BETHESDA, Md., Aug. 08, 2024 (GLOBE NEWSWIRE) -- Liquidity Services (NASDAQ:LQDT, www.liquidityservices.com)), a leading global commerce company powering the circular economy, today announced its financial results for the quarter ended June 30, 2024, as compared to the corresponding prior year quarter: Record Gross Merchandise Volume (GMV) of $380.4 million, up 14%, and Revenue of $93.6 million, up 16% Highest quarterly GAAP Net Income in Fiscal Year 2024 of $6.0 million, down $0.5 million1, and GAAP Diluted Earnings Per Share (EPS) of $0.19, down $0.021 Highest quarterly Non-GAAP Adjusted EBITDA in 10 years of $14.7 million, up $1.4 million, and Non-GAAP Adjusted EPS of $0.30, up $0.02 Cash balances of $136.8 million2 with zero financial debt "We are proud to report record GMV this quarter driven by market share gains, expanded services, and outstanding buyer participation, which resulted in our strongest Non-GAAP Adjusted EBITDA performance in a decade. Our flexible services, ranging from self-directed to fully-managed offerings, and efforts to harness the benefits of AI technologies are continuing to attract more sellers and buyers, enhancing the size and scale of our marketplace and fueling our growth. "Our GovDeals segment set a quarterly GMV record, with $250 million in GMV, driven by continued seller acquisition and service expansion. Our RSCG segment's focus on exceptional service delivery to its seller clients has been rewarded with increased volumes, which are poised to accelerate further in the fourth quarter. Our Machinio segment set another revenue record as it continues to be a leader in matching buyers and sellers of used equipment around the globe. "We have a robust business development pipeline, and our strong balance sheet has us well positioned to take advantage of strategic opportunities in the market," said Bill Angrick, Liquidity Services, CEO. Third Quarter Financial Highlights GMV for the fiscal third quarter of 2024 was $380.4 million, a 14% increase from $334.0 million in the third fiscal quarter of 2023. GMV in our GovDeals segment increased 17%, driven by new seller acquisition, service expansion and strong results in its vehicle and heavy equipment categories. GMV in our RSCG segment increased 9%, driven by increased volumes within client purchase model programs, partially offset by a lower value product mix in its consignment programs. GMV in our CAG segment increased 7%, driven by consignment sales in our industrial and heavy equipment categories, partially offset by project delays in the energy category. Consignment sales represented 86% of consolidated GMV for the third fiscal quarter of 2024. Revenue for the fiscal third quarter of 2024 was $93.6 million, a 16% increase from $80.8 million in the third fiscal quarter of 2023. Revenue in our GovDeals segment increased 28%, reflecting the increase in overall GMV, paired with a higher blended revenue take-rate due to an expansion of service offerings to new, high-volume sellers. Revenue in our RSCG segment increased 15%, reflecting increased volumes in our client purchase model programs relative to consignment programs. This mix shift tends to dampen RSCG's segment direct profit as a percentage of revenue. The increased volumes were mainly driven by lower-touch product flows. Revenue in our Machinio segment increased 15% due to increased subscriptions and pricing for its Advertising and System products. Revenue in our CAG segment decreased 4% despite the increase in GMV due to an increase in sales conducted with partners. The changes in our profitability metrics reflect our increased top-line performance, and increases in sales, marketing, technology and operations expenses to drive market share expansions, resulting in: GAAP Net Income of $6.0 million1, or $0.19 per share1, for the fiscal third quarter of 2024, a decrease from $6.5 million, or $0.21 per share, for the same quarter last year. Non-GAAP Adjusted Net Income for the fiscal third quarter of 2024 of $9.5 million, or $0.30 per share, an increase from $8.8 million, or $0.28 per share for the same quarter last year. Non-GAAP Adjusted EBITDA for the fiscal third quarter of 2024 of $14.7 million, a $1.4 million increase from $13.3 million in the same quarter last year. 1 GAAP Net Income for the fiscal third quarter of 2024 was impacted by $1.1 million ($0.8 million net of tax) of acquisition-related costs and litigation settlement expenses. There were no comparable impacts to the fiscal third quarter of 2023. These categories of expense are considered in our calculation of Non-GAAP Adjusted Net Income and Earnings per Share (see Page 8). 2 Includes $130.3 million of Cash and cash equivalents and $6.5 million of Short-term investments. Third Quarter Segment Financial Results We present operating results for our four reportable segments: GovDeals, RSCG, CAG and Machinio. For further information on our reportable segments, including Corporate and elimination adjustments, see Note 14, Segment Information, to our quarterly report on Form 10-Q for the period ended June 30, 2024. Segment direct profit is calculated as total revenue less cost of goods sold (excluding depreciation and amortization). Our Q3-FY24 segment results are as follows (unaudited, dollars in thousands):   Three Months Ended June 30,     Nine Months Ended June 30,     2024     2023     2024     2023   GovDeals:                       GMV $ 249,652     $ 213,052     $ 626,285     $ 542,025   Total revenue $ 22,109     $ 17,270     $ 56,384     $ 45,956   Segment direct profit $ 20,716     $ 16,389     $ 52,982     $ 43,572   % of Total revenue   94 %     95 %     94 %     95 %                         RSCG:                       GMV $ 78,950     $ 72,677     $ 225,145     $ 210,913   Total revenue $ 58,764     $ 50,971     $ 159,299     $ 150,657   Segment direct profit $ 17,365     $ 17,876     $ 48,478     $ 50,562   % of Total revenue   30 %     35 %     30 %     34 %                         CAG:                       GMV $ 51,838     $ 48,229     $ 154,245     $ 134,518   Total revenue $ 8,650     $ 8,985     $ 28,764     $ 27,795   Segment direct profit $ 7,430     $ 7,938     $ 23,611     $ 23,466   % of Total revenue   86 %     88 %     82 %     84 %                         Machinio:                       Total revenue $ 4,106     $ 3,559     $ 11,994     $ 10,144   Segment direct profit $ 3,906     $ 3,381     $ 11,409     $ 9,611   % of Total revenue   95 %     95 %     95 %     95 %                         Consolidated:                       GMV $ 380,439     $ 333,958     $ 1,005,675     $ 887,456   Total revenue $ 93,613     $ 80,770     $ 256,391     $ 234,505   Third Quarter Operational Metrics Registered Buyers — At the end of Q3-FY24, registered buyers, defined as the aggregate number of persons or entities who have registered on one of our marketplaces, totaled approximately 5.4 million, representing a 7% increase over the approximately 5.1 million registered buyers at the end of Q3-FY23. Auction Participants — Auction participants, defined as registered buyers who have bid in an auction during the period (a registered buyer who bids in more than one auction is counted as an auction participant in each auction in which he or she bids), was approximately 1,016,000 in Q3-FY24, a 10% increase from the approximately 924,000 auction participants in Q3-FY23. Completed Transactions — Completed transactions, defined as the number of auctions in a given period, were approximately 263,000 in Q3-FY24, a 4% increase from the approximately 252,000 completed transactions in Q3-FY23. Fourth Quarter Business Outlook We continue to expect double digit consolidated GMV growth at the mid-point of our guidance range and solid overall performance following this fiscal third quarter's record results. Following our GovDeals seasonally high fiscal third quarter, our fiscal fourth quarter GMV outlook continues to expect year-over-year growth. GovDeals revenue is expected to grow at a faster year-over-year rate than GMV due to expansion of more full-service consignment offerings compared to last year, including our acquisition of Sierra Auction in January 2024. Led predominantly by an expansion in purchase volumes in our RSCG segment, we expect RSCG to drive substantial growth in our fiscal fourth quarter both year-over-year and sequentially relative to the third quarter results, with revenues growing faster than GMV. These increased volumes, mostly comprised of a mix of lower-touch product flows, are expected to generate improving bottom line results for RSCG yet have the effect of slightly lowering RSCG's segment direct profit as a percentage of revenue both year-over-year and sequentially. Our Machinio subscription-based business is also anticipated to continue to grow revenue by double digits year-over-year. Our Capital Assets segment is expected to remain steady year-over-year and show sequential growth. Reflecting our growth and market share gains, operating expenses in sales, operations and technology are expected to be up year-over-year and sequentially relative to the fiscal third quarter. Given the expected mix of segment volume flows from seasonality and program additions, we are anticipating our consolidated revenue as a percentage of GMV be in the high twenty percentage range, and our segment direct profits as a percent of total revenue to be in the high forty percent range. Both ratios can vary based on our mix, including asset categories in any given period. Our Q4-FY24 guidance is as follows: GMV - We expect GMV to range from $330 million to $365 million. GAAP Net Income - We expect GAAP Net Income to range from $5.0 million to $7.0 million. GAAP Diluted EPS - We expect GAAP Diluted EPS to range from $0.16 to $0.22. Non-GAAP Adjusted EBITDA -We expect Non-GAAP Adjusted EBITDA to range from $12.0 million to $15.0 million. Non-GAAP Adjusted Diluted EPS - We expect Non-GAAP Adjusted EPS to range from $0.25 to $0.32. Our Business Outlook includes forward-looking statements which reflect the following trends and assumptions for Q4-FY24 as compared to the prior year's period, as well as other the risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended September 30, 2023, and our subsequent quarterly reports: Potential Impacts to GMV, Revenue, Segment Direct Profits, and ratios calculated using these metrics fluctuations in the mix of purchase and consignment transactions. Generally, when the mix of purchase transactions increases, revenue as a percent of GMV increases, while segment direct profit as a percentage of revenue decreases. When the mix of consignment transactions increases, revenue as a percent of GMV decreases, while segment direct profit as a percentage of revenue increases; 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; real estate transactions in our GovDeals segment can be subject to significant variability due to changes that include postponements or cancellations of scheduled or expected auction events and the value of properties to be included in the auction event; continued variability in project size and timing within our CAG segment; 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 direct-to-consumer marketplace; changes in economic or political conditions could impact our current or prospective buyers' and sellers' priorities and cause variability in our operating results; Potential Impacts to Operating Expenses 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; changes in our financial performance could cause fluctuations in the amount of stock compensation expense recognized for performance-based awards; Potential Impacts to GAAP Net Income and EPS and Non-GAAP Adjusted Net Income and Adjusted EPS our FY24 annual effective tax rate (ETR) is expected to range from approximately 26% to 32%. This range excludes any potential impacts from legislative changes to U.S. corporate tax rates that may be enacted; 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 expecting an increase in cash paid for income taxes starting in Q4-FY24 as our remaining net operating loss carryforward position is used; and our diluted weighted average number of shares outstanding is expected to be approximately 31.5 to 32.0 million. As of June 30, 2024, we have $7.6 million in remaining authorization to repurchase shares of our common stock. Reconciliation of GAAP to Non-GAAP Measures Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA. Non-GAAP EBITDA is a supplemental non-GAAP financial measure and is equal to Net Income plus interest and other income, net; provision for income taxes; and depreciation and amortization. Our definition of Non-GAAP Adjusted EBITDA differs from Non-GAAP EBITDA because we further adjust Non-GAAP EBITDA for stock compensation expense, acquisition costs such as transaction expenses and changes in earn-out estimates, business realignment expenses, litigation settlement expenses that are not expected to reoccur, and goodwill, long-lived and other non-current asset impairment. A reconciliation of Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA is as follows:   Three Months Ended June 30,     Nine Months Ended June 30,     2024     2023     2024     2023   Net income $ 6,000     $ 6,487     $ 13,616     $ 14,698   Interest and other income, net1   (891 )     (761 )     (2,803 )     (1,698 ) Provision for income taxes   2,702       2,543       5,071       5,265   Depreciation and amortization   3,199       2,866       9,297       8,433   Non-GAAP EBITDA $ 11,010     $ 11,135     $ 25,181     $