Liquidity Services(LQDT) - 2023 Q4 - Annual Report

Buyer and Market Growth - The number of registered buyers increased from 4.9 million to 5.1 million, representing a growth of 5%[9] - The registered buyer base grew by 4.8%, adding 234,000 new buyers in fiscal 2023[25] - As of September 30, 2023, the company had 5.1 million registered buyers in its marketplaces, with a 4.8% increase in the registered buyer base, adding approximately 234,000 buyers during fiscal 2023[25] - Approximately 3.3 million auction participants engaged in online auctions during the year ended September 30, 2023[25] Financial Performance - Gross merchandise volume (GMV) for the year ended September 30, 2023, was $1.2 billion, with total revenue of $314.5 million[9] - GMV has grown at a compound annual growth rate of 13.9% since 2018[9] - The global reverse logistics market is projected to reach $958 billion by 2028, growing at a compound annual growth rate of 5.6% from 2021 to 2028[15] - The retail industry experiences approximately $816 billion in merchandise returns annually, equating to nearly 18% of total sales[16] - Liquidity Services estimates that at least $100 billion of returned merchandise is moved through secondary markets[16] - The global used equipment market is valued at approximately $350 billion[16] Marketplace and Service Offerings - The company provides access to over 600 product categories, facilitating a continuous flow of surplus assets for buyers[23] - The company aims to maximize sellers' net recovery through channel strategies and dedicated programs[22] - The company operates multiple marketplace brands, serving various industries and product categories, including consumer goods, capital assets, and machinery[42][44] - The AllSurplus marketplace aggregates assets globally, enhancing buyer experience through mobile optimization and machine learning-driven recommendations[32][33] - The AllSurplus marketplace, launched in fiscal year 2020, connects the global buyer base with assets from across the company's network, enhancing the buyer experience through technology and innovation[45] - The company provides value-added services to sellers, including merchandising and channel optimization, logistics, and settlement support, which improve operational efficiencies and recovery rates[48] Technology and Innovation - The company is investing significant resources in enhancing marketplace user experiences and seller tools, leveraging generative AI and automation technologies[69] - The company’s technology investments have led to the development of the AllSurplus marketplace, which utilizes machine learning for site search and recommendations, optimizing asset visibility for buyers[32] - The company successfully migrated the GovDeals.com marketplace to a modernized platform in October 2023, enhancing user experience with AI and machine learning algorithms[66] - In fiscal year 2023, the company expanded capabilities of its flagship e-commerce platform, AllSurplus, including the introduction of Rapid Bid and AllSurplus Deals[67] - The company’s technology infrastructure leverages cloud services from Amazon Web Services and Microsoft Azure for scalability and resilience[65] Operational Efficiency - The company’s operations group includes buyer relations, shipping logistics, and warehouse network management to enhance transaction efficiency[74] - The company employs a robust cybersecurity program, including annual training for all employees to promote a culture of cybersecurity awareness[71] - The company intends to improve operating expense leverage through cost control and technology innovation, enhancing productivity and scalability[38] Employee and Workplace Culture - The company has 716 employees worldwide, with 91% located in North America, 6% in the EMEA region, and 3% in the Asia-Pacific region as of September 30, 2023[83] - The company emphasizes diversity, equity, and inclusion in its workforce, utilizing various recruiting strategies to attract talented candidates[85] - The company provides a range of health benefits, including multiple medical plans, dental and vision coverage, and paid parental leave, with a significant portion of premiums covered by the company[86] - The company operates a remote-first work environment to promote flexibility, high performance, and retention[89] - The company’s culture is built on core values such as integrity, customer focus, and continuous improvement, which are reinforced through performance management and employee engagement surveys[87] Community Engagement and Sustainability - The company engages in community outreach and sustainability initiatives, including disaster relief and zero-waste programs[88] - The company aims to benefit businesses and the environment by enabling the continued use of surplus assets, reducing waste and emissions[91] - The company’s e-commerce marketplaces promote sustainability by facilitating the resale and redeployment of surplus assets, reducing waste, and supporting corporate environmental initiatives[32]