Liquidity Services, Inc.

Welcome to the Liquidity Services, Inc. Second Quarter of Fiscal Year 2024 Financial Results Conference Call. My name is Liz, and I will be your operator for today's call. Please note that this conference call is being recorded. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. I will now turn the call over to Michael Patrick, Liquidity Services Vice President and Controller. Take it away.

Good morning. On the call today are Bill Engrick, our Chairman and Chief Executive Officer, and Jorge Salaya, our Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks. The following discussion and responses to your questions reflect management's views as of today, May 9, 2024, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and in filings with the SEC, including our most recent annual report on Form 10-K. As you listen to today's call, please have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. During this call, management will discuss certain non-GAAP financial measures. In its press release and filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP measures, including the reconciliation of these measures with the most comparable GAAP measures as available. Management also uses certain supplemental operating data as a measure of certain components of operating performance, which we believe is useful for management and investors. This supplemental operating data includes gross merchandise volume and should not be considered a substitute for or superior to GAAP results. At this time, I will turn the presentation over to our Chairman and CEO, Bill Engert.

Bill Engert Good morning and welcome to our Q2 earnings call. Our Q2 performance and the progress of our business segments and next Jorge Celaya will provide more details on the quarter. Our marketplace platform and services continue to delight customers fueling double-digit organic revenue and GMV growth year over year. Our business continues to prove its resilience even against the backdrop of higher interest rates, and slowing growth in many sectors of the economy. We are pleased that our balanced investments in sales operations and platform automation are being rewarded across our diversified segments with market share expansion and record buyer participation on our platform. In fact, This quarter, we shattered records for the number of completed transactions, up 44% year-over-year, and the number of auction participants, up 43% year-over-year, which reflects the growing breadth of supply and buyer liquidity we've developed on our marketplace platform. Our retail supply chain group segment set a new quarterly GMV record with approximately $80 million of GMV powered in part by the rapidly expanding growth of our all-surplus deals direct-to-consumer sales channel, which grew GMV sequentially over 60%. Our CAG segment continues to grow its recurring heavy equipment seller base at a record pace and grew its heavy equipment fleet GMV by over 30% year over year during the quarter. CAG's all surplus online marketplace is the global market maker of choice for industrial sellers in all regions of the world and in all industry verticals. For example, during the quarter, our CAG segment completed several high value transactions in our automotive and energy categories, reflecting how corporate clients are using our marketplace to monetize assets amidst changing and dynamic growth in many sectors of the economy. Our Machinio segment achieved record revenue and paying customer counts, driven by improvements to its online classifieds marketplace, which efficiently matches buyers and sellers of used equipment around the globe. Maschineo's recent expansion into China is well underway, and this initiative more than doubles the addressable market for our Maschineo business. We're also very excited to welcome Sierra Auction to Liquidity Services and are now leveraging its market-leading position in the Southwest United States to cross-sell its offerings to our government and commercial clients. We remain enthusiastic about our strategy and the strength of our business model. During Q2, we generated $34.8 million in operating cash flow, which funded our organic growth initiatives, the Sierra acquisition, and continued share repurchases, while generating a net $10 million of free cash flow to our balance sheet. In summary, we are very well positioned strategically, and financially in the current environment. We have solutions that help our clients weather the cyclicality of an uncertain macro environment. We have a robust business development pipeline and continue to pursue strategic opportunities in each segment of the circular economy to drive shareholder value and provide outstanding service to our customers across the global supply chain. I'll now turn it over to Jorge for more details on the quarter.