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Jun 30, 2023
Liquidity Services Q3 2023 Earnings Report
Achieved record GMV during the quarter driven by strong execution and market share gains.
Key Takeaways
Liquidity Services reported a 16% increase in revenue to $80.8 million and a 3% increase in GMV to $334.0 million. GAAP net income was $6.5 million, or $0.21 per share, while Non-GAAP Adjusted EBITDA was $13.3 million, up $1.5 million, and Non-GAAP Adjusted Diluted EPS was $0.28, up $0.07.
Gross Merchandise Volume (GMV) increased by 3% to $334.0 million.
Revenue increased by 16% to $80.8 million.
GAAP Net Income was $6.5 million, with GAAP Diluted Earnings Per Share (EPS) of $0.21.
Non-GAAP Adjusted EBITDA was $13.3 million, and Non-GAAP Adjusted Diluted EPS was $0.28.
Liquidity Services
Liquidity Services
Forward Guidance
For Q4-FY23, Liquidity Services expects GMV to range from $290 million to $315 million, GAAP Net Income to range from $4.0 million to $6.5 million, GAAP Diluted EPS to range from $0.13 to $0.20, Non-GAAP Adjusted EBITDA to range from $10.0 million to $13.0 million, and Non-GAAP Adjusted EPS to range from $0.19 to $0.27.
Positive Outlook
- continued R&D spending to support omni-channel behavioral marketing, analytics, and buyer/seller payment optimization
- spending in business development activities to capture market opportunities, targeting efficient payback periods
- a longer-term trend of continued mix shift to the consignment model, which may lower revenue as a percent of GMV but can improve segment direct profit as a percentage of revenue
- continued growth and expansion resulting from the continuing acceleration of broader market adoption of the digital economy, particularly in our GovDeals and RSCG seller accounts and programs, including the execution by RSCG on its business plans for AllSurplus Deals and its expanded distribution network
- continued growth in our Machinio advertising subscription service and acceptance of other Machinio service offerings
Challenges Ahead
- variability in the inventory product mix handled by our RSCG segment, which can cause a change in revenues and/or segment direct profit as a percentage of revenue, including variability from changes in consumer sentiment, retailers increasing product flows to us on an episodic basis to solve capacity constraints at retailer warehouse or distribution centers and retailers decreasing product flows as they solve capacity constraints and return more product to store shelves or fulfillment centers
- as growth in the foreclosed real estate category within the GovDeals segment occurs, take rates as a percentage of GMV are expected to become lower without significantly affecting segment direct profit as a percentage of revenue. GMV from real estate transactions can be subject to significant variability due to changes that include postponements or cancellations of scheduled or expected auction events, the value of properties to be included in the auction event, and the value of the properties that may be withdrawn due to the property holder curing their delinquency or taking other legal actions to delay the sale of their property
- continued variability in project size and timing within our CAG segment
- successful integration of Bid4Assets and execution by Bid4Assets on planned real estate auction activity and its business plan, including efforts underway with local and state governments to advance legislation that allows for online auctions for foreclosed and tax foreclosed real estate
- our annual FY23 effective tax rate (ETR) is expected to range from approximately 25% to 31%. This range excludes any potential impacts from legislative changes to U.S. corporate tax rates that may be enacted during Q4-FY23; and potential impacts from items that have limited visibility and can be highly variable, including effects of stock compensation due to participant exercise activity and changes in our stock price. We are not expecting a substantial increase to cash paid for income taxes due to our continued net operating loss carryforward position