LQDT - Earnings call transcript Q3 2024 | Liquidity Services, Inc.

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Operator

Welcome to the Liquidity Services Inc.

Third Quarter of Fiscal Year 2024 Financial Results Conference Call. My name is Lauren Cannon, and I will be your operator for today's call. Please note that this conference call is being recorded. [Operator Instructions] I will now turn the call over to Michael Patrick, Liquidity Services Vice President, and Controller.

Michael Patrick

morning. Good

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

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

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

management a find discuss our available. the as measures, regarding supplemental each gross substitute and believe GAAP should be This useful management uses of of certain performance, or certain including we for financial operating to measures. considered is call, for their most and with our this data measures of merchandise on additional these reconciliations also will data posted comparable superior operating as volume Management includes supplemental investors. which results. of non-GAAP components and also a will operating not measure GAAP website, the In filings certain you disclosures which SEC measures release with press non-GAAP During these is

and this Bill At turn will presentation our time, I CEO, to the Angrick. over Chairman

William Angrick

gains, of that by are buyer on achieve to $XXX market in and point provide Celaya goal results track annual $X.X on expanded of this outstanding report We're business segments GMV performance to QX will Good quarter our Jorge morning, our the I'll we a strong and record billion welcome proof progress earnings review call. next details GMV. driven proud of the more services provide million QX These our near-term to quarter. participation. and share and our

net scalable fiscal delivered our XXXX drive decade. performance strongest to And and QX, income a in platform growth. in EBITDA we profitable GAAP year in adjusted continues Additionally, quarterly highest our non-GAAP

self-directed Our offerings efforts benefits the buyers, of are attract fully to continuing more ranging size flexible fueling to services and sellers our to harness technologies AI and our enhancing from and and of marketplace, growth. scale the managed

continued Our a expansion. GovDeals record segment set and GMV $XXX seller service by driven of million acquisition quarterly

number during While of the and we sales of including have QX. prices, seen records, set of growth GovDeals evidence sellers, strong in number recorded listings softening of numerous vehicle listings and number year-over-year asset vehicle

the state We market expand Auction New together continue and QX, Washington; County, Mesa, our share Norman, Arizona. notable Oklahoma, and with of Spokane to including during clients the business recently signed York, acquired new Sierra

are contract segment in the of we in Additionally, our which is now Louisiana. assets for and bid our GovDeals several included states signed share Pennsylvania ramping new results, our have Philadelphia in marketplace, of contracts and

first volumes, accelerate Retail focus seller phase BXC Group to the Our efficiencies of the quarter. We fourth has its to service for which delivery are will been exceptional single and Chain poised tool, BXB in on increased enhance rewarded with further Supply both receiving launched our item our channels. operational segment which clients

in efforts we new channel, several RSCG relationship surplus will BXC our clients these in segment. and clients. utilizing expanded our long-standing deals or Together, in QX onboarded several result we QX, all and with growth beyond During our continued

around another the continues of record globe. used a Our as and equipment Machinio to in revenue set be buyers matching segment leader sellers it

receive customers through that reveals our storefront and Machinio research superior market value products competition. versus advertising Our the

all its geographies forward going market in sustain organic to better expect as share mid-teens or expands We QX. growth in revenue Machinio

control delayed or in Assets but the were due of our results Group QX, lower Asia to sales grew than during expectation and year-over-year Capital segment U.S. regions. several Our outside X% GMV canceled

However, QX. new during XX CAG mandates we to pipeline our have signing to industrial over good success adding clients, new continue

a for recurring segment. continued in sellers quarter, of CAG unique the new growth more We vertical well also CAG record revenue in set for our our heavy predictable bodes fleet which equipment during

we continue including and templates invest tools Finally, improvements, for efficiency to sellers. seller in convenience listing drive to platform asset and our

for uncertain assets experience. In an improve the We enhance we're continue match the data weather to of to of with in positioned buyer buyers' search listings, AI marketplace improve optimally our well of environment. cyclicality Together, and asset environment, clients our harness applications seller to these enrich current criteria. our available enhancements the financially to to strategically potential the summary, purchasing will quality useful and functionality macro assist continue and customers solutions

pursue We development economy strategic to the and in pipeline opportunities shareholder circular business robust of segment have drive continue to value. and customer each a

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

Jorge Celaya

Good morning.

million new quarter Our records, third a XX% record $XXX continues fiscal million $XXX GMV this in GovDeals and for set million, services. GMV increase year. last same the market and to at previous in expanding is for quarter of quarterly new over our set share including record a $XXX

clients remains long-term innovation, seller multichannel a cycles, grow with corporate The Assets to redeploy and business of with to with segment Our needs broad trusted advantage. global economic providing competitive remains partner monetize a reliability opportunities across a while presence their solutions to clients. business and assets Retail address our consistently and buyers segment flexibility, to assets Capital the for the scale, fixed

record pace, expanding Machinio base, markets. global established segment its its its while its growing client on continues and services Our

quarter non-GAAP $XXX year, resulting and adjusted expenses the while quarter XX% fiscal year $XX.X the earnings GAAP from $XX.X million, same X% compared financial XXXX in and $XX.X of of million to EBITDA of up last up XX% included last quarter Specifically, $X.XX recording year. last $X.XX, earnings share quarter year last the our consolidated per revenue year, per adjusted of of included, $XXX.X up from year. Non-GAAP acquisition-related in per or same from a share million the quarter same $X.XX legal settlement lower XX% the the of in million, third same results same quarter from GMV earnings share the or last up $X.X some of million million,

Our adjusted at fiscal our during cash, short-term the was EBITDA total segment's and We fiscal quarter of $XX.X ended million million the XX% for cash direct fiscal equivalents of generated with the cash in third operations investments. third third profits. $XXX.X quarter quarter. We from of this

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

same a paired blended expanded segment higher up rate results offerings. traditional as quarter new XX% each quarter fiscal XX%, to segment Specifically quarterly year, service profit XX%, direct take comparing record was last a from revenue this up up revenue the GMV GovDeals the from third with product categories and

X% Our segment product up proportion Retail segment year. direct higher revenue that lower to purchase reflecting the compared XX% X% in set profit on segment up value flows was last new while revenue retail the GMV down a record, of and and on on

due GMV the than flows. faster grew Revenue to purchase higher

CAG up listings with up by solutions down grew heavy segment in did Our subscriptions management equipment on X% vertical. partners XX% as turnkey increase segment in consignment project up profit our and equipment Machinio and continue direct revenue down recurring offset as GMV, our for industrial advertising its energy was we systems. X% dealer segment vertical to was was XX%, for and delays and pricing direct were sales yet on profit on revenue partly X% as category the both

to our fiscal outlook. Moving business quarter fourth

consolidated range at GMV results. midpoint continue and to overall We expect growth solid of double-digit the our guidance

faster and improved line volumes than We at As high still growing are a slightly quarter results for in expansion fourth in retail a GovDeals a lower expected revenue touch has our seasonally GMV purchase expected revenue percent be are result to as Retail product direct to grow an predominantly is comprised mix and volume quarter, growth come in a of volumes, revenue. its mostly anticipate bottom this to reminder, profit of offerings. than Retail broader These due the GMV during resulting year-over-year to product led service off segment overall third -- segment fiscal next consignment as in lower by fiscal of also faster rate segment. flows

fiscal quarter performance segment's sequential for is Assets steady Capital for this growth. outlook Our yet fourth year-over-year

revenue Our subscription-based continue by is digits to Machinio to grow double business anticipated year-over-year.

year non-GAAP average $XX of XX its GAAP is includes and for from consolidated the range and fourth share million from earnings expect $X million GAAP GMV lower revenue that we to the you, GAAP percentage programs, in as as be mix a per off will this of guidance to higher as to take fiscal is profit a $XXX income The quarter estimate XXXX high segment a with and EBITDA range. Management's shift $X.XX diluted XX.X percentage our per and fiscal expected anticipating per the diluted we per fourth EPS estimated GMV to range to million our the of weighted which XX approximately to percent adjusted range $X.XX million quarter ranging $XX a $X.XX the in in million expected direct XXXX. Thank are questions. percent high diluted high $X.XX quarter, fiscal net for Given revenue retail we from to We segment's non-GAAP assumes we adjusted range guidance to from for in $XXX have million. follows: total fourth million. shares is of million coming range volumes, mix quarter the of earnings new your share now share. to the GovDeals XX seasonally fully of of share. to outstanding $X Non-GAAP corresponding coming the be year

Operator

[Operator Instructions]

line Gary is Prestopino with from on Research the the Barrington question.

Gary Prestopino

of the you market? GovDeals. Is talking in -- what's evidence that vehicle used reflection some of really about direct in on Bill, going softening just were prices seeing vehicle a

William Angrick

We've vehicle construction seen fleet assets, and softening both with equipment. some Correct.

Gary Prestopino

the time, auction is feeling? there your same really kick what realizing follow I'm starting I used issues of pace. the to in at But supply well hearing generally you the for that can steady at as But the are can that vehicles what the fairly the a wholesale say constraints supply Are market are Okay. you consumers. you some about that you seeing industry, by up mean, from don't markets? about

William Angrick

headwinds The government buy have to budget intent to the its no continues market to and supply. has of We cycle. related sort replenishment buy,

So steady us. very for that has been

Gary Prestopino

is? maybe question you item or segment, what that second a about recovery talked is, tool the you RSCG then And you that launched Okay. tool. Could discuss single

William Angrick

and for return historically Sure. that item the tool been the would us from more things. something into use automate that operational used that it of tool right helps The process flow channel receiving allows received goods of couple a and available standardized I it's tool was essentially, has One, the of quickly that does a allows the us manual. to and optimize item harnessing identify that term each data receiving what single

faster so to items So to three, the recovery. it's the that a time driving which efficiencies; listing it's item allows accelerating the drives attributes determine direct-to-consumer us higher channel, versus us cash; BXB two, channel should ultimately in and of giving a go

So with we're that pleased enhancement.

Gary Prestopino

just in start do some XX or flowing completed then delayed asset the well of GMV new done will commentary, Okay. got you CAG mix? the into QX as And cited lastly, be that in you segment, as in in that your and QX, with when these sales that they that you the mandates feel does

William Angrick

Yes, next few mandates over ripen will the quarters.

forecast have consolidations, some with or can think their want the reflect they do what mergers, delays different internal upon these demand sometimes initiatives, cost-cutting macro start stop depending exercises. where I and corporate we volatility to America of for

very do us. with decisions with the recurring winning flow, corporate that it we it, importantly, do the percentage So call assets. high getting of to It name and these recurring disposition we're we What to Fortune of pitching, are affect call flow Fortune we're business really upstream anything fact flow XXXX downstream is like what business nothing that companies. brand from that has or forward -- we're a has XXX,

do the that those be to marketplace the go will transactions. So market assets whenever handles

of some or QX, of percentage fiscal into QX So will 'XX. some them fall QX

Operator

Sutton George line the from Craig-Hallum with the question. is on

George Sutton

of And that but And you negatives thinking to just business you and trying have kind I the grows, growth think challenged. cyclical being to environment you're wanted the a the through results. meaning I'm your current the how cyclicality. relative concept cyclical, to do about Bill, components. understand the of And characterized is you nice positives

place in challenge, today some pushed, related. here be that words, obviously on thoughts? to But cases if we may In wonderful we concerned would economy macro to those a other side, you seem discuss some alternative X-sided about your pricing you the had referred the future deals you marketplace. be be to a Can the of in the just given and sit

William Angrick

assets. monetizing for a huge we're Well, Sure. engine

So natural Fortune help wants slow a to XXX look balance to during a them husband environment. growth or sheet whether sharply, place a manage company resources to its more government agency we're

productively see that to some sort So the be going generate tailwinds it's the take we're return some from can't growth And it to if because used we asset a and be owner, natural to market. slowing for of place sold.

So when the the the think that's lumpiest CAG, XX% about it of the you I represents been a look positive. total of And pie. at GMV which is probably company, only

these quickly. government So less faster there's strong faster to digital assets muted -- seen assets we've around that be, to trying from physical are efficient, up tailwinds cyclicality sales industrial one work, to freeing more clients large the relative What space sell to as may quarter solutions, these both move is cash, one, other. time using to cycle,

is looking less go buy money, our in to something or wholesale asset costs I even think than natural of we're and marketplace and help money build side marketplace a They're use frugal. to save their at and an save the their two, operations. to buyer business to

migrated fact So get And trend. that's This return to been managing continues good of trusted is recessionary tracking, then execution market a on market where mix It's person grow. shopping. and has we shift sort to just from this through that goods. are a retail growing provider, monetizing any in the to It's side, online the we're of the around great.

BXB to direct-to-consumer expanded flows. we facility, was needs larger for release press out responding There It's our our a so on Brownsburg, and marketplace Indiana capabilities. facility. And it's a

a So all a markets efficient constant a of retail grow. think chain merchandise. it's scalable continues more to for the resilient we be around that returned we managing to supply and -- have model selling continue to And cyclical, in that's honestly,

George Sutton

And results pointing question other quarter. Great. for strong to then just the the in one

were service to to make expansion. want there? I referring knew referred sure you specifically just You to I what

William Angrick

both tools given commission clients do that. assets solutions for upload them. We've And Sure. can to and and where different mentioned clients many most opt lower pay of a relevant our opt They clients into use I that identify sort to what is solutions self-directed directly. to for

have returns fully also clients of return facility expansions offerings, of where managed and directed reflective our our the who to some We those provide -- consumers facilities. that's to have

transportation center. So removes to of leg it a back a return retailer's

items from back services consumers. the and space So we've created to and tools take directly

fleet that's is in we can We also have help where we assets. them individual business. catalog business to client a more us services services to the the of dispatch and government that, fleet Auction if And shorthanded, a to provide and history an allowed semi-assisted Sierra access business acquired had doing

the So when that about services. are we've refer been we things those talking to

Operator

today's this in no further have the you your at conference. Thank questions does This participation time. We program. for conclude

You may disconnect. now

Liquidity Services (LQDT) 8 Aug 242024 Q3 Earnings call transcript