Liquidity Services(LQDT) - 2024 Q4 - Annual Results

Executive Summary & Q4 FY2024 Highlights Q4 FY2024 Financial Performance Overview Q4 FY2024 showed significant growth in GMV, Revenue, Net Income, and Adjusted EBITDA and EPS | Metric | Q4 FY2024 | Q4 FY2023 | Change (%) | | :----------------------- | :---------- | :---------- | :--------- | | Gross Merchandise Volume (GMV) | $361.0 million | $315.6 million | 14% | | Revenue | $106.9 million | $80.0 million | 34% | | GAAP Net Income | $6.4 million | $6.3 million | 1.6% | | GAAP Diluted EPS | $0.20 | $0.20 | 0% | | Non-GAAP Adjusted EBITDA | $14.5 million | $12.8 million | 13% | | Non-GAAP Adjusted EPS | $0.32 | $0.26 | 23% | | Cash balances | $155.5 million | N/A | N/A | CEO Commentary & Strategic Vision CEO highlighted Q4 FY2024 as a successful year, achieving record annual GMV of $1.4 billion and expanding market share - Achieved double-digit consolidated GMV growth in each quarter throughout FY2024, culminating in a record annual GMV of $1.4 billion[1] - Grew auction participants by 22% and completed transactions by 12% during the quarter, indicating enhanced network effects in the two-sided marketplace platform[1] - RSCG segment set new quarterly records in GMV, revenue, and segment direct profit, while GovDeals delivered robust double-digit growth and Machinio achieved another quarterly revenue record[2] - Celebrated 25th anniversary, reflecting on growth, innovation, and commitment to sustainability as a leading global e-commerce company powering the circular economy[3] - Future strategy focuses on scalable marketplace technology, broad services, diversified client base, organic growth, and acquisition opportunities to drive continued growth and industry leadership[4] Recent Business Highlights Recent highlights include RSCG's Indianapolis expansion, GovDeals' largest auction, and CAG's diverse global sales - RSCG relocated and expanded its Indianapolis operations to accommodate increased supply, enhance customer experience, and reaffirm sustainability commitment[5] - GovDeals successfully conducted its largest auction, selling the historic Wainwright State Office Building for $8.3 million[5] - CAG executed diverse global sales, from oil-and-gas machinery in the U.S. to dairy processing equipment in Indonesia[5] Fourth Quarter Financial Performance Consolidated Financial Results Q4 FY2024 GMV increased 14% and revenue 34%, with Net Income up and Adjusted EBITDA and EPS growing | Metric | Q4 FY2024 (in millions) | Q4 FY2023 (in millions) | YoY Change (%) | | :----------------------- | :---------------------- | :---------------------- | :------------- | | GMV | $361.0 | $315.6 | 14% | | Revenue | $106.9 | $80.0 | 34% | | GAAP Net Income | $6.4 | $6.3 | 1.6% | | GAAP Diluted EPS | $0.20 | $0.20 | 0% | | Non-GAAP Adjusted EBITDA | $14.5 | $12.8 | 13% | | Non-GAAP Adjusted EPS | $0.32 | $0.26 | 23% | - Consignment sales represented 82% of consolidated GMV for Q4 FY2024[6] Segment-Specific GMV Performance RSCG and GovDeals achieved significant GMV growth, with RSCG setting a new record, while CAG saw a slight decrease - RSCG segment GMV increased 28% to a new quarterly record of $95.5 million, driven by expanded purchase programs and sell-in-place consignment solutions[6] - GovDeals segment GMV increased 14%, fueled by new seller acquisition, service expansion, and strong performance in vehicle and heavy equipment categories[6] - CAG segment GMV decreased 2%, as increased consignment sales were offset by lower availability of large spot purchase transactions with international clients[6] Segment-Specific Revenue Performance RSCG and GovDeals showed strong revenue growth, with RSCG's increase driven by purchase programs and GovDeals benefiting from higher take-rates, while Machinio also grew revenue - RSCG segment revenue increased 49% to a new quarterly record of $73.7 million, reflecting a mix shift towards purchase programs[7] - GovDeals segment revenue increased 26%, attributed to overall GMV growth and a higher blended revenue take-rate from expanded service offerings[7] - Machinio segment revenue increased 13% due to increased subscriptions and pricing for its Advertising and System subscription services[7] - CAG segment revenue decreased 17%, consistent with the lower GMV from large spot purchase transactions[7] Profitability Metrics Profitability metrics reflected increased top-line performance, with GAAP Net Income slightly up and Non-GAAP Adjusted Net Income and EBITDA showing stronger growth, despite increased operating expenses - GAAP Net Income for Q4 FY2024 was $6.4 million, a slight increase from $6.3 million in the prior year, with GAAP Diluted EPS remaining at $0.20[8] - Non-GAAP Adjusted Net Income increased to $10.2 million ($0.32 per share) from $8.4 million ($0.26 per share) in Q4 FY2023[8] - Non-GAAP Adjusted EBITDA rose to $14.5 million, a $1.7 million increase from $12.8 million in Q4 FY2023[8] - Q4 FY2024 GAAP Net Income included a $1.9 million increase in stock compensation expense due to variable performance-based stock awards[8] Capital Allocation & Share Repurchase The Board authorized an additional $10.0 million for share repurchases through December 31, 2026, supplementing the existing $7.6 million authorization, aligning with business growth priorities - Board authorized repurchase of up to $10.0 million of common stock through December 31, 2026[9] - This is in addition to $7.6 million remaining under a prior authorization through December 31, 2025[9] - The repurchase program is consistent with the Company's capital allocation strategy of prioritizing investment to grow the business over the long term[9] Fourth Quarter Segment Financial Results (Detailed) GovDeals Segment The GovDeals segment demonstrated strong growth in Q4 FY2024, with GMV increasing by 14% and total revenue by 26%, alongside segment direct profit growth | Metric | Q4 FY2024 (in thousands) | Q4 FY2023 (in thousands) | YoY Change (%) | | :------------------------------------- | :----------------------- | :----------------------- | :------------- | | GMV | $210,002 | $184,100 | 14% | | Total revenue | $20,173 | $16,054 | 26% | | Segment direct profit | $18,745 | $15,238 | 23% | | Segment direct profit as a % of revenue | 92.9% | 94.9% | -2.0 pp | RSCG Segment RSCG segment achieved significant GMV and revenue growth in Q4 FY2024, with GMV up 28% and revenue up 49%, driven by expanded purchase programs | Metric | Q4 FY2024 (in thousands) | Q4 FY2023 (in thousands) | YoY Change (%) | | :------------------------------------- | :----------------------- | :----------------------- | :------------- | | GMV | $95,538 | $74,661 | 28% | | Total revenue | $73,704 | $49,561 | 49% | | Segment direct profit | $18,395 | $17,505 | 5% | | Segment direct profit as a % of revenue | 25.0% | 35.3% | -10.3 pp | - The increase in RSCG's overall GMV and revenue was driven by broader expansions in purchase programs relative to consignment programs, leading to a lower segment direct profit as a percentage of revenue[7] CAG Segment The CAG segment experienced a slight decline in GMV and revenue in Q4 FY2024, primarily due to lower availability of large spot purchase transactions, despite an increase in segment direct profit margin