Liquidity Services Sets GMV Record as Revenue Growth Reaccelerates
Net income rose 41% to $10.4 million as profitability outpaced revenue growth.
Liquidity Services (LQDT), an operator of online marketplaces for surplus assets, set a quarterly gross merchandise volume record as growth accelerated across its resale and government businesses. Fiscal third-quarter GMV rose 10% to $453.0 million, while revenue increased 8% to $129.6 million.
The quarter marked a renewed expansion after two periods of weaker momentum. Revenue growth accelerated from 4% in the second quarter and a 1% decline in the first, while GMV growth strengthened from 6% and 3%, respectively.
Diluted earnings rose 39% to $0.32 a share, compared with 5% growth in the prior quarter. Adjusted earnings before interest, taxes, depreciation and amortization increased 30% to $22.0 million, though that growth rate eased from 37% in the second quarter.
The retail supply chain group became the main growth driver. Its GMV rose 19%, revenue increased 8% and direct profit climbed 30% to $25.2 million as a greater consignment mix, channel optimization and improved asset recovery helped the direct-profit margin expand to 29% from 24%.
GovDeals GMV growth accelerated to 9%, while revenue growth slowed to 7% and direct profit rose 9% to $24.2 million. The capital-assets group recorded a 1% GMV decline, but improved take rates on multinational projects lifted revenue 18% and direct profit 13%.
Consignment sales accounted for 83% of consolidated GMV, up from 81% in each of the preceding two quarters, supporting the gap between GMV and revenue growth. Completed transactions rose 17% to about 334,000 and registered buyers increased 9% to 6.4 million, while auction participants fell 5% to about 1.046 million.
For the fiscal fourth quarter, Liquidity Services expects GMV of $415 million to $455 million and adjusted EBITDA of $22 million to $25 million. The company expects sequentially lower GMV and revenue from the retail supply chain group, while forecasting a strong sequential performance from the capital-assets business.
The company ended the quarter with $231.1 million in cash and no financial debt, up from $204.0 million three months earlier. Its fourth-quarter outlook calls for GAAP net income of $10 million to $13 million and a business mix that lifts total segment direct profit to the mid-50% range of revenue.