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Sep 30, 2021
Liquidity Services Q4 2021 Earnings Report
Liquidity Services recorded outstanding growth driven by strong demand and strategic investments.
Key Takeaways
Liquidity Services reported a strong Q4 2021 with a 24% increase in GMV and a 26% increase in revenue. GAAP Net Income increased significantly due to a tax benefit, and Non-GAAP Adjusted EBITDA also saw an increase.
GMV increased by 24% to $244.4 million.
Revenue increased by 26% to $70.3 million.
GAAP Net Income increased to $32.8 million, including a $24.6 million tax benefit.
Non-GAAP Adjusted EBITDA increased to $11.4 million.
Liquidity Services
Liquidity Services
Forward Guidance
Liquidity Services anticipates continued growth in GMV but expects increased costs and a higher effective tax rate to impact profit in Q1-FY22. The company expects growth in transaction volumes across segments and sustained positive macroeconomic factors to influence recovery rates.
Positive Outlook
- Continued R&D spending to support omni-channel behavioral marketing, expanded analytics, and buyer/seller payment optimization.
- Increased spending in business development activities to capture market opportunities, targeting expected payback periods of 12 to 18 months.
- Stabilized macroeconomic factors that most directly influence the recovery rates of asset categories, such as transportation assets.
- Continued mix shift to consignment pricing model, which will lower revenue as a percent of GMV but can improve gross profit margins.
- 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.
Challenges Ahead
- Profit guidance for Q1-FY22 is at or below the same period last year reflecting increased costs related to growing the capacity of our sales, marketing, product development and technology teams, and higher market-driven labor costs, to support future growth with operating leverage that is expected to improve throughout FY22 and beyond.
- Anticipate a year-over-year decline in gross margins in Q1-FY22 due to near-term product mix changes in our RSCG segment.
- Effective tax rate is expected to increase starting in Q1-FY22 to approximately 18-20% from 4.5% for FY21 when excluding the impact of the valuation allowance reversal.
- Short-term variability in the inventory product mix within the RSCG segment, which can cause a decline in gross profit margins.
- Continued variability in project size and timing within our CAG segment, especially as COVID-19 and its variants continue to impact the global economy and the ability to conduct cross-border transactions.