Michael Patrick; Vice President and Controller; Liquidity Services Inc
Bill Angrick; Chairman and Chief Executive Officer; Liquidity Services Inc
Jorge Salaya; Executive Vice President and Chief Financial Officer; Liquidity Services Inc
George Sutton; Analyst; Craig-Hallum
Gary Prestopino; Managing Director; Barrington
Operator
Welcome to the Liquidity Services Inc first quarter of fiscal year 2025 financial results conference call. My name is Tanya and I'll be your operator for today's call. Please note that this conference call is being recorded at this time. (Operator Instructions). I will now turn the call over to Michael Patrick Liquidity Services, Vice President and Controller. Please go ahead.
Michael Patrick
Good morning. On the call today are Bill Angrick, our Chairman and Chief Executive Officer and Jorge Salaya, our Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks. The following discussion and responses to your questions reflect management's views as of today, February 6, 2025g and will include forward-looking statements.
Actual results may differ materially, additional information about factsors that could potentially impact our financial results is included in today's press release and in filings with the SEC including our most recent annual report on form 10-K as you listen to today's call. Please have our press release in front of you which includes our financial results as well as metrics and commentary on the quarter.
During this call management will discuss certain non-GAAP financial measures in our press release and filings with the SEC. Each of which is posted on our website. You will find additional disclosures regarding these non-GAAP measures including the reconciliations of these measures with their most comparable GAAP measures as available.
Management also uses certain supplemental operating data as a measure of certain components of operating performance, which we also believe is useful for management and investors. This supplemental operating data includes gross merchandise volume and should not be considered a substitute for or superior to GAAP results. At this time, I will turn the presentation over to our Chairman and CEO Bill Angrick.
Bill Angrick
Good morning and welcome to our Q1 earnings call. I'll review our Q1 performance and the progress of our business segments. And next Jorge Salaya will provide more details on the quarter. Our strong start to fiscal year 2025 was fueled by the continuing adoption of our services by customers and continued momentum across our businesses resulting in record quarterly GMV and double digit GMV growth in each of our segments.
The strength of our performance across all of our segments is powered by our relentless drive to exceed the expectations of our sellers and buyers by continually enhancing our services and leveraging advanced technologies. We are attracting more sellers and buyers to our platform and enhancing our overall marketplace experiences.
We continue to see growing network effects in our marketplace platform as we have now eclipsed a $1.5 billion annual G&B run rate and grew our auction participants by 13% year over year during the quarter, reflecting consistent strong demand for the value priced goods offered in our marketplace against a backdrop of persistent inflation.
Strong buyer participation drove record quarterly GMB revenue and direct profit in our retail supply chain group segment for the second quarter in a row, our rapid growth reflects our position as the most reliable and trusted solution provider in the retail supply chain. We expect to continue our momentum by continuing to grow our buyer base and value added services.
Notably, we continue to expand our presence with consumer buyers for high value goods using our online auction marketplace capabilities and our distribution center network to facilitate low cost customer pickup of single items. Our GovDeals segment grew its GMB and revenues by 11% and 29% year over year respectively, driven by growth in both high value capital goods and non vehicle asset categories over a growing seller base.
Notable new sellers for GovDeals during Q1 included New York City, Tulsa, Oklahoma, Humboldt County, California and Naval Air Station, Jacksonville, Florida. We also set a new record for GovDeals sellers with over $1 million of GMV transacted in a quarter, reflecting our ability to continue to penetrate our existing sellers through continuous improvement in our service and results.
Our CAG segment grew its GMV 31% organically every year driven by strength in its energy and heavy equipment verticals. As we continue to scale our recurring seller base, our CAG auction participants more than doubled year over year reflecting the increased vibrancy of our CAG marketplace for sellers of industrial and heavy equipment.
We have a strong pipeline heading into Q2 and are well positioned to continue this momentum. Finally, our Machinio segment recorded double digit organic growth in revenue and direct profit during Q1 and now has over 4,000 subscribers from over 100 countries on the platform.
Machinio has continued to expand its coverage into the Asia Pacific region which represents a significant growth opportunity for our classified marketplace for used machinery. We expect continued steady growth in fiscal '25 for Machinio driven by continuous improvement to our marketplace, traffic enhanced features and increased value to our subscriber base.
As we look to the future, we continue to invest in growing our seller base buyer channels and value added services both organically and via acquisitions. Investors should expect acquisitions that are accretive and would expand our market share and capabilities. In that context, we're excited to announce the acquisition of auction software and simple auction site, a private label auction marketplace and SaaS solutions provider.
This acquisition will enhance our software development capabilities and extend our market reach. Our leadership team continues to make progress towards our midterm goal of achieving $2 billion of annual GMB. To achieve this objective, we will focus on increasing the sales volume transacted on our marketplace, expanding our buyer base and sales channels to enhance recovery on the assets we sell, modernizing our platform with new technologies to increase our operational efficiencies and improve the customer experience and finally executing complementary bolt-on acquisitions.
With our market leading solutions, our strong financial foundation and strategic focus, we are well positioned to capitalize on numerous emerging opportunities in the $100 billion circular economy and drive long term growth and shareholder value. I'll now turn it over to Jorge for more details on the quarter.
Jorge Salaya
Good morning. We are pleased to report a strong start to our 2025 fiscal year. Our fiscal first quarter results finished slightly above our first quarter guidance range. We set a new quarterly consolidated GMV record as we have seen continued expanding market share with double digit GMV growth across each of our cycles.
Our growth diversification and mix of business has led to four quarters of sequential operating leverage to adjusted EBITDA from our scalable solutions and resilient operational capabilities. Our consolidated results for the fiscal first quarter of 2025 included GMV of $386.1 million up 26% from $305.9 million in the same quarter last year.
Revenue was $122.3 million. Up 72% from $71.3 million last year. Consistent with our previous fourth quarter of fiscal year 2024, revenue has continued to grow faster than GMV, mainly due to the expansion of lower touch purchase programs in our retail segment. Our GAAP earnings per share was $0.18 while $0.28 on a non-GAAP adjusted basis.
Our GAAP in net income was $5.8 million up 205%. And our non-GAAP adjusted EBITDA was $13.1 million up 81% versus last year. We ended the fiscal first quarter with $139.1 million in cash, cash equivalents and short term investment. We continue to have zero debt and we have $17.5 million of available borrowing capacity under our credit facility.
We also are not expecting any significant changes in the near term to our capital expenditures relative to our recent historical averages. Specifically comparing segment results from this fiscal first quarter of 2025 to the same quarter. Last year, our retail segment was up 65% on GMV doubled its revenue growing 101% and was up 31% on segment direct profit setting new quarterly records for each of these metrics for the second consecutive quarter.
Our capital assets group segment was up 31% on GMV 26% on revenue and up 27% on segment direct profit led by continued addition of recurring sellers of low touch heavy equipment sales. As a reminder last year, the fiscal first quarter of 2024 for the CAG segment experienced delays in selected international sales events. Many which subsequently took place during the fiscal second quarter last year.
Our GovDeals segment GMV was up 11% revenue up 29% and direct profit of 25% driven by strong performance in vehicles continued growth in new sellers and the service initiatives from Sierra auctions expansion. Machinio's revenue and segment direct profit were each up 10%.
Our outlook for the fiscal second quarter of 2025 anticipates continuing our solid start to the fiscal year as a whole. Guidance anticipates a strong first half of fiscal year 2025 for growth and operating leverage. Consistent with our fiscal first quarter results last year, the expanded purchase programs in our retail segment are expected to continue to grow revenue at a higher rate than GMV and therefore impacting the percent direct profit to revenue ratio.
While our CAG heavy equipment and energy categories are expected to continue solid growth. The prior year comparable period for tag reflected the completion of several international sales events that had previously been delayed from last year's fiscal first quarter. Our GovDeals and Machinio segments are expected to continue expansion of new clients, grow with existing clients and grow expanded service offering.
On a consolidated basis consignment GMV is expected to continue to be approximately 80% of total GMV. Consolidated revenue as a percent of GMV is expected to remain the low 30s% range and the total of our segment direct profits as a percent of consolidated revenue is expected to be in the low 40s% range. These ratios can vary based on our overall business mix of segments and within each segment including asset categories in any given period.
Management's guidance for the second quarter of fiscal year, 2025 is as follows. We expect GMV to range from $360 million to $390 million. GAAP net income is expected in the range of $5.5 million to $8 million with a corresponding GAAP diluted earnings per share ranging from $0.17 to $0.25 per share.Non-GAAP adjusted diluted earnings per share is estimated in the range of $0.27 to $0.35 per share.
We estimate non-GAAP adjusted EBITDA to range from $12 million to $14.5 million. The GAAP and non-GAAP earnings per share guidance assumes that our effective tax rate applied to our fiscal second quarter results will follow our historical trend and be in the low to mid 20s. Our annual effective tax rate is still expected to be in the high 20s or low 30s.
We also expect that we will have approximately $32 million to $32.5 million fully diluted weighted average shares outstanding. The acquisition of auction software is not expected to materially impact our consolidated results for the quarter. Thank you. We will now take your questions.
Operator
Certainly, we will now begin our question and answer session. (Operator Instructions). George Sutton of Craig-Hallum.
George Sutton
Thank you. Wonderful results. Congratulations. So I wondered if we could address something you had in your prepared comments. You mentioned expanding market share, which is fairly obvious given the growth. I'm just curious if you could talk about how much is expanding market share versus just a better market condition as you see it.
Bill Angrick
I think the market share comment relates to customers providing access to more goods, more categories, more geographic regions and that's across each of our segments. Market conditions have been fairly choppy depending upon, you know what, where you sit.
Different categories have different cross currents. I did note the persistent inflation which tends to bring buyers to a platform offering value, price, goods, George, but I think this is about just blocking and tackling bringing the brand to more and more corporate and government organizations.
George Sutton
So you mentioned inflation and just as a note on that, we have a potential new tariff set of situations. I'm curious historically, what have you seen when tariffs are put in place relative to your business?
Bill Angrick
Well, the scarcity value of product in various categories already being in the US and available, tends to be a positive. You used equipment can be quite useful if you can't import it. And I think that's something that on balance is probably neutral, positive for us.
George Sutton
One last thing I wondered if you could just walk through the simple auction acquisition and it looks like a relatively small but fast growing business. It's fairly narrow as it's set up today on the memorabilia side. I'm wondering how broad could that offering ultimately become?
Bill Angrick
Sure. I think this is a great example for us of bringing our ecosystem to include the transactional marketplaces we serve and then the software we can provide resellers on our platform. We are largely a B to B platform. Our buyer base consists of, many small entrepreneurial and midsized businesses who often resell what they acquire. They are all looking to be on a digital platform to support their own individual small businesses and both simple auction site and auction software.
Which is the other part of this, this company we acquired, provide the tools, the auction platform, the resale platform and capabilities to further serve our buyers who then are looking to grow the resale business. So this is this has a few aspect one, it's an aqua hire, a lot of great talent developing, modern scalable software and to a business that's operating in a software as a service business model for many years successfully, an area that we think has potential to grow.
I think three puts us in a position to add value in some new categories. You mentioned a few. I think there's a great opportunity and just generally good. I think there's a very loyal group of auctioneers and resellers and nostalgia categories including, collectibles and even estate sales and antiques. That leverage this online auction community. And I think we can monetize our buyer base. I think we can extend the reach to more categories and do so in a very asset like software enabled way. So it's a great fit for us.
George Sutton
Super. Lastly, the your Doge press release was frankly one of the better thought out press releases I've seen in a long time. Congratulations on that.
Bill Angrick
Well, thank you. We founded our business originally in Washington DC. We have a lot of experience working within the federal government. A lot of these principles we've been talking about, for 25 years and, when you have some open mindedness to rethink how government functions, I think it's a great entry point for companies like Liquidity Services. We right now could, unlock efficiency for federal agencies and we look forward to having, future interaction and conversation with decision makers as they arrive at new policy.
George Sutton
Super. Thank you.
Operator
Gary Prestopino of Barrington
Gary Prestopino
Hey, good morning Bill. A question GovDeals.
Are you starting to see more of an increased flow of vehicles coming through to auction? You know, that was kind of constricted over the last couple of years due to what happened with the pandemic. So how is that looking now? And what's your take on what's happening in the future? There.
Bill Angrick
Vehicle flow has been healthy. I wouldn't say it has been a massive catalyst to support our results, but it is not anemic, which was an issue as you point out, Gary, when inputs were you know, chip sets weren't available. So I think the supply chain has more normalized flows steady. That isn't the primary catalyst for GovDeals results. I think as I mentioned, we've had good results in non vehicle categories. And another high value capital item categories, which could include things like high value fire trucks, helicopters, construction equipment and equipment to maintain roads and bridges those are all performing well for us.
We as you know, also have a real estate category that as we've seen through some of our results, and even some, some of our releases, we're now getting a lot of government owned real estate on the platform which tends to bring your larger chunks of GMB and this is a wonderful category for us to expand and it makes no sense for those sales to occur in an offline manner. So broad based growth vehicles are a healthy contributor among many.
Gary Prestopino
Okay. Can I don't know if this question was asked or you did mention it, but in terms of the GMV increase, you also mentioned that you've got new high buying sellers. I mean, how much of that GMV increase, came from new accounts recently signed over the last 6 to 12 months.
Bill Angrick
As you go through each of the categories. I think GovDeals and CAG benefited from continued growth in the in the seller community. So we've invested in expanding your sales business development capacity. We're beginning to reap the benefits of that. I think retail is a combination of us penetrating existing relationships and adding new sellers, adding new territories in new categories.
So we know that there is a lot of room to grow, sort of circular economy, commerce in the retail category we're committed to that. So it's a good mix, Gary, of both new names and existing relationships driving that GMB growth.
Gary Prestopino
Okay. That's helpful. And then with the auction software business, you're saying it's a SaaS model, I mean, is, is the revenue streams there generated just from selling the SaaS software, on a rental basis or does the platform allow you to take any percentage of the transaction as a fee as well.
Bill Angrick
It's a combination of both. And if we see an opportunity to standardize and provide a very reasonably priced SaaS e-commerce platform and then unlock additional recovery for these call it subscribers by providing access to, an aggregated buyer marketplace. And you know, in terms of delivering value from those improved auction results and access to a larger buyer base, we would receive a percentage of that GMV.
But, but again, that would be well within the affordability of small and midsized businesses. So it's a very asset light marketplace business model that does unlock additional value for these subscribers and would, would reap some GMV related pricing for liquidity services.
Gary Prestopino
So as I looked at this website, obviously it's kind of nitchie at those collectibles. I saw wine auctions and things of that nature. But does this give you the ability now, if you have a potential client that wants to run their own auctions, you would sell on the platform and they would be able to, to do that across all three of your segments or are you, is that kind of how you see this being leveraged across your portfolio of businesses?
Bill Angrick
Yeah, there are a couple of areas that have application first in the retail supply chain, there are a lot of you know, individual resellers who you know that digital presence is important. And these are largely, companies that specialize in, particular categories and they're reselling to consumers and they want to have a good experience. And so we think we can bundle you know, this this auction platform with those use cases and help many people who buy from us, someone who's buying a truckload might be reselling to consumers.
So we think it's a nice adjacency that we can serve within the retail marketplace. You also see that in the Machinio segment where you have you know, something like $20 billion of used equipment looking for a home on Machinio's classifieds marketplace, Machinio's is not a transactional platform and dealers often like to control their brand and their experience.
And so a white label auction marketplace platform or sales platform would be a very good fit for those dealer customers, they get to control the brand, they get to control the pricing. What we help them do, Gary is convert that traffic to their marketplace to e-commerce sales and handle the payment, handle the invoicing and billing something we do very well. So I think that's another area of application.
Gary Prestopino
Okay. Thank you.
Operator
We have no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.z
