Financial Data and Key Metrics Changes - In Q3 2022, the company achieved a record Gross Merchandise Volume (GMV) of $325 million, representing a 33% year-over-year increase from $244.7 million [6][15] - Revenue for Q3 2022 was $69.9 million, consistent with the same quarter last year [15] - GAAP net income for Q3 was $16.4 million, resulting in diluted earnings per share of $0.50 [18] - Non-GAAP adjusted EBITDA was $11.9 million, down from the same quarter last year due to increased operating expenses [19] Business Line Data and Key Metrics Changes - The GovDeals segment saw a 52% increase in GMV and a 13% increase in revenue, driven by the inclusion of bid for assets [16] - The Retail RSCG segment experienced a 1% decline in GMV and a 4% decline in revenue, attributed to a shift in return goods volumes [16] - The CAG segment reported a 13% increase in GMV but an 8% decrease in revenue, reflecting increased sales with partner organizations [17] - The Machinio segment grew by 27% in revenue, continuing its strength in the subscription business [17] Market Data and Key Metrics Changes - There was a 22% year-over-year increase in the number of registered buyers and a 43% increase in auction participants [8] - The number of completed transactions on the platform increased by 37% year-over-year [8] - The company noted strong adoption of its consignment model, with 89% of GMV transacted under this model, up from 85% in the prior year [9] Company Strategy and Development Direction - The company aims to expand its market leadership in the $100 billion circular economy and is focused on scaling its business towards an objective of $1.5 billion in annualized GMV [6] - Investments in technology integration and enhanced user experience are being made to support self-directed sales and improve client outcomes [12][39] - The company is also focused on diversifying its product flows and sales channels, particularly in the retail sector [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, noting that rising inflation and supply chain uncertainties present positive drivers for the business [25][26] - The company anticipates continued strength in the energy sector and expects to grow its low-touch services in this area [21] - Management provided guidance for Q4, expecting GMV to range from $300 million to $330 million and GAAP net income to be between $3.5 million and $6.5 million [23] Other Important Information - The company operates with strong cash flow, holding $88.3 million in cash and zero debt, with $25 million of available borrowing capacity [19] - The company has performed $5.4 million in share repurchases during the quarter [19] Q&A Session Summary Question: Market opportunities excluding government vehicle retirements - Management acknowledged that supply chain challenges have increased the demand for their services, and they are well-positioned to assist clients in managing and selling inventory [25] Question: Investment in bringing more sellers onto the platform - Management highlighted investments in human capital and technology to enhance their enterprise sales organization and marketing efforts [28] Question: Trends in government agencies moving auction business online - Management noted that there is significant potential for government agencies to adopt online sales, estimating a $3 billion to $4 billion GMV opportunity in the public sector [30] Question: G&A expense decrease and its causes - Management confirmed that the decrease in G&A expense was due to reversals of variable compensation accruals as the year-end approaches [34] Question: Growth potential without major spending cycles - Management indicated that the current infrastructure could support an increase in GMV up to $2 billion without significant new investments [37] Question: Decline in gross profit in certain segments - Management explained that the shift towards a consignment model is leading to lower revenue as a percentage of GMV, but they remain focused on delivering high-margin services [39]

Liquidity Services, Inc. (NASDAQ:LQDT) Q2 2022 Earnings Conference Call May 5, 2022 10:30 AM ET Company Participants Bill Angrick - Chairman and Chief Executive Officer Jorge Celaya - Executive Vice President and Chief Financial Officer Conference Call Participants Gary Prestopino - Barrington Research Operator Welcome to Liquidity Services Inc. Second Quarter of Fiscal Year 2022 Financial Results Conference Call. My name is James and I will be your operator for today’s call. Please note that this conferenc ...

Company Overview - Liquidity Services operates a B2B e-commerce marketplace for surplus assets, promoting the Circular Economy[6] - The company has over 15,000 trusted clients worldwide and has completed over 800,000 transactions annually[9] - Liquidity Services has completed over $9 billion in transactions[9] Market Performance - In Q2-FY22, AllSurplus marketplace experienced a +696% increase in closed transactions and a +478% increase in auction participants[28] - Machinio Segment revenue grew by 29% in Q2-FY22 due to subscriber growth[40] - Bid4Assets has completed the sale of over $1 billion in assets since inception[33] Financial Highlights - For the three months ended March 31, 2022, Net Income was $12 million[45] - Q2 FY22 Adjusted EBITDA was $9215 thousand[51] - GovDeals accounted for 65% of the company's GMV mix in Q2 FY22[49]

Financial Data and Key Metrics Changes - In Q1 2022, Liquidity Services achieved a record GMV of approximately $260 million, representing a 37% year-over-year increase from $190.4 million in Q1 2021 [14][7] - Revenue for Q1 2022 was $66.7 million, a 20% increase compared to the same quarter last year [14] - Net income for Q1 2022 was $3.6 million, resulting in diluted earnings per share of $0.10 [15] - Non-GAAP adjusted EBITDA was $9.4 million, showing improvement over the same quarter last year [15] Business Line Data and Key Metrics Changes - The GovDeals segment saw a 46% increase in GMV and a 29% increase in revenue compared to the same quarter last year [16] - The retail or RSCG segment experienced a 3% increase in GMV and an 11% increase in revenue [16] - The CAG segment reported a 60% increase in GMV and a 42% increase in revenue [16] - Machinio's revenue increased by 34% [16] Market Data and Key Metrics Changes - The number of registered buyers on the platform grew to over 4.7 million, with completed transactions and auction participants up 39% and 24% year-over-year, respectively [8][7] - The company anticipates a seasonal decline in Q2 2022 but expects strong growth in the second half of the fiscal year [17] Company Strategy and Development Direction - Liquidity Services aims to scale to $1.5 billion in annualized GMV, with aggressive investments in people, products, and technology to capture market opportunities [11] - The company is focusing on expanding its marketplace platform and enhancing digital transformation in the supply chain [10] - The integration of Bid4Assets is expected to boost the GovDeals segment GMV as the year progresses [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, which performs well in both economic expansion and contraction [9] - The company is optimistic about capturing higher-value construction and transportation equipment due to infrastructure investments [31] - Management expects to see significant improvement in the real estate category as they leverage Bid4Assets' expertise [31] Other Important Information - Liquidity Services holds $91.3 million in cash and has a debt-free balance sheet [15] - The company has $17 million in authorization to repurchase shares and anticipates potential earn-out payments related to Bid4Assets [16] Q&A Session Summary Question: What was the organic growth in GMV? - Management indicated that independent of Bid4Assets, the core business has maintained six consecutive quarters of 20%-plus GMV growth [23] Question: Will the revenue to GMV percentages scale down with a full quarter of Bid4Assets? - Management confirmed that the ratio of revenue to GMV is expected to decrease over the year, moving from the high 20s to the low 20s [25] Question: What were the stellar constraints in the RSCG segments? - Management noted that the retail industry faced challenges with product availability due to shipping backlogs, but this issue is expected to normalize [28] Question: What is the outlook for growth in the second half of the year? - Management highlighted significant investments in headcount and business development, expecting returns to materialize in the latter half of the year [30] Question: How does the company plan to support growth beyond $1.5 billion GMV? - Management believes the current infrastructure can support growth beyond $1.5 billion, potentially reaching $2 billion to $3 billion in GMV [45]