Liquidity Services(LQDT) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2022, Liquidity Services achieved a record GMV of approximately $260 million, representing a 37$190.4 million in Q1 2021 [14][7] - Revenue for Q1 2022 was $66.7 million, a 20$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]