LQDT - Earnings call 4 2023 | Liquidity Services, Inc.

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Operator

Hello, and welcome to Liquidity Services Inc. Fourth Quarter of Fiscal Year 2023 Financial Results Conference Call. My name is Towanda, 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 Service Chairman, Chief Executive Officer; and Jorge Celaya, Executive Vice President and Chief Financial Officer. for their available remarks. be will questions prepared after They

include questions responses Service December The results will and your differ X, statements. reflect materially. may and today, following discussions of to Liquidity Actual as management XXXX, forward-looking views

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

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

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

You begin. may

William Angrick

with so results, our review our full new on to inflationary which year. increases earnings QX the details run areas Celaya XXXX pleased annual doing wages puts of I'll business us environment. per X increasingly We marketing provide of Jorge non-GAAP that for adjusted due we gains and a our our EBITDA also next progress these while quarter. performance transactions in And completed transactions delivered will GMV to XXXX welcome business. We the $X.X an the year during record call. strong and future highest in setting morning, technology year on billion and quarter, concluded investing performance segments. and since QX absorbing quarter million fourth for completed Good diversified XXX,XXX the a deliver our of and fourth fiscal sales, with more in and rate I'm the

by tightening year. inflation past 'XX during the a business Fed Continued climate fiscal provided the and difficult during persistent

exposure and our our our flexible model industry However, for environment. In in growth challenging direct grew and full 'XX, XX% segments of the year-over-year multiple sectors Services and X% organically, Liquidity retail help this service fiscal profit year respectively. to deliver particular, CAG

business resilient prospects. strong in free high Our of model to shares deliver as this we opportunity allowed long-term in continues deliver range QX guidance year-over-year XX% we've our to at and cash repurchase adjusted to growth Together, end us see deliver financial our results and flow, the continued our EPS.

Let's look take at individual our a segments. closer

customers. our QX, offerings, segment high to by million to retail segment quarterly profit During driven direct GMV our organically grew year-over-year our XX% level of record and in $XX.X flexible and X% GMV reliability new service grew

successfully policymakers disposition and of the elevated chain, return awareness as supply liquidity and goods. of retail among services decision-makers, consumer have for management trusted We most the mission solution reliable the and partners branded

away side challenging of programs we once-in-a-generation we buyer quickly new consumers our longer of million leader. Accordingly, Deals which their higher opportunity record our the in compelling provide discretionary as sentiment. In reach facility service GMV industry shifted growth consumer values to partners we short consumer market a fueled this momentum of and to to U.S. We've throughout term, continue customers. the in And in opportunity, business. trend retail are Indianapolis to changing our and the we've recovery high-value and has reflecting with term, economy. will offer have our buying $XXX pickup as drive during distribution in goods support consumers our guidance, invest goods as of center in direct our multichannel access from growth at continued the reflected base our some a growing in locations keep service and mix consolidate marketplace, buyer retail we our by have to pace for consumer expanded AllSurplus of the base to outstanding AllSurplus dollars provides Deals and number with products experience curbside changing This grow position adding the quarter moving including pains the grow In expanding our LSI now supply some categories. clients a this retail to important the to X our

QX, in During normalization GMV $XXX segment increased GovDeals of XX% million, the and supply driven chain general. to continued expansion share vehicle our by our year-over-year of market

experience promised, enhancements As mobile to and a provides We executed we responsive and initiative recovery improve minimal our navigation, modernized with to search, enhanced successfully an buyer with realized which disruption improved GovDeals customers sellers. these GovDeals expect our this out new rates marketplace rolled bidding our design. platform, by

of and continue with GovDeals the client fleet logistic business expand also improve to improve the of listings quality value-added service asset our and needs. We addition to of management

year-over-year profit transactions. drop year's energy large prior offset GMV strong During and grew in spot QX, direct in biopharma, a as the sales from our categories heavy CAG international equipment segment our X% purchase

our positioning of commercial XX% continued solution make more awareness the In remain equipment opportunity, high industrial wins of to accounts trusted with this national We added strong capital support and equipment our be category a business a sellers new strong category. significant as we signed potential, progress, grew talent CAG and future net business had during heavy growing upside the the revenue. to to business we've market our several Recent of growing pipeline. In to contracts, margin fleet segment QX, include heavy expect our high-growth, and continue CAG team new new maker, particular, equipment new line scaling continued equipment in most of and consistent, GMV assets development heavy expand heavy than we growth category

direct continues more its grow over equipment monthly profit the categories. segment enhanced and and million active organically revenue with to XXX over traffic customers Machinio listings, X.X mid-teens has X.X marketplace equipment million visits buyer our Finally, Machinio nearly countries. Today, used and from the lead paying in X,XXX

for several revenue expansion to to planned of conclusion, make platform 'XX continue invest to brand We enhancements. In grow during new continue share, to service in growth services product fiscal shareholders. drive into multiyear the this and technology recurring awareness high-margin offerings, expansion business investments subscription and market we geographic our through liquidity Asia long-term

of will leverage we've made Our in from the fixed our capacity. investments expanded our benefit operational results

us cash planet. ample dedication capital-efficient approximately our in Our flexibility business mission, X together our for cash circular we and million Liquidity benefit with the flow, sellers, closing, strong Services economy plans. In thank debt, execute across of their to power, to financial financial $XXX the our to all members operating and the team provides buyers

on now to for quarter. it details more I'll the over turn Jorge

Jorge Celaya

Good morning.

our we XX%. billion up set record for GMV up XXXX to fiscal grew For a X% revenue annual year, million, and $XXX.X at $X.X

due total nonrecurring was $XX.X in single assets year. Non-GAAP X% XX% that income prior year bid the up million, the net years. nonrecurring of earn-out Our from for $XX excluding gain overall GAAP gain EBITDA to the last year adjusted X to XX% the highest when or was of million liability impact down up

our each XXXX drive produce to As and fiscal we market year, year-over-year enter looks share our of segments growth. incremental

same in on fourth XX% the GMV, in results. from comments the year our million up fiscal Some completed with $XXX.X quarterly We year. quarter XXXX of quarter $XXX.X million last

last fourth from $XX quarter the quarter grew guidance year. same $XX.X million, to directional in million Our revenue with our quarter last X% consistent

million fourth $XX.X $X.XX million. in non-GAAP results $X.XX, non-GAAP cash and We of short-term investments. EBITDA from during in cash, equivalents the with cash of quarter quarter included Our share quarter per and generated GAAP $XX.X consolidated EPS adjusted flows operations adjusted of ended the and earnings million $XXX.X

continue debt credit have and We $XX under facility. of borrowing million available our to capacity X

fourth segment our XX% driven per direct availability was results same on prices. year, market which the GovDeals vehicles, trend broader increased profit XX% the revenue last unit GMV, of comparing vehicle by and than quarter quarter Specifically this segment offsets fiscal on XX% more segment to up on of from reduced

XX% compared revenue segment increase reflected X% was an product and direct which client on RSCG to on on last flows year up programs. GMV, expanding XX% Our from in profit. segment and new

we in past percentage of mix received a segment quarter direct the product overall year-over-year as the margin drove lower revenue. While a profit

increases Our its in yet mentioned, on as CAG energy transactions. the as and biopharma, purchase spot international XX% mostly year's segment global on GMV, was direct offset, down X% heavy large categories, segment profit equipment up Bill prior revenue, on X%

increase up and its XX%, was direct up XX% continued also revenue profit Machinio was in subscriptions. reflecting segment

quarter where fourth year, profit direct value GAAP $X.XX and income share assets GAAP earnings compared resulting segment's of the million, gain fair adjustment. $X.XX bid in last included the improvements diluted in nonrecurring per share per resulted $X.X for last from earn-out $X.XX year, for the a of net to again, Our

So same non-GAAP the quarter last $X.XX, from in adjusted this year. for quarter EPS $X.XX was up fourth

of partially year, technology quarter quarter in and this and support million expansion, from operation million year-over-year and our to offset reflecting last sales last marketplace increases market to diversification our Compared EBITDA continued by non-GAAP $XX.X share $XX.X up enhancements. in growth and adjusted in same was year, the expenses marketing,

our historically fiscal is of higher adjusted years. EBITDA especially profitability of during direct the margins, Our percent half as second profit a

year compared the fiscal margins XXXX for our first planning typical in consolidated expected sequential half calls top of Our second to the with growth line year-over-year half. for and improvement XXXX

guidance reflects soft, goods. lower of a volume than demand The fiscal retail receiving first with our higher for is year, year consumer of RSCG value broader currently segment quarter XXXX products that a last

pacing client-specific last -- basis on last slower same a quarter In year. products is currently addition, sale of supply some consignment than for than the higher-value

at adjusted year our ranges result, and EBITDA is quarter for quarter first a first as client to XXXX to segment. a nonrecurring GMV, reminder, program. benefit the are while the included continue mainly $XXX,XXX be of quarter our fiscal down, guidance above GAAP year EPS by last Also expected consistent adjusted for for mix driven As a to current our expected retail supply EPS results a first the non-GAAP be fiscal completed from to guidance prior to year-over-year

the mix revenue anticipate last segment's ratio mid-XX And consistent quarter in as GMV We quarter percent decline year, with direct continue the revenue, to to percentage prior our first our a of from consolidated profits to range. year. the of percentage a slightly be mainly due but same as currently

$X.XX net $XXX GMV expected non-GAAP diluted guidance share. earnings income $X.X a initiatives per invest $X.XX million follows: to quarter per sales Non-GAAP continuing of of of are in EPS from shares estimate in $X growth. Management's from now is guidance ranging GAAP million that fiscal fully XXXX earnings questions. first for $XX assumes diluted weighted to We the technology as The $X fiscal non-GAAP in share of We your to enhancements to range year million support we We estimated to range per adjusted range million quarter range to diluted adjusted and GAAP marketplace you, the $X.XX is year million. from have outstanding first expect share. $XXX and our with take and per of GAAP XX will our average the to long-term million. to the Thank in and share we $X.XX for corresponding million XXXX. EBITDA is

Operator

the will of [Operator session. comes begin line Instructions] from Our Gary Research. the We first question with Prestopino now Barrington question-and-answer

Gary Prestopino

here. questions of number a Jorge, and Bill

the repurchases. quarter? of all, repurchase I in share shares this any the First in anything you see release didn't Did narrative about

William Angrick

make executed, just was have repurchases, sure me an we I believe for understand you do what repurchases. sure authorization make we can Jorge Let tapered -- answer open

Jorge Celaya

to little none quarter. very was there Gary, this Yes,

Gary Prestopino

that with was the you're Why Okay. building? that cash

William Angrick

from recall just our Well, we we're growth, support partnerships, the use some ideas of around have that also inorganic some perspective, funding to can cash and company's strategy.

active acquisition here, continue spent -- of you course, pipeline. back use meaningful and do will be beyond we an of to see look got you'll quarter dollars this And we've repurchase capital. one we that So if on

X wouldn't overweight the I last So months.

Gary Prestopino

guess, I the didn't quarter? GMV Okay. narrative. it anything sales, in I in also then of What was of a percentage And as see consignment the

William Angrick

think model, of from up roughly I XX% we're quarter. the about GMV is XX% -- in under the consignment year prior

Gary Prestopino

profit margin not on a revenues in that GMV. just AllSurplus make making direct would your it down like moved of growing retail function then -- the some the the the here and has or on going profit first there revenue going segment, on there not grow line the the of some something direct all, to with or is of is with growing -- that And Is RS in Great. in hitting that Okay. things is as to extent looks relative investments the understand else the that as that's you're what's top dramatically GMV?

William Angrick

we've you it's outstanding job if returns. for industry-wide an at of the selling Services Well, Yes. X-sided dynamic and solution retail, in and look a Liquidity done marketplace, sort the as positioning managing

So we're getting record inbound volume.

variety that in, ways. a in of comes Now volume

We low and a have some touch, consignment volumes, low is fee. selling therefore, which lower service

mentioned, consignment overall. it So we've business just retail. We've been -- within as growing I been growing our we've

collected. Gary, some margins take rates, have but high lower we in a direct on So volume, coming profit percentage with lower the GMV, which as that's revenue means gross of

dynamic. So X that's

I tapped probably consumer the on ticket a industry brakes participants you've heard about items. and think the has other the higher many dynamic, from bit purchasing how

that lower returns Liquidity value generally ago. omnichannel that. not retailers. good as coming back of as just in where attractive flow goods there X We to year It's and mix basket retailers money still on the e-commerce into comes the a Services is were of that mix we -- reflects So make lower

working so problem, high-quality interest we're our that. is that, got But service. in And if through ton call of the a that we've you it

in and amount during season. rate significant solutions if e-commerce players sell-through wanting wouldn't of product needing that holiday is people and a surprise like doesn't would ton of a have the and us We it at retailers that this there interest

up of us sets inventory. in for strong all So of a it move our post-holiday clients their to sort dynamic help goods ranges

Gary Prestopino

low like about investments growth is is on that your and last year. that, Okay. is guidance GMV the like going your -- And last you're year higher at than Yet last the looks in year. to QX, going leverage sales on just I'll for high be EBITDA for of just growth And I When last look about it at running below in that and like statement were higher talking marketing then end jump guidance on the and it of personnel? and end, at an QX, is much get terms possibly X and as was the your adjusted we well, question, talking seeing off. income be in start about most stuff obviously you and expenses you're close and QX $XX line level of in, to it to and expenses come looks not add just in to as going to to Because because for the last least the would the line? is to QX would QX idea aggregate I'm and at million you then therefore, sales marketing do be of need trying where the quarters,

William Angrick

I think accurate sales and in out and calling you're technology. in increase capacity an

available a see marketing, marketing-driven that's think sort a efficient. terms been gotten is been and fairly this in of that's customer and in industry we've disciplined. opportunity tech-enabled company we costs, believes and acquisition But talent asset-light I of in gone hyper great This never marketplace. heavy very we've equipment, some really company

leverage of some capacity, in now and decades well million really business which money be AI-driven there. essentially half marketplace. a capabilities amount Gary, after that within deals GovDeals, upgraded in preparing is a adding We that second to GovDeals X have spent growing and decent some we're the marketing So $XXX GMV time will provide

So the if second payoff just recovery half we year. in the XX%, of can very by bump high

up a did staff we bit little there. So

is China, U.S. gross bigger XX% Europe taking Machinio market, and business. and that's combined, a to than We're Asia, that including about and talking the margin

of follow-through So is like there XX%. XX%, revenue incremental

an equipment. on buyers financing expand So listings now we we Machinio for classified set China of in up office used and to provide

equipment also of financing GovDeals. on out rolled We for buyers

we think, would and and add, we'll that. executing think in second digested growth an I investments put inflationary or very near the leverage some, through But in I rational into the we we've there. get as that's and the strategy investments in bets the environment, those model So on good I some half the out move term

Gary Prestopino

third-party you facilitating transaction Are just you Or are finance? sheet using your a the lender. with to balance

William Angrick

very We're financial healthy be. want complementary. a referral us very not we broader to latter. institutions of do But lender to that direct is nor for and The ecosystem a

Operator

from Sutton Craig-Hallum. of line comes question next Our George the with

George Sutton

Bill, space. you portion more about of at a you to very made detail retail chance I you consolidate. the referring on were you just Can what comment the mentioned once-in-a-generation a to into go beginning believe compelling the there?

William Angrick

Yes.

dynamic additional buyer the we marketplace to programs call and awards in when we're services, a -- and a around and multi and demand lot multichannel supply what service. we're think job benefits our set use coalesce in I services seeing of getting buyer a engagement experience, We're interest of community. our a great that doing and the of

to coalescing platform. pallets truckloads demand buyer our direct from to So consumer onto

I think and are smaller players of industry. And the scale at a for to that going business. and able perform disintegrating lot being essentially valuable I very time, being think the that's out same not of

those crash. So cycle. like saw business We dynamics I back XXXX. this And dotcom started then and our a think the in the mania time cycle in happened we at a really, during Fed tightening

those that deliver investment. can does inexpensive. that and long-term marketplace deliver not take stand It's their which So tall on promises experiences, scalable

We now great logistics and really marketplace and direct-to-consumer center that sales and have both -- has that distribution the We've pre very post-sale support, international, valuable network and a channels been a online to enhanced. BXB that's national has Canada U.S. industry. got

footprint, dealing had of a been And time. I reduction reduction lot corporate excess in some period players, of think retail among warehouse the tightening capacity of with costs overhead. industry has for We've in

solution excess both inventory. into provide and step turnkey sell and a that so to And one-stop returns we manage and

any of we sellers and want well-integrated the an consolidate in be front as buyers, what And stage that's very and our marketplace indispensable, what have us. solution position. of believe Star to North opportunity the that So is setting that's to long-term with we that's, that's for you

George Sutton

you I'm sounds, you're doing a bit correctly, of hearing if fair just through that natural competition. And it

another planning. You effectively could you're an becoming acquirer Is the also end in up that entity of what space?

William Angrick

I we our very that's that's available get in wouldn't good, we And healthy -- this because M&A marketplace number see time. have I think over out course Yes. mean, think but of of to role. recognize I the people about everything just I rule a partnerships,

George Sutton

question Just environment putting this context. current into another historical

you playing economic cyclical sense start buy buyers retail see us just give the items this any context to how seen dynamic given You've dynamics of or sort price lower situation. long Can you where out? of

William Angrick

lower Well, it done a think the job think a build the end to have cost back they're the hard landing is But months. probably last I generally living I from pulled disproportionately has been balance either higher better think there's a a out managing XXXX. goods playing concern of XX I buying people due And buffer for over and personal in little sheets. maybe trying that and/or a to guarded,

doing So they're redoing an space. we're not outdoor appliances entire as -- buying or entire entertainment living or saying room about

provider, then of and sell cost-efficient of efficient And like season. of mean seeing as most an been the can the fine. behavior that's in down upper And doubt and opportunity of Depot yesterday and I that side may we'll purchase are being the market there's other is, results mean suggests And well the I a that the around whatever be no probably and means liquidity we're that companies Lowe's higher on even may liquidate. end that purchases. softened, tempering the Walmart products there's consumer services. in on that, it Target think activity goods. whatever But that's sort we But we're some commentary comes focused Amazon through. It consumer the basket Home has holiday shift a it retailers during from average for of that scalable very just funnel not to some long able and on move and in and

Operator

have further today's the in this call. We and for gentlemen, participation. no your questions Thank conference queue. Ladies concludes you

now may You disconnect.

Liquidity Services (LQDT) 7 Dec 232023 Q4 Earnings call transcript