• Revenue: $174.2 million, up 5% on a reported basis, 2% organic growth.

• Adjusted EBITDA: $80 million, up 2% year over year, with a margin of 46%.

• Adjusted Diluted EPS: $0.0386, down 3% year over year.

• Adjusted Free Cash Flow: $65.8 million, 82% conversion from adjusted EBITDA.

• Net Debt: $114.7 million, leverage of 1.4 times.

• Arts and Antiques Revenue: $90.3 million, up 12% year over year.

• Industrial and Commercial Revenue: $71.8 million, 1% growth year over year.

• GMV: $3.6 billion, down 11% year over year.

• Take Rate: 4.2%, up from 3.6% last year.

• Value-Added Services Revenue: $10 million, 35% growth year over year.

• Adjusted EBITDA Margin: 46%, down from 47% last year.

• Warning! GuruFocus has detected 6 Warning Signs with LSE:ATG.

Release Date: November 27, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Auction Technology Group PLC (LSE:ATG) reported a 5% increase in revenue for the full year, reaching $174.2 million, with a 2% organic growth.

• The company's A&A division grew by 12% overall, with a 6% organic growth, driven by value-added services.

• ATG's take rate increased by 0.6%, with the A&A division approaching a 10% take rate, supported by the adoption of value-added services like atgShip, atgAMP, and atgPay.

• The company reported a 35% year-over-year growth in value-added services, contributing significantly to revenue.

• ATG successfully reduced its net debt to $114.7 million, achieving a leverage of 1.4 times, demonstrating strong cash flow management.

Negative Points

• The company's GMV declined by 11% year-over-year, with a 6% decline even after excluding the impact of rotated volume in the I&C division.

• Adjusted diluted EPS decreased by 3% year-over-year, impacted by higher tax rates due to the full-year effect of the increased UK corporation tax.

• Auction services revenue declined by 18%, attributed to a strategic decision to focus on larger auctioneers and reduce acquisition of smaller auction houses.

• The I&C division experienced only 1% growth, with one of its marketplaces, Proxibid, having a difficult year despite improvements in the second half.

• The company anticipates continued challenges in the A&A market, with a reported 6% decline in GMV, reflecting a difficult market environment.

Q & A Highlights

Q: Can you explain the fluctuation in the gray conversion rate from 77% to 74%? A: The fluctuation is due to auction house mix. Core auctioneers in Gray Iron are consistently 100% timed, but variations occur when other auctioneers, who don't specialize in Gray Iron, sell some of it. This mix can cause fluctuations in conversion rates, which is normal across all asset categories.