LIQUIDITY SERVICES INC Q1 FY2025 earnings call

• Strong start to fiscal year 2025 with record quarterly GMV and double-digit GMV growth in all segments. - Continued adoption of services by customers and momentum across businesses. - Relentless drive to exceed sellers' and buyers' expectations by enhancing services and leveraging technology. - Network effects on marketplace platform with over $1.5 billion annual GMV run rate and 13% year-over-year growth in auction participants. - Retail supply chain group had record quarterly GMV and direct profit. - GovDeals segment grew GMV and revenues by 11% and 29% respectively, with new sellers and growth in high-value categories. - CAG segment grew GMV 31% organically, with auction participants more than doubling. - Machinio segment had double-digit organic growth in revenue and direct profit, with over 4,000 subscribers from over 100 countries. - Announcement of acquisition of Auction Software and Simple Auction Site to enhance software development capabilities and market reach. - Midterm goal of achieving $2 billion of annual GMV, focusing on increasing sales volume, expanding buyer base, modernizing platform, and executing acquisitions.

In fiscal first quarter of 2025, retail segment had GMV up 65%, revenue up 101%, and segment direct profit up 31%, setting new quarterly records for the second consecutive quarter. Capital Assets Group (CAG) segment had GMV up 31%, revenue up 26%, and segment direct profit up 27%. GovDeals segment saw GMV up 11%, revenue up 29%, and direct profit up 25%. Machinio segment had revenue and segment direct profit each up 10%. Revenue contribution details: Retail segment's revenue grew 101%, CAG 26%, GovDeals 29%, Machinio 10%

• Fiscal second quarter 2025 outlook anticipates continuing solid start to the fiscal year. - Guidance for second quarter: GMV range $360 million to $390 million; GAAP net income range $5.5 million to $8 million; GAAP diluted earnings per share range $0.17 to $0.25; non-GAAP adjusted diluted earnings per share range $0.27 to $0.35; non-GAAP adjusted EBITDA range $12 million to $14.5 million. - Consolidated revenue as a percent of GMV expected to remain in low 30s, and segment direct profits as a percent of consolidated revenue in low 40s. - Acquisition of auction software not expected to materially impact consolidated results for the quarter.

• Actual results may differ materially from forward-looking statements. - Market conditions and factors impacting financial results as detailed in press release and SEC filings.

Q: Could you talk about how much is expanding market share versus just better market condition?

A: The market share comment relates to customers providing access to more goods, categories, and geographic regions across segments; marketing conditions are choppy but persistent inflation brings buyers to value-priced goods platform, and it's about blocking and tackling to bring brand to more corporate and government organizations.

Q: Historically, what have you seen when tariffs are put in place relative to your business?

A: The scarcity value of product in various categories already in the US and available is a positive; used equipment can be useful if importable, which is on balance neutral positive.

Q: Walk through the Simple Auction acquisition and how broad the offering could become?

A: It's bringing ecosystem to include transactional marketplaces served and software for resellers on platform; largely B2B platform with buyer base of small entrepreneurial and mid-sized businesses reselling, and the acquisition allows adding value in new categories like general build goods and leveraging buyer base.

Q: On GovDeals, how much GMV increase came from new high-volume sellers?

A: GovDeals and CAG benefited from continued growth in seller community, with retail being a combination of penetrating existing relationships and adding new sellers, territories, and categories; it's a good mix of new names and existing relationships driving GMV growth.

Q: With the auction software business, is it SaaS model and how revenue streams work?

A: It's a combination of both; providing reasonably priced SaaS e-commerce platform and unlocking additional recovery by providing access to aggregated buyer marketplace, with receiving percentage of transaction as fee within affordability of small and midsize businesses.