LQDT - Earnings call 1 2024 | Liquidity Services, Inc.

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Operator

Welcome to the Liquidity Services Inc.

First Quarter Fiscal Year 2024 Financial Results Conference Call. My name is Norma, and I'll 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; Jorge Celaya, Executive Vice President and Chief Financial Officer. XXXX, questions your prepared management's questions of February for and following views available forward-looking today, to include responses reflect X, be after remarks. The their discussion as statements. They'll will and Liquidity Services Actual results may materially. differ

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

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

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

William Angrick

next, will more our quarter. We organic this modernized progress on review by platform. consolidated QX welcome growth morning. quarter, the performance strong engagement our I'll Celaya recorded GovDeals and to which the provide And our segments. in bidder and segment, of benefited marketplace our in our govdeals.com XX% GMV QX from call. earnings led details business Good Jorge

and ROI to by our solutions, marketing sale Additionally, machine XCMG Machinio was more automating our assets continue an outstanding the of Pacific as these management, X,XXX assets. our respectively. asset our Machinio segment. Growth in note, and RSCG management international corporation inferior than which System, refurbishment of be software selected dealer impacted addressable remarket successful for the the and we profitability facilitate and in reconditioned recent improving sales and growth multinational just product segments of into which Asia by machinery Asia-based during strong activities. Of customers extend end, segment of by subscriber example CAG their quarter to delighted part market at construction one sales our Machinio deliver program recorded more as is Machinio life expansion were doubles in E-Commerce, an selected than to delays QX This the mix by events region, refurbished of and

we quarter, in are segment expected seasonally second growth. enter fiscal most as product seeing projects the high to we of an the mix and during RSCG However, of year-over-year in second our resumption quarter, the CAG are fiscal resulting close delayed our improvement the in

grew platform number provide our grew completed to segments number of XX% across by participants all We liquidity continue sellers during auction strong the as our year-over-year. the of and year-over-year QX, for XX% on transactions

direct to in the drive expanding market marketplace, supply addressable to value base including our continue expands our access We and AllSurplus provides recovery multichannel merchandise in higher which invest Deals price consumers retail buyer chain. to

quarter. In to marketplace we for we of through vehicles, channel have of choice government transactions, CAG platform week-over-week leading and and in the as position the improved strengthens revenue Sierra fleet surplus for X we base we value of as government buyer all segments the continue through online for the successfully their make for offering drive investments platform. share that continue to to AllSurplus are to economy strong claims and Liquidity which as circular and turning capitalize to better markets, market industries the of for across support for summary, out drive this report to current provider assets pleased Deals our deliver are and our companies long-term fiscal in in outstanding intend platform's assets, move new strategy, on and enhance completed customers pipeline records deliver in supply share in we our market growth setting our and current our long-term sizes expand to Services rolled they quarter. In of seek segments We trusted shareholders. multiyear remain Services the our capabilities Auction, business the growth to second inventories expand efficiencies, Liquidity profitability are our chains our parallel, commercial We our commercial to sale and acquisition profitability our to GovDeals equipment and sellers. In our accelerates and and and we manage and continue to

operational benefit and expanded Our investments capacity. these results from our will

Liquidity the to Services thank over power and Jorge business details capital-efficient debt more approximately turn ample our operating with team strong benefit for with buyers now their zero for million planet. And flow, plans. the dedication in our us of across economy execute members Our to quarter. to to all sellers, We $XXX cash provides it flexibility financial on the to circular I'll cash our mission

Jorge Celaya

GMV, of the very GovDeals a the our fiscal morning. segments $XXX.X strong performance XX% year last up quarter. this We with million quarter completed same million in saw and Machinio first $XXX.X for XXXX first quarter from fiscal year. Good in We

the delays finalized in trends related improvement already CAG finishing low projects, mostly and within recent more high-margin guidance mix quarter value product While market. lower in were which January from a the guidance, supply to segment retail slower-than-anticipated various this albeit the our at segment to the overall end of in due

was mix GMV. million, reflecting factor all-time same fiscal supply the consignment XX%, year, GMV segment a of from X% the last down mix our Our retail quarter higher high. $XX.X at million tying $XX.X first was quarter revenue consignment in in an The of

$X.XX, consolidated and quarter $X.XX of profitability million. EPS non-GAAP Our GAAP of EPS adjusted adjusted fiscal non-GAAP of $X.X EBITDA included first

the and revenue direct and profit $XXX percentage fiscal our We cash, results. We during impacting of retail delays compared respectively, paid controlled million these cash in with last While ended quarter, January, in cash of were million the reflected performed acquisition operating share $XX.X equivalents to And beginning in short-term of mix, quarter. same expenses completed year and quarter for the the $X.X the investments. our well CAG million product closing in the and segments during repurchases this quarter second drop at at the quarter. Sierra Auction we

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

increase this direct first to same quarter vehicles up quarter last and of on up strong direct continuing engagement XX% segment with driven results management its pricing Advertising increased fiscal profit availability was on subscribers segment bidder on dealer on comparing for newly segment XX%, up XX% products. segment modernized XX% the our our was year, System XX% by profit and and Machinio Specifically and and GMV, revenue marketplace GovDeals Govdeals.com platform. Machinio in from up was Machinio

X% was solutions, $X.X segment by were purchase on down EPS X% and consignment per X% XX% RSCG in and high-margin lower GMV projects for of profit $X.XX, last the direct per revenue and down of delays segment sales $X.XX lower continued while income energy was down to with the international mix the for during direct million, as Non-GAAP activity $X.XX the due not was value enough our year a prior adjusted up low-touch quarter net the take quarter's GMV, GAAP compared mix revenue diluted driven the were share on to Our down transaction. GAAP last increases first XX% last on CAG in more consignment segment quarter year. Despite segment mix product and the global fiscal rate, GMV, on the purpose quarter December, increase resulting to year. to of as from in impact retailer up profit industrial diversified compared $X.XX first year. programs to same reflect share offset GMV XX% consignment first earnings yet retailer in on some the was

$X.X EBITDA from quarter same million the year, CAG adjusted reflecting was the $X.X this non-GAAP While quarter and last results. segment million of down in retail

the outlook half the consolidated first of results anticipate half second for for to compared XXXX fiscal of with XXXX year the quarter fiscal improvements continues expected to in fiscal year-over-year growth Our second XXXX.

strong acquisition second continued of year includes improvement performance GovDeals The quarter. our segment Sierra of in XXXX our and further for this from guidance quarter fiscal GovDeals segment Auction the

quarter delayed second also have for fiscal Our past transactions from quarter. fiscal captures stronger looks first as this CAG segment it sequential a quarter to this

the of of We mid-XX% season. to flows these its program consignment currently is can expenses revenue variable top expects mix programs, sequential increase our a remain categories of mix reflect from post-holiday related acquisition, to We the low growth percent some as operating to effect growth to continued a also consignment also programs. Consolidated to quarters certain based GMV expenses and which our level to receive from product anticipate in this range, expect the to mix expense sequentially. asset seasonal vary on year, during Compared to Sierra RSCG consignment coming while our mainly and expected continue consolidated to on segment traditional currently lower-touch improve transacted. return last year, Compared RSCG operations last the seller across mix and the expansion of current in purchase of lower Auction line are overall. value our expected begin higher will for

outstanding earnings our non-GAAP from of XX share. quarter second to and assumes as segment net year expected non-GAAP as XXXX. Thank adjusted million fiscal at $XXX Non-GAAP $X.XX to a diluted quarter per per expect of to average to range sequentially $X increase million. We GAAP of that we the range XXXX diluted million to earnings per for year-over-year, from $X.XX fiscal $X.XX you, share. ranging income a million year in share fully expect fiscal GAAP $XX the The EBITDA EPS is adjusted similar your guidance from $X.XX will second to GAAP guidance percentage the corresponding questions. million XXXX of profits total weighted range results. Management's now We estimated we $X percentage per $X follows: diluted first quarter have range to and a million in is to is share We take shares for remaining with estimate direct to the our $XXX GMV revenues million, of

Operator

Prestopino Our the Instructions] line Research. question first Barrington comes of from [Operator Gary with

Gary Prestopino

a Sierra, made. the couple really of regarding acquisition Bill, and Jorge you questions

cash closed reflective January year-end since the right, I on not on all, for it is cash, that? of that, X? balances First mistaken of that payment in am Or the

Jorge Celaya

That's correct.

Gary Prestopino

right? does reflect it then, So not

Jorge Celaya

we the $XXX made million acquisition in XX, December in January.

Gary Prestopino

have a us that. to currently? the of then will GMV And you I can margin it the has similar sure Auction? business And that it of very Right. generation of wanted make Sierra -- Or just idea give contribution? kind does of profit direct some GovDeals

William Angrick

$XXX gross very market. GMV business, we -- scale similar fleets, consignment, opportunity that sub-$XXX consolidator high to market is that's an favorable in-migration to our can The a in and places. It's in million of XXX% of that XXX% GovDeals, margins. example infrastructure, is from This vehicle leverages upgrading position from business California virtually the increasing to quickly it's business a plus Arizona retirement be a benefiting and other that assets. is territory. This million a in investment very

growth customers to long-standing opportunity. of government XXXXs. two-pronged a There a have we the number are back going So

buyer operations that and that legacy many are through fleet now there base. liquidity both covet really the Additionally, we commercial GovDeals Sierra's owners the bring

so million-plus have quickly business some a and we're in we've base Gary, And buyer to had underpenetrated territory integrating, $XXX presence really that a been in. grow activities operational but these

Jorge Celaya

good just growth accretive, quarter quarter accretive. is would that Sierra past Bill point I but performing of acquisition, we also a extremely without well. next GovDeals quarter to as Sierra the -- Gary, quarter and very the another deals double-digit out expect it without it's size, And is this But have the given but still the indication without Sierra. had is said, it

Gary Prestopino

Okay.

any that of I us idea the to was? at you're liberty I not GMV give So assume generation what this guess

William Angrick

and for fleet commercial with not sellers. government disclosing segment we're for GovDeals accounts it's that, integrated and CAG but our into our marketplace being No,

Gary Prestopino

Okay.

know, getting headline it's better, is because something Okay. economy see continue expect issue but you And Or or that to said platform? the higher think see that retail amount don't of, where your it still that a situation is a sluggish you you'll whole comparables given little you're to flowing 'XX? the that then be less continue on you what ticket lower getting I ticket would sector a items bit this through GMV news, last with items to for flowing year where of whatever, throughout would fiscal through GMV,

William Angrick

said more consumer we've significant few behavior for the online. a think ticket last with a high we've in quarters, this and I consumer to reset seen and purchasing we're -- respect frugal

current we've think balance year, and normalized the executing comfortable we're Gary. that, the of environment I in the for

recovery we've think product on to sort needed been service I where a and sure consumer operational and our right return extracts This this to investments. And this, growth which and of through our to adjust our so moving getting sort sort with is auction capability the not of channels through really up is our the up margins not Deals, seller margin leverages we've we're ground-up levels centers with front which effective in a new for of that move clients infrastructure of good channel marketplace sort improve more to make X and a opened of an AllSurplus that leveraging marketplace clients. that current essentially goods platform -- value the traditional existing operational expansion. share of we're distribution

So positioned. very we're I think well

we're consumer of retailers, one fact, -- for companies, supply shows In e-commerce the behavior. including companies, with who the retailers, week, resetting looking they're as they're think omnichannel at our vendors very multichannel that And I supply receptivity -- retail positioning. strong mentioned, all all this we to toward trade chain dealing because efficiencies all big

to So of term, the in allows market. market winner be them capacity, reduced reduced and think going capabilities efficient we're that lot more them And in provide a share. warehouse of and we a to I many stepped be long and us to that have in infrastructure, grow

Gary Prestopino

would report then And quarter? had the do did at just this morning. the I've for lastly, see this for QX, and post of you in I apologize there? Okay. release stock appetite didn't an repurchases companies But it levels, have And kind any missed couple I -- because these earnings if of of a your you share

William Angrick

capital, and to Well, quarter. as have a be continuing throughout do We'll Gary. that far year, program the we repurchase this execute of as allocation that, are we executing including

yes is last done answer on I'll any was quarter. details the Jorge other in and to So the on that, defer to what

Jorge Celaya

in December. repurchases remarks, Yes, past in $X.X Gary, as pointed out million this share the

Operator

of Our George Instructions] Craig-Hallum. [Operator question comes next line with from Sutton the

George Sutton

Bill, that about a partners? Can going you you to is give going mentioned market? Are the talk TAM attack you that? purely the your through Asia. us Are Can how sense strategy direct? opportunity just into what double through you you of selling you

William Angrick

in me, Thank the leveraging, you question. current excuse Craig, infrastructure for We're Gary we -- me, the -- the have George, that Asia. excuse

We have China and over need that management asset decade a support. These for serving CAG relationships. companies been sales multinational in are

with years. very XX We strong for consultant has over us Asia, have in been ex-McKinsey now almost leader a

direct. into there, we sales extend sell what and did regional took we So Machinio physical of a we presence added advantage organization is our to platform markets, the and those

of us is running in move opened the equipment we're But Europe, a companies. tapping are these North a that's -- adoption seeing interesting solution, we're just of small revenue used Machinio that And buying already the some equipment up and before and are player. activity of in of for region, into buyers. the know open on more value And now to quickly a and is that practices, sell efficiently profitable we reality digital Now U.S., more ecosystem, proposition sort we're And there. And relationships. availability. platform that variety throughout the that gave, now supply the very interest feeds outside is hit not Asia, front And Mainland that I with. more big getting growth. The small subscribers with America, starting we presence there albeit and sales redoubling it -- to allows ensure large Machinio's again, business people a equals China being that a and we base we're and a able it's an pretty these in lot small inside and presence of through example had George, sales more of ground XCMG, product there's good

that accelerate expect to organic time. we over growth So

George Sutton

walk Jorge and the CAG, QX? expect you sort the in if just through to quarter? wondered in could far of the that thus QX any how of much CAG of I What's quantification quarter slipped ultimately do that deals closed the in get So

Jorge Celaya

So that have January. in I been I'll in George, remarks dozen the most probably what said them was say is tell the deals of you there and of there I most half can was transacted -- a

right, that strong up, going to very expect transactions. a we had December with we have when them next really, this into these most catch-up coming already be to were slip then or We solid that in And to planned that CAG next have quarter, maybe you only the to partially complex all they're quarter, March a transactions. But pretty expect CAG from of has it but they these. the time because compound X.X will especially But quarter. was not more international X on quarter, the time slippages, one

George Sutton

to how is called Well, challenges again, transactions the of in quarter. some you as one of there a that... curious half about out in GMV? -- just of how the dozen the much equating reasons I'm Or a it much first for

Jorge Celaya

call the at those not from what guess, on transactions is it in if on I'm as the said, -- calling of some I I'm two But product those that, market then I transaction out retail. and to it was George. to those shortfall, we you in issues do particular quantification, what least, be, want going mix expected, to segments delays

William Angrick

happening public in too. Remember, all is marketplace this a

some George, good really that results of end that collectively. low have the have types near have see delays, And think one are real the in been had in sold, wouldn't the time the listed being range it's rolled what's and the would fair transactions So quarter, at the end been current illustrating some we've that But over. can to we of I range. It absent of marketplace. high the say

we to recovery, I those buyer have in we a your I how really world, In So the on highest clients covering the world, deliver growth And we we're again, quarter-to-quarter. to looking strategy. model invest. liquid things goal. And That's where our building our important to base, that a manage. And long best we're industry continue value know it's opportunities. making that we're the mean game. about to how in there's most that's That's growth basis. are the we're every very continuous think the about precise sure

win win the think we've and that's combination and the I the with Machinio. convert in we've the segment the and marketing, with opportunity talked assets capital And tools that differentiated lot -- feel and we very every got a marketplace, excited of and of the sort done of opportunities helping retail modernization and that a everyone some business industry in utilizing, us is the tools machine-driven we're one-to-one experience in of services AI more about to right to marketplace pipeline GovDeals integrate, in like about all the

what think going needs and So currently are why we're well the positioned to I grow. to we're in that's the continue to market,

George Sutton

AI, this it call almost Got did slip in did include the term America was that conference but Bill, you. not in. first you the

me. So it congratulations. That's for

William Angrick

interruption was an streak. of unintended That the

Operator

your today's participation. you call. Thank your This for you conference questions. for concludes Thank

wonderful a disconnect. have You day. may now Everyone,

Liquidity Services (LQDT) 8 Feb 242024 Q1 Earnings call transcript