Liquidity Services, Inc.

Welcome to the Liquidity Services, Inc. Third Quarter of Fiscal Year 2024 Financial Results Conference Call. My name is Lauren Cannon 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 a 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.

Good morning. On the call today are Bill Engrick, our Chairman and Chief Executive Officer, and Jorge Celaya, 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, August 8, 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 our 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 their most comparable GAAP measures as available. Management also uses certain supplemental operating data as a measure of certain components of operating performance, which we also believe is useful for management and investors. The 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.

Good morning, and welcome to our Q3 earnings call. I'll review our Q3 performance and the progress of our business segments, and next, Jorge Celaya will provide more details on the quarter. We're proud to report record GMV this quarter of $380 million. driven by market share gains, expanded services, and outstanding buyer participation. These results provide a strong proof point that we are on track to achieve our near-term goal of $1.5 billion in annual GMV. Additionally, our scalable platform continues to drive profitable growth. And in Q3, we delivered our highest quarterly GAAP net income in fiscal year 2024 and 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 GovDeal segment set a quarterly GMB record of $250 million, driven by continued seller acquisition and service expansion. While we have seen evidence of softening prices, GovDeals recorded strong year-over-year growth in vehicle sales and set numerous records including the number of sellers, number of asset listings, and number of vehicle listings during Q3. We continue to expand our market share together with the recently acquired Sierra Auction business and sign notable new clients during Q3, including the state of New York, Spokane County, Washington, Norman, Oklahoma, and Mesa, Arizona. Additionally, and our bid for assets marketplace, which is included in our CUB deals segment results, we are now ramping our Philadelphia contract and have signed several new sheriff contracts in the states of Pennsylvania and Louisiana. Our retail supply chain group segments 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. We launched the first phase of our single item receiving tool, which will enhance operational efficiencies for both our B2B and B2C channels. During Q3, we onboarded several new clients who are utilizing our all surplus deals B2C channel, and we expanded our relationship with several longstanding clients. Together, these efforts will result in continued growth in Q4 and beyond in our RSCG segment. Our Maschineo segment set another revenue record as it continues to be a leader in matching buyers and sellers of used equipment around the globe. Our market research reveals that customers receive superior value through our Maschineo advertising and storefront products versus the competition. We expect to sustain mid-teens or better organic revenue growth going forward as Machinio expands its market share in all geographies in Q4. Our capital asset group segment grew GMV 7% year-over-year during Q3, but results were lower than expectation due to several delayed or canceled sales outside of our control in the U.S. and Asia regions. However, we continue to have good success in signing new clients, adding over 33 new mandates to our industrial CAG pipeline during Q3. We also set a new record for unique sellers in our CAG heavy equipment fleet vertical during the quarter, which bodes well for continued growth of more predictable recurring revenue in our CAG segment. Finally, we continue to invest in platform improvements, including seller listing tools and asset templates to drive efficiency and convenience for our sellers. We continue to harness the potential of AI applications to improve the quality of asset listings, enrich data useful for customers, and enhance marketplace search functionality to optimally match available assets with our buyer's purchasing criteria. Together, these enhancements will continue to improve our seller and buyer experience. In summary, we're well positioned strategically and financially in the current environment. Our solutions assist clients to 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 customer and shareholder value. And I'll turn it over to Jorge for more details on the quarter.