newer used to fleets, more flowing the many our there’s transportation bill clients to

Gary Prestopino

Okay.

William Angrick

on sanguine very We’re that.

On delivery up to to volume densely who population footprint centers. retail but share, the their expanding also our are centers to market moving needs more returns. retail closer of with our picking omni-channel more our That’s business, for many are partners, we last-mile we’re and expressed by clients e-commerce and high respond creating

densely solution region. coming be for example who So of us our a Pittston, populated returns a is expect Northeast creating PA more great facility clients to value-added from the

goods exercise and houseware our retail our We’re items, that’s markets electronics existing into people eventually COVID theater up the supply as marketplace. and also the emerged all expensive habit picking flowing business e-commerce equipment, building tools, items, back from in furniture items, with have more lawn the still through online, channel through through improvement equipment, to buy and garden home do-it-yourself coming home chain higher-value

same So that items Also, also our boost through market share AllSurplus an essentially provides, of of another who the less retail good retail we a take side, for that retailers capacity part business. we to end marketplace. but center an doing capabilities the is we’re of we’re area deals early, to way Deals and of technology condition underlying business. brands. insatiable we’re boost direct-to-consumer is manufacturers refurbishing on lots flowing an grow. It’s channel, people to our we’ll providing them keep retail provided important way the in for that’s that products seeing going still business, retail we’re and the to to certify offer that stream new from are helps to continue that’s a manufacturers’ price distribution goods And volume we’ve appetite what a leveraging new AllSurplus in users created want but But than that we’ve full these then back And solution. which uptake goods, protect the The updated a and that there. suite have manufacturing feel to have that because I’d platform underscore it. in of of of And

business asset in XX% capital grew the that’s the side, a last On that’s quarter.

curtailed. in multiple of adoption technology, regions, marketplace affecting for plants have electric vehicles regions asset manufacturers broad-based automotive, rotation our at of of are is on solutions some massive their in asset have marketplace, focused and very highly you a who highly provide sought that’s semiconductor manufacturing used electronics after prized equipment been to redeployment by seeing are in supplies have we look the as sustainability. lot multiple remarketing equipment clients. We and new attached clients Most management digital of because the around objectives service these you which AssetZone you our and corporate And the

from award services. XXX and saved an weeks over In $XX redeploying by us be sharing software fact, the in our who few million Fortune using company, with we’ll next a assets

various sellers to cloud that and to restrictions investment, we and ago. valuable to take several So constraints. our few liquid be there to been priority themes buyers assets very system over advancing in a lives our the of last and channel sheets this are years these restraints, our value lots is And were recover wanted And companies add travel massive placed with just or investment and healthcare all also very that’s and ability technology but we balance these sustainability industrial the COVID payment CAG the strategies. would were And to marketplace years, the settle an reporting began nimble markets, the the to I shifts with all the marketplace. Gary very ready that using has and of around due tools as be cloud-based helping their in from policies, transactions grow

very the continue. a business have us. we spot expect strong So in been bright business and pipeline we to CAG that’s a nice that for And development

Gary Prestopino

somebody go. let I’ll else Okay.

Operator

still open, sir. line Your is

proceed. can questions, If you have further any you

Gary Prestopino

thing, GMV XXXX, Okay, companies product project-based global of into thanks. that about something talking these just Bill, you’re pipeline advance, that, – going strong the far because…? online when that commitments another to that like sell getting from Yeah, you’re QX is in

William Angrick

some process cases, pre-sale to And some or fail. we there’s early to the in asset visibility to in navigate in were sales. other but very meaningful some that have assets to the put Yeah, dismantling conditions, we client all being preconditions brought help

Gary Prestopino

Can you like? what that of in give pipeline us that looks some growth idea

William Angrick

compared to we’re about Well, up year ago, we I were think a XX%. where

Gary Prestopino

Okay, that’s news. great

William Angrick

that, XXX, as quarters. well has managed as And Fortune we’re these is And these range XXXX projects the span robust. like fully self-directed we of full companies our platform But solutions, both uptake offering multiple sometimes what services. self-directed a in been Fortune very

a historically all have energy another companies, of lot post-sale of lot the companies in is assets, strong and that and would us a to do of which pre and We quarter, have asked for work. handle out performer the come us energy

Now it’s has these to that one and able are It’s us, their directly assets locations cloud-based multiple through client, world. great for throughout system, client business our the embraced. upload margin high very a great the for clients the from really

Gary Prestopino

So advantage they’re of taking the self-serve?

William Angrick

Absolutely.

Gary Prestopino

with And run billion for you investments growth, to which making, all of that of $X.X capable are that’s taking rate a then just lastly, you’re the Okay. good GMV.

is, As investment would capacity you’re you needing further year? done needing growth this you’d investments? once I you I’m will at make platform does I current support make, with what the be stair guess assume, step Or mean, infrastructure your of there, kind I what be from getting is to to

William Angrick

is will product have group far like set we’re business, natural support to $X.X some that estate, is growing billion. on because that I growth self-directed a heavy – we the up on rapidly. bringing doing new think There verticals that’s enhancement core believe equipment, real ourselves We beyond

go $X of $X.X we build billion think out infrastructure another core billion of XXXX. it, the ahead of we coming beyond call with $X billion would and GMV to that fiscal $X we the So could that billion,

Gary Prestopino

Thank my work. Okay, great. keep taking you I question up you. appreciate and the good

William Angrick

Thank you.

Operator

participating. And Ladies you call. sir. this And concludes no you, we thank our time. have this questions thank We gentlemen, for further at and

disconnect. may now You

Liquidity Services (LQDT) 3 Feb 222022 Q1 Earnings call transcript