Liquidity Services, Inc.

Welcome to the Liquidity Services, Inc. fourth quarter of fiscal year 2024 financial results conference call. My name is Lisa, and I will be your operator for today's call. Please note that this conference 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 Service, vice president and controller. Please go ahead.

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, December 12, 2024, and will include forward-looking statements. Actual results may 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. In addition 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 reconciliations 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. 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 Angrich.

Good morning, and welcome to our Q4 earnings call. I'll review our Q4 performance and the progress of our business segments. And next, Jorge Celaya will provide more details on the quarter. Our healthy fourth quarter results capped a successful year of market share expansion and consistent growth in fiscal year 2024, backed by our investments in innovation, service, and strong operational execution for our customers. we achieved double-digit consolidated GMV growth in each quarter throughout the year, and each of our segments achieved double-digit annual GMV growth, culminating in record annual GMV of $1.4 billion. Overall, we are seeing enhanced network effects in our two-sided marketplace platform as we grew our auction participants and completed transactions by 22% and 12% year-over-year, respectively, during the quarter. We converted this growth to over $22 million in operating cash flow in the fourth quarter, highlighting the strength of our asset-light business model. In the fourth quarter, our RSCG segment set new quarterly records in GMV, revenue, and segment direct profit as we drove expanded relationships with our seller clients by leveraging our decades of industry-leading expertise and multichannel buyer liquidity. Our GovDeal segment delivered robust double-digit growth through ongoing seller acquisition and service expansion. Additionally, our Machinio segment achieved another quarterly revenue record, further solidifying its position as a leading platform for connecting buyers and sellers of used equipment worldwide. We're also thrilled to celebrate a significant milestone, our 25th anniversary. Over the past quarter century, Liquidity Services has grown from a scrappy startup, I was there, into a leading global e-commerce company, powering the circular economy and delivering unmatched value worldwide. Our journey has been marked by remarkable growth, innovation, and a steadfast commitment to promoting sustainability. This milestone allows us to reflect on our achievements and express our deepest gratitude to our dedicated team our loyal clients, and supportive stakeholders who have been instrumental in our success. As we look to the future, we remain committed to driving excellence and innovation in all that we do. Overall, our scalable marketplace technology, broad range of services, diversified client base, organic growth initiatives, and pipeline of acquisition opportunities will propel us in continuing our track record of growth. Our leadership team has now set its sights on reaching the $2 billion annual GMV milestone, which is a key step combined with service and margin expansion towards attaining the $100 million of the annual EBITDA milestone. To achieve these objectives, we will focus on the following areas. One, increasing our market share and the sales volume transacted on our marketplace. Two, expanding our buyer base and sales channels to enhance recovery on the assets we sell. Three, infusing and modernizing our platform with new technologies including AI tools to increase our operational efficiencies and improve the customer experience. And finally, four, executing complimentary bolt-on acquisitions. We expect to realize these goals in the next few years, which in turn will deliver tremendous value for our customers and our shareholders.