Q1 2022 Liquidity Services Inc Earnings Call

Speaker 1: Welcome to the Liquidity Services Incorporated first quarter of fiscal year 2022 financial results conference call. My name is Vanessa 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.

Welcome to the liquidity services incorporated first quarter of fiscal year 2022 financial results Conference call. My name is Vanessa 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.

We will conduct a question and answer session on the call today are bill and Greg liquidity services, Chairman and Chief Executive Officer, and George Celaya, Its 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.

Speaker 1: On the call today are Bill Engrich, Liquidity Services Chairman and Chief Executive Officer and George Salaia, its Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks.

Speaker 1: The following discussion and responses to your questions reflect Liquidity Services Management's views as of today, February 3, 2022, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact the financial results is included in today's press release and filings with the SEC, including the most recent annual report on Form 10-K .

To reflect liquidity services management's views as of today February three 2022 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 filings with the SEC.

<unk>. The most recent annual report on Form 10-K , as you listen to today's call. Please have the press release in front of you, which includes liquidity services' financial results as well as metrics and commentary on the quarter. During this call liquidity services management will discuss certain non-GAAP financial measures in its press release.

Speaker 1: As you listen to today's call, please have the press release in front of you, which includes liquidity services financial results, as well as metrics and commentary on the quarter. During this call, liquidity services management will discuss certain non-GAAP financial measures. In its press release and filings with the SEC, each of which is posted on its website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures.

<unk> and filings with the SEC each of which is posted on its website you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures liquidity services management also uses certain supplemental operating data as a measure of certain components of operating performing.

Speaker 1: Liquidity services management also uses certain supplemental operating data as a measure of certain components of operating performance.

Speaker 1: which they also believe is useful for management and investors.

Which they 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.

Speaker 1: Disimplemental operating data includes gross merchandise volume and should not be considered a substitute for or superior to GAAP results.

Speaker 1: At this time, I will now turn the presentation over to Liquidity Services CEO , Mr. Bill Engrich.

At this time I will now turn the presentation over to liquidity Services' CEO , Mr Bill and Rick.

Speaker 2: Good morning and welcome to our Q1 earnings call. I'll review our Q1 performance and provide an update on key strategic initiatives. Next, Jorge Salaya will provide more details on the quarter. – Long-term investments in –

Good morning, and welcome to our Q1 earnings call I'll review, our Q1 performance and provide an update on key strategic initiatives.

Jorge Celaya will provide more details on the quarter.

Long term investments in our people products.

Speaker 2: outstanding customer service have been rewarded with surging volume as we set an all-time quarterly GMB record during Q1.

Outstanding customer service have been rewarded.

With surging volume as we've set an all time quarterly record during Q1.

Speaker 2: And in Q1, we surpassed our previously stated goal of reaching $1 billion in annualized GMB.

And in Q1, we surpassed our previously stated goal.

$1 billion in annualized GMB.

Speaker 2: has the world's largest marketplace for surplus goods, liquidity services powers the $100 billion plus circular economy.

As the world's largest marketplace for surplus goods liquor.

Liquidity services powers, the $100 billion plus circular economy.

Speaker 2: by ensuring that every piece of used equipment and return consumer merchandise quickly finds a second life and stays out of the landfill system.

Ensuring that every piece of used equipment and return consumer merchandize quickly find.

Second life.

Out of the landfill system.

Speaker 2: We deploy a sophisticated set of technology, software, and data-driven services to deliver on this mission.

We deploy a sophisticated set of technology.

Software and data driven services to deliver on this mission.

Speaker 2: in the most efficient manner with the highest financial recovery and lowest carbon footprint for our customers.

Most efficient manner with the highest financial recovery and lowest carbon footprint for our customers.

Speaker 2: our mission and value proposition are resonating with sellers.

Our mission and value proposition.

Resonating with sellers.

As we grew our GNP by 37% year over year in Q1.

Speaker 2: as we grew our GMB by 37% year over year in Q1 to approximately $260 million, an all-time record, and our sixth consecutive quarter of 20% plus annual GMB growth.

Approximately $260 million, an all time record and our sixth consecutive quarter of 20% plus annual GMB growth.

Our growth was broad based across every sector of the economy, including energy transportation.

Speaker 2: across every sector of the economy, including energy, transportation, construction, retail consumer goods.

Destruction.

Retail consumer goods industrial.

Speaker 2: industrial manufacturing, and our newest vertical, real estate.

Manufacturing and our newest vertical real estate.

Our proven track record of delivering superior financial returns.

Speaker 2: our proven track record of delivering superior financial returns.

Speaker 2: and lower supply chain cost for our customers.

Lower supply chain costs for our customers.

Is driving more higher value goods to be lifted and sold on our marketplace platform on.

Speaker 2: is driving more higher value goods to be listed and sold on our marketplace platform on a sustained basis.

A sustained basis.

Speaker 2: In one example this past month, we sold two Bell helicopters on our marketplace for the City of Jacksonville, Florida.

And one example, this past month, we sold two bell helicopters.

On our marketplace with the city of Jacksonville, Florida.

Speaker 2: These items generated over $1 million of proceeds to the client attracting over 30,000 unique buyers and thousands of bids.

These items generated over $1 billion of proceeds to decline attracting over 30000 unique buyers.

With bids for these assets.

Speaker 2: Our mission and value proposition is also resonating with buyers.

Our mission and value proposition is also resonating with buyers.

Speaker 2: During Q1, the number of registered buyers on our platform grew to more than 4.7 million.

During Q1, the number of registered buyers on our platform grew to more than $4 7 million.

Speaker 2: which provides our retail, industrial, and government agency sellers.

Which provides a retail industrial and government agency sellers.

Speaker 2: superior execution for the sale of their asset.

Superior execution for the sale of their assets.

During Q1, the number of completed transactions in auction participants on our platform were up.

Speaker 2: During Q1, the number of completed transactions and auction participants on our platform were up 39% and 24% year over year respectively.

39% and 24% year over year, respectively.

Reflecting the growing liquidity in our marketplace.

Speaker 2: reflecting the growing liquidity in our marketplace.

Speaker 2: Finally, our mission and value proposition are resonating with our current and prospective employees.

Finally, our mission and value proposition.

Resonating with our current and prospective employees.

Speaker 2: and benefits our efforts to acquire and retain top talent to execute our business plan.

And benefits our efforts to acquire and retain top talent.

To execute our business plan.

Speaker 2: as we take aim at our next leg of growth.

As we take aim at our next leg of growth.

We grew our head count in Q1 by approximately 12% year over year.

Speaker 2: We grew our headcount in Q1 by approximately 12% year over year, principally in the areas of

Principally in the areas of.

Speaker 2: technology, business development, marketing, and operation.

Technology business development marketing and operations.

Speaker 2: These incremental investments and talent are directly tied to capturing market share and delivering long-term shareholder value.

These incremental investments and talent are directly tied to capturing market share and delivering long term shareholder value.

Speaker 2: Our market share expansion and growth is the result of long-term secular trends.

Our market share expansion and growth is the result of long term secular trends and the.

Speaker 2: and the associated investments we've made in our marketplace platform to drive digital transformation in the supply chain to benefit buyers, sellers, and the planet.

The associated investments, we've made in our marketplace platform to drive digital transformation in the supply chain to benefit buyers sellers and the planet.

Speaker 2: It is also important to underscore that our business at Liquidity Services is resilient.

It is also important to underscore that our business at liquidity services is resilient.

Speaker 2: and performs well in both periods of economic expansion.

And performs well in both periods of economic expansion.

And contraction.

Speaker 2: Indeed, our marketplace plays a vital role in solving the needs of both large enterprises and small businesses and navigating several macro trends including the growth of online commerce which drives more product returns.

Indeed, our marketplace plays a vital role in solving the needs of both large enterprises and small businesses.

Navigating several macro trends, including the growth of online commerce, which drives more product returns.

The increasing product obsolescence as organizations adopt next generation technologies.

Speaker 2: increasing product obsolescence as organizations adopt next generation technologies.

Speaker 2: and the shared goal of reducing waste and CO2 footprint.

And the shared goal of reducing waste and Sidoti footprints through smart asset redeployment and remarketing strategies in every sector with.

Speaker 2: through smart asset redeployment and remarketing strategies in every sector, the global economy.

The global economy.

Our ecommerce marketplace solutions are well positioned to continue to power the $100 billion, plus circular economy and deliver value to shareholders through our ability to unleash the intrinsic value of surplus through our marketplace platforms.

Speaker 2: Our e-commerce marketplace solutions are well positioned to continue to power the $100 billion plus circular economy and deliver value to shareholders through our ability to unleash the intrinsic value of surplus through our marketplace platform.

Speaker 2: Our platforms ignite and enable a self-reinforcing cycle of value creation where buyers and sellers attract one another in ever-increasing numbers.

Our platforms ignite and enable a self reinforcing cycle of value creation, where buyers and sellers attract one another in ever increasing numbers.

Speaker 2: The result is a continuous flow of goods that becomes increasingly valuable as more participants join our platform, thereby creating positive network effects that benefit sellers, buyers, and our shareholders.

The result is a continuous flow of goods.

Becomes increasingly valuable as more participants joined our platform, thereby creating positive network effects that benefit.

Sellers buyers and our shareholders.

Speaker 2: Given our progress, we have established a new near-term target objective of scaling to $1.5 billion in annualized GMB. And accordingly, we are aggressively investing in our people, products, and technology to achieve this target.

Given our progress we have established a new near term target objective of scaling to one $5 billion in annualized GMB.

And accordingly, we are aggressively investing in our people products and technology to achieve this target.

These investments will enable us to capture the market opportunity and key at key asset categories, such as heavy equipment.

Speaker 2: These investments will enable us to capture the market opportunity in key asset categories such as heavy equipment, vehicles, industrial and consumer goods and real estate.

Vehicles, industrial and consumer goods and real estate.

Speaker 2: and accelerate our growth in the second half of fiscal year 2022 and drive us towards our new target of $1.5 billion in annualized GMB.

And accelerate our growth in the second half of fiscal year, 2022, and drive us towards our new target of $1 5 billion in annualized <unk>.

Speaker 2: With a profitable, growing business, we continue to look for intelligent uses of cash, including these outlined organic growth initiatives.

With a profitable growing business, we continue to look for intelligent uses of cash <unk>.

Including these outlined organic growth initiatives.

Speaker 2: to further penetrate and realize opportunities in our existing markets, share repurchases.

To further penetrate and realize the opportunities in our existing markets.

Share repurchases and tuck in acquisitions.

Speaker 2: In closing, we thank our team members across liquidity services for their dedication to our mission to power the circular economy and build a better future for surplus.

In closing we thank our team members across liquidity services for their dedication to our mission.

Power, the circular economy, and build a better future for surplus.

Speaker 2: I'll now put it over to Jorge for more details on the quarter.

Now I'll turn it over to Jorge for more details on the quarter.

Good morning.

Speaker 3: Our first quarter results reflect continued momentum in our gov-deal segments and another strong quarter from our CAG. Second.

Our first quarter results reflect continued momentum in our Gulf deal segments on another strong quarter from our CAG segment.

These results also reflects additional resources in our sales marketing and technology groups.

Speaker 3: These results also reflect additional resources in our sales, marketing, and technology groups.

Speaker 3: and the investments in our new All Surplus Deals growth initiative and the operating capacity expansion in the Northeast for our RSCG site.

The investment in our new all surplus deals growth initiatives.

And the operating capacity expansion in the northeast for our <unk> segment.

We are targeting our efforts and investments to support and generate profitable growth across our segments.

Speaker 3: We are targeting our efforts and investments to support and generate possible growth across our segments as we anticipate accelerated GMB growth in the second half of fiscal year 2022 to early 2023.

As we anticipate accelerated <unk> growth in the second half of fiscal year 2022 early 2023.

Speaker 3: We completed the first quarter of fiscal year 2022 with $260.2 million in GMV, an all-time quarterly record that exceeds

We completed the first quarter of fiscal year, 2022 with $262 million in <unk>.

An all time quarterly record that exceed.

Speaker 3: The $1 billion annualized goal we set forth previous

The $1 billion annualized goal, we set forth previously.

<unk> was up 37% from $194 million in the same quarter last year.

Speaker 3: GMB was up 37% from $190.4 million in the same quarter last year.

Speaker 3: Revenue for this first fiscal quarter was $66.7 million, a 20% increase compared to the same quarter last year.

Revenue for this first fiscal quarter was $66 $7 million a.

A 20% increase compared to the same quarter last year.

Our consignment <unk> sales grow faster than purchase GMP sales and more so.

Speaker 3: As consignment GMV sales grow faster than purchase GMV sales and more so the self-service component of consignment GMV.

Self service component of confinement GMB.

Speaker 3: Revenue as a percent of GMV would be expected to lower as we have indicated previous.

Revenue as a percent of <unk> would be expected to lower as we have indicated previously.

Speaker 3: This change in mix has been part of our long term strategy.

This change in mix has been part of our long term strategy.

Speaker 3: We anticipate growth in real estate sales to reduce

We anticipate growth in real estate sales to reduce.

Speaker 3: The ratio of revenue to GMV given lower average take rates with this being a high-value category.

The ratio of revenue to <unk>, given lower average take rates with this being a high value category.

However, despite this lower ratio of revenue to <unk> gross margin for real estate are expected to be similarly, as strong as our self service low touch businesses, including of deals and maps the corresponding low operating expense leverage business model in line with our <unk> segment.

Speaker 3: However, despite this lower ratio of revenue to GMV, gross margins for real estate are expected to be similarly as strong as our self-service, low-touch businesses, including GovDeals, and match the corresponding low operating expense, high leverage business model in line with our GovDeals.

Speaker 3: net income for this first quarter was $3.6 million. Resulting in diluted earnings per share of 10 cents.

Net income for this first quarter was $3 6 million, resulting in diluted earnings per share of <unk>.

non-GAAP adjusted EBITDA was $9 4 million an improvement over the same quarter last year.

Speaker 3: non-GAAP adjusted EBITDA was $9.4 million, an improvement over the same quarter last year.

Speaker 3: We hold $91.3 million in cash and that debt free balance sheet after completing the acquisition of bid for assets on November 1st for $11.1 million. Net of cash receipts.

We hold $91 $3 million in cash and a debt free balance sheet. After completing the acquisition of bid for assets on November one.

$11 $1 million net of cash received.

Speaker 3: and spending $3 million in share repurchasing during the court.

And spending $3 million in share repurchases during the quarter.

Speaker 3: As of December 31st, 2021, we have $17 million in authorization to repurchase shares. And the potential to pay up to $37.5 million in earnout base upon bid-for-affets performance over the 2020 year calendar year.

As of December 31, 2021, we have $17 million in authorization.

<unk> to repurchase shares and the potential to pay up to $37 $5 billion in earn out based upon bid for assets performance over the 2020 year calendar year.

Speaker 3: Currently, anticipate some incremental burnout payments in fiscal year 2023's first quarter, with a potential final payment during the second fiscal quarter of 2023.

We currently anticipate some incremental earn out payments in fiscal year 2023, the first quarter.

With a potential final payments during the second fiscal quarter of 2023.

Speaker 3: Specifically comparing segment results for this first quarter to the same quarter last year. Our gov deal segment was up 46% on GMB and 29% on revenue. Our retail or RSG segment was up 3% on GMB and up 11% on revenue. And our Cag segment was up 60% on GMB and up 42% on revenue. The Xenia was up 34% on revenue.

Specifically comparing segment results for this first quarter to the same quarter last year. Our <unk> segment was up 46% of GMB and 29% on revenue our retail <unk> segment was up 3% on <unk> up 11% on revenues in our CAG segment was up 60.

<unk>, 42% of revenue.

<unk> was up 34% on revenue.

We expect the seasonal decline in Q2 of fiscal year 2022.

Speaker 3: We expect the seasonal decline in Q2 of fiscal year 2022 in advance of our typical strong third quarter.

In advance of our typical strong third quarter.

Gov deals fundamentals and trends remain solid.

Speaker 3: Govdeals, fundamentals, and trends remain solid. HADS pipeline remains strong, and retail continues to diversify and execute on transforming our investments into additional growth. HADS pipeline remains strong, and retail continues to diversify and execute on transforming our investments into additional growth.

Pipeline remains strong and retail continues to diversify and execute on transforming our investments into additional growth.

While these businesses.

Speaker 3: growth initiative, King Traction. We anticipate lower profits in the short term for Q2 of fiscal year 22.

Growth initiatives gain traction, we anticipate lower profits in the short term for Q2 fiscal year 'twenty two.

Speaker 3: Combine with the Govdeal seasonality and change in mix for TAG Project Bates sales this coming quarter.

Combined with the golf deal seasonality and change in mix for CAD project based sales this coming quarter.

Speaker 3: We also expect the GovDeals segment GMB to be further boosted.

We also expect the Gulf deals segment of <unk> <unk>.

To be further boosted.

Speaker 3: by the combination with bid for asset as fiscal year 22 progresses. And we leverage bid for asset subject matter focus and gov deals expansive government client base.

The combination with bid for assets.

Fiscal year 'twenty, two progresses, and we leverage bid for assets subject matter focus and Gov deals.

Government client base.

Our second quarter of fiscal year 'twenty two guidance range for <unk> is above the same period last year from 25% to 40% at the low to high end of our guidance range respectively.

Speaker 3: Our second quarter of fiscal year 22 guidance range for GMB is above the same period last year from 25% to 40% at the low to high end of our guidance range respect.

As confinement <unk> sales grow faster than under the purchase model and we integrate the sales from our growing real estate business. The ratio of revenue as a percentage of GMB is expected lower due to mix and result in a slower revenue growth percentage versus GMB growth.

Speaker 3: As confinement GMV sales grow faster than under the purchase model and we integrate the sales from our growing real estate business. The ratio of revenue as a percentage of GMV is expected lower due to mix.

Speaker 3: and results in a slower revenue growth percentage versus GMB growth from this strategic business

From this strategic business model shift.

Our profit guidance for the second quarter of fiscal year 'twenty two is at or below the same period last year, mainly reflecting the increased cost for sales marketing and technology to generate and respond to the growth. We expect in the second half of fiscal year 2022 and beyond.

Speaker 3: Our profit guidance for the second quarter of his school year 22 is at or below the same period last year, namely reflecting the increased cost for sales, marketing and technology to generate and respond to the growth we expect in the second half of his school year 2022 and the off.

As a reminder, resulting from a reversal of our tax valuation allowance in the fourth quarter of fiscal year 'twenty one do.

Speaker 3: As a reminder, resulting from our reversal of our tax valuation allowance in the fourth quarter of fiscal year 21, due to our stronger level of...

Due to our stronger level of profitability trends.

Speaker 3: Our effective tax rate is now expected to be approximately 18 to 24% during fiscal year 22.

Our effective tax rate is now expected to be approximately 18% to 24% during fiscal year 'twenty two.

This higher effective tax rate will have no significant corresponding increase to cash paid for income taxes for 2022.

Speaker 3: This higher effective tax rate will have no significant corresponding increase to cash pay for income taxes for 2022.

Speaker 3: Yep, has a negative year-over-year comparable impact for a fiscal year, 22, net income, and earnings per share.

Yes, how some negative year over year comparable impact to our fiscal year 'twenty to net income and earnings per share.

Management's guidance for the second quarter of fiscal year 2022 is as follows we expect <unk> to range from $260 million to $290 million.

Speaker 3: Management guidance for the second quarter of fiscal year 2022 is us follow.

Speaker 3: We expect GMV to range from $260 million to $290 million. Gatnet income is a-

Net income is expected to range.

Speaker 3: from $1.5 million to $4.5 million with a corresponding gap that alluded earnings per share ranging from four to 13 cents per share. We have to.

From $1 5 billion to $4 $5 billion with a corresponding GAAP diluted earnings per share ranging from 4% to 13 <unk> per share.

We estimate non-GAAP adjusted EBITDA to range from $6 5 million to $9 5 million.

Speaker 3: to range from $6.5 million to $9.5 million.

Speaker 3: Non-GAP-adjusted diluted earnings for share is estimated in the range of 11 to 20 cents for share.

non-GAAP adjusted diluted earnings per share is estimated in the range of 11% to 20.

For sure.

The GAAP and non-GAAP earnings per share guidance assumes that we have approximately 35 2 million fully diluted weighted average shares outstanding for the second quarter of fiscal year 'twenty two.

Speaker 3: The gap and non-gap earnings per share guidance assumes that we have approximately 35.2 million fully diluted weighted average shares outstanding for the second quarter of fiscal year 22. next poll on January 25, 2021.

We will now take your questions.

Speaker 1: Thank you. We will now begin our question and answer session. If you have a question, please press star then one on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. And if you're using a speaker phone, please pick up the handset first before pressing the numbers. Once again with your question, please press star then one on your touchtone phone.

Thank you we will now begin our question and answer session. If you have a question. Please press Star then one on your Touchtone phone if you wish to be removed from the queue. Please press the pound sign or the hash key and if youre using a speakerphone. Please pick up the handset first before pressing the numbers once again.

With your question. Please press Star then one on your Touchtone phone.

Speaker 2: We have our first question from Gary Presipino with Barrington Research. Please go ahead. Your line is open. Good morning, well, a couple of questions here. First of all, Bill, are you going to, could you just give us some idea of what the organic growth in GMV was? Are you going to make that metric public or not?

We have our first question from Gary <unk> with Barrington Research. Please go ahead. Your line is open.

Good morning, all.

<unk>.

Couple of questions here first of all Bill are you going to could you just give us some idea of what the organic growth in <unk> was are you going to make that metric.

Public or not.

Speaker 2: The integration of the businesses will make that more difficult to provide over time, but independent of bid for assets, we were in line with that six consecutive quarters of 20% plus GMB growth, Gary. So the core business is performing well. And you only had two months of bid for assets.

The integration of.

The businesses will make that more difficult to provide over time, but independent of.

The bid for assets, we were in line with that six consecutive quarters of 20% plus GMB growth Gary So the core business is performing well.

You only had two months of bid for assets right.

Speaker 4: Correct, it was closed on the November 1st. Okay, good. All right, and then in terms of the revenue to GMV and the net revenue to GMV, I got it measured. Total revenue to GMV, 25.6%, net revenue to GMV about 15% this quarter. With the full quarter and growth in bid for assets, Jorge, do you expect those numbers to percentages to scale down from where they were?

Correct was closed on the borrowers okay. Good.

Alright.

And then in terms of the.

Revenue to <unk> in the net revenue the GMT.

I got it measured total revenue grew <unk> 25, 6% net revenue <unk> about 15% this quarter.

With a full quarter of growth in bid for assets Jorge do you expect those numbers to.

Percentages to scale down.

From where they were in Q1.

Yes.

Speaker 3: Yes, and pretty much in line with what I said last quarter, which was that over the course of the year, that ratio of revenue to GMV, where it used to be in the high 20s, now it's going to be more in the low 20s. Okay, gonna go that direction.

Pretty much in line with what I said last quarter, which was that over the course of the year that ratio of revenue to <unk>.

It used to be in the high <unk> now is going to be more in the low twenties.

Okay going to go that direction as the year progresses.

Speaker 4: All right, that's good. And then one of the things that you mentioned in the release was that there were some stellar constraints in the RS&G segment in the quarter. Could you just elaborate that?

Alright.

That's good.

And then.

One of the things that you.

You mentioned in the release was that there were some stellar constraints in the Rs.

<unk> segment in the quarter could you just elaborate that.

On that.

Speaker 4: was that in uh... for hay in your in your business outlook section no no you you you you said that rs and g the the rs cg i'm sorry uh... you had uh... three percent growth

Was that an Jorge in your in your business outlook section.

No no no.

You said that <unk>.

RSC G I'm sorry.

You had 3% growth.

Speaker 4: diversified seller product flows, but it was magnified by selective seller capacity constraints. I'm trying to get an idea of what was going on there. I think certainly you've seen

Diversified solar product flows and but it was magnified by selective seller capacity constraints I am trying to get an idea of what.

What well do going on there.

I think certainly you have seen.

Speaker 4: the retail industry struggle with getting product to store. Um, product to ship, uh, the backlog in the ports is well publicized.

The retail industry struggle with getting product to the store.

That product to ship the backlog in the ports as well publicized.

Speaker 4: and the markets reflected that challenge and availability of product. So I think that's something that is resolving itself and some of the indications in this last video.

And the markets reflected that challenge.

Availability of product. So I think that that's something that is resolving itself.

Some of the indications and this last.

Speaker 4: two to four weeks has indicated that the ports are starting to free up and I think that would normalize that issue. Okay.

Two to four weeks as indicated the ports are starting to free up and I think that would normalize that issue.

Okay.

So that leads me into.

Our next question in terms of the.

Speaker 2: My next question in terms of the...

Speaker 2: Outlook as you look in the back half of this year, you're saying that you're going to see the acceleration of growth.

Outlook as you look in the back half of this year.

Youre, saying that youre going to see an acceleration of growth.

Speaker 4: overall versus the first half of the year. And maybe if you could, you know, go market by market and give us some of the rationales for what you're talking about in terms of growth going forward, that would help us, you know, just understand the dynamics of what's going on with the business.

Overall versus the first half of the year and maybe if you could.

Coal market by market and give us.

Some of the rationale for what you're talking about in terms of growth going forward would help us.

Just to understand the dynamics of what's going on with the business.

Sure.

Speaker 4: Well, I think first of all, across the entire business, we've front loaded significant headcount improvement.

Well I think first of all across the entire business, we frontloaded significant head count.

Improvement in.

Speaker 4: business development, seller facing marketing, and product development.

Business development.

All are facing marketing.

And.

Development, which is essentially.

Speaker 4: enhancing functionality to meet seller needs, which would trigger more activity on our marketplace. So that investment certainly is a cost that we're carrying in the first half of the year without the return on that investment showing up immediately. That return will begin to reveal itself as we move through the June and September quarters. And the Gov deals...

Enhancing functionality to meet seller needs, which would trigger more activity on our marketplace. So.

That investment certainly is a cost that we're carrying in the first half of the year without.

The return on that investment showing up immediately that return will begin to reveal itself as we move through the June and September quarters.

And the Gov deals marketplace.

Speaker 4: We have 15,000 government agency clients that are now being presented with the opportunity to fold their real estate sales into the relationship. We have probably the longest.

We have 15000 government agency clients that are now being presented with the opportunity to fold their real estate sales into the relationship we have probably the longest.

Speaker 4: understanding subject better expert managing online real estate bills with amenities and bit for assets that's You know helping drive that

Standing subject matter expert managing online real estate sales with government entities bid for assets.

Helping drive that.

Yes.

Speaker 4: capture of the opportunity. So we certainly expect that based on

Capture the opportunity. So we certainly expect that based on.

Speaker 4: contractual relationships, we will realize significant improvement in the real fate categories we move through the year. And when we bought bid for assets, Gary, we outlined that we believe that this is a $1 billion GMD business opportunity. Now it's going to take a few years to get it, but I think we'll make a material

Contractual relationships.

We will realize significant improvement in the real estate category as you move through the year and when we bought bid for assets Gary We outlined that we believe that this is a $1 billion <unk> business opportunity.

Now, it's going to take a few years to get it but I think will make a material.

Gain in towards towards that goal.

Speaker 4: and gain in toward that goal in the first year of only bid to asset. So I think that's there, that's gonna start to reveal itself as we move to the second half of the year. The core GovDeals business is moving up the value chain to capture higher value, construction equipment, transportation equipment, vehicle fleets, power generation.

The first year.

Year of owning bid for assets, so I think that stair steps going to start to reveal itself.

As we move through the second half of the year the core Gov deals business.

<unk> is moving up the value chain to capture higher value construction equipment transportation vehicle fleets.

Power generation assets.

Speaker 4: And with an infrastructure bill flowing into the local municipal government budgets, we think there's opportunity for many of our clients.

<unk>.

With an infrastructure bill flowing into the local and municipal government budgets, we think theres opportunity for many of our clients.

Speaker 4: to rotate the newer assets and that will free up more used equipment to be moving through the fabulous business. Okay, well very...

To rotate to the newer assets and that will free up more used equipment to be moving through the <unk> business. Okay.

So we're very sanguine on that.

Speaker 4: On the retail business, we are picking up market share and we're expanding our footprint to respond to

On the retail business.

We are picking up market share and we're expanding our footprint to respond to needs expressed by many of our retail clients, who are moving closer to high density population centers with their last mile delivery centers.

Speaker 4: needs expressed by many of our retail clients who are moving closer to high density population centers with their last mile delivery centers.

Speaker 2: that's creating more volume, forward volume for our e-commerce and I'm the channel partners, but also more returns. So our Piston PA Facilities, a great example.

That's creating more volume for volume.

Our E Commerce, and Omnichannel Omnichannel partners, but also more returns so.

Pitched NPA facility is a great example of us creating.

Speaker 4: creating a value-added solution for clients who expect more returns becoming from the densely populated Northeast region.

The value added solution for clients, who expect more returns to be coming from the densely populated northeast region.

Speaker 4: We're also picking up more business in our existing markets as people have emerged from COVID still with the habit to buy higher value goods online.

We're also picking up.

More business in our existing markets.

People have emerged from Covid still with.

The habit to buy higher value goods online.

Speaker 4: expensive home theater electronics items furniture and house where items exercise equipment Law and garden equipment building tools do it yourself home improvement items all that's flowing through e-commerce and eventually coming back through our channel into the retail supply-changer marketplace so That is

Expensive home theater electronics items furniture, and houseware items exercise equipment lawn and garden equipment building tools do it yourself home improvement items, all of that's flowing through ecommerce and eventually coming back through.

Our channel into the retail supply chain group marketplace.

So.

That is.

Speaker 4: an important part of what we're doing to boost capacity and volume in the retail business.

An important part of what we're doing.

To boost capacity in volume in the retail business.

Speaker 4: Also, we've created a new All-Surplus Fields Director consumer channel.

Also we've created a new all surplus deals direct to consumer channel.

Which is essentially the same underlying technology platform that all surplus provides but providing a stream of good too.

Speaker 4: which is essentially the same underlying technology platform that all surplus provides, but providing a stream of good to end users who have an insatiable appetite for.

End users, who have an insatiable appetite for less.

Speaker 4: you know, less than new deals price goods. And we're leveraging a distribution center that we have there. And we're seeing good uptake of that solution. And we'll keep people updated on it. It's still early, but we feel that's another way to boost our market share in the retail business. The manufacturing side, I'd also want to underscore for.

Less than new.

Deals priced goods and we're leveraging a distribution center that we have there.

And we're seeing good uptake of that of that solution and we'll keep people updated on is it still early but we feel that's another way to boost our market share in the retail business.

On the manufacturing side I'd also want to underscore for.

The retail business lots of products.

Speaker 4: retail business, there are lots of products that manufacturers take back from retailers are flowing through our marketplace because we've provided the full suite of refurbishing capabilities to...

But manufacturers take back from retailers are flowing through our marketplace book because we provided.

The full suite of refurbishing capabilities too.

Certify condition of these items and then offer them in a way that helps protect the manufacturers brands.

Speaker 2: that certify condition of these items and then offer them in a way that helps protect the manufacturer's brands. And that's an area of retail that we're going to continue to grow. On the capital asset side.

And that's the area of retail that we're going to continue to grow on the capital asset side.

Speaker 4: you know that's a business that grew 60% in the last quarter.

That's a business that grew 60% in the last quarter.

We are seeing.

Speaker 4: broad-based adoption of the digital solutions by manufacturers who have plants in multiple regions, equipment in multiple regions, and you have some massive...

Broad based adoption of digital solutions by manufacturers, who have plants in multiple regions equipment in multiple regions and you have some massive.

Speaker 4: rotation and technology. You know, you look at electric vehicles affecting automotive. You know, you have a lot of semiconductor electronics manufacturing equipment that's highly sought after in the used marketplace as new supply has been curtailed. Most of our clients are very focused on asset redeployment and remarketing because of their...

Rotation in technology, you look at electric vehicles affecting the automotive you have a lot of semiconductor electronics manufacturing equipment, that's highly sought after.

In the used marketplace as new supply has been curtailed.

Most of our clients are very focused on asset redeployment and remarketing because of their corporate objectives around sustainability and we provide.

Speaker 4: corporate objectives around sustainability and we provide the ask

The asset zone.

Speaker 4: asset management service attached to our marketplace which is highly prized for these clients. In fact, we'll be sharing an award in the next few weeks from a Fortune 500 company.

Asset management service attached to our marketplace, which is highly prized for.

For these clients in fact will be will be sharing an award in the next few weeks from a fortune 500 company.

Speaker 4: who saved over $10 million with us by redeploying assets using our software and services. So there are lots of themes around, you know, massive technology shifts in industrial markets. The...

<unk> saved over $10 million with us.

By redeploying assets using our software and services. So there are lots of themes around.

Massive technology shifts and industrial markets.

The.

Speaker 4: priority of advancing sustainability strategies. And companies just wanted to be very liquid with their balance sheets and using our channel to recover value from these assets that's helping grow the CAG marketplace. But I would also add our investment in a cloud-based marketplace system with all these other things

Priority of.

Advancing sustainability strategies and companies just wanted to be.

Very liquid with their balance sheets, and using our channel to recover value from these assets thats, helping grow the CAG marketplaces I would also add our investment in a cloud based marketplace system.

With all of these tools.

Speaker 4: and the ability to take payment and settle transactions and all the reporting that lives in the cloud has been very valuable to our buyers and sellers over the last two years. But this is an investment carry that we began several years ago and we were ready to be very nimble as various restrictions were placed due to the COVID policies.

The ability to take payment and settle transactions and all the reporting that lives in the cloud has been.

Very valuable to our buyers and sellers.

Over the last few years, but this is an investment theory that we began several years ago.

And we were ready to be very nimble.

Has various restrictions were placed due to the COVID-19 .

Policies.

Speaker 5: or healthcare restraints, travel constraints. So that's been a nice bright spot for us. And we have a very strong business development pipeline in the CAG business and we expect that to continue.

Our healthcare restraints travel constraints so that's been.

A nice bright spot for us and we have a very strong business development pipeline and the CAG business and we expect that to continue.

Okay.

I'll, let somebody else go.

Yeah.

Your line is still open Sir if you have any further questions you can proceed.

Speaker 4: Are your lines still open, sir? If you have any further questions, you can proceed. Oh, okay, thanks. Yeah, just another thing built. The strong global pipeline of Project Base GMZ going into Q3, 22. Would you're talking about something like that? Is that?

Okay. Thanks.

Yes, just just another thing built strong global pipeline of project based gmg going into Q3.

'twenty two.

When you're talking about something like that is that.

Speaker 4: You're getting commitments from these companies that to sell products online that far in advance.

Youre getting commitments from these these.

Companies that sell product.

Online.

That far in advance.

Speaker 4: Yeah, because we're just in some cases, in some cases there's

Because we're just in some cases.

In some cases there is.

Some dismantling or other preconditions to the assets being.

Speaker 4: some dismantling or other preconditions to the assets being put to fail. And we're brought in early in that process to help the client navigate all pre-sale condition. But we have disabilities, some very meaningful...

Put to sale and were brought in early in that process to help.

The client navigate all presale condition, but we have visibility to some very meaningful.

Asset sales.

Can you give us some idea of what that growth in that pipeline looks like.

Speaker 6: Can you give us some idea of what that growth in that pipeline looks like?

Speaker 4: Well, I think compared to where we were a year ago, we're up about 50%.

Well I think compared to where we were a year ago, we're up about 50%.

Speaker 2: Okay, that's great news. And you know, these projects sometimes span multiple quarters, but what we like is that...

Okay great.

Great News.

These projects, sometimes span multiple quarters, but what we like is that.

Were offering these fortune 500 fortune 1000 companies.

Speaker 2: We're offering these Fortune 500, Fortune 1000 companies a full range of both self-directed.

Full range of both self directed solution.

Speaker 4: as well as fully managed services and the uptake in our self directed platform has been very robust.

As well as fully managed services and the uptake in our self directed platform has been very robust.

Speaker 4: We have a lot of energy companies, which is another strong performer for us in the quarter. A lot of energy companies that historically would have asked us to come out and handle assets and do all of the pre and post-fell work now through our cloud-based system, these clients are able to upload their assets directly from multiple locations throughout the world. It's great for the client, it's great for us. Very high margin.

We have a lot of energy companies, which is another strong performer for us in the quarter a lot of energy companies that historically would have asked us to come out and handle assets and.

Do all of the pre and post sell work now through our cloud based system. These clients are able to upload their assets directly from multiple locations throughout the world. It's great for the client it's great for us a very high margin.

Business and one that the client really has embraced.

Speaker 2: business and one that the client really has embraced. So they're taking a

So they are taken advantage of the self serve.

Absolutely.

Speaker 6: Okay, and then just lastly, with the investments that you're making, which are all good for growth,

And then just lastly, with the investments that you're making which are all good for growth.

That's capable of taking you to $1 5 billion dollar.

Speaker 6: that's capable of taking you to a $1.5 billion run rate of GMV. As you stair-step growth from there, will you be needing to make, I would assume you'd be needing to make further investments or, I mean, I guess what I'm getting at is what kind of capacity does your current platform infrastructure support.

Run rate of GMB.

As you as you stair step growth from there.

Will you be needing to make I would assume you be needing to make further investments.

Or I mean, I guess, what I'm getting out is what kind of capacity does your current platform infrastructure support.

Speaker 4: once you're going to leave. The investment this year. I think we will have set ourselves up to support growth far beyond the 1.5 billion. There is.

Once you don't believe restaurant this year.

I think we will have set ourselves up to support.

Growth far beyond the $1 5 billion.

There is.

Speaker 4: you know, a core, a core group that is bringing on, you know, new verticals like real estate, heavy equipment, we're doing some...

A core.

Our core group that is bringing on new verticals like real estate.

The equipment, we're doing some.

Speaker 6: you know, natural product enhancement on the shelf directed business because that's growing rapidly. So we would think we could we could go beyond, you know, the 1.5 billion, call it another billion ahead of that 2 to 3 billion of GMB with the core infrastructure that we've built coming out of fiscal 22. Okay, great. I appreciate you taking my question and keep up the good work. Thank you. Thank you.

Natural product enhancement on the self directed business because thats growing.

Rapidly. So we would think we could we could go beyond.

The $1 5 billion call. It another $1 billion ahead of that $2 billion to $3 billion of GMB with the core infrastructure that we've built coming out of fiscal 'twenty two.

Okay great.

<unk>.

Taking my questions and keep up the good work. Thank you. Thank you.

Okay.

Speaker 1: And thank you, sir. And we have no further questions at this time.

And thank you, Sir and we have no further questions at this time.

Speaker 1: Ladies and gentlemen, this concludes our call. We thank you for participating. You may now disconnect.

Ladies and gentlemen, this concludes our call and we thank you for participating you may now disconnect.

Okay.

Speaker 7: The.

Okay.

[music].

Okay.

[music].

[music].

[music].

Speaker 1: Welcome to the liquidity services incorporated first quarter of fiscal year 2022 financial results conference call. My name is Vanessa 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'll come to the liquidity services incorporated first quarter of fiscal year 2022 financial results Conference call. My name is Vanessa 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.

<unk> and answer session on the call today are bill and Greg liquidity services, Chairman and Chief Executive Officer, and George Celaya, Its 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 liquidity serve.

Speaker 1: On the call today are Bill Engrich, Liquidity Services Chairman and Chief Executive Officer and George Salaia, its Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks.

Speaker 1: The following discussion and responses to your questions reflect liquidity services management's views as of today's February 3rd, 2022, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact the financial results is included in today's press release and filings with the SEC, including the most recent annual report on Form 10K.

Does this management's views as of today February three 2022 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 filings with the SEC, including the most recent.

Annual report on Form 10-K , as you listen to today's call. Please have the press release in front of you, which includes liquidity services' financial results as well as metrics and commentary on the quarter. During this call liquidity services management will discuss certain non-GAAP financial measures in its press release and filings with the SEC.

Speaker 1: As you listen to today's call, please have the press release in front of you, which includes liquidity services financial results, as well as metrics and commentary on the quarter. During this call, liquidity services management will discuss certain non- GAAP financial measures. In its press release and filings with the SEC, each of which is posted on its website, you will find additional disclosures regarding these non- GAAP measures , including reconciliation of these measures, with comparable GAAP measures .

We see each of which is posted on its website you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures liquidity services management also uses certain supplemental operating data as a measure of certain components of operating performance, which they are.

Speaker 1: Liquidity services management also uses certain supplemental operating data as a measure of certain components of operating performance.

Speaker 1: which they also believe is useful for management and investors.

Also believe is useful for management and investors.

Speaker 1: Dissempelinental operating data includes gross merchandise volume and should not be considered a substitute for a superior to Gap results.

The supplemental operating data includes gross merchandise volume and should not be considered a substitute for or superior to GAAP results.

Speaker 1: At this time, I will now turn the presentation over to Liquidity Services CEO , Mr. Bill Engrich.

At this time I will now turn the presentation over to liquidity services CEO , Mr Bill and Rick.

Speaker 4: Good morning and welcome to our Q1 earnings call. Our review are Q1 performance and provide an update on key strategic initiatives. Next, more hastily will provide more details on the quarter. Long-term investments in...

Good morning, and welcome to our Q1 earnings call I'll review, our Q1 performance and provide an update on key strategic initiatives next Jorge Celaya will provide more details on the quarter.

Long term investments in our people products and.

Speaker 2: and outstanding customer service have been rewarded with surging volume as we set an all-time quarterly GMB record during Q1.

And outstanding customer service have been rewarded with surging volume as we set an all time quarterly GNP record during Q1.

Speaker 5: And in Q1, we surpassed our previously stated goal of reaching $1 billion in annualized GMB.

And in Q1, we surpassed our previously stated goal of reaching $1 billion in annualized GMB.

Speaker 5: has the world's largest marketplace for surplus goods, liquidity services, powers the $100 billion dollar plus circular economy.

As the world's largest marketplace for surplus goods liquor.

Liquidity services powers, the $100 billion plus circular economy.

Speaker 5: by ensuring that every piece of used equipment and return consumer merchandise quickly finds a second life and stays out of the landfill system.

Ensuring that every piece of used equipment and return consumer merchandize quickly by the SEC.

<unk> life and <unk>.

Stays out of the landfill system.

Speaker 5: We deploy a sophisticated set of technology, software, and data-driven services to deliver on this mission.

We deploy he said.

<unk> set a technology software and data driven services to deliver on this mission.

Speaker 2: in the most efficient manner with the highest financial recovery and lowest carbon footprint for our customers.

And the most efficient manner with the highest financial recovery and lowest carbon footprint for our customers.

Speaker 2: Our mission and value proposition are resonating with sellers.

Our mission and value proposition.

Are resonating with sellers.

As we grew our <unk> by 37% year over year in Q1 two.

Speaker 5: as we grew our GMV by 37% year of a year in Q1 to approximately $260 million. At all time record and our sixth consecutive quarter of 20% plus annual GMV growth. Our

Approximately $260 million, an all time record and our sixth consecutive quarter of 20% plus annual GMB growth.

Our growth was broad based across every sector of the economy, including energy transportation.

Speaker 2: across every sector of the economy, including energy, transportation, construction, retail consumer goods.

Construction retail consumer goods.

Speaker 2: industrial manufacturing and our newest vertical real estate.

Industrial manufacturing and our newest vertical real estate.

Our proven track record of delivering superior financial returns.

Speaker 2: our proven track record of delivering superior financial returns.

Speaker 2: and lower supply chain costs for our customers.

And lower supply chain costs for our customers.

Is driving more higher value goods to be lifted and sold on our marketplace platform on.

Speaker 5: is driving more higher value goods to be listed in solar on our marketplace platform on a sustained basis.

A sustained basis.

Speaker 2: And one example this past month we sold two bell helicopters on our marketplace for the City of Jacksonville, Florida.

And one example, this past month, we sold two bell helicopters.

On our marketplace and the city of Jacksonville, Florida.

Speaker 5: These items generated over $1 million of proceeds to the client attracting over 30,000 unique buyers, a thousand with bid.

These items generated over $1 million of proceeds to decline attracting over 30000 unique buyers.

With bids for these assets.

Speaker 2: Our mission and value proposition is also resonating with buyers.

Our mission and value proposition is also resonating with buyers.

Speaker 5: During Q1, the number of registered buyers on our platform grew to more than 4.7 million.

During Q1, the number of registered buyers on our platform grew to more than $4 7 million.

Speaker 5: which provides our retail, industrial, and government agency sellers.

Which provides a retail industrial and government agency sellers.

Speaker 5: Superior execution for the sale of their assets.

Superior execution for the sale of their assets.

During Q1, the number of completed transactions in auction participants on our platform were up.

Speaker 5: During Q1, the number of completed transactions and auction participants on our platform were up 39% and 24% year over year respectively.

39% and 24% year over year, respectively.

Reflecting the growing liquidity in our marketplace.

Speaker 4: reflecting the growing liquidity in our marketplace.

Speaker 2: Finally, our mission and value proposition, a resonating with our current and prospective employees.

Finally, our mission and value proposition.

Resonating with our current and prospective employees.

Speaker 2: and benefits are efforts to acquire and retain top talent to execute our business plan.

And benefits our efforts to acquire and retain top talent.

To execute our business plan.

Speaker 2: as we take aim at our next leg of growth.

As we take aim at our next leg of growth.

Speaker 2: We grew our headcount in Q1 by approximately 12% year over year, principally in the areas of

We grew our head count in Q1 by approximately 12% year over year.

Principally in the areas of.

Speaker 5: technology, business development, marketing, and operation.

Technology business development marketing and operations.

Speaker 2: These incremental investments and talent are directly tied to capturing market share and delivering long-term shareholder value.

These incremental investments and talent are directly tied to capturing market share and delivering long term shareholder value.

Speaker 2: Our market share expansion and growth is the result of long-term secular trends.

Our market share expansion and growth is the result of long term secular trends and the.

Speaker 2: and the associated investments we've made in our marketplace platform to drive digital transformation in the supply chain could benefit buyers, sellers, and the planet.

The associated investments, we've made in our marketplace platform to drive digital transformation in the supply chain to benefit buyers sellers and the planet.

Speaker 2: It is also important to underscore that our business at Liquidity Services is resilient.

It is also important to underscore that our business at liquidity services is resilient.

Speaker 2: and performs well in both periods of economic expansion.

And performs well in both periods of economic expansion.

And contraction.

Speaker 2: Indeed, our marketplace plays a vital role in solving the needs of both large enterprises and small businesses and navigating several macro trends, including the growth of online commerce, which drives more product returns.

Indeed, our marketplace plays a vital role in solving the needs of both large enterprises and small businesses.

Navigating several macro trends, including the growth of online commerce, which drives more product returns.

The increasing product obsolescence as organizations adopt next generation technologies.

Speaker 2: The increasing product-ops-alessments as organizations adopt next generation technologies.

Speaker 2: and the shared goal of reducing waste and CO2 footprint.

And the shared goal of reducing waste and C. O two footprints through smart asset redeployment and remarketing strategies in every sector with.

Speaker 2: through smart asset redeployment and remarketing strategies in every sector, the global economy.

The global economy.

Our ecommerce marketplace solutions are well positioned to continue to empower the $100 billion, plus circular economy and deliver value to shareholders through our ability to unleash the intrinsic value of surplus through our marketplace platforms.

Speaker 5: Our e-commerce marketplace solutions are well-positioned to continue to power the $100 billion plus circular economy and deliver value to shareholders through our ability to unleash the intrinsic value of surplus through our marketplace platform.

Speaker 4: Our platforms ignite and enable a self-reinforcing cycle of value creation where buyers and sellers attract one another in ever-increasing numbers.

Our platforms ignite and enable a self reinforcing cycle of value creation.

Buyers and sellers attract one another in ever increasing numbers.

Speaker 4: The result is a continuous flow of goods that becomes increasingly valuable as more participants join our platform. Thereby creating positive network effects that benefit sellers, buyers, and our shareholders.

The result is a continuous flow of goods that becomes increasingly valuable as more participants join our platform, thereby creating positive network effects that benefit sellers buyers and our shareholders.

Given our progress we have established a new near term target objective of scaling to one $5 billion in annualized GMB.

Speaker 2: Given our progress, we have established a new near-term target objective of scaling to $1.5 billion in annualized GMB. And accordingly, we are aggressively investing in our people, products, and technology to achieve this target.

And accordingly, we are aggressively investing in our people products and technology to achieve this target.

These investments will enable us to capture the market opportunity and key at key asset categories, such as heavy equipment.

Speaker 5: These investments will enable us to capture the market opportunity in key asset categories such as heavy equipment, vehicles, industrial and consumer goods, and real estate.

<unk> industrial and consumer goods and real estate.

Speaker 2: and accelerate our growth in the second half of fiscal year 2022 and drive us towards our new target of 1.5 billion in annualized GMB.

And accelerate our growth in the second half of fiscal year, 2022, and drive us towards our new target of $1 5 billion in annualized <unk>.

Speaker 2: With a profitable growing business, we continue to look for intelligent uses of cash, including these outlined organic growth initiatives.

With a profitable growing business, we continue to look for intelligent uses of cash include.

Including these outlined organic growth initiatives.

Speaker 5: to further penetrate and realize opportunities in our existing markets, share our purchases.

To further penetrate and realize opportunities in our existing markets.

Share repurchases and tuck in acquisitions.

Speaker 2: In closing, we thank our team members across liquidity services for their dedication to our mission to power the circular economy and build a better future for surplus.

In closing we thank our team members across liquidity services for their dedication to our mission.

Power, the circular economy, and build a better future for surplus.

Speaker 2: I'll now turn it over to Jorge for more details on the quarter.

Now I'll turn it over to Jorge for more details on the quarter.

Good morning.

Speaker 3: Our first quarter results reflect continued momentum in our GovDeal segments and another strong quarter from our CAG segment.

Our first quarter results reflect continued momentum in our Gulf deal segments on another strong quarter from our CAG segment.

These results also reflects additional resources in our sales marketing and technology groups.

Speaker 3: These results also reflect additional resources in our sales, marketing, and technology groups.

Speaker 3: and the investments in our new ALSERPLUS SEALs growth initiative and the operating capacity expansion in the Northeast for our RSCG site.

The investment in our new all surplus deals growth initiatives.

And the operating capacity expansion in the northeast for our <unk> segment.

Speaker 3: We are targeting our efforts and investments to support and generate possible growth across our segments as we anticipate accelerated GMB growth in the second half of fiscal year 2022 to early 2023.

We are targeting our efforts and investments to support and generate profitable growth across our segments.

As we anticipate accelerated <unk> growth in the second half of fiscal year 2022 early 2023.

Speaker 3: We completed the first quarter of fiscal year 2022 with $260.2 million in GMB and all time quarterly records.

We completed the first quarter of fiscal year, 2022 with $262 million in GMB.

An all time quarterly record that exceed.

Speaker 3: The $1 billion annualized goal we set forth previous

The $1 billion annualized goal, we set forth previously.

<unk> was up 37% from $194 million in the same quarter last year.

Speaker 3: GMB was up 37% from $190.4 million in the same quarter last year.

Speaker 3: Revenue for this first fiscal quarter was $66.7 million, a 20% increase compared to the same quarter last year.

Revenue for this first fiscal quarter was $66 7 million, a 20% increase compared to the same quarter last year.

As consignment <unk> sales grow faster than purchase GMP sales and more so.

Speaker 3: As consignment GMV sales grow faster than purchase GMV sales and more so, the Felt Service component of consignment GM.

Self service component of confinement GMB.

Speaker 3: Revenue as a percent of GMV would be expected to lower as we have indicated previous.

Revenue as a percent of G. M V would be expected to lower as we have indicated previously.

Speaker 3: This change in mix has been part of our allowing term strategy.

This change in mix has been part of our allowing term strategy.

Speaker 3: We anticipate growth in real estate sales to reduce

We anticipate growth in real estate sales to reduce.

The ratio of revenue to <unk>, given lower average take rates with this being a high value category.

However, despite this lower ratio of revenue to <unk> gross margin for real estate are expected to be similarly, as strong as our self service low touch businesses, including of deals and maps the corresponding low operating expense high leveraged business model in line with our Gulf deal sudden.

Speaker 3: However, to fight this lower ratio of revenue to GMV, gross margin for real estate are expected to be similarly as strong as our self-service low-touch businesses, including Gavvios, and match the corresponding low operating expense high-leveraged business model in line with our Gavvios.

Speaker 3: Net income for this first quarter was $3.6 million. Resulting in diluted earnings per share of 10 cents.

Net income for this first quarter was $3 6 million, resulting in diluted earnings per share of <unk>.

non-GAAP adjusted EBITDA was $9 4 million an improvement over the same quarter last year.

Speaker 3: Non-GAP adjusted EBITDA with $9.4 million, an improvement over the same quarter last year.

Speaker 3: We hold $91.3 million in cash and that debt free balance sheet after completing the acquisition of bid-for-assets on November 1st for $11.1 million. Net of cash received.

We hold $91 $3 million in cash and a debt free balance sheet. After completing the acquisition of bid for assets on November one.

$11 $1 million net of cash received.

Speaker 3: and spending $3 million in share repurchases during the quarter.

And spending $3 million in share repurchases during the quarter.

Speaker 3: As of December 31st, 2021, we have $17 million in authorization to repurchase shares. And the potential to pay up to $37.5 million in earnout based upon bid-for-assets performance over the 2020 year calendar year.

As of December 31, 2021, we have $17 million in authorization to repurchase shares and the potential to pay up to $37 5 million in earn out based upon bid for assets performance over the 2020 year calendar year.

We currently anticipate some incremental earn out payments in fiscal year, 2020, Three's first quarter, where.

Speaker 3: Currently, it anticipates some incremental burnout payments in fiscal year 2023's first quarter with a potential final payment during the second fiscal quarter of 2023.

With a potential final payments during the second fiscal quarter of 2023.

Speaker 3: Specifically comparing segment results for this first quarter to the same quarter last year. Our gubdial segment was up 46% on GMB and 29% on revenue. Our retail or RSG segment was up 3% on GMB and up 11% on revenue. And our Cag segment was up 60% on GMB and up 42% on revenue. The Cineo was up 34% on revenue.

Specifically comparing segment results for this first quarter to the same quarter last year. Our <unk> segment was up 46% on GMB and 29% on revenue our retail <unk> segment was up 3% <unk> up 11% on revenue in our CAG segment was up 60.

<unk>, 42% of revenue.

<unk> was up 34% on revenue.

We expect the seasonal decline in Q2 of fiscal year 2022.

Speaker 3: We expect the seasonal decline in Q2 of fiscal year 2022 in advance of our typical strong third quarter.

In advance of our typical strong third quarter.

Gov deals fundamentals and trends remain solid.

Speaker 3: GovDeals fundamentals and trends remain solid, tags pipeline remains strong, and retail continues to diversify and execute on transforming our investments into additional growth.

Pipeline remains strong and retail continues to diversify and execute on transforming our investments into additional growth.

While these businesses.

Speaker 3: growth initiatives, King Traction. We anticipate lower profits in the short term for Q2 of fiscal year 22.

Growth initiatives gain traction, we anticipate lower profits in the short term for Q2 fiscal year 'twenty two.

Speaker 3: Combine with the Gov. Dio seasonality and change in mix for CAD, project based sales is coming quarter.

Combined with the golf deal seasonality and change in mix per kg project based sales this coming quarter.

Speaker 3: We also expect the GovDeals segment GMB to be further boosted.

We also expect the Gulf deals segment GMB to be further boosted.

Speaker 3: by the combination with bid for asset as fiscal year 22 progresses. And we leverage bid for asset subject matter focus and gov deals expansive government client base.

By the combination with bid for assets.

Fiscal year 'twenty, two progresses, and we leverage bid for assets subject matter of focus and Gov deals.

Government client base.

Our second quarter of fiscal year 'twenty two guidance range for <unk> is above the same period last year from 25% to 40% at the low to high end of our guidance range respectively.

Speaker 3: Our second quarter of fiscal year 22 guidance range for GMB is above the same period last year from 25% to 40% at the low to high end of our guidance range with respect.

As confinement <unk> sales grow faster than under the purchase model and we integrate the sales from our growing real estate business. The ratio of revenue as a percentage of <unk> is expected lower due to mix and.

Speaker 3: As confinement GMV sales grow faster than under the purchase model and we integrate the sales from our growing real estate business. The ratio of revenue as a percentage of GMV is expected lower due to mix.

Speaker 3: and results in a slower, revenue growth percentage versus GMB growth from this strategic business.

As a result in a slower revenue growth percentage versus GMB growth.

From this strategic business model shift.

Our profit guidance for the second quarter of fiscal year 'twenty two is at or below the same period last year, mainly reflecting the increased cost for sales marketing and technology to generate and respond to the growth. We expect in the second half of fiscal year 2022 and beyond.

Speaker 3: Our profit guidance for the second quarter of his school year 22 is at or below the same period last year, namely reflecting the increased cost for sales, marketing and technology to generate and respond to the growth we expect in the second half of his school year 2022 and beyond.

As a reminder, resulting from a reversal of our tax valuation allowance in the fourth quarter of fiscal year 'twenty one due.

Speaker 3: As a reminder, resulting from our reversal of our tax valuation allowance in the fourth quarter of fiscal year 2021 due to our stronger level of...

Due to our stronger level of profitability trends.

Speaker 3: Our effective tax rate is now expected to be approximately 18-24% during fiscal year 22.

Our effective tax rate is now expected to be approximately 18% to 24% during fiscal year 'twenty two.

This higher effective tax rate will have no significant corresponding increased the cash paid for income taxes for 2022.

Speaker 3: This higher effective tax rate will have no significant corresponding increase to cash paid for income taxes for 2022.

Speaker 3: Yes, how's the negative year over year comparable in fact for fiscal year 22 met income and earnings per share?

Yes, how some negative year over year comparable impact to our fiscal year 'twenty to net income and earnings per share.

Speaker 3: Management guidance for the second quarter of fiscal year 2022 is us follow.

Management's guidance for the second quarter of fiscal year 2022 is as follows we expect <unk> to range from $260 million to $290 million.

Speaker 3: We expect GMB to range from $260 million to $290 million. Gatnet income is a-

Net income is expected to range.

Speaker 3: from $1.5 million to $4.5 million with a corresponding gap diluted earnings per share ranging from $0.04 to $0.13 per share.

From $1 5 billion to $4 $5 million with a corresponding GAAP diluted earnings per share ranging from 4% to 13 per share.

We estimate non-GAAP adjusted EBITDA to range from $6 5 million to $9 $5 million.

Speaker 3: to range from $6.5 million to $9.5 million.

Speaker 3: non-GAAP adjusted diluted earnings per share is estimated in the range of 11 to 20 cents per share.

non-GAAP adjusted diluted earnings per share is estimated in the range of 11% to 20.

For sure.

The GAAP and non-GAAP earnings per share guidance assumes that we have approximately 35 2 million fully diluted weighted average shares outstanding for the second quarter of fiscal year 'twenty two.

Speaker 3: The GAP and non-GAP earnings for shared items assumes that we have approximately 35.2 million fully diluted weighted average shares outstanding for the second quarter of fiscal year 22. the grand

We will now take your questions.

Speaker 1: Thank you. We will now begin our question and answer session. If you have a question, please press star then one on your touch tone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. And if you're using a speakerphone, please pick up the handset first before pressing the numbers. Once again with your question, please press star then one on your touch tone phone.

Thank you we will now begin our question and answer session. If you have a question. Please press Star then one on your Touchtone phone if you wish to be removed from the queue. Please press the pound sign or the hash key and if youre using a speakerphone. Please pick up the handset first before pressing the numbers once again.

With your question. Please press Star then one on your Touchtone phone.

Speaker 6: We have our first question from Gary Presptino with Barrington Research. Please go ahead, your line is open. Good morning, well, a couple of questions here. First of all, Bill, could you just give us some idea of what the organic growth in GMB was? Are you going to make that metric public or not?

We have our first question from Gary <unk> with Barrington Research. Please go ahead. Your line is open.

Good morning, all.

<unk>.

Couple of questions here first of all Bill or are you going to could you just give us some idea of what the organic growth in <unk> was are you going to make that metric.

Public or not.

Speaker 6: The integration of the businesses will make that more difficult to provide over time, but independent of bid for assets we were in line with that six consecutive quarters of 20% plus GAB growth gary. So the core business is performing well. And you only had two months of bid for...

The integration.

The businesses will make that more difficult to provide over time, but independent of.

Bid for assets, we were in line with that six consecutive quarters of 20% plus GMB growth Gary.

Okay. The core business is performing well.

You only had two months of bid for assets right.

Speaker 6: Correct. It was closed on the bar for OK, good alright and then in terms of the. Revenue to GMV and the net revenue to GMV. I got it measured total revenue to GMV 25.6% net revenue to GMV about 15% this quarter with a full quarter and growth in bid for assets. For hey, do you expect those numbers to? Percentages to scale down. From where they.

Correct, we closed on the borrowers okay. Good alright.

And then in terms of the.

Revenue to <unk> in the net revenue either GMT.

Got it measured total revenue grew <unk> 25, 6% net revenue <unk> about 15% this quarter.

With a full quarter of growth in bid for assets Jorge do you expect those numbers to.

Percentages to scale down.

From where they were in Q1.

Yes.

Speaker 3: Yes, and pretty much in line with what I said last quarter, which was that over the course of the year, that ratio of revenue to GMB, where it used to be in the high 20s, now is gonna be more in the low 20s. And it's gonna go that direction.

Pretty much in line with what I said last quarter, which was that over the course of the year that ratio of revenue the GMB.

Where it used to be in the high <unk> now is going to be more in the low twenties.

Im going to go that direction as the year progresses.

Speaker 6: All right, that's good. And then one of the things that you mentioned in the release was that there were some stellar constraints in the RS and G segments in the quarter. Could you just elaborate that?

Alright.

That's good.

And then.

One of the things that you.

You mentioned in the release was that there were some stellar constraints in the Rs.

<unk> segment in the quarter could you just elaborate that.

On that.

Okay.

Speaker 6: with that in uh... for hay in your in your business outlook section no no you you you you said that rs and g the rs cg i'm sorry uh... you had uh... three percent growth

Was that an Jorge and you're in your business outlook section.

No no no.

You said that <unk>.

RSC G I'm sorry.

You had 3% growth.

Speaker 6: diversified seller product flows and but it was magnified by selective seller capacity constraints. I'm trying to get an idea of what what what was going on there. I think I think certainly you've seen

Diversified solar product flows and but it was magnified by selective seller capacity constraints I'm trying to get an idea of what.

What was going on there I think I think certainly you have seen.

Speaker 4: The retail industry struggle with getting product to store. Okay. Product to ship the backlog in the ports as well publicize.

The retail industry struggle with getting product to the store.

Okay that product to ship the backlog in the ports as well publicized.

Speaker 5: and the markets reflected that challenge and availability of product. So I think that's something that is resolving itself and some of the indications in this last video.

And the markets reflected that challenge.

Availability of product. So I think that that's something that is resolving itself.

Some of the indications and this last.

Speaker 5: two to four weeks has indicated that the ports are starting to free up and I think that would normalize that issue.

Two to four weeks as indicated the ports are starting to free up and I think that would normalize that issue.

Okay.

So that leads me into.

My next question in terms of the.

Speaker 6: My next question in terms of the...

Speaker 6: Outlook as you look in the back half of this year, you're saying that you're going to see the acceleration of growth.

Outlook as you look in the back half of this year, youre, saying that youre going to see an acceleration of growth.

Speaker 6: over all versus the first half of the year. And maybe if you could go market by market and give us some of the rationales for what you're talking about in terms of growth going forward, that would help us just understand the dynamic of what's going on with the business.

Overall versus the first half of the year.

Maybe if you could.

Coal market by market and give us.

Some of the rationale for what you're talking about in terms of growth going forward.

Help us.

Just understand the dynamics of what's going on with the business.

Sure.

Well I think first of all across the entire business, we frontloaded significant head count.

Speaker 5: Well, I think first of all, across the entire business, we've front loaded significant headcount improvement.

<unk>.

Speaker 5: business development, seller facing marketing, and product development.

Business development.

Seller facing marketing.

Product development, which is essentially.

Speaker 2: enhancing functionality to meet seller needs, which would trigger more activity on our marketplace. So that investment certainly is a cost that we're carrying in the first half of the year without the return on that investment showing up immediately. That return will begin to reveal itself as we move through the June and September quarters. And the God deals with that.

Hansen functionality to meet seller needs, which would trigger more activity on our marketplace. So.

That investment certainly is a cost that we're carrying in the first half of the year without.

The return on that investment showing up immediately that return will begin to reveal itself as we move through the June and September quarters.

And the Gov deals marketplace.

Speaker 2: We have 15,000 government agency clients that are now being presented with the opportunity to fold their real estate sales into the relationship. We have probably the longest.

We have 15000 government agency clients that are now being presented with the opportunity to fold their real estate sales.

Into the relationship we have.

Probably the longest.

Speaker 4: understanding subject better expert managing online real estate bills with humanities and bit for assets that's You know helping drive that

Standing subject matter expert managing online real estate sales with government entities bid for assets.

Helping drive that.

Speaker 2: capture of the opportunity. So we certainly expect that based on

Capture the opportunity. So we certainly expect that based on.

Speaker 5: contractual relationships, we will realize significant improvement in the real-fake categories we move through the year. And when we bought bid for assets, Gary, we outlined that we believe that this is a $1 billion GMD business opportunity. Now, it's going to take a few years to get it, but I think we'll make a material...

Contractual relationships, we will realize significant improvement in the real estate category as we move through the year and when we bought bid for assets Gary We outlined that we believe that this is a $1 billion GMP business opportunity.

Now, it's going to take a few years to get it but I think we will make a material.

Gain in towards towards that goal.

Speaker 4: gain in toward that goal in the first year of only bid for asset. So I think that's there. That's going to start to reveal itself as we move to the second half of the year. The core God deals business is moving up the value chain to capture higher value, construction equipment, transportation equipment, vehicle fleets, power generation.

Sure.

The first.

Year of owning bid for assets, so I think that that stair steps going to start to reveal itself.

As we move through the second half of the year the core Gov deals business.

<unk> is moving up the value chain to capture higher value construction equipment transportation vehicle fleets.

Power generation.

Asian assets.

Speaker 4: and with an infrastructure bill flowing into the local municipal government budgets, we think there's opportunity for many of our clients.

<unk>.

With an infrastructure bill flowing into the local and municipal government budgets, we think there's opportunity for many of our clients.

Speaker 5: to rotate to newer assets and that will free up more used equipment to be moving through the ag Emmanuel's business.

To rotate to the newer assets and that will free up more used equipment to be moving through the <unk> business. Okay.

Okay, we're very sanguine on that.

Speaker 5: On the retail business, we are picking up market share, and we're expanding our footprint to respond to needs expressed by many of our retail clients who are moving closer to high density population centers with their last mile of delivery centers. That's creating more volume, forward volume for our e-commerce and on the channel partners, but also more returns. So our Pitchton PA facilities are a great example of us.

On the retail business.

We are picking up market share and we're expanding our footprint to respond to.

Needs expressed by many of our retail clients, who are moving closer to high density population centers with their last mile delivery centers.

That's creating more volume for volume for our ecommerce and Omnichannel Omnichannel partners, but also more returns so.

Our pitch to NPA facility is a great example of us creating.

Speaker 2: creating a value-added solution for clients who expect more return to becoming from the densely populated Northeast region.

Value added solution for clients, who expect more returns to be coming from the densely populated northeast region.

Speaker 4: We're also picking up more business in our existing markets as people have emerged from COVID still with the habit to buy higher value goods online. It'll be...

We're also picking up.

More business in our existing markets.

People have emerged from Covid still with.

The habit to buy higher value goods online.

Speaker 5: expensive home theater electronics items, furniture and houseware items, exercise equipment, lawn and garden equipment, building tools, do-it-yourself home improvement items, all that's flowing through e-commerce and eventually coming back through our channel into the retail supply chain group marketplace. So that is.

Expensive home theater electronics items furniture, and houseware items exercise equipment lawn and garden equipment building tools do it yourself home improvement items, all of that's flowing through ecommerce and eventually coming back through.

Our channel into the retail supply chain group marketplace.

No.

That is in.

Speaker 5: an important part of what we're doing to boost capacity and volume in the retail business.

An important part of what we're doing.

To boost capacity in volume in the retail business.

Speaker 2: Also, we've created a new All Surplus Deals Direct to Consumer Channel.

Also we've created a new all surplus deals direct to consumer channel.

Which is essentially the same underlying technology platform that all surplus provides but providing a stream of good too.

Speaker 2: which is essentially the same underlying technology platform that all surplus provides, but providing a stream of goods to end users who have an insatiable appetite for.

Users, who have an insatiable appetite for.

Speaker 2: you know, less than new deals, price goods, and we're leveraging a distribution center that we have there, and we're seeing good uptake of that solution, and we'll keep people updated on it still early, but we feel that's another way to boost our market share in the retail business. The manufacturing side, I'd also want to underscore for

Less than new.

The deals priced goods and we're leveraging a distribution center that we have there.

And we're seeing good uptake of that of that solution and we'll keep people updated on is it still early but we feel that's another way to boost our market share in the retail business.

The manufacturing side I'd also want to underscore for.

Speaker 2: retail business, and lots of products that manufacturers take back from retailers are flowing through our marketplace because we've provided the full suite of refurbishing capabilities to...

The retail business lots of products.

But manufacturers take back from retailers are flowing through our marketplace, but because we've provided.

The full suite of refurbishing capabilities too.

Certify.

Speaker 5: Certify condition of these items and then offer them in a way that helps protect the manufacturer's brands And that's an area of retail that we're going to continue to grow on the capital asset side

Condition of these items and then offer them in a way that helps protect the manufacturers brands.

And that's the area of retail that we're going to continue to grow on the capital asset side.

Speaker 2: You know, that's a business that grew 60% in the last quarter.

That's a business that grew 60% in the last quarter.

We are seeing.

Speaker 5: broad the based adoption of the digital solutions by manufacturers who have plants in multiple regions, equipment in multiple regions, and you have some massive...

Broad based adoption of digital solutions by manufacturers, who have plants in multiple regions equipment in multiple regions and you have some massive.

Speaker 4: rotation and technology, you know, you look at electric vehicles affecting automotive, you know, you have a lot of semiconductor electronics manufacturing equipment that's highly sought after in the used marketplace as new supplies been curtailed most of our clients are very focused on asset redeployment and marketing because of their

Rotation in technology, you look at electric vehicles affecting automotive you have a lot of semiconductor electronics manufacturing equipment, that's highly sought after.

And the used marketplace as new supply has been curtailed.

Most of our clients are very focused on asset redeployment and remarketing because of their corporate objectives around sustainability and we provide.

Speaker 5: corporate objectives around sustainability and we provide the...

The asset zone.

Asset management service attached to our marketplace, which is highly prized.

These clients in fact will be will be sharing an award in the next few weeks from a fortune 500 company.

Speaker 2: who saved over $10 million with us by redeploying assets using our software and services. So there are lots of themes around massive technology shifts in industrial markets. The...

Saved over $10 million with us by redeploying assets using our software and services. So there are lots of themes around.

No.

Massive technology shifts and industrial markets.

The.

Our priority of.

Speaker 4: priority of advancing sustainability strategies. And companies just wanted to be very liquid with their balance sheets and using our channel to recover value for these assets, the helping grow the Cagg Marketplace. And I would also add our investment in a cloud-based marketplace system with all these incomes and overall consumers and businesses notimate investment.

Advancing sustainability strategies and companies just wanted it to be.

Liquid with their balance sheets, and using our channel to recover value from these assets thats, helping grow the CAG marketplace I would also add.

Our investment in a cloud based marketplace system with all of these tools.

Speaker 2: and the ability to take payment and settle transactions and all the reporting that lives in the cloud has been very valuable to our buyers and sellers over the last two years. But this is an investment carry that we began several years ago and we were ready to be very nimble as various restrictions were placed due to the COVID policies.

And the ability to take payment and settle transactions and all the reporting that lives in the cloud has been very valuable to our buyers and sellers.

Over the last few years, but this is an investment Gary that we began several years ago.

We were ready to be very nimble.

Various restrictions were placed due to the COVID-19 .

<unk> policies.

Speaker 5: or healthcare restraints, travel constraints. So that's been a nice bright spot for us. And we have a very strong business development pipeline in the CAG business, and we expect that to continue. Happy New Year!

Our health care restraints travel constraints.

So that's been.

A nice bright spot for us and we have a very strong business development pipeline and the CAG business and we expect that to continue.

Okay.

I'll, let somebody else go.

Your line is still open Sir if you have any further questions you can proceed.

Speaker 6: Are your lines still open, sir? If you have any further questions, you can proceed. Oh, okay, thanks. Yeah, just another thing built, the strong global pipeline of project base GMZ going into Q3, 22. Would you're talking about something like that? Is that...

Okay. Thanks.

Yes, just just another thing built a strong global pipeline of project based gmg going into Q3.

'twenty two.

When you're talking about something like that is that.

Speaker 6: You're getting commitments from these companies that to sell product online that far in advance.

Youre getting commitments from these these.

Companies that sell products.

Online.

That far in advance.

Speaker 4: Yes, in some cases there's...

Yeah, because we're just in some cases.

Some cases there is.

Some dismantling or other preconditions to the assets being.

Speaker 5: some dismantling or other preconditions to the assets being put to fail and we're brought in early in that process to help the client navigate all presale conditions. We have visibility to some very meaningful...

Put to fail and were brought in early in that process to help.

The client navigate all presale condition, but we have visibility to some very meaningful.

Asset sales.

Can you give us some idea of what that growth in that pipeline looks like.

Speaker 6: Can you give us some idea of what that growth in that pipeline looks like?

Speaker 4: Well, I think compared to where we were a year ago, we're up about 50 percent.

Well I think compared to where we were a year ago, we're up about 50%.

Speaker 2: Okay, that's great news. And you know, these projects sometimes span multiple quarters, but what we like is that...

Okay great.

Great News.

These projects, sometimes span multiple quarters, but what we like is that.

Were offering these fortune 500 fortune 1000 companies.

Speaker 2: We're offering these Fortune 500, Fortune 1000 companies a full range of both self-directed.

Full range of both self directed solution.

Speaker 4: as well as fully managed services and the uptake in our self-directed platform has been very robust.

As well as fully managed services and the uptake in our self directed platform has been very robust.

Speaker 4: We have a lot of energy companies, which is another strong performer for us in the quarter. A lot of energy companies that historically would have asked us to come out and handle assets and do all of the pre and post-fell work now through our cloud-based system, these clients are able to upload their assets directly from multiple locations throughout the world. It's great for the client, it's great for us. Very high margin.

We have a lot of energy companies, which is another strong performer for us in the quarter a lot of energy companies that historically would have asked us to come out and handle assets and.

Do all of the pre and post sell work now through our cloud based system. These clients are able to upload their assets directly from multiple locations throughout the world. It's great for the client it's great for us a very high margin.

Business and one that the client really has embraced.

Speaker 5: business and one that the client really has embraced.

So they are taken advantage of the self serve.

Absolutely.

Speaker 6: Okay, and then just lastly, with the investments that you're making, which are all good for growth,

And then just lastly, with the investments that you're making which are all good for growth.

That's capable of taking you to $1 5 billion dollar.

Speaker 6: That's capable of taking either a $1.5 billion run rate of GMV. As you stair step growth from there, will you be needing to make, I would assume you'd be needing to make further investments or I guess what I'm getting at is, what kind of capacity does your current platform infrastructure support?

Run rate of GMP.

As you as you stair step growth from there.

Will you be needing to make I would assume you'd need to make further investments.

Or I mean, I guess, what I'm getting out is what kind of capacity does your current platform infrastructure support.

Speaker 4: once you're done with the investment issue. I think we will have set ourselves up to support, you know, of growth far beyond the 1.5 billion. There is, um,

Once you don't believe restaurant this year.

I think we will have set ourselves up to support.

Growth far beyond the $1 5 billion there is.

Speaker 5: you know, a core, a core group that is bringing on, you know, new verticals like real estate, heavy equipment, we're doing some...

A core.

Our core group that is bringing on new verticals like real estate.

The equipment, we're doing some.

Speaker 2: you know, natural product enhancement on the shelf directed business because that's growing rapidly. So we would think we could we could go beyond, you know, the 1.5 billion, another billion ahead of that, two to three billion of GMB with the core infrastructure that we've built coming out of fiscal 22. Okay, great. I appreciate you taking my question and keep up the good work. Thank you. Thank you.

Natural product enhancement on the self directed business because thats growing.

Rapidly. So we would think we could we could go beyond.

The $1 5 billion call. It. Another 1 billion ahead of that $2 billion to $3 billion of GMB with the core infrastructure that we've built coming out of fiscal 'twenty two.

Okay great.

You are taking my question and keep up the good work. Thank you. Thank you.

Okay.

Speaker 1: And thank you, sir. And we have no further questions at this time.

And thank you, Sir and we have no further questions at this time.

Speaker 1: Ladies and gentlemen, this concludes our call. We thank you for participating. You may now disconnect.

Ladies and gentlemen, this concludes our call and we thank you for participating you may now disconnect.