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LIQUIDITY SERVICES INC (LQDT)·Q1 2025 Earnings Summary

Executive Summary

  • Record GMV of $386.1M (+26% YoY), revenue of $122.3M (+72% YoY), and non-GAAP adjusted EBITDA of $13.1M; all segments posted double-digit GMV growth, and results finished slightly above management’s Q1 guidance range .
  • Q1 beat all guided metrics: GMV, GAAP EPS ($0.18), adjusted EPS ($0.28), and adjusted EBITDA ($13.1M) all exceeded the top end of prior guidance; strength was driven by RSCG purchase programs and GovDeals’ higher blended take rate from expanded services .
  • Management raised the near-term outlook: Q2 guidance calls for GMV $360–$390M, GAAP EPS $0.17–$0.25, adjusted EPS $0.27–$0.35, and adjusted EBITDA $12.0–$14.5M; operational mix ratios (consignment ~80% of GMV; revenue/GMV low-30s; segment direct profit/revenue low-40s) are maintained from Q1 .
  • Strategic catalysts: acquisition of Auction Software/Simple Auction Site expands SaaS/private-label capabilities; GovDeals added notable public-sector sellers and set a record for sellers with >$1M quarterly GMV; Machinio continues double-digit growth and APAC expansion .

What Went Well and What Went Wrong

  • What Went Well

    • RSCG delivered new quarterly records in GMV, revenue, and direct profit for the second straight quarter; CEO: “powered by our relentless drive to exceed… leveraging advanced technologies” .
    • GovDeals revenue grew 29% on higher blended take rate and service expansion; new sellers included New York City and other municipalities; record count of sellers transacting >$1M GMV in the quarter .
    • Non-GAAP adjusted EPS rose to $0.28 (+100% YoY) and adjusted EBITDA to $13.1M (+81% YoY); strong balance sheet with $139.1M in cash and investments, zero debt .

  • What Went Wrong

    • Sequential margin compression: adjusted EBITDA fell from $14.5M in Q4 to $13.1M in Q1 as RSCG’s expanded purchase model (lower-touch flows) drove revenue faster than GMV but tempered direct profit ratios .
    • Operating cash flow was negative (-$12.1M) as AR built and payables fell; prior-year Q1 was also negative (-$8.9M), highlighting seasonal and working capital dynamics .
    • Ongoing timing variability in CAG projects and GovDeals real estate events; management flagged continued variability and macro sensitivities despite a strong pipeline .

Financial Results

MetricQ3 FY2024Q4 FY2024Q1 FY2025
GMV ($USD Millions)$380.4 $361.0 $386.1
Total Revenue ($USD Millions)$93.6 $106.9 $122.3
GAAP Diluted EPS ($)$0.19 $0.20 $0.18
Non-GAAP Adjusted Diluted EPS ($)$0.30 $0.32 $0.28
Non-GAAP Adjusted EBITDA ($USD Millions)$14.7 $14.5 $13.1
Adjusted EBITDA Margin (%)15.7% 13.6% 10.7%

Guidance vs Actual (Q1 FY2025)

MetricGuidance (Q1 FY2025)Actual (Q1 FY2025)Beat/Miss
GMV ($USD Millions)$350–$385 $386.1 Beat (above top end)
GAAP Diluted EPS ($)$0.08–$0.16 $0.18 Beat (above top end)
Non-GAAP Adjusted Diluted EPS ($)$0.18–$0.26 $0.28 Beat (above top end)
Non-GAAP Adjusted EBITDA ($USD Millions)$9.5–$12.5 $13.1 Beat (above top end)

Segment Breakdown (Q1 FY2025 vs Q1 FY2024; $USD Thousands)

SegmentGMV Q1 FY2025GMV Q1 FY2024Revenue Q1 FY2025Revenue Q1 FY2024Segment Direct Profit Q1 FY2025Segment Direct Profit Q1 FY2024
GovDeals212,141 190,408 20,522 15,900 18,816 15,056
RSCG109,771 66,561 87,681 43,721 18,495 14,112
CAG64,168 48,895 9,851 7,834 8,796 6,943
Machinio——4,294 3,886 4,077 3,703
Consolidated386,080 305,864 122,331 71,325 ——

KPIs

KPIQ4 FY2024Q1 FY2025
Registered Buyers (Millions)5.5 5.7
Auction Participants (Thousands)1,016 960
Completed Transactions (Thousands)279 253

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GMV ($USD Millions)Q2 FY2025N/A$360–$390 New
GAAP Net Income ($USD Millions)Q2 FY2025N/A$5.5–$8.0 New
Non-GAAP Adjusted EBITDA ($USD Millions)Q2 FY2025N/A$12.0–$14.5 New
GAAP Diluted EPS ($)Q2 FY2025N/A$0.17–$0.25 New
Non-GAAP Adjusted Diluted EPS ($)Q2 FY2025N/A$0.27–$0.35 New
Consignment GMV (% of total)Q2 FY2025~80% (Q1 outlook) ~80% (Q2 outlook) Maintained
Revenue/GMV (%)Q2 FY2025Low-30s (Q1 outlook) Low-30s (Q2 outlook) Maintained
Segment Direct Profit/Revenue (%)Q2 FY2025Low-40s (Q1 outlook) Low-40s (Q2 outlook) Maintained
Diluted Shares (Millions)Q2 FY202531.5–32.0 (Q1 guidance) 32.0–32.5 Raised
Effective Tax Rate (Quarter)Q2 FY2025Annual ETR 28–34% (Q1 guide) Low-to-mid 20s in Q2 due to stock comp vesting Lower quarter ETR

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY2024, Q4 FY2024)Current Period (Q1 FY2025)Trend
AI/technology initiativesIntroduced single-item receiving tool; AI-driven merchandising and buyer matching “Leveraging advanced technologies” to enhance marketplace experiences Expanding adoption
Supply chain/mixRetail purchase programs driving revenue faster than GMV; direct profit % tempered Continued expansion of lower-touch purchase flows in RSCG; revenue > GMV growth Persistent mix shift
Tariffs/macroSoftening prices in GovDeals for fleet assets; macro variability Tariffs viewed neutral to positive; inflation attracts value-oriented buyers Macro-sensitive but resilient
Product performance (segments)GovDeals set GMV records; Machinio record revenue; CAG delays offset All segments double-digit GMV growth; GovDeals added marquee sellers Broad-based strength
Regional trendsMachinio expanding globally; GovDeals footprint growth Machinio APAC expansion; second sale in China via AllSurplus International expansion
Regulatory/legalAdvancing legislation for online public-sector real estate auctions Ongoing push; record public real estate sales highlighted Building momentum
R&D executionContinued investments; operating leverage targeted in 2H R&D spend to support omni-channel marketing and payments optimization Sustained investment

Management Commentary

  • CEO: “Our strong start to FY2025… resulted in a new quarterly GMV record and double-digit GMV growth in every one of our segments… excited to announce the acquisition of Auction Software… expand our SaaS offerings and extend our market reach” .
  • CFO: “Our fiscal first quarter results finished slightly above our first quarter guidance range… revenue has continued to grow faster than GMV mainly due to expansion of lower touch purchase programs in our retail segment” .
  • CEO on strategy: “Investors should expect acquisitions that are accretive… we’re excited to announce the acquisition of Auction Software… enhance our software development capabilities and extend our market reach” .
  • CFO on Q2: “We expect GMV $360–$390M… GAAP EPS $0.17–$0.25… adjusted EPS $0.27–$0.35… adjusted EBITDA $12–$14.5M” .

Q&A Highlights

  • Market share vs market conditions: Growth driven more by share gains and expanding access to more goods/categories/geographies; inflation supports buyer demand for value-priced goods .
  • Tariffs: Potential new tariffs seen as neutral-to-positive due to scarcity value of domestically available used equipment .
  • Acquisition rationale: Auction Software/Simple Auction Site provides white-label/SaaS tools for resellers; an acqui-hire expanding modern, scalable software, enabling transaction-linked revenue share alongside subscription fees .
  • GovDeals vehicle supply: Vehicle flow “healthy,” with stronger non-vehicle capital items and growing public real estate category contributing to GMV .
  • Seller growth: GMV increase reflects both new accounts and deeper penetration of existing relationships across segments .

Estimates Context

  • Wall Street consensus via S&P Global was unavailable at the time of this analysis due to a data access limit; comparison to estimates could not be performed. Results were benchmarked against company guidance, with Q1 GMV, EPS, adjusted EPS, and adjusted EBITDA all exceeding the top end of guidance ranges .

Key Takeaways for Investors

  • Broad-based strength and execution: All segments posted double-digit GMV growth; RSCG scaled low-touch purchase programs, and GovDeals expanded service take rates—supporting continued revenue outperformance vs GMV .
  • Evidence of operating leverage despite mix shift: Four quarters of sequential operating leverage cited by CFO; however, the purchase-heavy mix tempers direct profit ratios—watch margins as purchase programs scale .
  • Near-term setup: Q2 guide implies sustained growth with maintained operational ratios and higher diluted shares; quarter ETR lowered due to stock-comp vesting—EPS variability possible around vesting windows .
  • Cash and balance sheet: $139.1M cash and investments, no debt; strategic flexibility to continue bolt-on acquisitions and invest in platform modernization .
  • Secular tailwinds: Inflationary backdrop and circular economy adoption favor value-focused marketplaces; public-sector real estate and international energy equipment sales (China) broaden opportunity set .
  • Trading implications: Strong beat vs guidance and expanding seller base are positives; monitor margin trajectory amid purchase mix, seasonal working capital (negative Q1 operating cash flow), and project timing variability in CAG .
  • Medium-term thesis: Management reiterated $2B annual GMV midterm goal and a path toward $100M annual EBITDA through scale, technology (including AI), and accretive acquisitions; execution on mix and margin will be the key determinant of value realization .